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Gilead Sciences' Hepatitis Drug in Spotlight at Major Medical Meeting


Both medical and investor communities will scrutinize results from an experimental, next-generation treatment for the liver-destroying virus hepatitis C.

It's just about showtime for Gilead Sciences (GILD) and its experimental hepatitis C drug.

When specialist doctors from around the world gather in Spain next week to learn about new drugs in development for liver diseases, data for Gilead's GS-7977 will be closely scrutinized and among the most anticipated research presented. The company hopes to show it has a real potential winner of a drug to treat the liver-wasting virus hepatitis C.

The big medical meeting, the International Liver Conference, begins Wednesday, and some scientific abstracts have been released in advance of the five-day gathering. However, a pair of key studies for Gilead's drug are still embargoed until presentations starting Thursday. Gilead and a host of rivals are trying to develop an all-oral and better treatment regimen for hepatitis C. There has been a lot of excitement in the medical community and the investment world over Gilead's drug.

"We have very high expectations for GS-7977," Stifel Nicolaus analyst Joel Sendek says in a recent note recommending Gilead's stock.

He is counting on the drug to spur future growth. Gilead is so dominant among HIV drug makers (with about 70% of the treatment market) that it's unlikely to expand as rapidly in the future, he says.

Gilead also begins losing patent protection on HIV drugs later this decade, which is a key reason the company is expanding into hepatitis. A better hepatitis treatment potentially would bring in billions of dollars in new annual revenue. Gilead clearly has high hopes for 7977 as it was the strategic drug acquired with the recent $11 billion takeover of Pharmasset. (See Gilead Plans $11 Billion Takeover of Pharmasset to Gain Hepatitis Drugs.)

Shares of Gilead are up 12% this year but fell earlier this week. The stock closed at $45.72 Thursday.

While there are a number of other companies vying for the next generation of hepatitis C treatments, none of them made such a big wager on an acquisition. Among the other companies racing to bring a new hepatitis drug to market: Abbott Laboratories (ABT), Bristol-Myers Squibb (BMY), Merck (MRK), Vertex Pharmaceuticals (VRTX), Idenix Pharmaceuticals (IDIX) and Roche (RHHBY.PK). Abbott was among the companies whose hepatitis research was released earlier in advance of the Spain conference and turned some heads with impressive study data. (See Abbott Laboratories Rises to Record High on Hepatitis Drug Study.) A Bristol-Myers drug is being tested with Gilead's 7977 in research to be presented at the medical meeting.

Hepatitis C is being carried by millions of people and many of them don't even know they have the virus. As many as 170 million people worldwide have a chronic infection, according to one estimate. More than 3 million Americans are estimated to be chronically infected, according to government figures.

Vertex and Merck launched two much improved treatments for the virus last year. The research focus now is to create a new class of drugs.

Twitter: @brettchase

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