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Gilead Shares Rise on Hepatitis C Treatment

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The company says a combination therapy of Gilead's drugs showed 100% cure in a study of previously untreated patients. Abbott also reports promising results as a big medical meeting begins.

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The goal for the next generation of hepatitis C treatments is to develop an all-oral regimen that doesn't require an injection of the older medicine interferon, which causes flu-like side effects. It's the goal of Gilead, Abbott and other rivals, including Vertex Pharmaceuticals (NASDAQ:VRTX).

Demand for hepatitis treatments is expected to rise as many people infected even decades ago may have the virus and not realize it. As many as 170 million people worldwide have chronic infections and more than 350,000 people die from the virus each year, according to estimates. More than 3 million people in the US have chronic infections, according to government figures.

The payoff for the company that successfully brings a new treatment to the market is a potential blockbuster drug that generates billions of dollars per year. Gilead paid an eye-popping $11 billion for Pharmasset earlier this year to gain that company's experimental hepatitis C treatments.

As impressive as Gilead's findings are, Abbott's combination therapy also looks strong, Stifel Nicolaus analyst Joel Sendek notes.

Unlike Gilead, Abbott didn't pay the giant premium to acquire its experimental medicines. Abbott's hepatitis program will be very important going forward as that company splits in two. Abbott is in the midst of spinning off its drug business into a new company that will be called AbbVie -- a move expected to be completed by the end of this year.

The companies are presenting their study results at the annual meeting of the American Association for the Study of Liver Diseases in Boston.

Twitter: @brettchase

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