Gilead's Next "Mount Everest" Drug Bictegravir: Will Merck & GlaxoSmithKline Undercut It?

Glead Sciences sees HIV drug bictegravir as its "Mount Everest", but competitors like GlaxoSmithKline and Merck will be able to price their competing drugs 10% to 55% cheaper, Leerink analyst Geoffrey Porges said Thursday.

The analyst noted Merck and Glaxo are working on HIV regimens that include generic drugs. Gilead, on the other hand, "has established premium pricing for their fixed-dose combinations based on all-branded component pricing," Geoffrey Porges wrote.

As a result, Gilead will grapple to gain share in HIV — a much-needed sector as its profitable Hepatitis C franchise continues to diminish. Next two years and $40+ billion in sales, Gilead's Hepatitis C drugs sales declined in 2016. The biotech is expected to further drops in 2017.

Gilead has dominated the HIV landscape over the past five years, Porges said. Their bictegravir-based formulas are likely to be the "gold standard" for first- and second-line HIV therapies, Porges wrote.

Gilead is also experiencing competitive pressure from the likes of Merck and AbbVie. Merck has successfully fought off patent litigation vs. Gilead with its HIV drug Zepatier. AbbVie is set to launch a next-generation asset in 2018.