Big Pharma to unveil new wave of AIDS drugs

NEW YORK (CNNMoney.com) -- This week, members of Big Pharma will lift the curtain on what could be the next generation of HIV drugs.

Pfizer, Merck, Johnson & Johnson and the biotech Gilead Sciences are all planning to unveil study results on drugs that slow the spread of the AIDS virus in Los Angeles this week, at the Conference on Retroviruses and Opportunistic Infection.

AIDS drugs might not have the blockbuster potential of drugs that treat cancer and heart disease, which afflict patients in the relatively affluent U.S. and European populations. About two-thirds of the approximately 40 million worldwide AIDS patients live in sub-Saharan Africa, and many are too poor to afford the thousands of dollars in annual costs for HIV anti-virals. But these drugs do serve as rich PR platforms for drug companies, which often give them away or sell them at reduced prices.

The companies' experimental anti-virals are designed to help patients live longer by blocking the AIDS virus from replicating. New HIV drugs are considered essential because the constantly-mutating AIDS virus is developing resistance to the older protease inhibitors introduced in the 1990s.

"The virus is smart and learns to maneuver around any treatment that is out there," said Barbara Ryan, analyst for Deutsche Bank North America. "The virus mutates and obviously develops resistance to the therapies."

Also, many AIDS patients have survived long enough to develop resistance to the drugs that have kept them alive, said Gilead (up $0.42 to $74.05, Charts) spokesman James Loduca. His company plans to unveil late-stage data for its experimental anti-viral GS 9137 on Wednesday.

Kate Robins of Pfizer (up $0.22 to $25.84, Charts) said her company will announce on Tuesday the final results of studies on its experimental drug maraviroc. The drug has been filed with the Food and Drug Administration and European regulators.

"Resistance is forming, so we need new drugs," said Robins. "If approved, [maraviroc] will be the first new class of oral HIV medicine in a decade."

Merck (up $1.54 to $44.48, Charts) is also expected to announce late-stage data on Tuesday for its anti-viral MK-0518, which the company is expected to submit to the FDA in the second quarter of 2007.

Barbara Ryan projects peak annual sales of $500 million to $700 million each for Pfizer's maraviroc and Merck's MK-0518, assuming they're approved by the FDA. Les Funtleyder, analyst for Miller Tabak, projects annual sales of $300 million to $400 million for MK-0518 and about $200 million for maraviroc.

Merck is also testing an AIDS vaccine, but it will not be releasing data for that product this week. An AIDS vaccine does not yet exist, and is considered the Holy Grail for AIDS research.

Pam Van Houten of the Johnson & Johnson (up $0.15 to $64.30, Charts) subsidiary Tibotec Pharmaceuticals said her company plans to unveil mid-stage data regarding its experimental anti-viral TMC278 on Wednesday. That drug is expected to enter late-stage testing by the end of 2007.

The FDA has granted "fast track" review status to the Merck and Pfizer drugs, which means that it sets a goal of six months to review then. The review process for most drugs generally takes longer than a year.

The analysts interviewed for this story do not own shares of the stock mentioned here, but Deutsche Bank might make a market in Merck and Pfizer.

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