Almost as if to provide a metaphor for HIV treatment strategy - drug combination is the weapon of choice for fighting the infection - two major players said last week they plan to join forces in a $464 million merger whereby Gilead Sciences Inc. will acquire Triangle Pharmaceuticals Inc.

The duo is aiming at another pairing, and maybe more.

Triangle brings to the table its Phase III drug, Coviracil (emtricitabine), a nucleoside reverse transcriptase inhibitor up for FDA review next year. The new drug application was accepted in November, and a European filing is expected shortly. Gilead has the approved HIV therapy Viread (tenofovir disoproxil fumarate), another NRTI that is, like Coviracil, a once-daily pill.

The companies said they will start working on a co-formulation right away.

Coviracil also is being studied in Phase III studies for chronic hepatitis B, or HBV. Since "the treatment paradigm for HBV may mirror that of HIV," said John Martin, president and CEO of Gilead, it also might be co-formulated with Gilead's Hepsera (adefovir dipivoxil), recently approved for hepatitis B.

"I'm almost kicking myself because I didn't see this coming," said Thomas Shrader, an analyst with Gerard Klauer Mattison & Co. Inc.

Triangle's pipeline made it ripe for a buyout, and Gilead needed a pipeline in a big way, even with its four marketed products in addition to Viread and Hepsera: AmBisome (liposomal amphotericin B); Tamiflu (oseltamivir phosphate) for influenza; Vistide (cidofovir) for cytomegalovirus retinitis in AIDS patients; and DaunoXome (liposomal daunorubicin) for AIDS-related Kaposi's sarcoma.

In May, Gilead said it had begun a Phase I trial of a topical gel to prevent vaginal transmission of HIV. The gel is tenofovir, "the active ingredient of Viread," Shrader noted. "That's the only thing they've ever talked about."

What Gilead did have was marketing, sales and manufacturing expertise.

Triangle, on the other hand, had candidates behind Coviracil - amdoxivir, a nucleoside analogue in Phase II clinical studies for the treatment of HIV, and clevudine, a nucleoside analogue in Phase I/II studies for hepatitis B. What it needed was the kind of help Gilead could provide, since Triangle over the summer had said goodbye to its Coviracil partner, Abbott Laboratories.

"I thought somebody would buy Triangle," Shrader said, since the company's story was too good to resist, but he said he expected it would be a heavyweight such as GlaxoSmithKline plc, which, with Bristol-Myers Squibb Co., owns about 80 percent of the HIV market. (See BioWorld Financial Watch, Nov. 11, 2002.)

He also expected Gilead to beef up its pipeline through an acquisition, "but I thought it was going to be Versicor, which is a lot like Triangle, with a lot of late-stage stuff."

Versicor Inc., focused on antibiotics and antifungals, made headlines in August when it disclosed an agreement to buy Milan, Italy-based collaborator Biosearch Italia SpA for $260.7 million in a stock swap. In September, Versicor was in the news again with positive data from a Phase II trial with its antibiotic, dalbavancin, for the treatment of skin and soft-tissue infections.

The company's lead product, anidulafungin, is in Phase III trials for esophageal candidiasis and aspergillus, and in a Phase II study in invasive candidiasis, with Phase III data expected in March and a new drug application anticipated as early as April of next year.

Instead, Gilead - with more than $625 million in cash reserves and cash-flow positive status achieved in the third quarter - chose to acquire Triangle.

The definitive agreement signed by the two companies structured a transaction that involves, in the first step, a cash tender offer for all outstanding Triangle stock at $6 per share and, in the second step, a cash merger in which Gilead will acquire any remaining Triangle stock at the same price.

After the deal is done, Triangle will become a wholly owned subsidiary of Gilead, which is providing Triangle with $50 million of interim financing to pay operating bills in exchange for a convertible note.

The combined companies may need that Gilead cash for projects not immediately obvious, according to Shrader. "This deal is a little more subtle than you might guess at first," he said.

Gilead conducted a three-year trial, called Study 903, comparing Viread's efficacy and safety to the HIV drug d4t (stavudine), marketed as Zerit by Bristol-Myers, when used as part of a first-line treatment regimen. The trial was designed to compare a regimen of Viread, lamivudine and efavirenz to a regimen of stavudine, 3TC and efavirenz in 600 patients. (See BioWorld Financial Watch, July 15, 2002.)

In the analysis of the intent-to-treat population, 87 percent of patients in both the Viread arm and the stavudine arm achieved suppression of HIV RNA below 400 copies/mL (the primary efficacy endpoint), following 48 weeks of treatment. When missing data are excluded, 95 percent of patients receiving Viread, compared to 96 percent of patients receiving stavudine, had reductions in HIV RNA to below 400 copies/mL.

In other words, the two regimens were pretty much equivalent. But results also showed patients in the d4t arm had an increase in triglycerides, with more mitochondrial toxicities (which can mean peripheral neuropathy as well as other conditions) and more of a change in cholesterol levels, making Viread safer.

"A lot of the most interesting data is in this recent study," Shrader said. "Head to head with Zerit, it's an equivalent drug but safer. That's the easiest place for this drug to get used. It doesn't have the lipid changes or mitochondrial DNA issues [of Zerit]. And in Coviracil's package, the best data they have is also to replace Zerit," on the basis of safety and efficacy.

"Both of these drugs have chosen to say they're better than Zerit - but Zerit is the worst of the good-selling drugs because of toxicity issues," he said. The drug to beat, Shrader said, is Combivir, GlaxoSmithKline's combination of its therapies Epivir (lamivudine), also known as 3TC, and Retrovir (zidovudine), also known as AZT.

And in key data from one Triangle trial, FTC-303, comparing Coviracil with lamivudine, he said, the news is not so good as it relates to the differing proportion of patients in each group with less than 400 copies of the HIV RNA at 48 weeks - 73 percent for Coviracil vs. 82 percent for lamivudine, a disparity that has been chalked up to attrition (15 percent vs. 9 percent, respectively).

"You can argue it away by saying it was people leaving the trial," Shrader acknowledged, "but Glaxo is going to have a field day with that data. The biggest fear is that [Gilead/Triangle] will bundle Coviracil with Viread, and then Glaxo will say, But your lamivudine data is not as good.'"

Triangle's clinical package to the FDA included data from about 2,000 patients, including those in FTC-303 and in another trial called FTC-301. There was another potentially pivotal trial, FTC-302, that resulted in what Shrader called "bizarre" and "a curious mess." The trial was stopped after many patients in both arms developed liver toxicity.

FTC-301, a 48-week international trial of 571 patients, compared Coviracil once daily to Zerit twice daily, and an early unblinding of the trial showed Coviracil clearly and strongly superior - especially good news for Triangle since, in Gilead's 903 study, Viread only showed equivalence.

Shrader said he believes Coviracil will be approved based on the trials "but it's hard to really know, given how little data we get to see." In any case, GlaxoSmithKline will be a formidable competitor for the new HIV therapy advanced by researchers at Gilead/Triangle.

"They need to show the drug is as good as lamivudine," Shrader said. "I think there's another trial in there."