By Randall Osborne


Not so long ago, AIDS seemed conquerable to many. At least, there was widespread belief that its effects were manageable, and that a cure might be found for those who used drugs to stall the disease's horrifically replicating, mutating march.

These days, almost nobody talks much of cure. The debate focuses most often on upcoming therapies, and whether any can provide more efficacy (over the short or long term) without the side effects of those potions already approved. Existing treatments ¿ usually some "cocktail" of therapies ¿ provide only additional time for AIDS patients.

Although the popular press has backed away from the AIDS story, biotechnology firms continue to experiment with drugs for the condition, and the market is expected to almost triple in the next five years or so, growing to about $13 billion by 2007.

In fact, there's so much activity in the HIV sector that many investors don't know where to start evaluating where they might put their money. They haven't been getting much help from most analysts, who took aim on particular companies that had HIV drugs in the works, but seldom tried for a broad view ¿ as they might, say, with rheumatoid arthritis or cancer.

"That's what attracted me to the sector," said Chrystyna Bedrij, chief investment officer with Griffin Securities Inc., an investment bank in New York. "There was zip on AIDS."

Bedrij has put together a 50-page report on HIV therapies, and she said the interest in them by pharmaceutical firms hardly has waned. Many hope to partner with cutting-edge biotechnology companies ¿ which pioneered many of the approved therapies.

"They're all looking," Bedrij told BioWorld Financial Watch. "I'm getting lots of calls," she said last week, adding that Johnson & Johnson had just phoned with questions.

Highly active anti-retroviral therapy (HAART), the main approach against AIDS, is beset by the curses of increased resistance and steadily weaker immune response, and most research is directed toward finding adjunctive relief.

Eighteen AIDS drugs are on the market today, all of them protease inhibitors, or reverse transcriptase inhibitors of the nucleoside or non-nucleoside variety, typically combined in triples or more to make the drug cocktail.

But they're not the ideal solution, and about 100 new investigational new drug applications have been filed with the FDA by firms aiming to come up with something better.

Meanwhile, AIDS drugs are selling at about $5 billion per year, Bedrij said, calling GlaxoSmithKline plc "the mother ship" with its NRTIs Combivir, Epivir, Retrovir, Trivizir and Ziagen.

Even the likes of Combivir are no magic bullet, though, and Bristol-Myers Squibb Co. has Zerit and Videx waiting for those who've developed resistance to it. Drawbacks of this class of drugs have to do with dosing ¿ and with reduced compliance, which can quickly give the disease a new foothold. Triangle Pharmaceuticals Inc. and Gilead Sciences Inc. plan to fix this problem with their more easily taken Coviracil and tenofovir, respectively.

Protease inhibitors, once the high hope of AIDS patients, do their strong magic with equally potent side effects, killing about 10 percent of users by causing heart attacks. Merck & Co. markets Crixivan and Pfizer Inc. is selling Viracept.

In the non-nucleoside reverse transcriptase inhibitors zone, DuPont Pharmaceuticals Inc.'s Sustiva leads the pack, and the company is asking the FDA to approve a tablet form.

Handy dosing is the order of the day, and Bedrij noted in her report that Triangle's Coviracil, Gilead's tenofovir and Bristol-Myers' BMS-232632 ¿ all under development ¿ offer the potential for once-per-day administration. Glaxo's Trivizir, already on the market, combines three NRTIs in a single pill.

What's next?

"HIV is an old topic, so people think there's nothing going on," Bedrij said, but plenty is happening. The main areas that show potential, she said, are entry inhibitors, immune-based therapies and vaccines.

"Also, there's been such a sell-off [in HIV companies]" that the time is ripe for investors to begin shopping, she said. Bedrij located the most promise in a specific area of research: entry inhibitors that prevent the virus from breaking into target cells.

"I see hope, tremendous hope," she said. "They're coming along nicely, and [the first] could be approved by the end of next year. It's really close."

The leader there is Trimeris Inc.'s T-20, being developed in Phase III trials with Hoffmann-La Roche Inc. T-20 is a 36-amino-acid peptide that works by blocking infection and cell-to-cell virus transmission by inhibiting gp41-mediated fusion. Although injected twice daily, which is less than convenient, and although leading to some resistance, the drug seemed to function well with other HIV drugs. A second-generation compound seems to work even against HIV strains that resist T-20.

Trimeris said last week that both pivotal Phase III trials for T-20 are fully enrolled, and the companies said they expect to submit for European and U.S. regulatory approval in the early second half of 2002.

Another player is Progenics Pharmaceuticals Inc.'s PRO 542. The drug operates by binding to the gp120 glycoprotein to prevent healthy cells from being infected, or detaching gp120 from the virus altogether.

"I like them," Bedrij said. "They have a lot of good things published on them in the scientific community. I think Trimeris is first to market, so you should go with the leader, but it could turn our that those guys [at Progenics] have a better technology, even though they're only in Phase I/II."

Could Progenics catch up with Trimeris?

"That could happen," Bedrij acknowledged. "Look at Remune."

Remune (HIV-1 Immunogen) failed to meet its primary endpoint in a Phase II study in June, sending The Immune Response Corp.'s stock plunging 55 percent.

Bedrij said she was meeting with officials from another company who "knew in Phase I that Remune would fail. Obviously the news was leaking." No similar buzz has followed the Trimeris drug, she noted.

In immune-based therapies, at the front of the pack in Phase III trials is Proleukin (recombinant interleukin-2), from Chiron Corp. and intended to boost CD4+ cells.

"I still like [Chiron], but I'm kind of neutral right now," Bedrij said. "But I do think it's one of the top 10. They have great scientists, although right now it's not in market favor."

Her pick in the preventive vaccine department is VaxGen Inc.'s AIDSVAX, made from synthetic proteins cloned from gp120 and due for interim results from its Phase III studies in early winter.

"You have go with VaxGen, though it's a speculative buy," she said. "If you're looking toward HIV and you want one vaccine, they're the farthest along. If something happens in November [such as unfavorable interim results], it could be worth zero. Or it could be huge, with a multiple payload. But that's what biotech's all about."