By Lisa Seachrist

Washington Editor

Gilead Sciences Inc. saw its stock drop 22 percent Tuesday following an FDA advisory panel's decision Monday night to refuse to give the Foster City, Calif.-based company's drug for HIV infection, Preveon (adefovir dipivoxil), an approval endorsement.

The Antiviral Drugs Advisory Committee voted 13 to 1 in denying Gilead's proposal to use a 60-milligram dosage of its novel reverse transcriptase inhibitor as a treatment for HIV-infected patients who are failing other treatments. The panel came to its decision based on the drug's kidney toxicity and questions about its effectiveness. (See BioWorld Today, Nov. 2, 1999, p. 1.)

The company's stock (NADSAQ:GILD) closed Tuesday down $14.187 at $49 a share in heavy trading as the company began to evaluate the next step with the drug.

"It's a simple procedure from here; we need to discuss and work with FDA to see if there is any way to move this drug forward,'' said John C. Martin, chairman and CEO of Gilead.

Gilead also is developing adefovir dipivoxil, a nucleotide analogue designed to inhibit reverse transcriptase, in a lower dosage for the treatment of hepatitis B. The Phase III program in that indication is unaffected by Monday's panel decision.

While the company hasn't decided to drop development of the drug for HIV, several analysts view this indication as dead - especially since the company has another nucleotide reverse transcriptase inhibitor, tenofovir disoproxil fumarate (PMPA), in Phase II development.

"My speculation is that given the resources they put into adefovir, at this point it just doesn't make sense to run another trial," said Mike King, vice president and senior analyst with BancBoston Robertson Stephens Inc. in New York. "It's going to cost them more in time and money and take away resources from tenofovir."

Al Rauch, senior vice president and biotech analyst with Everen Securities Inc. in Chicago, agreed with King's assessment. "My best guess is that they don't develop adefovir for this indication," he said. "Why bother when tenofovir is going to cannibalize the drug anyway?"

However, most analysts and the company itself don't expect to see tenofovir on the market until late 2001. In the meantime, a number of patients are using adefovir as part of a compassionate-use program.

"Tenofovir is two years away," Martin said. "There is a medical need now for patients who have failed other treatments. We need to figure out a path forward for this drug."

Much of the panel hearing was dedicated to determining whether the company had shown a 60-milligram dose of the drug was equivalent to the more toxic, but proven, 120-milligram dose. King suggested it was possible the company could consider trying to get approval for the 120-milligram dose. Until the company meets with FDA, Martin said he couldn't speculate on how it will move forward except to say the company believes the 60-milligram dose is superior.

Monday's decision to deny an accelerated approval to adefovir marked the first time the committee had nixed an antiviral seeking accelerated approval for the treatment of HIV infection. That move may, in fact, mark a change in drug development strategy, Rauch said.

"The FDA has been easier on these drugs in the past because they wanted to get drugs to the patients," Rauch said. "Now, they are wanting there to be more long-term data for these drugs. They are raising the bar for everybody."

In other words, the success of the previous antiretrovirals has resulted in a situation where people infected with HIV are taking the drugs chronically. As a result, it will become important to have a large database to document the effects of long-term usage of these drugs.

"Because we have a number of drugs to treat [HIV infection] on the market already, long term safety data becomes increasingly important," Martin agreed. "That is a change in the development of these types of drugs [as a result of treatment successes]."