By Debbie Strickland

Even though results reached statistical significance, a 30-patient trial turned out to be too small to win FDA marketing clearance for Forvade, a topical treatment for herpes simplex virus in AIDS patients.

"More patients would be required to make this approvable," said Howard Jaffe, senior vice president for drug development at Gilead Sciences Inc., of Foster City, Calif. "The important point is that the core of the submission was a 30-patient study, of which only 20 received active treatment. According to what we've heard from the FDA, there obviously is a need for additional studies."

Forvade has the same active ingredient — a nucleotide analog called cidofovir — as Vistide, an intravenous treatment for cytomegalovirus retinitis in AIDS patients. The FDA approved Vistide last June.

On May 1 the company announced it had won European Commission approval to market Vistide in the 15 European Union countries. Pharmacia & Upjohn, of Kalamazoo, Mich., has exclusive non-U.S. marketing rights. It will sell the drug in Europe and pay Gilead a related $10 million milestone fee this month. Within two months, Pharmacia & Upjohn also will make a $40 million equity investment in Gilead, purchasing more than 1.13 million preferred shares at $35.28 per share. The preferred stock is convertible to Gilead common shares on a one-to-one basis.

A new topical gel formulation of cidofovir, Forvade is considered an entirely different drug entity. In addition to the herpes simplex virus indication, the drug is currently undergoing trials as a treatment for genital warts, which afflicts some 1 million Americans annually; and molluscum kontagiosum, a disfiguring skin disorder that occurs in AIDS patients.

When Gilead applied for expedited FDA review of Forvade in January, it hinged its case on last year's strong Phase I/II results for an indication in AIDS patients whose herpes infections are either resistant or no longer respond well to the standard herpes therapy, acyclovir. In a 30-patient, placebo-controlled trial, 50 percent of the patients receiving Forvade had good responses or complete resolution of lesions, compared to zero percent of the placebo patients. None of the Forvade patients reported major side effects.

The company is "ironing out" with the FDA the setup of a possible new trial, Jaffe said.

In the meantime, U.S. patients may obtain Forvade at no cost through the ongoing expanded access program. Under a similar program in France, patients may obtain the treatment on a cost-recovery basis.

Gilead's stock (NASDAQ: GILD) fell 8 percent Wednesday, closing at $25.75, a $2.25 change. The company has about $300 million in cash.

Despite the Forvade setback, Gilead's fans in the financial community remain enthusiastic.

"It's not very important at all," said Thomas Dietz, managing director of Pacific Growth Equities, in San Francisco.

The call for more studies is a "very small" matter, agreed analyst Tim Wilson of UBS Securities, in New York. "I don't think it really matters."

Both analysts agreed with Gilead's top executive's assessment of the market for AIDS drugs.

"Given the recent advances in the treatment of AIDS and the decreased incidence of AIDS-related opportunistic infections," said John Martin, president and CEO, "the treatment of refractory herpes represents a small commercial opportunity."

Dietz and Wilson rate the product's commercial potential at approximately $10 million per year, and both recommend Gilead's stock as a "strong buy."

"Their product pipeline is one of the strongest in the industry at the moment," said Dietz, noting the company's same-day update on clinical trials of two promising HIV/AIDS drugs — PMPA and GS 840.

Patient enrollment has begun for a Phase I/II study of the oral version of PMPA, a potential treatment of human HIV infection. The double-blind, placebo-controlled, dose-escalating trial will enroll patients with CD4 counts of 200 cells per cubic millimeter and above, and HIV RNA greater than or equal to 10,000 copies per milliliter. PMPA is an acronym for (R)-9-(2-phosphonylmetho-xypropyl) adenine.

Gilead's other AIDS product, GS840, a nucleotide analog active against reverse transcriptase, is in Phase II/III clinical trials. The company has reached its patient-enrollment goal of 400. The National Institutes of Health is sponsoring a separate, 2,000-patient trial of that drug in combination with other AIDS therapies. *