15 March 2021 - - US-based biopharmaceutical company Gilead Sciences, Inc. (NASDAQ: GILD) and US-based pharmaceutical company Merck (NYSE: MRK) have entered into an agreement to co-develop and co-commercialize long-acting treatments in HIV that combine Gilead's investigational capsid inhibitor, lenacapavir, and Merck's investigational nucleoside reverse transcriptase translocation inhibitor, islatravir, into a two-drug regimen with the potential to provide new, meaningful treatment options for people living with HIV, the companies said.

Islatravir and lenacapavir are both potentially first-in-class medicines in late-stage clinical trials, with significant clinical data generated to date.

Both medicines have long half-lives and have demonstrated activity at low dosages in clinical studies, which support development as an investigational combination regimen with long-acting formulations, both oral and injectable.

The first clinical studies of the oral combination are expected to begin in the second half of 2021.

Under the terms of the agreement, Gilead and Merck will work as partners, sharing operational responsibilities, as well as development, commercialization and marketing costs, and any future revenues.

Merck and Gilead seek to build on their legacies of transforming HIV care by focusing on long-acting therapies, which may represent a meaningful innovation in HIV drug development.

While daily, single tablet regimens are available for people living with HIV, options that would allow for less frequent, oral dosing or infrequent injections rather than daily dosing have the potential to address preference considerations, as well as issues associated with adherence and privacy.

As the field of HIV treatment evolves, long-acting therapies may provide additional options for people living with HIV and their physicians that will help continue to put the needs of individuals at the center of their own care.

Lenacapavir and islatravir, alone and in combination, are investigational and not approved anywhere globally. Their safety and efficacy have not yet been established.

Under the terms of the agreement, Gilead and Merck will co-develop and co-commercialize long-acting products to treat people living with HIV that combine Gilead's proprietary investigational capsid inhibitor, lenacapavir, and Merck's proprietary investigational nucleoside reverse transcriptase translocation inhibitor, islatravir.

The collaboration will initially focus on long-acting oral formulations and long-acting injectable formulations of these combination products, with other formulations potentially added to the collaboration as mutually agreed.

Across the oral and injectable formulation programs, Gilead and Merck will share global development and commercialization costs 60%/40%, respectively.

For long-acting oral products, Gilead will lead commercialization in the US and Merck will lead commercialization in the EU and rest of the world.

For long-acting injectable products, Merck will lead commercialization in the US and Gilead will lead commercialization in the EU and rest of the world.

Gilead and Merck will co-promote in the US and other certain major markets. Merck and Gilead will share global product revenues equally until product revenues surpass certain pre-agreed per formulation revenue tiers. Upon passing USD 2bn a year in net product sales for the oral combination, the revenue split will adjust to 65% Gilead and 35% Merck for any revenues above the threshold.

Upon passing USD 3.5bn a year in net product sales for the injectable combination, the revenue split will adjust to 65% Gilead and 35% Merck for any revenues above the threshold.

Beyond the potential combinations of lenacapavir and islatravir, Gilead will have the option to license certain of Merck's investigational oral integrase inhibitors to develop in combination with lenacapavir.

Reciprocally, Merck will have the option to license certain of Gilead's investigational oral integrase inhibitors to develop in combination with islatravir.

Each company may exercise its option for an investigational oral integrase inhibitor of the other company following completion of the first Phase 1 clinical trial of that integrase inhibitor.

Upon exercise of an option, the companies will split development cost and revenues, unless the non-exercising company decides to opt-out.

Both companies currently have oral once-weekly integrase inhibitors in preclinical development.

Cowen and Company LLC is acting as financial advisor to Gilead. Hogan Lovells and White and Case, LLP are serving as legal counsel to Gilead. Morgan, Lewis and Bockius and Gibson Dunn are serving as legal counsel to Merck.

Islatravir (formerly MK-8591) is Merck's investigational nucleoside reverse transcriptase translocation inhibitor (NRTTI) that exhibits both translocation inhibition (which prevents nucleotide binding and incorporation to the DNA chain, resulting in immediate chain termination) and delayed chain termination (which prevents nucleotide incorporation even in the event of translocation).

Islatravir is currently being evaluated for the treatment of HIV-1 infection in combination with other antiretrovirals, including the ILLUMINATE clinical trials program for oral, once-daily treatment.

Islatravir is also being studied for preexposure prophylaxis of HIV-1 infection as a single agent across a variety of formulations, including the IMPOWER clinical trials evaluating an oral once-monthly regimen.

In 2012, Merck licensed islatravir (4'-ethynyl-2-fluoro-2'-deoxyadenosine or EFdA) from the Yamasa Corp. based in Choshi, Japan.

Lenacapavir is a novel investigational capsid inhibitor that interrupts the activity of HIV capsid, a protein that surrounds and protects the virus' genetic material and essential enzymes.

In in vitro studies, lenacapavir interrupts multiple distinct stages of the viral lifecycle, potentially preventing the virus from becoming infectious and gaining access to uninfected cells.

The safety, efficacy and dosing of lenacapavir are being evaluated in multiple ongoing clinical studies. Data presented at AIDS 2020 from the ongoing Phase 1 study support subcutaneous every six-month administration of lenacapavir for both HIV treatment and prevention studies.

During IDWeek 2020, the company announced it would be evaluating the use of lenacapavir among cisgender women as an injectable PrEP option administered every six months.

An additional lenacapavir for PrEP study in men who have sex with men and persons of trans experience is planned. Both studies are expected to begin in 2021.