Approval for Gilead's Cayston - Analyst Blog

In a positive development, Gilead Sciences (GILD) received long-awaited US Food and Drug Administration (FDA) approval for Cayston (aztreonam for inhalation solution). The drug is indicated for the treatment of lung infection caused by Pseudomonas aeruginosa (P. aeruginosa) in patients with cystic fibrosis (CF).

Cayston, to be administered in dosages of 75 mg thrice daily over a 28-day period through the Altera Nebulizer System, will be available in the U.S. shortly at certain specialty pharmacies.

The approval does not surprise us, since Cayston received a positive opinion from the FDA’s Anti-Infective Drugs Advisory Committee in Dec. 2009. Although the New Drug Application (NDA) had been submitted in Nov. 2007, there were several hiccups in the approval process. In Sep. 2008, Cayston was denied approval by the FDA, which asked Gilead to resubmit the application with more data.

Cayston received conditional marketing approvals in the EU and Canada in Sep. 2009 and received approval in Australia in Jan. 2010. Marketing applications of the drug are currently pending in Switzerland and Turkey.

CF is a chronic, debilitating genetic disease that affects the respiratory and digestive systems of approximately 70,000 people worldwide, including 30,000 people in the U.S.

Although Gilead is one of the leading players in the HIV segment, it has been trying to expand its presence in other areas as well. We believe the recent approval will help the company achieve this goal.

Gilead’s performance over the past few quarters has consistently crossed expectations, specifically on strong sales of the HIV franchise products. Meanwhile, the worldwide panic regarding swine-flu boosted Gilead’s royalty income, a trend expected to continue, thanks to increased sales of the anti-viral drug Tamiflu. We have an Outperform rating on the stock.

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