Over the last two decades the treatment of HIV and Aids has been transformed.
Once viewed as a 'death sentence', new therapies have improved survival rates for those with access to the latest drugs so much, that it is now considered a chronic illness.
While death rates remain high in Africa, and other poor countries, the number of people dying in developed countries is now very low.
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Sadly, far less progress has been made in treating hepatitis C. This 'silent killer' now kills more people in the US than Aids does.
However, one biotech company is on the verge of a new approach that could make the disease far more treatable.
That's good news for those at risk of catching the disease and for investors in the company behind the treatment
A potential goldmine
For now the only treatment involves taking interferon to boost the immune system, plus a long course of drugs. This is a very unpleasant regime, with side effects that range from fever to heart failure.
Worse still, it's not especially effective, with success rates as low as 40% for some individuals. As a result, some people choose to avoid the treatment altogether, hoping that options will improve before their health declines further.
Another major problem with hepatitis C is that many sufferers don't even realise that they have it. Thanks to ineffective screening of donated blood before the 1990s, many people were accidently infected when they had transfusions during an operation.
The latest estimate suggests that as many as 3% of American 'baby boomers' (those born between 1945 and 1965) could have the disease. Overall, 3.2 million are infected in the US alone, and up to 200 million people worldwide.
That's a huge number and even this could understate the extent of the problem. The medical body that advises US politicians suggests that people over a certain age, or who received blood before 1992, should be routinely screened.
In short, hepatitis C is incredibly serious, and very widespread, even within developed countries. In turn, that means there is a huge market for an effective treatment. GBI Research thinks that spending on this area will rise from $2.6bn to $14.9bn by 2018. Other estimates reckon this could be as high as $20bn.
That's a potential goldmine. So it's no surprise that several drug companies have tried to discover a better treatment. Yet despite the large amounts invested, all we have to show so far is a number of high profile flops. For example, Bristol-Myers Squibb had to drop one drug, due to serious side effects.
The most promising hepatitis C treatment
Gilead
Nasdaq: GILD
A frequent problem with complicated treatment regimes such as the one for hepatitis C - is that patients end up being unable to follow the regime to the letter.
So one big benefit of Gilead's treatment is that it simplifies the process. It removes the need for regular injections of interferon and other medications, and replaces them with a one-a-day pill.
Trials suggest that this dramatically boosts the treatment success rate by up to 100% while cutting down the number of side effects. The treatment period is also far shorter.
Thanks to the impressive results seen so far, and the limited alternative treatment options, the US health regulator the Food and Drug Administration - has given the drug "priority review". This means it could be approved for use as early as December, even though it is still going through the final set of trials.
This means that unless something very unexpected happens, Gilead is all but guaranteed a big share of the market.
Gilead has plenty of potential in its pipeline
However, Gilead is by no means a one or bust' biotech. Its pipeline is full of interesting products. It is also working on a treatment for hepatitis B. Hepatitis B is generally less serious than its cousin, and usually disappears on its own.
However, in a small number of cases it can turn into a chronic condition that is linked with higher levels of liver disease and cancer. And because it's so widespread roughly a third of the world's population has had it at some point in their lives there are a large number of chronic sufferers. Indeed, some studies suggest that it is second only to smoking as a cause of cancer. So this is another huge market for Gilead to tackle.
It is also making progress on developing new drugs to treat HIV. While treatment for HIV has improved massively in two decades, there is always demand for new pills that reduce the side effects of existing treatments. These include a loss of bone density and impaired kidney function.
There are also promising cancer, respiratory and liver drugs in the pipeline. Assuming these are successful, Gilead's revenue is expected to double over the next three years, from its current $19.5bn level. That would put it on a price/earnings ratio of 9.8 by 2016.
The stock should be easy enough to buy via a stockbroker who deals in US stocks (as the major brokers do). If you'd rather invest in the sector via a fund, then both the London-listed Biotech Growth Trust (LSE: BIOG) and the Worldwide Healthcare Trust (LSE: WWH) own Gilead as part of their top ten holdings.
And if you're interested in the biotech sector which is one of the most fascinating investment areas around right now, in my view you should find out more about my colleague Tom Bulford's biotech newsletter. Tom has lots of experience at delving into speculative sectors like this and sorting potential winners from losers, so he's the perfect guide to the industry. Find out more here.
Red Hot Biotech Alert is a regulated product issued by Fleet Street Publications Ltd. Your capital is at risk when you invest in shares, never risk more than you can afford to lose. Please seek independent financial advice if necessary. Fleet Street Publications Ltd. 0207 633 3600.
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