Gilead backs exuberant analyst projections for new hep C drug

Could Gilead Sciences' ($GILD) new hepatitis C drug, Sovaldi, haul in between $5 billion and $6 billion in sales this year? That was the question on investors' minds last week, when Gilead announced 2013 revenues that beat consensus Wall Street expectations, but then it declined to provide 2014 sales projections for Sovaldi. The drug was approved December 6 and brought in $139.4 million in sales in its first three weeks on the market, Gilead reported.

Now the California company is starting to make some noise about Sovaldi's prospects. On Tuesday, CEO John Milligan told Reuters he still won't make a definitive projection, but he doesn't disagree with analysts' estimates. "It would be unprecedented for a drug to launch at that level, but because of the duration of therapy being short, because of the number of patients who are out there who have the disease, it's not unreasonable math to come to that conclusion," Milligan said.

Milligan went on to tell Bloomberg that insurance companies are starting to line up to offer reimbursement for Sovaldi. "We've been approached by some big plans and some big HMOs about making sure that they can get access early and they've already engaged with us on negotiations," Milligan told Bloomberg. "To date, without exception, those conversations have been very productive."

Getting insurers on board will be critical to Sovaldi's success. The drug costs $84,000 for a 12-week course of therapy--a price tag that could prompt a backlash in the market, which is crowded with less expensive (albeit less attractive) alternatives for treating hepatitis C. In January, Bloomberg reported that Sovaldi's launch had pharmacy benefit managers searching for ways to control drug spending, such as excluding new pricey drugs from formularies.

In clinical trials, patients taking Sovaldi showed viral loads that were so low they were considered to be cured of hepatitis C--an advantage that should resonate with payers, Milligan told Bloomberg. "When you talk to them about the long-term benefits, they recognize they're not going to have to worry as much about liver transplants and other care they're going to have to give," he said, adding that Medicaid plans in some states are already covering the drug.

Meanwhile, Gilead has embarked on a bigger plan for Sovaldi. Days ago, the company applied for FDA approval of a combination drug containing Sovaldi and its NS5A inhibitor ledipasvir. In clinical trials, the combined treatment has yielded cure rates of as much as 99.1% in patients with a hard-to-treat variant of hepatitis C. Gilead expects the combo will be approved this year.

- here's the Reuters story
- read more at Bloomberg

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