10. Gilead Sciences

Gilead
Gilead is suffering a massive hep C sales slowdown, but it's hoping its leap into CAR-T cancer therapies can fuel longer-term growth. (Gilead China)

Gilead Sciences 
2017 revenue: $26.11 billion 
2016 revenue: $30.39 billion 
Headquarters: Foster City, California

Gilead Sciences' revenue drop was expected: The hepatitis C franchise fell off the company’s best-selling altar in 2017. Compared with 2016’s $14.83 billion, 2017’s $9.14 billion represents a massive 38.4% decline—and that’s not the end of the slope. 

A shrinking pool of patients needing treatment, competition from newer meds and pricing pressure as its rivals jockey for market share all contributed to the corrosion starting in 2016. Even plans to salvage the franchise with the first pan-genotypic med Epclusa mid-2016 and later Vosevi were soon disrupted by AbbVie’s Mavyret, a cheaper version that only requires eight weeks of treatment, compared with 12 weeks or longer for others.  

In September, Gilead got Sovaldi approved in China and priced it at one-fifth of the U.S. cost. With an estimated 10 million HCV population, the country could be a lucrative opportunity, but the problem is Gilead doesn’t have much time. Recently, AbbVie took the battle to the country with a filing for approval of Mavyret. 

RELATED: Dogged by AbbVie's new share-stealing Mavyret, Gilead's hep C forecast comes in far short

Without any disruptive new hep C products likely in the foreseeable future, Gilead expects “both pricing and market share to stabilize by mid-2018 with more predictable but slightly declining patient starts moving forward,” said Gilead CFO Robin Washington on the fourth-quarter earnings call in February. How's that stabilized scene going to look for Gilead? Around $3.5 billion to $4 billion, per the company’s estimate. 

Other than that, not much of the discussion from the company’s executives or analysts during the call was around the HCV group. But as Goldman Sachs analysts pointed out in a recent report, invoking Gilead’s HCV business as an example, Gilead won’t be the last biopharma company to face the ethical and commercial question: Is curing patients a sustainable business model? 

At least the rapid rise of its HCV business provided enough cash for Gilead to grasp a new growth opportunity: CAR-T. Shelling out more than $11 billion, Gilead acquired CAR-T front-runner Kite Pharma, along with its lead drug Yescarta, approved by the FDA in October as a third-line therapy for large B-cell lymphoma.  

CEO John Milligan said during the call that by mid-2018 Gilead will have authorized enough cancer centers to treat 80% of eligible Yescarta patients. Meanwhile, the company is still testing the new cell therapy’s potential. With a minimum follow-up of one year and a median of 15.4 months after the first infusion of Yescarta, 40% patients continued to have a complete response, according to an ongoing long-term analysis. A phase 3 trial aiming to push it to second-line treatment is expected read out in 2020. 

RELATED: Can CAR-T and gene therapy cures really sustain biopharma? Not for all, analyst says

And in what Jefferies analysts interpreted as a “long-term investment to build a cancer cell therapy platform over the next five years,” Gilead made a bolt-on CAR-T purchase to take in Cell Design Labs. The big biotech said the two technologies Cell Design owns could build on Kite’s know-how and lead to cancer therapies with improved selectivity and safety. 

HCV revenues hitting a low plateau accentuates the resurgent importance of Gilead’s flagship HIV franchise. In 2017, Gilead raked in $14.2 billion from HIV/HBV meds, up from $12.9 billion in 2016. The franchise recently won a major boost from the FDA’s approval for three-drug, single-tablet regimen Biktarvy.  

Wall Street analysts have high hopes for Biktarvy, partly because it is meant for both treatment-naïve and switch-over patients. Consensus pegs its peak sales at about $6 billion. 

That didn’t go down well with rival GlaxoSmithKline, which filed a patent lawsuit to stall Gilead’s new med and potentially make room for its recently FDA-approved Juluca, the first complete HIV treatment regimen containing just two drugs.  

Now, both companies are ramping up new clinical readouts in the hopes of securing their position in the long term. In a head-to-head clinical showdown, Biktarvy matched up to GSK’s combo of Tivicay, Epivir and Ziagen. More importantly, patients on Gilead’s drug experienced fewer drug-related adverse events. 

Elsewhere in Gilead’s arsenal, sales of pulmonary arterial hypertension therapy Letairis and angina drug Ranexa grew to $887 million and $717 million, respectively. But Letairis will face generic competition in the U.S. in July 2018, and Ranexa in 2019.

10. Gilead Sciences

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