Gilead Sciences, Inc. Poised To Be One Of The Most Remarkable Growth Stories In Biotech, Says Analyst

Published: Nov 11, 2014

Gilead Poised To Be One Of The Most Remarkable Growth Stories In Biotech, Says Analyst

November 10, 2014

By Riley McDermid, Breaking News Sr. Editor

Gilead Sciences, Inc. needs to hold on until its one-a-day hepatitis C drug Harvoni launches, despite lower sales numbers for its pipeline and continued pressure from the capital markets, said Geoffrey Porges, a biotech analyst with Sanford and Bernstein, on Monday.

Porges said that Gilead's third quarter sales of its other hepatitis C drug, Sovaldi, were lower than anticipated, driven primarily by a sharper than predicted drop in U.S. sales, which he said is attributable to “patient warehousing, channel inventory reductions and marginally lower” net price as discounted payers came on stream during the period.

“We expect Gilead's HCV franchise to recover, however, as Harvoni launches and patients warehoused in advance of the Harvoni launch are started on therapy,” wrote Porges in a note to investors. “Our review of last week's Sovaldi and Harvoni prescription data shows strong Harvoni uptake, supports our expectations, and bodes well for a recovery to previous levels.”

Overall, Gilead will likely see new prescriptions return to peak Sovaldi levels, with additional room to run likely, said Porges. New prescriptions for Harvoni/Sovaldi combined for the last week of October reached levels near those seen in March and April of this year.

“[This was] recovering from the decline seen in third quarter, when U.S. new patient volume for Sovaldi fell to 30,000 patients, compared to 40,000 patients in the second quarter,” wrote Porges. He said the initial data suggests the decline in patient volume was indeed largely attributable to warehousing and should recover.

“We believe that Gilead Sciences will be one of the more remarkable growth stories in industry history from 2013 until 2017, with one of the fastest launches in industry history emerging from its Hepatitis C franchise,” said Porges.

“This launch adds to a steadily growing HIV franchise which offers relatively predictable 8 to 10 percent growth through 2017,” he concluded. “In addition the company has an emerging oncology franchise which will be led by idelalisib which was just approved for B cell malignancies.”

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