Gilead Sciences, Inc. (NASDAQ:GILD), the undisputed leader of the fast-expanding hepatitis C treatment market, will continue to see strong growth from its top-selling franchise despite a stagnating trend in the industry. The upcoming pan-genotype HCV drug of the biotech giant is expected to play a key role in buoying HCV sales of the company thus safeguarding the leading share it holds in Hepatitis C market.
The current HCV portfolio of Gilead comprises two blockbusters that have already reaped undisputed dominance for the drugmaker in a very short period of time. Sovaldi, initially granted the green signal from the US Food and Drug Administration in December 2013, came as a breakthrough treatment against conventional treatments. The drug generated striking growth for the company in the very first year after which the sales started to decline.
Harvoni, an advanced version of Sovaldi, was launched in October, 2014 and has been translating into soaring HCV sales growth since then. These two drugs reaped combined sales of $12.4 billion and $19.1 billion in FY14 and FY15 respectively.
However, for the first time ever in the recent quarter, the drugs’ combined sales showed a decline due to maturing sales of its two top sellers. Sovaldi yielded sales worth $1.28 billion, exhibiting a fall of 17.5% on a quarter-over-quarter (QoQ) basis in the first quarter of this year, while Harvoni’s sales for the same period stood at $3.02 billion, exhibiting a decline of 9.8% QoQ.
This decline flows from the very advantage that these drugs hold. They offer complete cure to the debilitating liver disease thus reducing the patient population pool over time. Not only this, these drugs have been facing strengthening competition from its rivals that offer a significant blow to rising dominance of Gilead in the HCV space. Abbvie emerged as the direct rival for Gilead when it launched its HCV drug, Viekira Pak, in 2014 and won coverage from the largest pharmacy benefit manager (PBM) in US in 2015. Gilead followed to sign agreements with various PBMs of the country too — thanks to the smart moves the biotech giant has been able to maintain its dominance in the HCV market (currently owning 85% of the entire market). However, HCV competition for Gilead is expected to rise with Merck’s entrance into the market with its new drug, Zepatier, launched only five months ago. Zepatier is priced at nearly 30% below the hefty price tag of Gilead’s HCV products — signaling a pricing battle to follow soon.
Given the growing difficulties which continue to threaten the dominance of Gilead in HCV treatments market, HCV sales of the biotech are definitely headed downhill. The share of HCV drugs franchise in total revenue of the company is estimated to fall from 58.6% in FY15 to 41.4% in FY20. Harvoni’s share will fall from a strong 42.5% in FY15 to only 24.8% in FY20, while Sovaldi’s will decline to only 8.4% in FY20.
The recent blow to Gilead’s HCV franchise has translated into an acute blow for total revenue of the company too. The Biotech’s revenue saw a decline for the first time ever. The latest quarter’s revenue came in at $7.79 billion, marking a decrease of 8.46% QoQ.
However, the sales estimates for Gilead’s HCV franchise do not include striking sales growth expected from the upcoming pan-genotype HCV drug, Epclusa. The said drug, formed by combining Gilead’s FDA approved nucleotide analogue polymerase inhibitor, sofosbuvir, with an investigational NS5A inhibitor, velpatasvir, is meant to treat all genotypes of the debilitating liver disease — the first drug with this potential. Thus Epclusa is set to be the new generation HCV drug in the market, translating into a much-needed boost for the biotech’s HCV franchise if approval comes as expected.
Leerink analyst, Geoffrey Porges, highlighted the strong growth potential of this upcoming drug in his recent research note after he held talks with Gilead’s Chief Scientific Officer, Norbert Bischofberger. He stated in the report: “With the potential forthcoming approval of Gilead’s new HCV DAA (direct-acting antivirals) therapy sofosbuvir/ velpatasvir (sof/vel), Dr. Bischofberger stressed that the company still saw a role, albeit relatively small, for its next late-stage HCV combination regimen: sof/vel/GS-9857. However, for the vast majority of patients he expects sof/vel, or Harvoni, to provide excellent treatment.
Gilead has already submitted a new drug application (NDA) for Epclusa and is expected to receive the final decision from Food and Drug Administration by June 28, 2016. The decision is most likely expected to be in the green since the drug has already been granted a positive recommendation from the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP).
The report shed light on Mr Bischofberger’s view of future growth of this new HCV drug, mentioning: “Looking ahead, he also stressed that the utility of a next-generation HCV therapy would only be incremental at best."
Another Segment of Growth: HIV drugs
Gilead’s new drug growth plans are not restricted to the HCV drugs franchise only. The company recently boosted efforts to shift reliance from the maturing HCV franchise to its HIV drugs instead. The recent drug launches by the biotech are clearly in line with this objective.
Leerink's latest research report mentioned: “Dr. Bischofberger confirmed that the company has now migrated most of its virology research effort away from HCV to HBV and other areas.”
Gilead’s robust portfolio of HIV drugs makes it a dominant leader in the HIV treatments market as well, owning almost $60% market share. This franchise currently reaps $13.5 billion, as per sales in FY15, which are expected to grow by a high rate to $18.4 billion by 2020, majorly on growth stemming from new products.
Gilead’s new HIV drugs belong to an emerging class of HIV drugs based on tenofovir alafenamide (TAF). Genvoya, launched in November 2015, belongs to this class and is meant as advanced version of the company’s two drugs: Stribild and Atripla. Other major new drug launches include Odefsey and Descovy, successors to Gilead’s old drugs, Complera and Truvada. These drugs are set to reap striking growth for the HIV drugs franchise in the coming years.
The current HCV portfolio of Gilead comprises two blockbusters that have already reaped undisputed dominance for the drugmaker in a very short period of time. Sovaldi, initially granted the green signal from the US Food and Drug Administration in December 2013, came as a breakthrough treatment against conventional treatments. The drug generated striking growth for the company in the very first year after which the sales started to decline.
Harvoni, an advanced version of Sovaldi, was launched in October, 2014 and has been translating into soaring HCV sales growth since then. These two drugs reaped combined sales of $12.4 billion and $19.1 billion in FY14 and FY15 respectively.
However, for the first time ever in the recent quarter, the drugs’ combined sales showed a decline due to maturing sales of its two top sellers. Sovaldi yielded sales worth $1.28 billion, exhibiting a fall of 17.5% on a quarter-over-quarter (QoQ) basis in the first quarter of this year, while Harvoni’s sales for the same period stood at $3.02 billion, exhibiting a decline of 9.8% QoQ.
This decline flows from the very advantage that these drugs hold. They offer complete cure to the debilitating liver disease thus reducing the patient population pool over time. Not only this, these drugs have been facing strengthening competition from its rivals that offer a significant blow to rising dominance of Gilead in the HCV space. Abbvie emerged as the direct rival for Gilead when it launched its HCV drug, Viekira Pak, in 2014 and won coverage from the largest pharmacy benefit manager (PBM) in US in 2015. Gilead followed to sign agreements with various PBMs of the country too — thanks to the smart moves the biotech giant has been able to maintain its dominance in the HCV market (currently owning 85% of the entire market). However, HCV competition for Gilead is expected to rise with Merck’s entrance into the market with its new drug, Zepatier, launched only five months ago. Zepatier is priced at nearly 30% below the hefty price tag of Gilead’s HCV products — signaling a pricing battle to follow soon.
Given the growing difficulties which continue to threaten the dominance of Gilead in HCV treatments market, HCV sales of the biotech are definitely headed downhill. The share of HCV drugs franchise in total revenue of the company is estimated to fall from 58.6% in FY15 to 41.4% in FY20. Harvoni’s share will fall from a strong 42.5% in FY15 to only 24.8% in FY20, while Sovaldi’s will decline to only 8.4% in FY20.
The recent blow to Gilead’s HCV franchise has translated into an acute blow for total revenue of the company too. The Biotech’s revenue saw a decline for the first time ever. The latest quarter’s revenue came in at $7.79 billion, marking a decrease of 8.46% QoQ.
However, the sales estimates for Gilead’s HCV franchise do not include striking sales growth expected from the upcoming pan-genotype HCV drug, Epclusa. The said drug, formed by combining Gilead’s FDA approved nucleotide analogue polymerase inhibitor, sofosbuvir, with an investigational NS5A inhibitor, velpatasvir, is meant to treat all genotypes of the debilitating liver disease — the first drug with this potential. Thus Epclusa is set to be the new generation HCV drug in the market, translating into a much-needed boost for the biotech’s HCV franchise if approval comes as expected.
Leerink analyst, Geoffrey Porges, highlighted the strong growth potential of this upcoming drug in his recent research note after he held talks with Gilead’s Chief Scientific Officer, Norbert Bischofberger. He stated in the report: “With the potential forthcoming approval of Gilead’s new HCV DAA (direct-acting antivirals) therapy sofosbuvir/ velpatasvir (sof/vel), Dr. Bischofberger stressed that the company still saw a role, albeit relatively small, for its next late-stage HCV combination regimen: sof/vel/GS-9857. However, for the vast majority of patients he expects sof/vel, or Harvoni, to provide excellent treatment.
Gilead has already submitted a new drug application (NDA) for Epclusa and is expected to receive the final decision from Food and Drug Administration by June 28, 2016. The decision is most likely expected to be in the green since the drug has already been granted a positive recommendation from the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP).
The report shed light on Mr Bischofberger’s view of future growth of this new HCV drug, mentioning: “Looking ahead, he also stressed that the utility of a next-generation HCV therapy would only be incremental at best."
Another Segment of Growth: HIV drugs
Gilead’s new drug growth plans are not restricted to the HCV drugs franchise only. The company recently boosted efforts to shift reliance from the maturing HCV franchise to its HIV drugs instead. The recent drug launches by the biotech are clearly in line with this objective.
Leerink's latest research report mentioned: “Dr. Bischofberger confirmed that the company has now migrated most of its virology research effort away from HCV to HBV and other areas.”
Gilead’s robust portfolio of HIV drugs makes it a dominant leader in the HIV treatments market as well, owning almost $60% market share. This franchise currently reaps $13.5 billion, as per sales in FY15, which are expected to grow by a high rate to $18.4 billion by 2020, majorly on growth stemming from new products.
Gilead’s new HIV drugs belong to an emerging class of HIV drugs based on tenofovir alafenamide (TAF). Genvoya, launched in November 2015, belongs to this class and is meant as advanced version of the company’s two drugs: Stribild and Atripla. Other major new drug launches include Odefsey and Descovy, successors to Gilead’s old drugs, Complera and Truvada. These drugs are set to reap striking growth for the HIV drugs franchise in the coming years.
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