Last week's news in review

By Barbara Obstoj-Cardwell - Editor

Gilead Sciences came up with a good set of financials late Wednesday, beating expectations, particularly with its new hepatitis C drugs, Sovaldi (sofosbuvir) and Harvoni (ledipasvir and sofosbuvir), with the latter generating sales of $3.35 billion in the fourth quarter of 2015, beating expectations of $3.1 billion. However, the company looks like it may be at risk of its own success. Hepatitis C has attracted further new drug developments from companies such as AbbVie with Viekira Pak and Merck & Co, with the latter due to launch its new drug Zepatier at a 40% discount. Moreover, the more people are actually “cured” – which these new drugs have remarkable cure rates – fewer patients will be around who need them. HCV starts in Europe and the USA may have peaked in the first half of 2015.

Leerink analyst Geoffrey Porges says he remains about Gilead’s outlook in hepatitis C virus, and expects significant erosion in its revenue yield per patient in the coming years. He forecast Gilead’s HCV revenue declining by 20% in 2016, and then by more than half by 2020 compared to the 2015, as new entrants, shorter duration, different geographies and government mandates all erode the realized value per patient. However, he has resumed coverage of Gilead with a buy rating and a price target of $125 per share. citing the strong growth potential for its HIV franchise over the next 10 years, based on successful commercialization of its new TAF-based HIV combinations, and then the likely introduction of a new blockbuster combination containing Vx9883 - its internally developed second generation HIV integrase inhibitor.