Could HCV market be nearing bottom for Gilead?
- Gilead beat analyst expectations for the second quarter, despite sales and earnings both falling compared to the same period in 2016. The big biotech recorded total product sales of $7.1 billion, down from $7.8 billion in the second quarter last year.
- Analysts think Gilead’s hepatitis C franchise's declines could be flattening out, however. The company had sales of $2.9 billion for its HCV franchise — which includes Harvoni (leipasvir/sofosbuvir), Sovaldi (sofosbuvir) and Epclusa (sofosbuvir/velpatasvir) — down from $4 billion in 2016.
- Meanwhile sales of its HIV/hepatitis B franchises were up to $3.6 billion for the quarter, from $3.1 billion in the year prior.
Gilead still has $36.6 billion in cash and equivalents sitting on its balance sheet. And it still has not made any major deals, much to the irritation of analysts and investment bankers.
Meanwhile, HCV revenues continue to decline, although not at the free fall-like rate the market had built into expectations. Its HIV revenues are up slightly — a positive, but not one that will make up for the declines from the behemoth HCV franchise.
The big biotech did raise its guidance for the year, increasing sales projections to a range of $24 billion to $25.5 billion, with non-HCV revenues expected to come in between $15.5 billion to $16 billion.
Gilead’s HIV franchise continues to grow with its TAF-based regimens, which accounted for 51% of Gilead's total HIV prescription volume at the end of June.
"Leading the way was Genvoya with a treatment-naïve patient share of 41%, more than twice that of the second-most prescribed therapy. This represents the highest treatment-naïve patient share for a single product or regimen since the early days of Atripla," said Chief Operating Officer Kevin Young on the second quarter call.
As the company continues to cure patients of HCV, it will depend on its HIV franchise more and more. Gilead remained optimistic about HCV for the moment though — noting there were approximately 190,000 newly diagnosed HCV patients in 2016, a 32% increase from 2015. The company attributes at least some of the increase to its marketing campaign geared toward baby boomers.
"This reinforces our belief that there is a significant opportunity to treat and cure many HCV infected individuals for years to come," added Young on the Wednesday evening call.
"We still consider this a large market, a very important market for Gilead, albeit that we still think there is a gradual trend down and where that sort of turns the corner or bottoms out, right now, still remains to be seen," he added.
While that may or may not be true, investors are starting to look at Gilead’s NASH pipeline in hopes the company can hit another homerun in this liver disease as well.
The big biotech has two Phase 3 studies ongoing for its ASK-1 inhibitor selonsertib, which it expects to be fully enrolled by the first half of 2018. Data is expected in 2019.
Competitor Intercept Pharmaceuticals announced earlier this year that it was having trouble enrolling patients for its late-stage NASH study — showing where the enthusiasm from physicians and patients could be directed.
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