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Sovaldi misses estimates but still makes history

Published on 29/10/14 at 09:46am
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The trajectory of Gilead’s new hep C pill Sovaldi has slowed but the drug is still on course to break the $10 billion marker in its first year on the market.

The treatment sold $2.8 billion in the third quarter, less than the $2.96 billion analysts believed it would be making. But despite the slowdown Gilead’s total revenue for the quarter more than doubled to $6 billion from a year earlier, making it now the world’s biggest biotech company.

Sovaldi (sofosbuvir) has also made $8.4 billion in the first nine months of its commercial life, making it the most successful drug to ever be launched.

But sales are slowing: in the second quarter Sovaldi revenue hit $3.2 billion and patients are holding off on the treatment whilst even more impressive hep C drugs gain approval.

Sovaldi has cure rates of 90% but Gilead received FDA approval earlier this month for its new hep C combination medicine Harvoni, which combines Sovaldi with a drug called ledipasvir and does not require any injectable drugs. This combo also has a cure rate of 94 – 99 per cent.

Robyn Karnauskas, an analyst at Deutsche Bank, wrote in a note to clients referring to patients who postpone current therapy while waiting for new treatments to arrive – that lower Sovaldi sales were “not unexpected with the launch of Harvoni and patient warehousing”.

But commercial success comes at a cost for patients and insurers: Harvoni’s price tag is $94,500 for a 12-week treatment, and $63,000 for eight weeks’ treatment. Sovaldi currently costs $84,000 for 12 weeks’ worth of therapy but is also used with Roche’s older injectable hep C medicines, which adds to the total cost.

This means that Harvoni works out as being marginally cheaper than Sovaldi, and with better cure rates. “We think the eight-week option, the cheaper option, is going to very favourably looked at by insurers,” explains John Milligan, Gilead’s president and chief operating officer.

Early data suggest Harvoni is poised to be even more of a success than Sovaldi, meaning its reign as the best ever drug launch may be short-lived. Doctors wrote 445 Harvoni prescriptions in the week beginning Tuesday 14 October, when the drug first went on sale, almost three times the number of Sovaldi treatments handed out when it launched in December 2013.

“We believe this confirms the potential for Harvoni to reaccelerate prescription growth and draw increasing numbers of patients on to therapy,” wrote Wells Fargo analyst Brian Abrahams in a note to investors.

But the price tag is still a major concern to payers. Jeff Myers, president of Medicaid Health Plans of America, tells the Financial Times that his members were already dealing with a ‘tsunami of cost’ from Sovaldi that would only get worse with Harvoni.

“Because Harvoni is all-oral and there are less side-effects, we expect more doctors to prescribe it than Sovaldi. That means there is a second wave that will wash over the ocean wall,” he says.

Ben Adams 

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