NEW YORK (Reuters)
— When Gilead Sciences Inc declined to project 2014 revenue
for its high-profile new hepatitis C drug last week, its shares fell
nearly 7 percent over the next two days.
Wall Street analysts say investors were likely
spooked by the omission, concerned it could signal that sales of the
new drug, Sovaldi, might not approach sky-high forecasts.
On Tuesday, Gilead President and Chief Operating Officer John
Milligan again declined to predict sales of the medicine that won
U.S. marketing approval in December. But he also did not dismiss
analysts' record-shattering forecasts that the treatment could rake
in $5 billion to $6 billion in its first year on the market.
"It would be unprecedented for a drug to launch at that level, but
because of the duration of therapy being short, because of the
number of patients who are out there who have the disease, it's not
unreasonable math to come to that conclusion," Milligan told Reuters
on the sidelines at the Bio CEO & Investor conference in New York.
"We're in early launch phase, just two months in, so it's dangerous
to extrapolate from two months. I can see the number that's out
there. I don't know if it's too high or too low based on the
dynamics," Milligan said.
Along with its fourth-quarter results released last week, Gilead
reported $139.4 million in Sovaldi sales after less than one month
on the market. The drug promises to increase cure rates with a much
shorter duration of treatment and far fewer side effects than
previous standard regimens.
"We've seen great enthusiasm from the doctors, and the question is
how long will they continue to bring those patients in, what
experience will they have as we get through this year?" Milligan
He noted that a rival hepatitis C regimen from AbbVie Inc with an
equally impressive cure rate could hit the market this year and
affect sales. But AbbVie's treatment involves more drugs and many
more pills a day, likely giving Gilead a competitive edge.
Gilead this week applied for approval of a combination of Sovaldi
and an experimental antiviral drug, ledipasvir, that would be taken
as one pill once a day, which could also impact future sales.
In late stage clinical trials, the combination provided cure rates
well in excess of 90 percent, in some cases with as little as eight
weeks of treatment. It would allow patients to avoid use of older
hepatitis drugs that can cause troublesome side effects.
Current standard treatment regimens take 24 to 48 weeks and
include injected interferon that causes miserable flu-like symptoms,
leading many patients to discontinue or delay treatment, and
ribavirin, which can cause anemia and other unpleasant side effects.
It is widely believed that thousands of patients have put off
treating the virus in order to wait for new drugs such as Gilead's.
By being the first of the expected new wave of oral hepatitis C
treatments to market, many analysts believe that Gilead will grab
the lion's share of those "warehoused" patients.
"Remember, patients who started in December haven't gotten through
their 12 weeks of therapy yet, so (doctors) haven't seen that full
experience of seeing patients cured and they really won't understand
that until we get into the mid part of this year," Milligan said.
"So I encourage people not to get too far ahead of themselves in
thinking about that," he said of the multibillion-dollar first-year
Wall Street sales forecasts. "I can understand the enthusiasm
because you can get to pretty big numbers in a hurry."