Gilead Sciences Inc’s massive hepatitis C franchise is fading, the company warned on Tuesday, projecting that sales this year could be just two-thirds of what investors had been expecting.
Revenue from the company’s drugs for the viral infection would be US$7.5 billion to US$9 billion this year, Gilead said in a statement.
That is far below the US$11.6 billion analysts had projected, according to data compiled by Bloomberg. The company sells three main hepatitis C treatments — Sovaldi, Harvoni and Epclusa.
“This is a challenging situation,” Gilead Sciences chief executive officer John Milligan said during a conference call with analysts, adding that the hepatitis C market is “declining faster this year than we would have predicted last year.”
The shares fell after the new projection, and on Tuesday were down 5.4 percent to US$69.20 per share at 6:31pm in New York.
The hepatitis C pills — which have cut treatment times and side effects compared with older medicines — were the biggest drug launch of all time and are still massive products for the Foster City, California, company.
However, competitors Merck & Co and AbbVie Inc have cut into Gilead’s market share, forcing prices down and the bulk of the easiest-to-find patients might already have been treated, meaning that sales are expected to continue to decline.
The average US price of a one-month supply of Harvoni after discounts and rebates was less than US$15,000 last year, Milligan said.
For patients taking three months of treatment, that would be more than 52 percent off the list price of US$94,500.
Competition and shorter treatment duration for patients would reduce sales this year by US$1.9 billion to US$2.5 billion from last year’s figure, while fewer new patients starting on the drugs would mean US$2.9 billion to US$3.8 billion less in this year’s sales, Gilead said in a presentation released along with the projections.
While investors fret over what would replace the hepatitis C drugs, Gilead has said it wants to use acquisitions to fill its product pipeline.
However, it announced no new major deals and instead increased its dividend by more than 10 percent.
Milligan acknowledged that it would be “challenging to grow without some sort of acquisition” outside of the HIV franchise, and the firm’s chief financial officer Robin Washington said the company would focus on pursuing external opportunities in the coming year.
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