What Impact Will Epclusa Have On Gilead Sciences, Inc. (NASDAQ:GILD) Revenue?

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Gilead Sciences, Inc. (NASDAQ:GILD) has received FDA clearance to bring its cocktail drug Epclusa to market to combat a range of hepatitis C strains. The development expands Gilead’s portfolio of hep C medicines that already include Sovaldi and Harvoni. Some analysts weighing in on the latest approval believe that Epclusa could fetch an additional $1.8 billion in revenue for Gilead.

Epclusa is a combination of Sovaldi with another antiviral compound called velpatasvir. The combined properties of Epclusa give the drug the power to tackle all six major genotypes of hep C.

More affordable treatment

In a move that appears designed to encourage uptake and appease patients and payers, Gilead Sciences has priced Epclusa below its older hep C drugs. It will cost patients $75,000 for a 12-week Epclusa treatment. That makes Epclusa treatment about $20,000 cheaper than Harvoni.

Gilead has recently faced growing criticism of its expensive hep C drugs as payers and governments struggle with the rising cost of healthcare. The pricing point of Epclusa means that it would cost nearly 50% less than drugs targeting the usually difficult to treat hep C genotype 3.

Success in patients

In a Phase III trial, between 95% and 99% of patients who received Epclusa didn’t have hep C virus in their blood after 12 weeks of treatment with the drug. As such, Epclusa becomes the first drug to treat hep C genotype 1 through 6.

Priority review

Gilead Sciences’ Epclusa had been granted priority review by the FDA. The agency also granted breakthrough therapy designation for Epclusa, which is recognition of drug candidates with compelling potential to bring about major treatment advances compared to existing drug options. These special designations helped to accelerate the development of Epclusa.

Hep C revenues

Gilead has not given its sales estimates for Epclusa, but some analysts believe that the drug could generate an additional $1.8 billion in hep C revenue for the company. Last year, Gilead generated $19.14 billion from the sale of its hep C drugs Harvoni and Sovaldi, which was an increase of 54% over 2014 sales. But there are fears that Epclusa could cannibalize the markets for Harvoni and Sovaldi.

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