Biotech Values

[DewDiligence]

Re: Sovaldi 1Q14 estimates

A few points to consider...

• The ex-US numbers for Olysio cannot easily be extrapolated to Sovaldi because Olysio is not yet approved for marketing in the EU. Olysio’s ex-US sales in 1Q14 came from Japan and (to a much lesser degree) Canada.

• Sovaldi was formally approved by the EU Commission on 1/17/14, so the post-approval period constituted 74/90 = 82% of 1Q14.

• Among the large EU countries, the UK and Germany allow immediate sales following approval (subject to future price negotiation); however, the other large EU countries (and most of the small EU countries) generally require a negotiated reimbursement rate prior to the start of commercial sales.

• Sovaldi’s (initial) 12-week price is $66K in Germany and $57K in the UK.

• jbog may be correct that GILD attempts to reduce 1Q14 reported Sovaldi sales by including a large allowance for returns and (additional) rebates relative to GILD's prior accounting practices.