Biotech Values

[jbog]

Gild

The Japanese pricing authority has released the price for Sovaldi with a daily price of 61,799.3 Yen per day or $514 per day or ~$43K for 12 weeks. This is better than our expectations of $15K in Japan. We model $65M in Japanese sales for 2015 and $678M for peak sales in 2020. These now look conservative…

Gilead has estimated that 19,000 patients would be treated with peak sales of ~$820M. The price is expected to remain the same until the sales reach greater than $1,640M. Gt2 in Japan is 29% of the hepC population with prevalence of 1.1M and 745K patients are diagnosed as per Gilead. If the 216,050 patients diagnosed for Gt2 are treated, it is potentially a $9.3B cumulative market opportunity in this segment. We expect that sales will potentially be higher than the threshold of $1,640M at which point Gilead will be required to provide further discounts of over 20%. This shows that drugs with better efficacy and safety profiles are able to command premium pricing.