Sovaldi: Gilead hits pay dirt with a breakthrough hep C drug

Project name: sofosbuvir
Disease: Hepatitis C
Peak sales estimate: $7 billion
Approved: Dec. 6
Company: Gilead

The Scoop: 
From the moment Gilead ($GILD) completed its deal to buy Pharmasset for the jaw-dropping price of $11 billion in the fall of 2011, the biotech began driving one of the biggest, most ambitious late-stage development programs in the industry.

At the time, Gilead R&D chief Norbert Bischofberger told analysts that the company was "way ahead" of everyone else working on an all-oral therapy that could quell the hepatitis C virus. In an industry long on promises and short on performance, he proved to be mostly right. While AbbVie ($ABBV) and Bristol-Myers Squibb ($BMY) have followed closely behind with promising new therapies of their own, no one could catch up to the ambitious Gilead. And now Gilead is just months away from filing for an approval on a combination of Sovaldi and the NS5A inhibitor ledipasvir, which will significantly broaden its reach into the genotype 1 crowd.

Gilead execs didn't appear to mind in the least when winning the race on hepatitis C meant snubbing Bristol-Myers Squibb and a remarkable combination program with daclatasvir. Critics howled, but Gilead shrugged it all off, set on sticking with its own in-house cocktail. Analysts responded by driving peak sales estimates ever further north, somewhat awed at the notion that the current standards of care from Vertex ($VRTX) and Merck ($MRK) were about to be swept away shortly after their appearance on the market. Thomas Wei of Jefferies & Co. had initially figured that Gilead would have to hit a peak sales estimate of $4 billion to justify the cost of Sovaldi. Analysts have recently been settling in around $7 billion after calculating the returns on a pill that will cost $1,000 a day--or $84,000 for a 12-week course.

But winning here has come at a cost that may be hard to calculate. Already whipped up by Gilead's steep prices on HIV drugs like the newly approved Stribild, some prominent nonprofits immediately took a swipe at Gilead's pricing strategy.

Patients, though, will benefit enormously from Gilead's work. Sovaldi and soon ledipasvir will wipe out most of the need for interferon, an injected therapy that has a stunningly harsh impact on many patients.

The bottom line for Gilead's Phase III combo program: Researchers say that "of the 1,518 patients randomized to the 12-week arms of ION-1 and to all arms of ION-2 and ION-3, 1,456 patients (95.9%) achieved the primary efficacy endpoint of SVR12. Of the 62 patients (4.1%) who failed to achieve SVR12, 36 patients (2.4%) experienced virologic failure: 35 due to relapse and only one patient due to on-treatment breakthrough (with documented noncompliance). Twenty-six patients (1.7%) were lost to follow-up or withdrew consent."

In an industry often criticized for a lack of innovation, Gilead's Sovaldi stands out as a marked exception. It represents some of the best development work biotech has seen in years, combined with a clumsily managed marketing rollout that will blight its reputation for years to come. -- John Carroll (email | Twitter)

For more:
Editor's Corner: The 5 biggest trends in biopharma R&D in 2013
Gilead races to the FDA with stellar PhIII results for its breakthrough hep C combo
New era for hep C treatment begins with FDA OK for Gilead's sofosbuvir
FDA review heralds first-in-class status for Gilead's hep C drug sofosbuvir
Gilead's sofosbuvir cures some of the toughest hepatitis C cases

Sovaldi: Gilead hits pay dirt with a breakthrough hep C drug

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