Dogged by AbbVie's new share-stealing Mavyret, Gilead's hep C forecast comes in far short

Gilead Sciences' once-high-flying hepatitis C drugs have come a long way down since their peak sales years, but thanks to new competition from AbbVie, the company's important franchise will have another rough year in 2018.

In reporting 2017 results yesterday, Gilead guided for 2018 hep C sales of $3.5 billion to $4 billion, far short of analyst expectations of $5 billion. 

One big reason? AbbVie's Mavyret, approved and launched last year at a deep discount to the competition. For most patients, AbbVie rolled out its drug at $13,200 per month, or $26,400 per treatment course, before discounts.

The price was significantly lower than other monthly prices, such as $28,000 per month for Gilead's Sovaldi and $31,500 per month for Harvoni at the time. The AbbVie option also boasted the shortest treatment course at 8 weeks, compared with 12 weeks or longer for other treatments. 

And so far, AbbVie's strategy has been working: On the company's fourth-quarter conference call, AbbVie CEO Richard Gonzalez said the med has scooped up 32% of the market.

At Gilead, AbbVie's aggressive strategy is doing some damage. Gilead reports that most of the pricing in the field has "gravitated towards the eight-week regimen price," chief financial officer Robin Washington said on Tuesday's conference call.  Washington added that the company expects "both pricing and market share to stabilize by mid- 2018 with more predictable but slightly declining patient starts moving forward."

That, of course, means the first half won't be so stable, and the California biotech's hep C guidance shows it. At $3.5 billion to $4 billion, it's less than half of 2017's hep C sales of $9.1 billion, and a quarter of the $19.1 billion Sovaldi and Harvoni together brought in at their peak, back in 2015. In 2014, the drugs generated $12 billion. The company's suite of hep C meds—including newer Epclusa—pulled in $14.8 billion in 2016.

Despite its aggressive play, AbbVie isn't generating nearly the same sales figures. The Illinois drugmaker reported total hep C sales for 2017 of $1.3 billion, with Mavyret contributing nearly $500 million. Evaluate analysts have predicted that Mavyret can pull in $1.25 billion in annual sales by 2022. The company also sells Viekira Pak.

"While we are still at the early stages of our commercialization, we have been very pleased with average strong uptake in both the U.S. and international markets," Richard Gonzalez said of Mavyret on the drugmaker's conference call.

Gilead's downfall in hep C has been well documented. Looking for a path to growth, the company last year picked up Kite Pharma in a $11.9 buyout. Through the deal, the biotech entered the cell therapy field and soon after won the second-ever CAR-T approval for Yescarta. That med is only in the very early stages of its commercialization, and CEO John Milligan said on Tuesday's call that already 28 cancer centers are certified to administer Yescarta.

"By mid-2018, we anticipate there will be enough centers certified to treat 80% of Yescarta-eligible patients," he said, adding that Gilead is "enrolling in clinical studies to expand the label to earlier lines of therapy and exploring combination therapy with other immuno-oncology agents."

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