(Bloomberg) –Gilead Sciences Inc. generated $2.27 billion in sales for Sovaldi – an extremely expensive hepatitis C pill – in the first quarter.
Analysts say the huge early sales raise questions about whether insurers can do much to hold back use of the drug.
Each pill has a retail price of $1,000. A typical patient will need to take 84 pills over a 12-week course of treatment.
Gilead – a major maker of HIV drugs as well as the source of Sovaldi — reported a total of $5 billion in first-quarter revenue.
The Sovaldi sales were “above even the high end of buy-side expectations,” Mark Schoenebaum, an analyst with ISI Group L.L.C., said in a note to clients.
Schoenebaum called the Sovaldi launch the best drug introduction in history.
The cost of Sovaldi has attracted scrutiny from health insurers and lawmakers.
Pharmacy benefit managers including Express Scripts Holding Co. have said they may try to start a price war once competing medicines from AbbVie Inc. and Merck & Co. reach the market.
CVS Caremark Corp., the second-biggest pharmacy manager, has said it might try to slow down the use of the drug.
About 30,000 patients have started on the medicine, company executives said on the call. Some of the sales came from distributors building inventory, Gilead said.
Analysts are predicting Sovaldi will generate about $12 billion in sales in 2017.
“There’s no doubt this is a tremendously impressive drug launch,” Marshall Gordon, an investor with ClearBridge Investments L.L.C., said in a telephone interview. “But everybody knows that, and there’s limited visibility on the sustainability of it.”
Gilead will use the cash it generates from hepatitis C to accelerate share buybacks, and it won’t rush to acquire companies or new drugs, company executives said.
“Just because we have more money available doesn’t mean we’re going to spend it,” said Norbert Bischofberger, Gilead’s head of research and development.
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