Gilead reports massive Q2 earnings jump thanks to Sovaldi
Gilead Sciences’ second-quarter earnings blew through year-ago levels, thanks in part to its blockbuster, controversial hepatitis C drug Sovaldi.
Sales of Sovaldi reached $3.5 billion in the second quarter and almost $6 billion for the first six months of the year, Gilead reported last week.
Overall, Gilead saw total revenue for the second quarter jump to $6.5 billion compared with $2.8 billion for the same period in 2013. Second-quarter net income hit $3.7 billion compared with $772.6 million in the same period last year.
At $1,000 a pill and $84,000 for a three-month course of treatment, Sovaldi’s pricing has garnered widespread criticism and raised concerns about its cost impact on public and private insurers.
John Martin, Gilead’s CEO, said during an earnings call last week that as more people become cured of hepatitis C because of Sovaldi, price concerns will abate. Since receiving Food and Drug Administration approval last year, the drug has cured 9,000 people. “Over time, the healthcare system will save a lot of money by these patients being healthy again,” he said.
Gilead revised its full-year revenue estimate to a range of $21 billion to $23 billion, double its earlier forecast of $11.3 billion to $11.5 billion, thanks to Sovaldi sales.
During the call, Martin credited some of Sovaldi’s success to the wide buy-in of state Medicaid programs. He said only three states do not cover the drug, but they are expected to do so once they finish drafting prior authorization requirements.
Private insurers and some state Medicaid programs continue to push for Gilead to cut the price. “While it was a blockbuster quarter for Gilead, people who can’t access the drug because of its price didn’t fare nearly as well,” Brendan Buck, a spokesman for America’s Health Insurance Plans, said in a written statement. “The current price cannot be justified by development costs; it’s purely a reflection of Gilead believing that it has a blank check.”
Sales of Sovaldi reached $3.5 billion in the second quarter and almost $6 billion for the first six months of the year.