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Gilead sees small HIV sales bump, slow cancer therapy momentum in Q4'17

Gilead Sciences Inc. expects revenues on its new gene-editing cancer therapy to ramp up midyear, but in the meantime hepatitis C sales continue to drag on earnings, according to results from the fourth quarter of 2017.

Gilead's overall fourth-quarter sales slipped more than $1.5 billion year over year. The company also recorded a GAAP net loss of $3.87 billion in the quarter due to charges related to the new U.S. tax law.

Growth in the California-based drugmaker's other franchises only partially offset losses in hepatitis C, or HCV. Though its latest HIV medicine, Genvoya, has grown since its launch to make $3 billion annually, the overall HIV and hepatitis B franchise made $3.7 billion in the quarter, just a $300 million increase on a year prior.

The hepatitis C franchise, by comparison, dipped $1.7 billion in the same period, continuing a more than yearlong trend of decline as the HCV population dwindles and less expensive rivals such as AbbVie Inc.'s Mavyret cut into the remaining patient population.

Gilead had warned this sales drop would happen, and President, CEO and Director John Milligan said on the company's fourth-quarter earnings call that the trend would soon stabilize as they do not expect more new entrants to the market.

"I think after years of having to be defensive about HCV revenues declining, it's very nice to be on the other side of that and talk about the positive trends going forward," Milligan said.

HCV revenues will be smaller but predictable in the future, he added, while the HIV franchise should pick up as a new single pill combination dubbed bictegravir/F/TAF, or bic/F/TAF, awaits a U.S. Food and Drug Administration decision this year.

The HIV field is not without competition. Juluca, a single pill regimen from GlaxoSmithKline plc's HIV unit ViiV Healthcare, was approved for the U.S. market in November 2017 and sells at a list price of $2,579 a month.

Asked whether the rival could use price as leverage, putting pressure on Gilead's own single-tablet regimen, Milligan said, "That has never happened in the field of HIV, but I don't know what the GSK and Viiv are planning."

Groundwork laid for new cancer treatment

Gilead's newer cancer treatment, the chimeric antigen receptor T cell therapy, or CAR-T cell therapy, Yescarta, has yet to turn a profit since its October 2017 approval by the U.S. Food and Drug Administration for a form of blood cancer knows as diffuse large B-cell lymphoma, or DLBCL.

Milligan said Gilead has 28 centers in the U.S. ready to prescribe and treat with Yescarta and plans to have 80% of the eligible population, or roughly 5,000 people, within reach by the middle of this year. The relatively new therapy, which includes withdrawing a patient's blood, sending it to a laboratory to engineer cancer-fighting capabilities into the T cells and then reinfusing it into the patient, requires extensive infrastructure and training.

Yescarta sales trends will not see a major inflection point so much as a "slowly growing momentum" as centers and payers become more familiar with this process, Milligan said. By the end of 2018, the company hopes to have a better idea of the typical patient flow through the centers, he added.

Novartis AG and Juno Therapeutics Inc. are both aiming to treat the DLBCL population with their own CAR-T cell therapies. Novartis' Kymriah, already approved for a childhood leukemia, is in the final stages of clinical trials, while Juno and its experimental therapies are now the $9 billion acquisition target of another large drugmaker, Celgene Corp.

Bluebird Bio Inc. is also in the wings, developing a form of CAR-T cell therapy that would target the BCMA protein in the plasma cancer multiple myeloma, which is also an early stage target for Gilead.

Milligan said Gilead is exploring a number of technologies to improve its foothold in the CAR-T cell therapy space, including lessening its sometimes dangerous side effects and working on a universal donor technology, which could remove the need for specific patients' blood withdrawals and the sometimes weekslong turnaround on the engineering process.