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Gilead could make a profit from COVID-19 drug, analysts say
That’s the maximum price that the Institute for Clinical and Economic Review recommended for a 10-day treatment of Gilead’s remdesivir, which received emergency approval from US regulators on Friday. Gilead has so far been quiet on its pricing plans and didn’t immediately respond to requests for comment.
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In this file photo one vial of the drug Remdesivir is seen during a press conference about the start of a study with the Ebola drug Remdesivir in particularly severely ill patients at the University Hospital Eppendorf (UKE) in Hamburg, northern Germany on April 8, 2020, amidst the new coronavirus COVID-19 pandemic. The experimental antiviral drug remdesivir has failed in its first randomized clinical trial to treat the COVID-19 illness, reports said on April 23, 2020, quoting draft documents that were accidentally published by the World Health Organization. Gilead Sciences, the company behind the medicine, disputed how the now deleted post had characterized the findings, saying the data showed a (AFP/Ulrich Perrey)
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ilead Sciences could make a profit on its new treatment for Covid-19 if it costs around $4,500 per patient, according to analysts at Piper Sandler and SVB Leerink.
That’s the maximum price that the Institute for Clinical and Economic Review recommended for a 10-day treatment of Gilead’s remdesivir, which received emergency approval from US regulators on Friday. Gilead has so far been quiet on its pricing plans and didn’t immediately respond to requests for comment.
A number of Wall Street analysts have been getting more cautious on Gilead’s ability to make a profit from remdesivir amid the pandemic, spurring several downgrades last week. The Food and Drug Administration clearance followed results from a US-led study suggesting the drug shortened hospital stays, conflicting with results from China that showed remdesivir had no effect on preventing deaths.
At $4,500 per patient, remdesivir “would have a gross margin and overall profit contribution that is below the company’s other products, but not highly dilutive to the company’s future profitability outlook,” Leerink’s Geoffrey Porges wrote in a note to clients Monday.
ICER’s estimate rests on remdesivir showing a mortality benefit. The nonprofit agency said if the company is looking to simply recover the costs of producing it, a 10-day treatment regimen should cost about $10. That figure doesn’t include the cost of research and development as remdesivir was previously developed for hepatitis C, ICER said.
Gilead is no stranger to drug-pricing debates after political scrutiny over the price of its HIV medicines. The company has said it may spend $1 billion on remdesivir this year.
Even after a promise to give away the first 1.5 million vials, the drug could generate more than $2 billion in sales by the end of the year with a $4,500 price tag, according to Piper Sandler analyst Tyler Van Buren. And “several billion in sales are easily achievable” with the number of hospitalized Covid-19 patients remaining high for the foreseeable future.
