Shares of Gilead Sciences (GILD) dropped 1.4% to close the trading session on Sep 5 at $105.36 following a Bloomberg report claiming that the biopharmaceutical major will ink a licensing deal with generic players in order to make its blockbuster hepatitis C drug Sovaldi available in approximately 80 developing nations such as India and Pakistan at low cost.
According to the report, Gilead is very close to completing the licensing deal which will permit generic players to make Sovaldi and one more candidate combining Sovaldi with another of Gilead’s hepatitis treatment. The deal could come into effect from the middle of this month. Gilead is currently in talks with generic players including Mylan (MYL).
The Bloomberg report further stated that the company intends to market the branded version of Sovaldi in the developing nations for as low as $900 for a 12-week course. The drug, which gained FDA approval in Dec 2013, is priced much higher in the U.S. ($84,000 for a 12-week course).
The high price tag of Sovaldi in the U.S. has attracted criticisms from various quarters. The latest controversy erupted in July this year when two members of the U.S. Senate Finance Committee issued a letter to Gilead asking it to justify Sovaldi’s high U.S. price (read more: Hefty Price Tag of Gilead's Sovaldi Questioned Again).
One of the points raised in the letter was the rationale behind the substantial discount offered on Sovaldi’s price in countries like Egypt. Similarly, if steep discounts are offered on Sovaldi’s price in low-income countries like India, it will once again stir up the hornet’s nest in the U.S. We expect investor to remain on updates regarding the issue.
Gilead carries a Zacks Rank #1 (Strong Buy). Stocks such as Endo International (ENDP) and Allergan (AGN) also carry the same rank.
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