Gilead Sciences, Inc. GILD announced that the Japanese Ministry of Health, Labour and Welfare has approved its hepatitis C virus (HCV) drug Sovaldi for the suppression of viremia in patients suffering from genotype 2 chronic HCV infection with or without compensated cirrhosis.
Sovaldi is the first product to be marketed by Gilead in Japan and is approved for use in combination with ribavirin.
According to the company’s press release, Japan has one of the highest rates of liver cancer in any industrialized country, resulting primarily from HCV.
We note that Sovaldi, which has been in the U.S. and EU market for a while now, generated multi-billion dollar sales for Gilead and has ensured a strong position for the company in the HCV market. Gilead has another blockbuster HCV drug in its portfolio – Harvoni. Combined sales of Harvoni and Sovaldi in 2014 were $12.4 billion, accounting for half of the company’s total product sales.
As per data from Centers for Disease Control and Prevention, approximately 3.2 million people in the U.S. suffer from chronic HCV infection.
The HCV market has huge commercial potential and several companies are working on bringing new and better treatments to market. Last December, the FDA approved Viekira Pak. Another player in the HCV market is Olysio.
Meanwhile, Bristol-Myers Squibb Company’s BMY HCV drug Daklinza (daclatasvir) is currently marketed in Japan and the EU. However, it is under review in the U.S. Another company focused on HCV treatments is Achillion Pharmaceuticals ACHN.
With new entrants like Viekira in the HCV market as well as pricing competition, we expect investor focus to remain on Sovaldi's and Harvoni’s performance.
Gilead currently carries a Zacks Rank #4 (Sell). A better-ranked stock in the health care space is Cambrex Corporation CBM, sporting a Zacks Rank #1 (Strong Buy).
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