Gilead (GILD) Sovaldi Prescriptions Tracking Down 16% Q/Q - RBC

RBC Capital is updating on weekly IMS data for Gilead's (Nasdaq: GILD) Sovaldi.

Analyst Michael J. Yee commented, GILD reported Q2 Sovaldi sales of $3.5B ($3.0B US and $449M OUS). Thus, Q3E USA sales "demand" should be $3B x 0.84 = ~$2.5B US and higher than consensus of around $2.2B USA ($2.8B WW). However, we expect large inventory drawdown of $200-300M thus reported US sales might be more like $2.2B - and thus "in-line" with consensus. Modest add'l upside might be VA, prisons, etc.

Importantly, this doesn't matter too much since all-oral is launching imminently and that trajectory is more important than reported Q3 sales. Plus, we and Street expect scripts to be lower in Q3 vs. Q2, due to warehousing effects ahead of pending "all-oral" approval (PDUFA Oct 10).

Based on our checks, we believe "all oral" could lead to +50% increase in volume from today and we expect scripts to bounce back up, implying significant $12B+ US sales in 2015. A decision may come very soon, given the Breakthrough Therapy designation + no panel, and since other recent Breakthrough Therapy drugs have received approval 1-2 mos ahead of their PDUFA dates (e.g. MRK's Keytruda/pembrolizumab).

RBC has Gilead at Outperform with a target price of $115.

For an analyst ratings summary and ratings history on Gilead Sciences click here. For more ratings news on Gilead Sciences click here.

Gilead Sciences closed at $105.93 yesterday.

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