Gilead Dislodges a Brick in the Biotech Wall of Worry
Gilead Sciences sneezes and the entire biotech sector catches a cold.
I know, it's such a cliche but I desperately wanted to use the cute Dumbo gif in this Tumblr post.
Investor concerns about the sustainability of premium drug pricing roared back Wednesday following Gilead's admission last night that it was offering insurance companies, private and public, deep discounts of up to 46% for its hepatitis C drugs Sovaldi and Harvoni.
If Gilead is giving away big Hep C price cuts, so too is its major competitor Abbvie. And the competition will only intensify when Merck and Bristol-Myers Squibb secure approvals for their respective Hep C therapies.
Meantime, the pool of hepatitis C patients available to treat is shrinking fast, which makes it tougher for laggards like Achillion Pharma and Regulus Therapeutics to grab a meaningful piece of the revenue pie.
All the Hep C stocks are down sharply Wednesday, which in turn is causing weakness in the Nasdaq Biotechnology Index and related ETFs. Pharmacy benefit managers like Express Scripts have said they're looking at other disease areas -- multiple sclerosis, rheumatoid arthritis and cancer, among them, to win new and larger drug price discounts.
The Wall of Worry biotech investors have been climbing this year looks a bit shakier.
