Even in the highly mercurial pharmaceutical industry, Gilead Sciences' growth since 2013 has been astonishing, with revenues more than doubling in 2014, and then rising by almost another third in 2015 to $32.6bn. In the same period, profits soared sixfold to over $18bn. The cause was the company's spectacularly successful hepatitis C drug Sovaldi, launched at the end of of 2013, followed by combination treatment Harvoni in late 2014. Together those two products contributed first year sales of more than $12bn, rocketing Gilead into the global Top 10 pharmaceutical companies. That kind of growth will be hard to maintain. The key challenge facing Gilead is to maintain steady development in the face of numerous rival drugs now entering the market, all priced well below Sovaldi's staggering $85k cost for a three-month course. After an exceptional leap in 2014, that drug saw sales virtually halve the following year to a still massive $5.3bn, but the slack was taken up by Harvoni, sales of which soared 600% to almost $13.9bn. Another anti-viral, Truvada, added a further $3.5bn. However by mid-way through 2016, sales were already in steep decline from their previous highs, despite the launch of another anti-viral, Epclusa. John Martin stepped down as CEO in 2016 in favour of John Milligan, but remains executive chairman. Gilead is no new arrival on the scene, though none of its previous drugs have experienced quite this level of success. A specialist in biopharmaceutical anti-viral treatments, it was launched in 1987, and among its early successes was the flu treatment Tamiflu (now controlled by Roche; Gilead earns royalties), followed by several anti-HIV products including Viread and Atripla (co-marketed by BMS). Adbrands does not currently profile this company but subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.
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Capsule checked 22nd July 2016
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Adbrands Weekly Update 10th Mar 2016: Direct to consumer ad expenditure for US prescription pharmaceuticals came close to record levels in 2015, according to estimates from Nielsen, reported by industry blog DTC Perspectives. Total spend reached $5.17bn last year, capping three years of gains since 2012's low of $3.4bn. The latest figure is close to eclipsing the record $5.4bn spent in 2006. A key factor is the increase in drugs with high selling prices, such as Gilead's Harvoni, a course of which costs as much as $100,000 a year. At that level, it doesn't take an excessive number of users to get a return on investment in marketing if its successfully builds demand. That in turn has prompted a backlash from physicians and insurers, who believe that marketing costs contributes to high pricing of many new launches. Harvoni was itself the year's 5th most advertised drug, behind Valeant's Xifaxan, Sanofi's Toujeo, Merck's Belsomra, and GSK's Breo Ellipta.
Adbrands Weekly Update 12th Jun 2014: Merck & Co, which recently agreed to sell its OTC portfolio to Bayer of Germany, has begun adding to its pharma portfolio with a deal to acquire biotech developer Idenix for $3.85bn. It saw off rival bids from AbbVie and Johnson & Johnson. The smaller company specialises in treatments for hepatitis C. Merck already has several products for this disease, but its position has been weakened by the spectacular success of Sovaldi, a new product from rival Gilead. Approved by the FDA only at the end of last year, Sovaldi has already become the fastest-selling drug launch in history, notching up sales of almost $2.3bn in just its first quarter on-sale, almost double analysts' forecasts.
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