The latest week prescription data suggests that Sovaldi now accounts for 84% of new prescriptions in the combined PI+NS5B classes for Hepatitis C treatment. This exceeds all forecasts; furthermore, I believe that Wall Street is underestimating the current annualized dollar run rate. Each weekly one-month prescription is worth approximately $28,000 (I discount it to $22,000). However, the standard course of therapy is for 3 months. Therefore, the difference between new prescriptions (NRx) and total prescriptions (TRx) will continue to diverge as more people initiate therapy and get their refills. Said another way, if new weekly prescriptions did not increase from the current 2500 level, total prescriptions, now at 3200, would rise over time to close to 5000. I expect NRx to increase sequentially by 50 on average, implying a much higher run rate as the year progresses.
Although GILD's stock price will be driven by its Hepatitis C-related revenues in 2014, I remain impressed with its pipeline in anti-infectives, oncology and fibrosis.
Disclosure: I am long GILD.