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GILD: Sovaldi Reimbursemnet Trends Favorable

|Includes:Gilead Sciences, Inc. (GILD)

Several states have held hearings recently, much like the one I attended sponsored by the California Department of Public Health last November. In all cases, recommendations are being made to cover the direct acting antiviral regimens to treat Hepatitis C. Clinicians recognize the benefit of the higher cure rate associated with these drugs. Separately, the 2/7 new US prescriptions for Sovaldi were up 10% sequentially, and reflect an annualized revenue rate of $7.5 billion, while the total prescriptions grew sequentially 25%. I believe this latter trend reflecting prescription refills off of a higher base is underappreciated by Wall Street. Wall Street 2014 consensus revenues (worldwide) have moved up to the $4-6 billion range, while I remain at $8 billion.

Len

Disclosure: I am long GILD.

Stocks: GILD