) gained 3.25% to close the trading session on Aug 15 at $99.45 per
share following the favorable verdict by an arbitration panel in a
patent infringement case with Roche (
). The tussle was regarding Gilead's blockbuster hepatitis C drug,
The Story So Far
In 2004, Roche had inked a deal with Pharmasset on PSI-6130.
Pharmasset had developed Sovaldi before it was acquired by Gilead
in early 2012. Roche initiated the arbitration proceedings in Mar
2013 and claimed that due to the agreement with Pharmasset it
enjoyed exclusive rights over sofosbuvir. Roche claimed that
sofosbuvir was the prodrug of PSI-6130.
Gilead challenged Roche's claims in Apr 2013. The recent
decision from the arbitration panel was in favor of Gilead. The
panel stated that since Roche was unsuccessful in establishing any
of its claims, it was not entitled to any damages/ relief.
The favorable verdict on Sovaldi has removed a major overhang on
Gilead's shares. Sovaldi is now the primary revenue earner of this
biopharmaceutical major. Sovaldi has performed exceptionally well
since its U.S. launch in Dec 2014. The drug has generated sales of
almost $5.8 billion in the first six months of 2014 and should
continue performing well. Gilead has been priced at $84,000 for a
12-week treatment period.
NICE News for Gilead
Gilead received further encouraging news on Sovaldi when U.K.'s
cost-effectiveness watchdog - NICE - recommended the use of the
drug for treating patients suffering from chronic hepatitis C. The
pricing is more than $58,000 for a 12-week treatment period. We
note that Sovaldi was approved in the EU in Jan 2014. The positive
recommendation from NICE follows the submission of additional
information by Gilead on Sovaldi's cost effectiveness. The
additional information on Sovaldi was requested by NICE in June
Gilead carries a Zacks Rank #1 (Strong Buy). Stocks such as
) and Illumina (
) are equally well ranked in the health care space.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
ROCHE HLDG LTD (RHHBY): Free Stock Analysis
GILEAD SCIENCES (GILD): Free Stock Analysis
ILLUMINA INC (ILMN): Free Stock Analysis Report
ACTELION LTD (ALIOF): Get Free Report
To read this article on Zacks.com click here.