Gilead Patent for Sovaldi Rejected in China, Shares Down - Analyst Blog

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Gilead Sciences Inc. GILD was down approximately 1.2% after news sources revealed that company's patent application for its blockbuster hepatitis C virus (HCV) infection drug, Sovaldi has been rejected in China.

Gilead's patent application that got rejected in China is of a prodrug (an inactive form of the drug which, after entering the patient's body, converts into a chemically active compound) of Sovaldi.

According to the sources, New York-based advocacy group, Initiative for Medicines, Access & Knowledge (I-MAK) had challenged Gilead's patent application at the beginning of the year. I-MAK has been working to increase the availability of generic versions of Sovaldi in several countries.

Gilead has been long criticized for its high price tag associated with its HCV drugs Sovaldi (approximately $84,000 for a typical 12-week course) and Harvoni (approximately $94,500 for a typical 12-week course).

Gilead has been under pressure to reduce HCV drug prices. The company has entered into agreements with several pharmacy benefit managers and health care service companies and is undertaking several pricing measures including an increase in discount, charge back and rebates.

Last year, Gilead had entered into non-exclusive licensing agreements with seven India-based generic pharmaceutical manufacturers to expand access to its HCV drugs in 91 developing countries.

We note that Mylan Inc. MYL has launched its generic version of Gilead's Sovaldi in India. Availability of lower priced generic version of its HCV drugs could hamper Gilead's top line as it is heavily dependent on these drugs for revenue growth.

Gilead carries a Zacks Rank #1 (Strong Buy). Other well-ranked stocks in the health care sector include Actelion Ltd. ALIOF and Valeant Pharmaceuticals International, Inc. VRX . Both sport the same Zacks Rank as Gilead.

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This article appears in: Investing , Business , Stocks
Referenced Symbols: GILD , ALIOF , MYL

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