Closer Look at Gilead's Slowing Hep C Prescriptions

NEW YORK (TheStreet) -- The number of prescriptions written for Gilead Sciences' (GILD) hepatitis C drug Sovaldi are showing signs of slowing growth, even a marginal decline, in the past month. Is this the beginning of the highly anticipated "re-warehousing" of patients, or is some other factor at play? What does this ultimately mean for Gilead going forward?

Sovaldi has been the best drug launch in history with first quarter sales of $2.3 billion, and is on pace for another record quarter when Gilead reports earnings in July.  Weekly Sovaldi prescription numbers (through the week of June 13) are charted below by ISI Group analyst Mark Schoenebaum. The incredible, vertical red line is Sovaldi, but notice the flattening of the curve in the past month.

A Sovaldi slowdown was expected this summer because doctors and hepatitis C patients are anticipating the U.S. approval of Gilead's next hepatitis C drug, ledipasvir, which will be combined with Sovaldi into a single pill. As we get closer to the FDA approval decision for ledipasvir in October, it makes sense for less acutely sick hepatitis C patients to wait for Gilead's newer and more convenient, single-pill therapy. If this recent flattening of the Sovaldi prescription curve is, indeed, just a warehousing of patients waiting for the Sovaldi-ledipasvir combo pill, then it should have a marginal impact on Gilead's stock price and its long term prospects. Prescription growth will re-accelerate when Gilead's single-pill therapy hits the market.

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