By Bill Berkrot
NEW YORK (Reuters) - When Gilead Sciences Inc declined to project 2014 revenue for its high-profile new hepatitis C drug last week, its shares fell nearly 7 percent over the next two days.
Wall Street analysts say investors were likely spooked by the omission, concerned it could signal that sales of the new drug, Sovaldi, might not approach sky-high forecasts.
On Tuesday, Gilead President and Chief Operating Officer John Milligan again declined to predict sales of the medicine that won U.S. marketing approval in December. But he also did not dismiss analysts' record-shattering forecasts that the treatment could rake in $5 billion to $6 billion in its first year on the market.
"It would be unprecedented for a drug to launch at that level, but because of the duration of therapy being short, because of the number of patients who are out there who have the disease, it's not unreasonable math to come to that conclusion," Milligan told Reuters on the sidelines at the Bio CEO & Investor conference in New York.
"We're in early launch phase, just two months in, so it's dangerous to extrapolate from two months. I can see the number that's out there. I don't know if it's too high or too low based on the dynamics," Milligan said.
Along with its fourth-quarter results released last week, Gilead reported $139.4 million in Sovaldi sales after less than one month on the market. The drug promises to increase cure rates with a much shorter duration of treatment and far fewer side effects than previous standard regimens.
"We've seen great enthusiasm from the doctors, and the question is how long will they continue to bring those patients in, what experience will they have as we get through this year?" Milligan said.
He noted that a rival hepatitis C regimen from AbbVie Inc with an equally impressive cure rate could hit the market this year and affect sales. But AbbVie's treatment involves more drugs and many more pills a day, likely giving Gilead a competitive edge.
Gilead this week applied for approval of a combination of Sovaldi and an experimental antiviral drug, ledipasvir, that would be taken as one pill once a day, which could also impact future sales.
In late stage clinical trials, the combination provided cure rates well in excess of 90 percent, in some cases with as little as eight weeks of treatment. It would allow patients to avoid use of older hepatitis drugs that can cause troublesome side effects.
Current standard treatment regimens take 24 to 48 weeks and include injected interferon that causes miserable flu-like symptoms, leading many patients to discontinue or delay treatment, and ribavirin, which can cause anemia and other unpleasant side effects.
It is widely believed that thousands of patients have put off treating the virus in order to wait for new drugs such as Gilead's. By being the first of the expected new wave of oral hepatitis C treatments to market, many analysts believe that Gilead will grab the lion's share of those "warehoused" patients.
"Remember, patients who started in December haven't gotten through their 12 weeks of therapy yet, so (doctors) haven't seen that full experience of seeing patients cured and they really won't understand that until we get into the mid part of this year," Milligan said.
"So I encourage people not to get too far ahead of themselves in thinking about that," he said of the multibillion-dollar first-year Wall Street sales forecasts. "I can understand the enthusiasm because you can get to pretty big numbers in a hurry."
(Editing by Matthew Lewis)