Richter cited Gilead Sciences' treatments for hepatitis C, which achieved cure rates of more than 90 percent. The company's U.S. sales for these hepatitis C treatments peaked at $12.5 billion in 2015, but have been falling ever since. Goldman estimates the U.S. sales for these treatments will be less than $4 billion this year, according to a table in the report.
"GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients," the analyst wrote. "In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise."
The analyst didn't immediately respond to a request for comment.
The report suggested three potential solutions for biotech firms:
DWMoose83 on December 2nd, 2018 at 00:05 UTC »
No, it's not. Which is why healthcare shouldn't be about business.
te_ch on December 1st, 2018 at 23:52 UTC »
I’ll give you Solution 4: rather than expanding the portfolio to cure diseases, diversify by adding lines of business that profit from activities related to wellness, recreation, or other things that patients could spend on after they are cured.
tilttovictory on December 1st, 2018 at 23:49 UTC »
This is an objective truth, from an investment standpoint. The question now is, how do we restructure investment incentives to ignore this as a problem for collective benefit.