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You'll Be Stunned by Gilead Sciences CEO's Prediction for 2018

No, this isn't one of those clickbait articles you've no doubt seen way too many times. Gilead Sciences (NASDAQ: GILD) CEO John Milligan actually did make a prediction about 2018. And it really was stunning, at least considering the context of where the company has been and is right now.

Gilead's revenue continues to plunge, with third-quarter sales dropping more than 13%. Its earnings are still sinking, too: The biotech reported an 18% year-over-year decline in net income in the third quarter. For quite a while, Gilead's management team has stated that they weren't sure when the root cause behind the company's deteriorating numbers, slumping sales for its hepatitis C virus (HCV) franchise, would stabilize.

But when Milligan was asked at the Credit Suisse conference held in Scottsdale, Ariz., on Tuesday if 2018 could be a flattening or stabilizing year, he replied that it could be. What he said in his response was even more surprising -- perhaps even shocking. Milligan thinks that next year could be "the beginning of a growth phase" for Gilead Sciences. What's behind Milligan's optimism?

Smooth sailing ahead in HCV

Believe it or not, Milligan thinks that AbbVie's (NYSE: ABBV) introduction of its new HCV drug, Mavyret, "sets the stage for smoothness to HCV sales for the future." Milligan acknowledged that AbbVie's pricing for its new drug will hurt Gilead in the fourth quarter of 2017 and into next year. So why does he think there will be smooth sailing ahead? For the first time in a long time, Milligan doesn't "see anything on the horizon that will be disruptive" in HCV.

What appears to be shaping up, in Milligan's view, is a one-on-one battle in HCV between AbbVie and Gilead Sciences. He said that most of the HCV drugs have about the same net price now. With pricing roughly at parity, it will come down to which HCV therapy works best for patients. Milligan thinks Epclusa matches up well against all other HCV drugs and in particular will "stack up very well against AbbVie."

Expected launch of the best HIV drug ever

Milligan was asked if Gilead's bictegravir/F/TAF combination was as good as it gets in treating HIV. His response: "Yes." That's a bold statement, considering the tremendous success Gilead has had with its HIV drugs through the years. However, Milligan backed up his confidence by ticking off a list of pluses for the bictegravir/F/TAF combo.

At the top of the list for Milligan was that the combo requires "very few compromises." The bictegravir/F/TAF combo doesn't have worrisome interactions and is, in Milligan's words, "a very forgiving regimen." He thinks the single pill taken once daily with great efficacy and a solid safety profile will prove to be very appealing to both patients and physicians. Milligan predicted that bictegravir/F/TAF will become the "most important product out there" in the HIV market, assuming it wins approval as expected in February.

Growth for Yescarta

Another reason behind Milligan's prediction of 2018 as a year for Gilead to return to growth is the potential for Yescarta. Gilead picked up the chimeric antigen T-cell (CAR-T) therapy with its acquisition of Kite Pharma. However, the prospects for Yescarta next year won't be nearly as important to a possible turnaround for Gilead as stabilization for its HCV franchise and continued success in HIV would be.


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