Gilead prices COVID-19 drug candidate remdesivir at $2340 per patient

Marco Green
June 30, 2020

At the $2,340 government purchase price, Gilead could collect revenue of about $2.3 billion from selling around 1.5 million remdeisivr treatment course in 2020, RBC Capital analyst Brian Abrahams wrote in a Monday note to clients.

A five-day treatment course using six vials of remdesivir is expected to cost a patient $2,340, which is well below the $12,000 hospital savings stemming from an earlier hospital discharge in the USA, according to Gilead. With the cost of goods sold unknown and variability in how many patients will be treated in the second half of the year, Karnauskas's base case reduces Gilead's stock value by about $3 a share.

"President Trump has struck an unbelievable deal to ensure Americans have access to the first authorized therapeutic for COVID-19", HHS Secretary Alex Azar said, adding: "To the extent possible, we want to ensure that any American patient who needs remdesivir can get it".

Remdesivir was developed by Gilead Sciences to treat Ebola, the deadly hemorrhagic fever that emerged in West Africa in 2014.

The Foster City, California-based company gained as much as 2.7% to $76.56 in early trading in NY.

In an open letter, Gilead Chief Executive Daniel O'Day said the price is well below the value it provides given that early hospital discharges could save around $12,000 per patient in the United States.

"In the USA, while new cases are rising, they are not resulting in hospitalization at rates seen in the first half".

In 127 poor or middle-income countries, Gilead is allowing generic makers to supply the drug.

Maintains hold rating and $73 price target.

"As with many other aspects of this pandemic, we are in uncharted territory in pricing remdesivir".

However, the price was swiftly criticised; a consumer group called it "an outrage" because of the amount taxpayers invested toward the drug's development.

"The pricing announcement is slightly below our expectation on the US commercial price, but may indicate higher price for national stockpiling".

After weeks of debate of how Topline Gilead Sciences would develop pricing that balances social responsibility with its profits, the company has announced the pricing plan for Remdesivir, its coronavirus treatment drug.

Because of those data, clinicians are viewing dexamethasone as the standard of care of COVID-19, with remdesivir merely an "adjunct" to it, ICER suggested.

One vial of the drug Remdesivir lies during a press conference about the start of a study with the Ebola drug Remdesivir in particularly severely ill patients at the University Hospital Eppendorf in Hamburg, northern Germany on April 8, 2020, amidst the new coronavirus COVID-19 pandemic.

Rates outperform and is revisiting remdesivir sales forecasts and Gilead's valuation.

Gilead donated 250,000 treatment courses to the US and other countries, but the donation period will come to an end next week, meaning the prices will apply beginning in July, CBS News reported.

"The same focus went into the price and although this medicine adds significant value to the healthcare system by reducing the hospital days, we made a decision to price this at a very extraordinary time in a unique way", he stated.

Rates overweight, price target $90.

O'Day said that shortening hospitalisation saves about US$12,000 ($17,500) per patient. At that price, remdesivir could rake in $1.9 billion in sales this year and peak at $7.6 billion in 2022, SVB Leerink recently estimated.

On the other hand, Gilead investors may find the price less appealing.

Rates buy, price target $97.

Other reports by Click Lancashire

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