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Goldman Sachs Asks: 'Is Curing Patients a Sustainable Business Model?' (cnbc.com)

Posted by msmash on from the wow dept.

Goldman Sachs analysts attempted to address a touchy subject for biotech companies, especially those involved in the pioneering "gene therapy" treatment: cures could be bad for business in the long run. "Is curing patients a sustainable business model?" analysts ask in an April 10 report entitled "The Genome Revolution." From a report: "The potential to deliver 'one shot cures' is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies," analyst Salveen Richter wrote in the note to clients Tuesday. "While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow."

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.

6 of 443 comments (clear)

  1. Well.. by Z80a · · Score: 5, Insightful

    Time to blacklist anyone working at goldman sachs from getting any sort of cure.

    1. Re:Well.. by Anonymous Coward · · Score: 5, Interesting

      No, they're got a point. Of course it isn't a sustainable business model. But that's OK. As long as the business gets a good ROI over time time period it doesn't matter if the profits dry up eventually. All this means is if you're going to value a company over the longer term, you should probably take effects like this into account.

    2. Re:Well.. by Anonymous Coward · · Score: 5, Insightful

      Why cure them entirely though, when you can mostly-cure them and treat the remaining effects with a lifetime supply of patented drugs?

      There is a market failure to research complete and cost effective cures for diseases.

      Medical research should be entirely funded by the public, and all patents and treatments that result made available to the public for free.

      Obviously, this leads to a better system. Stop trying to defend the status quo.

  2. It is ... by Going_Digital · · Score: 5, Insightful

    If your competitors can't. If you develop a treatment and your competitor has a cure then your business is flushed down the toilet while your competitor gets rich. So unless the biotech companies collude with each other there is always the risk that a competitor will produce a cure killing your business, so you had better get there first and kill their business instead.

  3. That's a question by Artem+S.+Tashkinov · · Score: 5, Insightful

    Yes, bloody idiots.

    The longer the person lives the longer he might be a client of various medical/pharmaceutical companies because we're not getting younger and healthier with each passing day.

  4. Re: Health care != profit by Anonymous Coward · · Score: 5, Informative

    50 year Type 1 diabetic here.

    > Insulin has changed significantly over the years

    The purity improved drastically since its discovery in 1921, which is how animal source insulins became safer and less likely to cause sensitivities, basically allergies, that reduced their effectiveness profoundly. The patent for insulin itself was made public domain by its inventor. The release of "human" insulin, and the patents for making it, were an effective attempt to get new patents, not to provide medical benefit from a natural chemical which cannot be patented. There seems to be no measurable medical benefit to the human insulin molecule over animal sources, and there are some reports of medical deficits with it.

    The folks at Novo are always *really excited* by the insulins. But the short acting human insulin only replaces the older regular insulin, and its speed of action is overwhelmed by the modern glucometer use and by the quick action of delivering insulin with an insulin pump. The longer acting human insulin based Lantus simply replaces NPH or UltraLente, older and cheaper ways to make insulin last longer. There is *zero* net benefit from the modern human insulins over the older and vastly cheaper animal based insulins. Using e. coli to make insulin doesn't actually improve it in any measurable way.

    > The newest generation of insulin is far safer and more effective than the stuff being made back in the 1930s.

    That is a false equivalency. Compared to the 1930's sure. Improvements in insulin effectively ceased in the 1970's with the last upgrade to "U-100" concentrations of insulin. The developments for insulin since then have been like the "new" and "improved" labels on detergent, or like marking farmer's market produce as "non-GMO". Very exciting and an excuse to charge more, but involving no useful change in the product and likely untrue.

    Yes, the "human" insulins were exciting. But using the human rather than the animal insulins has no demonstrable medical benefit, and costs roughly 10 times as much. Insulin is *grotesquely* expensive due to the captive market and the basically fraudulent "upgrades" over the last 30 years.. A classic example of drug companies continuing to blow smoke up our asses is seen at the "article" at https://www.adwdiabetes.com/ar.... I've not seen such a nonsensical puff piece since Sarah Palin campaigned for Trump.