Goldman Sachs asks in biotech research report: 'Is curing patients a sustainable business model?'

[SirLinksALot]

SOURCE: CNBC

URL: https://www.cnbc.com/2018/04/11/goldman-asks-is-curing-patients-a-sustainable-business-model.html

by Tae Kim


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."

"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. "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.

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[Frank Cannon]

Gosh. The dirtbags at Goldman acting like dirtbags. How shocking.

[thackney]

"Is curing patients a sustainable business model?" analysts ask in an April 10 report entitled "The Genome Revolution."

Try the business model of only treating the symptoms and waiting for your competition to sell the cure.

[Smokin Joe]

One problem with insurance. They get paid, regardless of outcome. If they only got paid if the patient lived, that might cause some changes.

There will always be new patients coming along. When we vaccinated against Smallpox, there was a new first rank killer, and there always will be, because I don't see everything being cured. (Germs adapt, too, and sooner or later, people just wear out).

[truth_seeker]

I would turn it into the question:

"How to design a business model which will provide cures.?"

Long term it seems to me that gene therapies offer greater promise, than pharmaceuticals.

[driftdiver]

Western medicine is good in many ways.  If you're injured they are pretty good at putting people back together.

Its sucks with threatment of any kind of disease, mental or physical.  Western docs treat the symptoms and not the disease.

[DB]

One problem with insurance. They get paid, regardless of outcome. If they only got paid if the patient lived, that might cause some changes.

Well if they decided your odds of recovery weren't high enough they would likely not treat you to begin with if that's how it worked.

[Smokin Joe]

Well if they decided your odds of recovery weren't high enough they would likely not treat you to begin with if that's how it worked.

Maybe a minimum payment for the effort, full pay for getting it right.

Or the most competent would be making a living and the rest flipping burgers.

(What do you call the guy who graduated at the bottom of his class at med school? "Doctor", just like the rest....)