Every company has one number that defines its success more than any other. For biotech superstar Gilead Sciences (NASDAQ:GILD), that number is...

$10.6 billion
In its latest quarterly earnings report, Gilead updated its full-year sales projections for 2014 from a range of $11.3 billion-$11.5 billion to a new range of $21 billion-$23 billion. The difference between these two ranges works out to a midpoint of $10.6 billion in additional product sales over 2013. Most of this growth is due to the launch of Sovaldi, a phenomenally successful (and phenomenally expensive) hepatitis C treatment that has already racked up $5.8 billion in sales over the first six months of the year.


Source: Andy Melton.

Gilead's total revenue is already up $6.2 billion for the first half of 2014 over the same period last year, which means Sovaldi alone has been responsible for over 90% of the company's revenue growth this year. Gilead could generate roughly $10 billion in revenue from the drug for the full year if all goes well. 

To put that in perspective, the previous record for most sales in the first year (four quarters) of availability was competing hep C treatment Incivek, from Vertex Pharmaceuticals (NASDAQ:VRTX). In its first four quarters of availability, Incivek brought in $1.6 billion.

Gilead collected $11.2 billion in revenue last year, and it could double that figure in one year on the back of a single drug. This sort of explosive growth happens with biotechs from time to time, but the scale of Sovaldi's first-year sales is unprecedented. After Gilead's first-quarter earnings, analysts projected that Sovaldi would generate $11.9 billion in sales by 2017, so there's still some growth opportunity moving forward.

There are risks and obstacles in the way of this sky-high projection, of course.

Sovaldi is incredibly expensive at $1,000 a pill and roughly $84,000 for a 12-week course of treatment. Public and private insurers (most states' Medicaid programs cover Sovaldi) have grudgingly swallowed this cost because the alternative is even costlier rounds of treatment and care for the life-threatening liver problems that tend to accompany untreated cases of hepatitis C.

But The New York Times cited Express Scripts (NASDAQ: ESRX) estimates that claim Sovaldi would cost publicly funded health insurance programs $55 billion and CVS Health (NYSE: CVS) projections of a possible $200-$300 annual increase in every American's health insurance premiums for the next five years.

Insurers have every incentive to reduce the burden of hepatitis C treatments, and American policymakers have a clear financial -- and electoral -- stake in dropping Sovaldi's costs. Sovaldi has already suffered a decline in weekly prescriptions dispensed for the drug, according to Motley Fool resident healthcare expert Brian Orelli. However, he points out that this drop is likely to reverse once a combination of Sovaldi and ledipasvir, which should address the flu-like symptoms that often result from interferon-based hepatitis C treatments, is approved for sale. There are more than 3 million people  with hepatitis C in the United States, and up to 85% of the infected will eventually suffer chronic effects. Only 70,000 Americans have taken Sovaldi, which leaves potentially millions more to be treated. Sovaldi's eventual revenue will depend highly on cost-control efforts from policymakers, and on the success of Gilead's rivals (of which there are several) in developing an alternative.

Alex Planes holds no financial position in any company mentioned here. Follow him on Twitter @TMFBiggles for more insight into investing, markets, economic history, and cutting-edge technology.

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