Gilead Sciences (NASDAQ:GILD) can't seem to do anything wrong.

Not only has the biotech's hepatitis C treatment Sovaldi become a multibillion-dollar drug less than a year into its launch, but Gilead got two pieces of good news today in the announcements of a positive result from a lawsuit and coverage of Sovaldi by the U.K.'s National Institute for Health and Care Excellence, or NICE.

Source: Gilead.

Gilead said an arbitration panel ruled it its favor in a lawsuit Roche filed against the company. Roche claimed rights to Sovaldi as part of its 2004 collaboration with Pharmasset, which Gilead subsequently purchased. The decade-old deal authorized the European pharma giant to license Pharmasset's "PSI-6130 and its prodrugs."

Roche claimed Sovaldi was a prodrug, a term that describes drugs that break down into the active drug once inside the patient -- in this case, breaking down into PSI-6130. Prodrugs can sometimes mask side effects because they're inactive until they break down, so it made sense for Roche to ask for prodrug derivatives and the main compound.

Fortunately for Gilead, the arbitration panel said Roche failed to make a viable claim that Sovaldi was indeed a prodrug of PSI-6130. In the worst-case scenario, Gilead could have been stuck with terms of the original deal, which gave Pharmasset royalties on sales of the drugs covered under the licensing agreement.

Gilead's legal woes aren't over yet, though. Merck and AbbVie both have pending lawsuits against Gilead claiming that Sovaldi is covered under their patents. Fortunately, if it loses either of those lawsuits, Gilead would likely only have to pay a royalty on Sovaldi sales, unlike the nightmare Roche scenario in which Gilead would have lost the entire franchise.

Playing NICE

Source: Gilead

In the U.S., Sovaldi's price tag -- $84,000 per course of treatment -- has come under considerable fire, so there were no guarantees that the U.K.'s cost watchdog NICE would agree to pay for Sovaldi, especially considering its hard-line approval process that weighs the cost of the drug with the potential benefits. The British agency routinely rejects reimbursing companies for high-priced cancer drugs.

Fortunately for Gilead, NICE realized that Sovaldi can cure almost all hepatitis C patients, agreeing to cover patients with genotype 1, 2, and 3 infections, with some prerequisites such as liver scarring or failure of other medications for patients with genotype 2 and 3 infections. NICE won't cover Sovaldi for patients infected with genotypes 4, 5, and 6, but those make up a small minority of hepatitis C patients in England.

NICE agreed to reimbursement for the drug at $58,380 per treatment. That's a minor haircut off the U.S. list price and nothing like in Egypt, where Gilead is practically giving the drug away for $900 per course of treatment.

Working in Gilead's favor, Sovaldi increases the cure rate and reduces the time that patients have to take interferon, which has nasty side effects that can cause patients to discontinue use. When a patient isn't cured with the older drugs, NICE has to pay for the interferon and doesn't get the benefit of a cure. For some genotypes of the virus, Sovaldi can cure patients on its own, eliminating the need for interferon altogether.

Part of the reason that NICE may not have put up a fight in agreeing to pay for Sovaldi is that the U.K. single-payer health system will eventually benefit from ridding patients of the virus, which can lead to liver cancer and the need for liver transplants that cost a lot more than $58,380. In the U.S., where people switch health insurance companies fairly regularly, the health insurer that pays for Sovaldi may not be the same insurer that would pick up the tab for the liver transplant.