A California jury's decision on Tuesday may result in Gilead Sciences losing billions of dollars, as claims from pharmaceutical company Merck that the California-based company's blockbuster drug's active ingredients infringed its patents were found valid in the court.
Gilead's new CEO told CNBC, however, that this isn't the end of the dispute. "We still think the Merck patents are invalid and we continue to believe that we have a strong case for that, and we do plan to appeal the case at the end of the day," John Milligan told CNBC on Wednesday.
While the drugmaker's Hepatitis C franchise has driven Gilead's business upward, it's drug-pricing practices have received backlash recently since combination drug Harvoni costs $1,125 per pill before discounts, and a 12-week regimen costs $94,000.
Drug-pricing disputes aren't all that rare these days. Pharma bad boy Martin Shkreli's raising the price of antiparasitic drug Daraprim from $13.50 per pill to $750 per pill, garnered a lot of attention and public concern, recently.
Milligan told "Closing Bell" that the company "priced [the drug] in alignment with the current standard of care at the time … even though the drug was clearly going to have a greater benefit to a greater number of people." He noted that "the system" has worked well with rebates and discounts, and emerging competition has pushed prices down.
"We are in this unfortunate situation where there's a headline of a very high price and behind the scene there's in fact quite low prices," the CEO told "Closing Bell," adding that the biotechnology company is working with Veterans Affairs to provide veterans lower cost medicine at "well below half" the listed price.
The executive considers that the benefits of the blockbuster drug outweigh the price controversy.
"We seem to forget that this is a very short course of therapy; 12 weeks for most patients — eight for some — and the fact that these patients are cured and they don't have to go on lifelong treatment," Milligan said.
The Gilead stock closed down about 4 percent Wednesday, and year to date it's declined 11 percent; in the past five years, however, the company's stock has risen over 300 percent.
While some consider that Gilead's catalyst for growth would be an acquisition, the CEO said that the biotech industry thrives through innovation.
"We are a company that needs to innovate … our products come on for a while, then the patents go away and then the products essentially disappear from our top line and our bottom line, so we constantly need to innovate," Milligan said, before adding that he reserves the right to change his mind.
— Reuters contributed to this report.