JPMorgan on $ABBV This afternoon, FDA announced that it has approved Viekira Pak, AbbVie’s
HCV combo (ABT-450/267/333). The Viekira Pak label is consistent with our
expectations with 12-week dosing recommended for the majority of patients
and 24-week dosing recommended for some GT1a cirrhotics. In our view, the
label enables AbbVie to be competitive in the market. We continue to expect
AbbVie to take at least 20% market share in what is likely a $15bn+ market,
which translates to our 2015 sales estimate of ~$3bn, with room for upside.
We remain OW ABBV shares.
? Viekira Pak is indicated for 12-week dosing for a majority of patients.
As expected, Viekira Pak is indicated for 12-week dosing for a majority of
patients, including all GT1b patients and all non-cirrhotic GT1a patients.
Ribavirin is recommended for GT1a patients and GT1b cirrhotic patients. In
our view, the Viekira Pak label enables AbbVie to be competitive in the
market.
? Not surprisingly, 24-week dosing is recommended for GT1a patients
with cirrhosis. The FDA is recommending a 24-week treatment duration for
GT1a cirrhotics. We note that the label also states that a 12-week treatment
duration may be considered for some GT1a cirrhotics based on prior
treatment history. As a reminder, phase III TURQUOISE-II data showed a
modest SVR12 rate improvement with 24-week dosing in
treatment-experienced GT1a cirrhotics, while treatment-naïve patients had
similar SVR12 rates with both 12-week and 24-week treatments. Along
these lines, we continue to see most GT1a cirrhotic patients on 12-weeks of
treatment.
? Viekira Pak pricing in line with our expectations. Viekira Pak has a list
price of $83,319 for a 12-week treatment, a 12% discount to a list price for a
12-week treatment of Harvoni ($94,500), but a premium to 8-wk Harvoni
($63,000). We continue to expect fairly rational discounting between
AbbVie and Gilead, and we would not be surprised to see AbbVie offer
select rebates in exchange for enhanced formulary access.
? We continue to forecast $3bn in HCV sales for AbbVie in 2015. AbbVie
is well-positioned to capture share in certain difficult patient populations
(i.e. cirrhotics), in our view, and we see AbbVie also capturing additional
share in select accounts with favorable formulary access. We continue to
expect AbbVie to capture ~20% share in a $15+ billion market, which
translates to $3 billion in 2015 HCV sales (with room for upside) and overall
ABBV EPS of $4.40. We would note that with launch spend already
factored into estimates and high gross margins, we would expect much of
any sales upside to fall to the bottom line. We estimate that an additional
$200 million in 2015 HCV sales would translate to roughly $0.09 of EPS
upside.
