Biotech Values

[Rocky3]

From Wells:

**Harvoni/Sovaldi IMS data week-ended 12/12/14 became available over the weekend. Harvoni NRx up weekover-week,
to 3,466 from 3,290, +5.3%..
**We assume multiple drivers in place, with potential for warehoused patients plus increased demand due to
Harvoni's better convenience offset by potential insurance barriers (including those awaiting ABBV
availability) though we anticipate some slowdown in treatment initiations in the late-December holiday
season, as patients and clinicians elect to defer treatment to the beginning of 2015. It is difficult to ascertain
the offsetting effects of these trends, though in our view Harvoni is still in growth phase.
**Sovaldi NRx decreased to 942 from 1,114, -15.4%, and appears to be stabilizing near the 1,059 average for the
three weeks before Thanksgiving. Sovaldi NRx appears to be settling at a run-rate of 1,000 scrips/week as the
base demand from GT-2/3 patients, a positive for GILD's HCV franchise.
**Total prescriptions across GILD's HCV franchise were down week-over-week, to 9,100 from 9,155, -1.0%.
This includes this week's total NRx count of 4,408, plus refills from the 4,083 Harvoni scrips first filled four
weeks ago, and the 1,683 Sovaldi scrips first filled eight weeks prior, though a slight refill ''gap'' is implied by
the difference in total TRX and expected total TRx.
**If Harvoni new parts starts are flat through 2014, our tracker suggests Q4 U.S./WW sales of $3.04B/$3.79B
versus FactSet consensus Q4 WW sales of $3.80B. This does include a net positive inventory build, as we
assume Sovaldi inventory drawdowns mostly occurred last quarter.
**BOTTOM LINE: Harvoni NRx and other scrips trends were stable this past week; while room for upside to
consensus is low, GILD's total HCV franchise sales should exit the year at a favorable steady-state into the
ABBV launch.