Biotech Values

[Rocky3]

In that $35 PT, Barclays gives ABBV peak rev of $2.5b on v-pak. In the same report they say they now expect ex-US sales to account for 70% of global HCV sales up from their previous estimate of 45%. Something doesn't quite add up when you put those two #s together.

Like the view of many other analysts, there continues to be a sense that MRK, ACHN, BMY, or someone will take the market share or will change the economics of the entire HCV market. The analysts may be right, but only time will tell how the market will really develop.

What we know now is that GILD and ABBV are approved in the US and the EU. JNJ is approved almost everywhere, but is used mostly with GILD and that should decrease and then go away. BMY is approved in the EU and Japan, and will have relatively significant sales in Japan until GILD and ABBV are approved, which should be this year. MRK and ACHN are not going to happen for awhile. GILD and ABBV should have significant sales in the EU and Japan for several years before there is any significant competition there.

What happens to pricing when there is competition is not knowable now. Clearly the analysts are paid to make projections, many of which will be wrong and some of which may be right. Those of us who are long ENTA, GILD, ABBV, ACHN, and maybe MRK have made our bets and hope hat we are right. I hope that the analyst is right about the size of the OUS market - if so GILD, ENTA, and ABBV should do well.