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what does bother me is that they mis-priced it and might have to start over.
Why do you think that? It is a done deal. I am not aware of any offering that goes through and is pulled for price issues. Lots of IPOs that never regained offering price. Nothing here to change it. People who bought offering have made bad buy (so far), nothing more.
HCV world-wide sales for 1Q18, 4Q18, 1Q19 and all of 2108:
--------1Q18-------/------4Q18------/------1Q19------/-------2018-------
GILD - 1,046 - 49.9% / 738 - 43.2% / 790 - 46.0% / 3,686 - 47.5%
ABBV - 919 - 43.8% / 862 - 50.5% / 815 - 47.4% / 3,616 - 46.6%
MRK - 131 - 6.25% / 108 - 6.3% / 114 - 6.6% / 455 - 5.9%
TOTAL - 2,096 / 1,708 / 1,719 / 7,757
The big news to me is that sales grew QOQ (less than 1%, but still grew). First time in several years. So maybe number of patients being treated are stable, price competition has subsided, or both. I'm very surprised that MRK is still a player at all, and its share actually increased slightly QOQ. GILD's share also increased and sales were up, even though it said that it treated fewer patients. My assumption therefore is that its net price per patient actually increased.
And the US commercial market script numbers have held up pretty well - see https://www.investorvillage.com/smbd.asp?mb=2629&mn=11866&pt=msg&mid=19336781
If the companies really think that the market will continue to exist for a while, maybe they will not compete on price so much. That could result in some nice upside surprises on revenue numbers. I doubt that it will happen but it is nice to dream.
Prices used were Jan 2 13 prices. Dividends received more than makes up for starting price differential. Still don't understand using any other than stock price and dividends received. That is what I have done.
HCV world-wide sales for 4Q18 and all of 2018, 2017, and 2016:
------4Q18------/------2018------/-------2017-------/------2016-------
GILD -738 - 43.2% / 3,686 - 47.5% / 9,137 - 73.2% / 14,834 - 79.77%
ABBV - 862 - 50.5% / 3,616 - 46.6% / 1,274 - 10.2% / 1,522 - 8.30%
MRK - 108 - 6.3% / 455 - 5.9% / 1,660 - 13.3% / 555 - 2.98%
TOTAL - 1,708 / 7,757 / 12,477 / 18,595
Overall market revenue down 38% YOY, and guidance is for another decline in '19, though much smaller. GILD guidance is for ~10-20% drop in patient starts in '19 (again seems overly optimistic to me), but for its HCV revenue to drop ~25%. I looked for total market to be ~$7.5-8.0B in '18, which was higher than companies' guidance. Current run rate is ~$6.83B, but total scripts are still falling, but not as much as last year. With more price competition in US public markets, my guess is that companies' 2019 guidance may be too high this year.
WSJ article on NASH today - Bid Pharma's Big Opportunity - https://www.wsj.com/articles/a-big-fatty-opportunity-for-big-pharma-11547807401
Quote:
What % of GILD’s $98M QoQ decline in 3Q18 HCV sales was due to each of the following: a) Fewer HCV patients treated; b) Lower ASP; c) Loss of market share to Mavyret?
GILD disclosed a 20% decline in new patients QOQ (big decline in Europe). The prior quarter was pretty flat on patients. That would indicate that last quarter was mostly lower ASP and this quarter was fewer patients, probably both fewer overall HCV patients and loss of market share to Mavyret. So much of Mavyret is OUS that it is difficult to guess those numbers. Zepitier is still a "sort-of" competitor OUS - pretty well gone in the US.
From the Japanese drug email list -
AbbVie’s hepatitis C drug Maviret (glecaprevir + pibrentasvir) was by far the best-selling medicine in Japan in April-September, but its sales appear to have already peaked out thanks to its own success. The shrinking market signals that the industry is on track to the elimination of the disease by 2030, as advocated by the WHO ...
Shows up on my list.
NBIX - up strongly on earnings (sales really). A long way from its sleep drug problems. Probably further to go. Lots of price target increases.
So, WY has been a pretty bad investment (compared to indexes and other major companies, though better than GE, over 10 years). DO you think that it may changes going forward, and, if so, why?
MRK HCV SALES
Interesting to me that MRK is still selling near same levels OUS - down from $130M to $123M QOQ. It reported ($10)M Sales in US, down from $0.
See http://s21.q4cdn.com/488056881/files/doc_financials/2018/Q2/Supplement-to-Earnings-News-Release-%E2%80%93-2Q18.pdf
RETA ended up ~65%. Moved a little from the opening.
I read it very differently. There is still a big (if not gigantic) untreated population - mostly due to price even at today's prices.
The quote
HCV - Louisiana attempt to change how it is paid for - NPR interview this morning - Dealing with $GILD, but just as easily apply to $ABBV
https://www.npr.org/2018/07/19/630378124/louisianas-new-approach-to-treating-hepatitis-c
MDGL - Bloomberg shows 19% of shares were short.
Comments on HCV sales to date -https://www.investorvillage.com/smbd.asp?mb=2629&mn=11690&pt=msg&mid=18284160
HCV world-wide sales for 1Q17, 4Q17, 1Q18 and all of 2107:
--------1Q17-------/------4Q17------/------1Q18-------/-------2017-------
GILD -2,576 - 76.2% / 1,498 - 63.4% / 1,046 - 49.9% / 9,137 - 73.2%
BMY - 162 - 6.3% / 59 - 2.5% / 0 - 0% / 406 - 3.3%
ABBV - 263 - 7.8% / 510 - 21.6% / 919 - 43.8% / 1,274 - 10.2%
MRK - 378 - 14.7% / 296 - 12.5% / 131 - 6.25% / 1,660 - 13.3%
TOTAL - 3,379 / 2,361 / 2,096 / 12,477
Overall market revenue down 38% YOY, but "only" ~11% QOQ. Annual run-rate now at ~$8.4B. I am expecting about $7.5-7.8B for '18 - worse reduction on percentage basis than '16-'17, due primarily to pricing reductions.
BMY gone from the WW market. MRK had net sales only OUS. ABBV had ~64% of its revenue OUS - much more than anyone has had before. GILD US sales have held up better than expected, but OUS sales are now significantly less than ABBV. US market continues significant decrease in revenue, but scripts have not resumed significant decreases yet. ABBV taking more share in US, but OUS is vastly more important to it, and there is no visibility as to existence or extent of continued OUS growth. I would expect one or two more quarters of OUS growth for ABBV, but not to same extent as 1Q18. But the most important question of "stable" sales number is not known (and probably not knowable). Do ABBV/GILD have more pricing power with BMY and MRK not in market, and no competitors on horizon? Or is the "cure" market fundamentally different from other drug pricing markets? I am no longer willing to bet that this is a $10B or even $7B WW market after '18. Others I'm sure will come out differently.
JMO.
HCV world-wide sales for 1Q17, 2Q17, 3Q17, 4Q17and all of 2107 and 2016:
--------1Q17-------/------2Q17--------/------3Q17------/------4Q17------/-------2017-------/------2016-------
GILD -2,576 - 76.2% / 2,868 - 77.1% / 2,197 - 72.9% / 1,498 - 63.4% / 9,137 - 73.2% / 14,834 - 79.77%
BMY - 162 - 6.3% / 112 - 3.0% / 73 - 2.4% / 59 - 2.5% / 406 - 3.3% / 1,578 - 8.49%
ABBV - 263 - 7.8% / 225 - 6.0% / 276 - 9.2% / 510 - 21.6% / 1,274 - 10.2% / 1,522 - 8.30%
MRK - 378 - 14.7% / 517 - 13.9% / 468 - 15.5% / 296 - 12.5% / 1,660 - 13.3% / 555 - 2.98%
TOTAL - 3,379 / 3,722 / 3,014 / 2,361/ 12,477 / 18,595
Overall market revenue down 33% YOY, and guidance is for another 40 -50% decline in '18. Average price for GILD new patient went from $38K+ to $26K- in US from Q3 to Q4. I assume ABBV net pricing is even lower. GILD guidance is for ~10% drop in patient starts in '18 (seems overly optimistic to me), but for its HCV revenue to drop 55-60%. I look for total market to be ~$7.5-8.0B in '18, but that is higher than companies' guidance. Current run rate is ~$9.45B, but total scripts are falling from last quarter. ABBV taking significant NRx market share, but duration will limit TRx market share. BMY should disappear by end of '18, but MRK will have something (but not much). Companies (GILD and ABBV) talk about end of price competition, but we really don't know where the bottom is - EU seems to be paying about $17K for each new patient, according to GILD. GILD being up today was a surprise to me. May be HIV prospects. Is clearly more of a HIV story than it has been for the last ~5 years - market share went up in recent quarters.
"• ABBV’s $2.5B sales figure is probably conservative, for the reason mentioned in #msg-138017796."
Maybe. Lots and lots of variables, with overall market size being the biggest risk. ABBV growth in commercial US market seems to have topped out for the time being. Expiration of contracts mid-year is an upside potential. OUS should be the core strength, but it was already strong there and the new drug has much, much less revenue than prior drug per patient. I will be surprised if ABBV surpasses $2.8B (40% of $7B or 30% of $9.33).
"• The midpoint of ENTA’s FY2018 guidance for gross operating expenses is $130M—not the $140M number you cited. (The guidance range is $122-138M: #msg-136339615.)"
You are right. I am assuming higher numbers due to experience with other companies, but that is probably unfair.
"• Your 5.5% royalty rate—equivalent to an 11% royalty on the glecaprevir component of Mavyret—is probably too low insofar as it implies that almost all of Mavyret’s 2018 sales will fall in the 10% (lowest) royalty tier. If 2018 Mavyret sales reach ABBV’s figure of $2.5B—or higher (as I suspect)—then a larger proportion of sales than what you’re modeling will almost certainly reach the 15% (mid-level) royalty tier. (Note that V-Pak’s highest-ever annual sales were $1.2B, less than half of what ABBV is forecasting for Mavyret in 2018.)"
We shall see. Since I am less optimistic about the overall income and, at least some of the income is from G1 drug in '18, I'll stick with the 5.5% for now. You are wrong about the highest annual sales for V-Pak. In '15, ABBV had $1.619B of HCV sales WW. That is for a drug that generally produced 70-100% more revenue per patient than Mavyret does. But there is no question Mavyret is a better drug and will have at least double the market share tha V-Pak ever did. But the market will be minute compared to the $22.7B of HCV sales in '15. See https://investorshub.advfn.com/boards/read_msg.aspx?message_id=120266388
I am sticking with my concern that ENTA will have little or no net income in 2018 and probably less in future years. But both of us are just guessing. Others can do their own estimating of total market, percentage of market, royalty rate, and expense total and then see what the net income number is. If there is income, ENTA will benefit from the lower tax rate just like ABBV and GILD will. That should increase the net income. JMO.
"GILD +4% today because ABBV expects 2018 HCV stability in pricing (in all geographies) and near-stability in US HCV patient volume."
Might be reason (more than 5% EOD), but others are possible, including (1) Wells Fargo report indicating GILD likely to beat on HCV and HIV revenue, (2) overall strength of market (BIIB up >10%), or (my favorite) (3) ABBV estimated tax rate for '18 of <10% which should be true for GILD (and others). Again, it is likely that all the reasons are part of it, though HCV issues still do seem to drive GILD share price. One of the reasons that I will not be buying short term calls before GILD earnings, when it is likely that there will be very low '18 HCV sales guidance.
The post that I referred to. DD requested that I repost here.I don't have time to reformat the chart now. Hope you get the idea.
For weeks ending 01/05 (holiday week) and 01/12:
TRx NRx TRx NRx
Harvoni 2380 902 2600 1120
Sovaldi 53 17 59 16
Epclusa 1550 576 1720 669
Vos 291 101 292 119
Total 4274 1596 4671 1924
Viek total 105 33 121 38
Mav 1290 636 1540 800
Total 1395 669 1661 838
Dakl 34 12 37 6
Zep 437 127 416 127
HCV Total 6140 2404 6785 2894
Overall market continues its downward move - 01/12 week worse than 12/22 week, which was a new low for non-holiday weeks. ABBV hitting new highs for TRx and NRx in absolute numbers, and with 24.5% (TRx) and 29% (NRx) of market. GILD and MRK hitting new lows for non-holiday week. MRK TRx will continue down since NRx so low. GILD at 69% and 66.5% of respective markets.
ABBV to report this week. Will be interesting to see $$ numbers, especially OUS where it already had significant strength. But it seems unlikely to me that its quarterly HCV will be much more than double its $276MM in 3Q17.
Much more interesting will be ABBV guidance. It has commented in the past about "multiple billion" of annual sales for HCV. It could guide for $2.5B+ for '18, but that could be the high point too, given the continuing decline in overall HCV sales. It should be able to get 25-35+% of the WW HCV sales in '18 and beyond, but the issue will be how big the market will be. China may determine that, and there will not be much clarity on that for awhile.
I still am expecting GILD to have higher sales than the upper end of its $9B HCV sales guidance for '17. I would guess $9.1-9.2B, but it is dependent on US pricing and OUS sales, so the guess is very much a guess. Again, more interesting is the issue of guidance. In the past, GILD has just made annual guidance, and that has been very conservative. So I am expecting very low guidance. I would not be surprised to see $3-6B HCV guidance. That would be consistent with prior conservative numbers (especially after 3Q17). Arguing against super-low guidance are the GILD comments about "price firmness" and the opening of China sales. So everything is a guess.
JMO.
Update BBG HCV weekly script info and my commentary on 4Q17 sale estimates and '18 guidance - https://www.investorvillage.com/smbd.asp?mb=2629&mn=11550&pt=msg&mid=17905733
The ABBV/ENTA share of NRx may be the highest (it is slightly lower on BBG than the 25%+ a few weeks ago), but the raw numbers seems to have stopped growing. It is below the number from 4 weeks ago, which not a real good sign, and is surprising. I assumed that the raw number would continue to grow to ~1000+. The TRx number has grown and should continue to grow, but it needs to get to 2000+ to have 30%+ of the market. Of course, if Mav is taking 40-50%+ of either the public market or the OUS market, that should make up for a smaller share of the private market.
Sand - interesting merger today (FMSA) - see http://event.on24.com/eventRegistration/console/EventConsoleHTML.jsp?titlecolor=000000&eventid=1565903&sessionid=1&username=&partnerref=&format=fhaudio&mobile=false&flashsupportedmobiledevice=false&helpcenter=false&key=B58AD48A9BBD6166212C9D5222A44166&text_language_id=en&playerwidth=748&playerheight=560&eventuserid=189060065&contenttype=A&mediametricsessionid=153203645&mediametricid=2243646&usercd=189060065&mode=launch
For slide deck and call