Biotech Values

[DewDiligence]

GILD—As a first-order approximation, let’s assume for the sake of discussion that the all-oral GT1 regimens are not launched in the US until year-end. With the Sovaldi weekly NRx number settling in the 3-4K range, and allowing for some non-capture by IMS, we may presume that about 200K US patients will use Sovaldi during 2014.

Well, 200K is a long, long way from the number of US diagnosed treatment-experienced or cirrhotic GT1 patients (who require 12 weeks of treatment), so I don’t see how the proportion of Sovaldi + Ledipasvir users who get treated for only 8 weeks can get to 90% during the next few years. When you consider the EU and the other consequential ex-US markets, it seems even harder for Stifel’s 90% figure to be attained in the next few years. I do think the 90% figure might be attainable eventually, but not for quite a long time.

In short, I would submit that Stifel is making a bogus assumption in order to model a higher price for GILD’s 8-week Sovaldi + Ledipasvir regimen than the consensus price of the posters on this board who have weighed in on this matter.

Feedback welcome.