Biotech Values

[Rocky3]

From Wells:

**Harvoni/Sovaldi IMS data weekended
11/28/14 now available. This week's Harvoni NRx were down almostprecisely
20%, which we attribute to the Thanksgiving holiday; this suggests Harvoni NRx are settling down at a runrate
of 3,000
scrips/week, continuing to indicate Harvoni TRx could exit 2014 at a runrate
of around about 7,000 scrips/week (excluding
holiday effects).
**Specifically, Harvoni NRx (key measure, in our view, as this reflects new patient starts) were down week over week, to
2,411 from last week's 3,008, 19.85%.
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) and lower treatment initiations looking ahead to the December holiday season. Sovaldi NRx decreased at the
same pace, to 784 from 988, 20.65%,
suggesting NRx could be settling at a runrate
of 1,000 scrips/week as the base
demand from GT2/
3 patients for that drug.
**Total prescriptions across GILD's HCV franchise were down week over week, to 3,894 from 4,366, 10.81%.
This measure
includes 1,483 refills from the 1,984 scrips first filled four weeks ago, and we attribute the 25% difference in ''missing refills''
to Thanksgiving as well, which could be compensated for the next week.
**If Harvoni new parts starts are flat through 2014, our tracker suggests Q4 U.S./WW sales of $2.81B/$3.55B, though a
bounceback in refills in next week's data would render this conservative. This does include a net positive inventory build, as
we assume Sovaldi inventory drawdowns mostly occurred last quarter.
**BOTTOM LINE: GILD's total HCV franchise sales should exit the year at a favorable steadystate
into the ABBV launch,
which could help reduce concerns about the overall market opportunity next year and expand the multiple.