Biotech Values

[Rocky3]

From Wells:

**Harvoni/Sovaldi IMS data week-ended 12/26/14 is now available. Harvoni NRx is down to 2,500 from 3,370, -25.8%,
reflecting the Christmas Eve/Christmas Day holidays.
**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. It is difficult to ascertain the offsetting effects of these trends,
though we are modeling Harvoni in growth phase of its launch and look to coming weeks for evidence of resumption of
growth.
**Sovaldi NRx decreased to 677 from 1,005, -32.6%, an incrementally greater decrease than Harvoni but in-line with
likely greater underlying demand from GT-1 patients for the new drug. Before this week, Sovaldi NRx appeared to be
settling at a run-rate of 1,000 scrips/week as the base demand from GT-2/3s, which should be solid if things bounce back
to those levels.
**Total prescriptions across GILD's HCV franchise were down week-over-week, to 7,402 from 9,412, -21.4%. This
includes this week's total NRx count of 3,177, plus refills from the 2,411 Harvoni scrips first filled four weeks ago, and the
1,353 Sovaldi scrips first filled eight weeks prior, for a total of 6,941 scrips with a slight refill ''excess'' is implied by the
difference in total TRX and expected total TRx.
**Our tracker suggests Q4 U.S./WW sales of $3.02B/$3.77B versus FactSet consensus Q4 WW sales of $3.75B. This
does include a net positive inventory build, as we assume Sovaldi inventory drawdowns mostly occurred last quarter and
Harvoni will be built up.
**BOTTOM LINE: Harvoni NRx and other scrips trends were down reflecting the holiday 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.