Enanta Pharmaceuticals Inc (ENTA)

[steveporsche]

fwiw---Gilead, AbbVie Hep C Price Cuts Seen Hitting Sales

BY AMY REEVES, INVESTOR'S BUSINESS DAILY


02:13 PM ET

As the price war over the new hepatitis C drugs heats up, the 2015 consensus estimates for both may be too high, according to Deutsche Bank.

In two separate notes Tuesday and Wednesday, analyst Robyn Karnauskas calculated the prospects for AbbVie's (NYSE:ABBV) Viekira Pak and Gilead Sciences' (NASDAQ:GILD) Harvoni and Sovaldi after the two companies announced a series of exclusive agreements with payers and pharmacy benefit managers.

"ABBV has so far nailed down 7% of US lives (Express Scripts (NASDAQ:ESRX) national formulary) while GILD has been chosen as preferred for 30% of US lives (CVS (NYSE:CVS) and Anthem (NYSE:ANTM)," she wrote. "If we were to assume 10% market share for ABBV among non-exclusive/preferred lives, we see overall share for ABBV at 14% and US sales at $1.25 billion in 2015."

With added revenues from Europe, where the drugs in Viekira Pak are expected to launch this year both as a set and as separate products, Karnauskas arrived at total HCV sales of $2 billion vs. $2.7 billion consensus. However, she also expects Gilead is going to low-ball consensus due to the price discounts it's had to negotiate to compete with AbbVie.

"At worst case, we expect discounts in commercial channels to be 15% for Harvoni (5% Sovaldi) which coupled with government discounts (40% Harvoni, 30% Sovaldi) calculates to 22% overall discount for HCV franchise," she wrote, explaining that this could result in revenue guidance $1 billion lower than the present consensus of $28.6 billion. "If guidance comes $2.5 billion lower that would validate what PBMs (pharmacy benefit managers) are telegraphing regarding discounts."

AbbVie is due to report Q4 and 2015 guidance on Jan. 30. Gilead hasn't yet set a date for its report.

Despite these lowered estimates, Karnauskas maintained a buy rating on both stocks due to their pipelines full of other promising drug candidates. The stocks didn't react much on the stock market today: In afternoon trading, Gilead was down 0.5% while AbbVie was down 1.4%. Gilead moved back above its 50-day moving average on Tuesday while AbbVie continues to slide below that key level.

http://news.investors.com/technology/012115-735507-hepatitis-c-drugs-gilead-abbvie-may-miss-estimates.htm