Biotech Values

[DewDiligence]

ENTA—…could there be something more at play here?

I don’t think so. ABBV’s method of issuing V-Pak sales guidance via an end-of-year annualized run rate (rather then a 2015 calendar-year number) enabled some analysts to plug unduly bearish assumptions into their models of the ramp-up, and there won’t be any hard data until 1Q15 results are released in April to refute those modeling assumptions.

Objectively, ABBV’s V-Pak guidance of a $3B+ run rate by the end of 2015 is pretty good and is consistent with my own valuation model from late 2013 in which I projected $4.1B of annualized V-Pak sales at peak throughput. Moreover, it’s very likely that ABBV fully expects to beat the $3B figure by a comfortable margin.