**Harvoni/Sovaldi IMS data week-ended 2/6/15 was just released and showed continued growth in Harvoni, with relative stability in Sovaldi. **Harvoni NRx are up another 2% this week to 3,846, with an unusually high uptick in TRx (+7% to 8,396) which may represent some variability. In the meantime, Sovaldi remains steady, with NRx just slightly down at 751, we believe reflecting the ~$3B steady-state run-rate for U.S. GT-2/3 usage. **Plugging these numbers into our proprietary projection tool, at current run-rate, Harvoni U.S. sales look to track at ~$9.4B. This assumes a 46% discount rate--actual discount may be higher, since the cited discount applied to Harvoni and Sovaldi both and Sovaldi likely less discounted, or may be lower if GILD has been rebating on a per-patient rather than per-pill basis. The $9.4B assumes a 1.5% week-over-week increase in new patient starts for the remainder of the quarter, then a ~1% weekly decline in new weekly new patient starts for the remainder of the year to account for the waning early-year bolus of patients gaining access as well as competition. Adding $3.2B for U.S. Sovaldi and $3.2B for ex-U.S. HCV sales would project total HCV sales of $15.9B. **Were new patient start run-rate to remain flat through end-2015, our projector suggests there would be ~177K new patient starts on Harvoni this year via IMS data - which given IMS's 67% capture rate could represent over 250K actual new patients treated - potentially leading to global HCV sales of $16.4B. **BOTTOM LINE: Continued steady growth in new patient starts on Harvoni remains encouraging and continues to demonstrate good growth/durability of HCV market thus far; we believe GILD is undervalued relative to peers even with the longer-term HCV uncertainties.
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