Biotech Values

[willyw]

GILD, MRK, ABBV, ENTA, ACHN; HCV and EASL/1Q ER. Any predictions?

For most of us with interest in HCV it has been a long and perhaps frustrating quarter. Perhaps we are all waiting to see where things are after the dust settles.

Just for fun, here are mine.

GILD has the market dominated. Shareholders are scared by market share, large discounts, the competition, the future and any other real or imagined threats. I am less scared. I think they will beat estimates handily. I think share price will rise by May, but it may fall with Abbvie data on 2nd gen or Abbvies ER this week where larger numbers of patients will be reported. In the end, EASL abstracts on 2nd gen programs, a good first quarter and reassurances of a good second quarter may break GILD out of this stagnant share price pattern.
IF current USA prescriptions are exceeding guidance and expections....what happens when you add in Canada, the EU, Egypt and Japan? This could be a huge surprise.

Hahahah; by surprise, I mean a positive surprise; not like last quarters's -10% drop after a report of record earnings, a dividend and stock buy back program. : )


ABBVIE, I think they will both rise and fall on data NRX and TRX. I think it will be higher than many expect, and lower than some anticipate. IT WILL have data that reassures that it is sharing in the HCV market and will have an extended place at the table w/ 2nd gen program. Other than that.... the numbers are so hidden and hard to take serious what is reported, I just don't have a clue. Some of the payors are slow coming on, but I think the pie may soon be divided and reported.


ENTA; good and growing income should shore up this stock. The promise of extended royalties from the 2nd gen program and a new ability to more closely chart income royalties should comfort investors. IF ENTA can breathe some new hope into it's other assets it should see several boosts; 1) earnings trajectory into 2017 better understood, 2) Promise of 2nd wave Japan, 3rd wave (493) income, 3) we could soon see data on newer asset progress in HCV/NASH. I think the price is unlikely to drop, is undervalued and has multiple catalysts to drive up upward again. EASL may provide this, or Abbvies ER, or ENTA's ER. Biggest threat? If Abbvie has dramatically lower than expected market share.


MERCK. I look forward to seeing all the data, but my impression is that the new HCV program will offer an improvement over the Abbvie 3D (1st Gen), but not at all over the Abbvie 2nd Gen program expected out in 2017. So they seem to have a temporary niche, but can they extend it with their (IDIX) nuke program? So far, I haven't heard much about this program.


ACHN, I cannot tell how many more times the stock will rise on the Sovaldi proxy trial, but it may rise again. What we need to see is data on wholly owned ACHN assets. I am more impressed with their NS5a than their nuke, but the nuke could still be an efficacious but slower acting, yet still viable compound.


I guess that is a segue over to JNJ. They have a alios (preclinical?)nuke, they have a decent approved PI (simeprevir), and if they added a decent NS5A they could have a reasonable treatment. It remains to be seen if they have a decent nuke, but their PI is not up to par with ENTA or GILDS. Unless they have a compelling nuke I can't see much potential. I have not seen much in the way of data, but we will at EASL. These nukes.... have a history of getting our hopes up and leaving us high and dry. It is hard to imagine it could be competitive w/ GILD 2nd Gen program(s). Abbvie just reported a 99% SVR-4 with their 2nd gen program.

RGLS could potentially have a seat at the table. We may also start seeing interesting combinations of drugs used if new drugs stop being developed. I think it could have potential when co-dosed with a drug or combo.

I am interested in if something surprising could pop up, like adding a new mechanism like RGLS or ENTA's host based compound.

I am also wondering/expecting what could be achieved if Abbvie were to add a third compound/mechanism to their 2nd gen program.

For those who are trying to build on GILD Sovaldi based treatments, I wonder; just how long will Sovaldi will be available? It is only really needed now for G-2 and 3. What happens to (single agent) Sovaldi when the GILD second gen all in one pill pan-genotypic protocol is approved? It is for this reason I think some of these trials my be proxy instead of the intention to cure w/ a Sovaldi based program. We will see.

Segue to.....
The future in HCV investment. I think we are rapidly approaching the point at which companies stop trying to develop new programs.
There are an almost fixed number of patients and they are rapidly starting to decline in the largest paying countries. The bar keeps getting set higher, and it becomes statistically difficult to improve much on a 95-99% cure rate. That leaves duration, and there may be treatment time that is also exceedingly difficult to improve much on. Although these are all large improvements over the old, they all have symptoms, AE's and some in development may not make it past preclinical or through trials.

I think we will see fewer players in HCV.
I think we will see some increasing numbers of doctors entering into this area in the future. I have a friend who has mentioned a GP provider in the future.
Larger numbers may be treated sooner than expected, which of course will further impact on companies who desire to get in on the HCV space.

There are a lot of moving parts, but this is what I am seeing/imagining.

Abbvie ER is Thursday AM, EASL is 22-26, GILD ER is Apr 30, ENTA 1st week May, ACHN 2nd week May

I think we will see a lot of movement in share price in the next few weeks. Hang on to your hat.