Biotech Values

[Rocky3]

*ABBV’s HCV sales for the first three quarters of 2019 were $2.297B ($815M + $784M + $698M); $3.0B - $2.297B = $703M.

With guidance at $3.3B for first two quarters, lowered to $3.1B after Q2, and now lowered to $3.0B, I would not say that $703M is current guidance for Q4. My interpretation is that guidance is $653-753M, since they have used only round numbers. My bet is that $653M is a much closer estimate. For ABBV especially, OUS sales is the primary issue and that is driven more by government policy and payments than market forces or company pricing. We have seen some pretty strange revenue misses and gains for HCV in prior Q4s due to VA and government quotas and other issues.

The GILD slides showed that total new patients have held up pretty well - much better than I had expected. The problem is that many more are public pay patients - Medicaid and prisons. So revenue continues down. If 2019 HCV WW revenue is around $6.3B (including MRK), that is the smallest decline in three years (prior years were $7.75B, $12.5B, and $18.6B). So still headed down, but there is less decline - and starts have stayed up.

JMO.