Biotech Values

[DewDiligence]

ENTA—The lofty peak-sales forecast* of $9-10B for Sovaldi+Ledipasvir can be construed as bullish for ENTA insofar as it’s consistent with my valuation model in #msg-94993406 in terms of sales and market share.

The ENTA valuation model in #msg-94993406 posits peak annual sales of ABBV/ENTA’s 3-DAA regimen of $4.1B and a market share of 38% in GT1 patients. By simple arithmetic, this assumes an overall GT1 market (US + EU) of $4.1B/0.38 = $10.8B, of which $6.7B ($10.8B-$4.1B) comes from Sovaldi+Ledipasvir (and other lesser competitors). Since this $6.7B figure is for GT1 patients only, it dovetails nicely with the Bernstein forecast of $9-10B peak sales of Sovaldi+Ledipasvir in all genotypes combined.

*2017 forecast from Geoffrey Porges of Sanford Bernstein, as reported in Barron’s (http://online.barrons.com/article/SB50001424053111903704404579338753826923552.html ).