Biotech Values

[kris_kade]

During midday trading, ENTA was affected by Morgan Stanley’s new downgrade of ABBV and the lowering of its forecast for ABBV/ENTA’s HCV sales. The purported rationale for MS’s downgrade was the statement by ABBV’s CEO during the JPM webcast two weeks ago that ABBV did not need to compete with GILD on price.

When I heard ABBV’s JPM comment in real time, I thought it was modestly bullish for ENTA insofar as the thinly-veiled message was that ABBV/ENTA’s HCV regimen was strong enough to compete with GILD on efficacy and safety…period.

I still expect ABBV to price the 3-DAA regimen at a discount to GILD’s Sovaldi + Ledipasvir, but ABBV’s statement at JPM suggests that the discount will not be enormous and will not trigger a pricing war.

Still does not make sense for MS's 40% cut in est. With Savaldi's successful ramp-up, all the more reason for ABBV to get decent share.