Biotech Values

[DewDiligence]

Re: Puts and takes for ENTA investors from GILD’s 4Q13 CC

[GILD plans] to file sofosbuvir/ledipadvir FDC in treatment naive and experienced GT1 patients for 8/12-week treatment regimen without ribavirin…

According to today’s CC, GILD’s NDA/MAA submissions will request FDA/EMA approval for 8-week treatment in treatment-naïve GT1 patients w/o cirrhosis and 12-week treatment in treatment-experienced or cirrhotic GT1 patients.

Of course, it remains to be seen whether the FDA/EMA will go along with GILD’s requested labeling—particularly the omission of ribavirin in treatment–experienced patients, where foregoing ribavirin lowered SVR12 by almost 3% in the ION-2 study (#msg-96696670).

It appears that GILD is opting for a plan that maximizes simplicity and preempts a pricing backlash*—rather than an approach that maximizes SVR12. This may be an astute decision for GILD from a business standpoint, but it opens the door for ABBV/ENTA to argue that they have the superior regimen from a medical standpoint.

As an ENTA investor, I consider GILD’s decision described above to be double-edged. On the other hand, it’s unquestionably bullish for ABBV/ENTA that GILD plans to conduct “HCV awareness” DTC advertising (#msg-96800604) and that the Sovaldi + Ledipasvir price in Europe is higher than I (or probably anyone) expected (#msg-96800767). All told, my investment opinion of ENTA hasn’t changed unduly as a result of today’s information.

*An 8-week treatment duration will cost approximately 1/3 less than a 12-week duration.