Biotech Values

[oc631]

[GILD] Appreciate[d] the various viewpoints.

The street wants to know why 70% of warehoused patients chose an interferon-based option last quarter. Is this an anomaly or a trend? Justifying this metric by suggesting it's tracking the genotype make-up within the U.S. population is pure BS. Ideally we should have seen a much higher oral treatment rate amongst GT2 patients. If this trend continues it suggests one of two things (and neither is wildly bullish for GILD at their current valuation).


1- GT2 patient uptake is weaker than expected. These patients are the low hanging fruit for GILD (without competition). GILD stands to lose many GT3 patients to the Sovaldi/Daclatasvir combination if approved.

2- Doctors (and perhaps ill-informed GT1 patients) are committing to interferon-based therapy. Taking the tolerability challenges of interferon-based therapy into consideration, and the fact an oral option will be approved this year, this scenario is ripe for non-compliance. Non-compliance will lead to higher rates of treatment failures. In a market (or genotype) where there's no competition this could only work to GILD's advantage. Unfortunately for GILD ABBV has a highly competitive combination and payers will support a competitive marketplace by insisting on re-treatment with a differentiated combination. What percentage of payers budgets are supporting GILD's HCV monopoly in 2014?


I'm not bearish on GILD as an investment yet these are some of the challenges. GILD is the most unethical large bio-company to grace the NASDAQ. And the most politically connected all the way through to the FDA. I'm not interested in discussing this matter since I'm on the road traveling and nobody wants to hear it anyway when there's money to be made.