Replies to post #177248 on Biotech Values

[ciotera]

Re: GILD

Nothing like $2B in a single quarter to go to analysts heads :)

[DewDiligence]

GILD—Credit Suisse: likely price of all-oral at $100K for 8 week regimen…

Does CS say what they’re modeling for the 12-week regimen? $150K?

As previously posted (#msg-100491031), I think the US list price of the 8-week Sovaldi + Ledipasvir regimen will be ~$67K and the list price of the 12-week regimen will be ~$100K—i.e. linear pricing. dewophile (#msg-100469795) and jq1234 (#msg-100849128) have identical or nearly identical forecasts.

What are your own forecasts for these prices?

[caravon]

Regarding to Gild HCV franchise sale and earning. IMO,
- Gild share prices have already incorporated future HCV sale and earnings
- Wells, Goldman, and Credit Swisse project/speculate that Gild HCV sale will be somewhat flat (I will not argue about this)
- Assuming that ABBV/Enta HCV combo will be approved by this year end, this sale will come out from the projected potential Gild sale. Therefore, Wells, Goldman, and Credit Swisse somehow ignore an effect of ABBV/Enta HCV sale on Gild HCV franchise. In other word, Wells, Goldman, and Credit Swisse are assuming that ABBV/Enta HCV sale will be a failure. (Here comes my disagreement.)

[Rocky3]

Updating - from 4/23 reports on GILD from Wells, Goldman, Credit Swisse, and RBC:

Goldman
Sovaldi sales: '14-10.4B; '15-10.9B; '16-10.1B; '17-10.7B
Earnings: '14-$6.25/sh; '15-$6.36/sh; '16-$6.61sh; '17-$7.40/sh

Credit Swisse
HCV franchise sales: '14-9.1B; '15-9.7B; '16-12.6B; '17-13.2B; '18-12.0B; '19-10.65B; '20-9.4B
Earnings: '14-$6.52/sh; '15-$6.56/sh; '16-$7.85/sh; '17-$8.51; '18-$6.80/sh; '19-$6.32; '20-$5.89

Wells Fargo
HCV regimens: '14-9.4B; '15-11.7B; '16-12.6B; '17-12.7B; '18-13.9B
Earnings; '14-$6.55/sh; '15-$7.57/sh; '16-$8.67/sh; '17-$9.78/sh; '18-$9.38

RBC
HCV: '14-9.5B; '15-11.5B; '16-9.9B
Earnings: '14-$6.15/sh; '15-$7.00; '16-$7.18



Other comments (summarized by me):

Goldman - (1) I previously posted primary bear case based mostly on sustainability; (2) out year per share increases are due to lower share counts from share repurchases: (3) models cost of all-oral at $95,000; (4) suggests stocking at $400M; (5) target $65

Credit Swisse - (1) likely price of all-oral at $100K for 8 week regimen; (2) suggest a 65% steady state market share for GILD; (3) breaks down HCV '14 sales into $7.6B for Sovaldi and $1.5B for all-oral; (4) target $110

Wells Fargo - (1) Thinks Medicaid share will go up during year, so selling price per RX will go down; (2) expects more warehousing of milder patients until all-oral available; (3) think GILD will price all-oral close to parity with Sovaldi with 12 week price at $90-100K; (4) breaks down '14 sales into $8.6B US, $.7B Europe, and .1B int'l; (5) target $87-$91

RBC - (1) If HVC cut in half from $12 to $6B by '18, still will earn $5-6/sh and a 12-14 p/e gets a value of $60-84; (2) Sees HCV sales $8B+ due to longer tail; (3) estimated inventory build at $400M; (4) If scripts up 50% and inventory flat then US in Q2 at $2.2B and ROW at $.3B for $2.5B total; (5) Base case of $96 is based on 30% of DCF of HIV ($25/sh), HCV ($45/sh), oncology ($7/sh), and synergies ($5/sh) and 70% P/E value of $99; (6) assumes HIV 80% maintenance post '18; (7) has upside and downside scenerios - upside is $110 on higher p/e and higher HCV sales, as well as HBV and other pipelines; (8) downside is $62, based on lower HCV share ($36/sh) and lower sustainability of HIV ($21/sh)

[bundyelvis]

Anything less than a 1000 bucks a pill will take a big chunk out of the gild. People cannot afford 16,500 co-pay for the 12 week program and 33,000 dollar co-pay for the 24 week. Then there are the 10 percent of the people that it does not cure them and there left with a hugh med bill.