Replies to post #177510 on Biotech Values

[DewDiligence]

GILD—As a first-order approximation, let’s assume for the sake of discussion that the all-oral GT1 regimens are not launched in the US until year-end. With the Sovaldi weekly NRx number settling in the 3-4K range, and allowing for some non-capture by IMS, we may presume that about 200K US patients will use Sovaldi during 2014.

Well, 200K is a long, long way from the number of US diagnosed treatment-experienced or cirrhotic GT1 patients (who require 12 weeks of treatment), so I don’t see how the proportion of Sovaldi + Ledipasvir users who get treated for only 8 weeks can get to 90% during the next few years. When you consider the EU and the other consequential ex-US markets, it seems even harder for Stifel’s 90% figure to be attained in the next few years. I do think the 90% figure might be attainable eventually, but not for quite a long time.

In short, I would submit that Stifel is making a bogus assumption in order to model a higher price for GILD’s 8-week Sovaldi + Ledipasvir regimen than the consensus price of the posters on this board who have weighed in on this matter.

Feedback welcome.

[Rocky3]

For a long time, I assumed that the all-oral would be priced at $84,000 for the 8 week treatment ($1,500/pill). I still think that it will be under that due to the political drama, but I may be underestimating GILD's price toughness (and ABBV's).

So I am back to my original thought, GILD will price the all-oral around $1500/pill. Will make the 8 week treatment at $84,000, less than the current ~$92,000 all in. Will make the 12 week $126,000. less than the current $150,000 all in with Oly.

ABBV at around $120,000 gross, but closer to $100,000 net.

Primarily based on continued discussions around pricing that emphasizes Sov cost with Oly. Still ~4 months away, so retaining right to change my mind again. FWIW.