Replies to post #203000 on Biotech Values

[DewDiligence]

BMY conceded on the 2Q16 CC that Daklinza sales will quickly evaporate now that Epclusa is on the market.

[biocqr]

GILD >wonder how much of this goes on...

How I Got the $84,000 Hepatitis C Drug For $1500 by Buying It From India

http://www.alternet.org/personal-health/84000-hep-c-drug-only-1500

I did some internet sleuthing, found that Harvoni from Indian pharmaceutical house Natco is sold as Hepcinat LP, and quickly discovered dozens of online vendors ready, willing and eager to sell it to me. I made my inquiries in the heady days of rollout last fall and got price quotes ranging from $500 to $2,500. I eventually decided to go with a company called Care Exim, which offered the pills for $1,500. (The cost is significantly lower now. In searches I made while writing this, some quotes were around $500 for the complete course of treatment. Care Exim now says it can provide Hepcinat for $1,050 for the full course of treatment.)

It felt kind of sketchy, however. I was dealing with unknown online drug purveyors based on the other side of the planet. They didn't take credit cards—payment took the form of a bank transfer—and didn't require a prescription. They were happy to ship to the United States even though doing so violated U.S. customs regulations and they were quick with assurances that it would get through with "no problem." Was it a scam? Was I buying counterfeit drugs? Those were the questions I weighed, balanced against the possibility of being cured at a cost I could (barely) afford.

I paid my money and I took my chances. The package arrived in nine days, untouched by customs. There were indeed three bottles of pills labeled as Hepcinat LP manufactured by Natco, with seals and even a folded paper insert with all the drug information on it. I took the pills for 83 days (saving one for possible testing just in case), waited a couple of weeks, then went to my doctor and had my blood drawn. The following week, he reported that my hepatitis C viral load was now zero. I was cured.

[Rocky3]

HCV world-wide sales for 3Q16 and all of 2016:

--------3Q16---------------2016-------
GILD -3,325 77.9% - 11,605 - 79.6%
BMY - 379 - 8.88% - 1,352 - 9.27%
ABBV - 378 - 8.85% - 1,211 - 8.30%
MRK - 164 - 3.84% - 326 - 2.2%
JNJ - 21 - .49% - 79 - .54%

TOTAL - 4,267 -- 14,573

Since the 2015 total was 22,703, '16 sales will be down at least 17%. And '17 should be down another 10%+ without significant additional discounting.

Since BMY is disappearing in the US (its primary market) and ABBV continues to lose share to MRK in the US (not nearly as important since ABBV already has such a small share), MRK will be the main competition in the US until ABBV comes with its 2nd generation product.

The main issue continues to be how much market there will be in 2018 and beyond. GILD's OUS sales have decreased much more significantly than its US sales. Clearly the Japanese price decrease is a big part of that, but the EU decrease is more of a surprise. ABBV is clearly taking some market share there, but its overall OUS sales are not really growing either. It appears that EU sales industry wide are going to fall going forward also.

The market is pricing GILD (and ENTA) as though the fall will be steep and with stop. The market had underestimated the sales in '14 and '15 and overestimated the sales in '16. Whether it is right now is anyone's guess. FWIW, my guess is that '17 and '18 will be down years in the 20% range (assuming no real price war in generation 2 products), and that the decreases will be smaller thereafter. I still think that GILD will maintain a ~80% market share WW. BMY will not have much share and ABBV will have the rest with its 2G product. But with the much smaller overall market, ABBV sales will not be much (if any) above its sales for '15. Of course further trials could show a problem with side effects that charge the prospects for GILD and/or ABBV greatly.

As always, JMO.