"• ABBV’s $2.5B sales figure is probably conservative, for the reason mentioned in #msg-138017796."
Maybe. Lots and lots of variables, with overall market size being the biggest risk. ABBV growth in commercial US market seems to have topped out for the time being. Expiration of contracts mid-year is an upside potential. OUS should be the core strength, but it was already strong there and the new drug has much, much less revenue than prior drug per patient. I will be surprised if ABBV surpasses $2.8B (40% of $7B or 30% of $9.33).
"• The midpoint of ENTA’s FY2018 guidance for gross operating expenses is $130M—not the $140M number you cited. (The guidance range is $122-138M: #msg-136339615.)"
You are right. I am assuming higher numbers due to experience with other companies, but that is probably unfair.
"• Your 5.5% royalty rate—equivalent to an 11% royalty on the glecaprevir component of Mavyret—is probably too low insofar as it implies that almost all of Mavyret’s 2018 sales will fall in the 10% (lowest) royalty tier. If 2018 Mavyret sales reach ABBV’s figure of $2.5B—or higher (as I suspect)—then a larger proportion of sales than what you’re modeling will almost certainly reach the 15% (mid-level) royalty tier. (Note that V-Pak’s highest-ever annual sales were $1.2B, less than half of what ABBV is forecasting for Mavyret in 2018.)"
We shall see. Since I am less optimistic about the overall income and, at least some of the income is from G1 drug in '18, I'll stick with the 5.5% for now. You are wrong about the highest annual sales for V-Pak. In '15, ABBV had $1.619B of HCV sales WW. That is for a drug that generally produced 70-100% more revenue per patient than Mavyret does. But there is no question Mavyret is a better drug and will have at least double the market share tha V-Pak ever did. But the market will be minute compared to the $22.7B of HCV sales in '15. See https://investorshub.advfn.com/boards/read_msg.aspx?message_id=120266388
I am sticking with my concern that ENTA will have little or no net income in 2018 and probably less in future years. But both of us are just guessing. Others can do their own estimating of total market, percentage of market, royalty rate, and expense total and then see what the net income number is. If there is income, ENTA will benefit from the lower tax rate just like ABBV and GILD will. That should increase the net income. JMO.
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