Replies to post #167668 on Biotech Values

[DewDiligence]

Good point re the different prevalence of GT1a vs GT1b in different countries; however, the percentages are not unduly lopsided. Among all GT1 patients, if one assumes 2/3 of treated patients will be GT1a in the US and 2/3 of treated patients will be GT1b in Japan and the EU, that’s probably close enough for modeling purposes.

[DewDiligence]

ABBV/ENTA—from a competitive and commercial standpoint if they felt they wouldn't do well [without ribavirin], i am not so sure they would run these arms [in PEARL-2/3/4].

Again, my view is that some arms of some of the registrational phase-3 trials had to exclude ribavirin. Think of the problem ABBV/ENTA would have had convincing advisory panelists and the FDA that ribavirin was an obligate component of the regimen if the phase-3 program hadn’t even tested that hypothesis.

[DewDiligence]

...I see ENTA a great value here since Abbvie seems totally committed and there is very little chance they won't be approved.

Many biotech investors don’t seem to realize that phase-3 trials for antiviral drugs are much less risky than phase-3 trials for other kinds of drugs. Efficacy at impeding viral replication can be well-established in phase-2, and the standard efficacy endpoint for HCV regimens (SVR12) is a lab measurement with no placebo effect. Thus, most phase-3 HCV trials are essentially safety/tolerability trials.

[mcbio]

Regardless I see ENTA a great value here since Abbvie seems totally committed and there is very little chance they won't be approved

I'm of the opinion that it's not simply a question of approval but rather you need to have confidence that ABBV/ENTA combo will be able to effectively compete against both GILD and the future QD IFN/ribavirin-free HCV DAA combos containing fewer components. If this turns out to be true, then, sure, I think ENTA will prove to be a great value here. But, I think the market is assigning some doubt on this front (I am as well) and that's why you see the cheap valuation.