Replies to post #171085 on Biotech Values

[mcbio]

I aimed to make my ENTA valuation model in #msg-92234861 conservative, especially with respect to pricing, where I assumed a blended average selling price in the US and EU of $25K for ABBV/ENTA’s 3-DAA regimen.

In light of GILD’s $1K-per-day US list price for Sovaldi, it’s probably safe for me to raise the $25K figure in my ENTA valuation model.

I must say I don't really understand where you come up with the $25K estimate for ABBV/ENTA all-oral combo. Olysio is priced at $66K for peg/riba combo and Sovaldi at $88K. There's no reason to believe that any all-oral combo will be priced at a discount to a peg/riba regimen. Indeed, an all-oral combo should certainly warrant some kind of premium.

[dugafish]

Really great work, and thank you for the early heads up. Question, did you assume 25K or 30K? It appears 30K, not that it would make a huge diff.

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http://investorshub.advfn.com/boards/read_msg.aspx?message_id=92234861

I conservatively model an average selling price for ABBV’s 3-DAA regimen of $30K for a 12-week course of treatment (higher in the US, lower in the EU). This translates into $3B of annual HCV sales booked by ABBV in the US and EU at peak throughput.
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[DewDiligence]

It’s reasonable to surmise that ABBV and ENTA have had in-depth discussions about an acquisition. The hang-up (IMO) is probably disagreement over how much value to ascribe to ENTA’s EDP-239 partnership with NVS.

Addendum: Any ENTA long rooting for a buyout should be hoping it happens later rather than sooner because a deal would likely be for cash rather than stock and the tax hit on a near-term deal (taxed at ordinary-income rates) would be punitive. (Also see the bottom of #msg-94843381 re the ObamaCare surcharge on investment income and capital gains.)

Those who own ENTA mostly in an IRA or who have sizable tax-loss carryforwards may ignore the above and root for a near-term buyout, LOL.