Replies to post #175193 on Biotech Values

[Rocky3]

You seem to be willing to accept the sell-side projections for GILD’s HIV franchise—lock, stock, and barrel; however, if something should go wrong with the TAF program, those numbers won’t hold up.

No more than I accept the HCV numbers. Very true that we don't really know if the HIV franchise hold long term, but I think that the '14 and '15 numbers seem conservative. Scripts are holding up very well so far this year. The estimates may be too low in the near term and too high in the longer term. I think that effects the p/e for '15 and '16 more than '14. Maybe a 10 or 15 p/e is more accurate in '16 when earnings may be $15/sh because HCV sales are over $20B. Losing half or more of the HIV franchise will be not very important. Much more important will be how long the HCV numbers can hold up. That will depend on education and non-US sales.

This blast off of scripts seems more and more negative for ABBV/ENTA. Less patients available (if percentage of patients from Dec remains) and more comfort with GILD drug. Seems the consensus of 20-25% for ABBV/ENTA more likely to me, but market is much larger than previously estimated. Maybe net, net it is the same dollars for ABBV/ENTA.

[ciotera]

GILD—Others should voice their opinion.

At the risk of repeating myself, there is no evidence that anything has fundamentally changed in this market vs. what was seen with previous launches. The higher they rise, the harder they fall.