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Replies to post #175802 on Biotech Values
**On 3/28 IMS prescription data for Sovaldi were released for the week ending 3/21/2014, the 15th week of launch. We
note IMS made slight downward adjustments to some of the prior prescription numbers.
**The week's total prescriptions for Sovaldi were 7,159, a change of +0.13% vs. last week's recently-adjusted 7,149.
**The week's new prescriptions for Sovaldi were 3,738, a change of -7.1% vs. last week's recently-adjusted 4,024 and
approximately the levels they were at two weeks ago.
**Plugging this into our proprietary Sovaldi projector, we believe U.S. Sovaldi sales could reach the following under these
scenarios:
(1) Base case - secondary warehousing - growth in new patient starts slows Q2-Q3 then picks up again Q4 - $8.72B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $7.49B
(3) Sovaldi new patient starts level off for rest of year -$12.74B
(4) Week-over-week NRx changes match those seen with Incivek+Victrelis at same point in launch - $11.13B
**With one week left in the quarter, Q1 2014 sales track at $2.22B in our base case, substantially higher than consensus
$716M.
**We note a few caveats, which is that there is limited data from which to extrapolate IMS's capture rate since we only
have one quarter of actual sales.
**BOTTOM LINE: We are not surprised at some point we would see a slowing of new prescriptions; we saw a one-week
blip earlier from week 12 to 13. In our base case we modeled new patient starts declining in Q2 and Q3 as initial
''warehoused'' patients were worked through and more patients await the all-oral regimens expected in Q4. We believe
the potential for a slowdown from the initial trajectory was an overhang on GILD shares but note that the bigger picture,
even before the optimal regimen is available, scrips still indicate 2014 U.S. sales could approach $9B (vs. buy-side consensus of $6-7B based on our recent survey)--suggesting a robust near- and long-term opportunity.
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