Replies to post #176145 on Biotech Values

[Rocky3]

From Wells:

**IMS prescription data for Sovaldi were released today for the week ending 3/28/2014, the 16th week of
launch. We note IMS made downward adjustments to some prior prescription data.
**The week's total Sovaldi prescriptions were 7,434, a change of +3.84% vs. last week's 7,159.
**The week's new Sovaldi prescriptions were 3,878, a change of +3.75% vs. last week's 3,738.
**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 -
$8.4B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $6.8B
(3) Sovaldi new patient starts level off for rest of year -$11B
(4) Week-over-week NRx changes match those seen with Incivek+Victrelis at same point in launch - $11.6B
**1Q14 U.S. sales are tracking at $1.6B ex-inventory, more than double sell-side consensus' $716M, with
potential additional meaningful upside from inventory build.
**We note a caveat is that there is limited data to extrapolate IMS's capture rate with only one quarter of actual
historical sales.
**BOTTOM LINE: We expect this bounceback in new Sovaldi prescriptions to provide reassurance that
following last week's decline, room for additional adoption remains. In our base case we still model new
patient starts declining in Q2 and Q3 as initial ''warehoused'' patients are worked through, though it is looking
like that potential decline may not ultimately be as steep. Scrips trends remain highly encouraging, and while
these will not address long-term concerns about pricing and out-year sustainability, we believe Sovaldi
remains off to about as good a start this year - in a non-optimal regimen, no less -- as one could have imagined.
We remain positive on GILD based on the long-term Sovaldi opportunity, the solid HIV foundation, and the
underappreciated pipeline.