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Sovaldi scripts seen strong in second week

  • Sovaldi (GILD -0.9%) scripts reportedly rose to 932 in the HCV drug's second week on the market, according to Bloomberg, citing Symphony Health data.
Comments (7)
  • LSYMD
    , contributor
    Comments (71) | Send Message
     
    With most of Wall Street on vacation, it should be interesting to see the reaction on Monday. I disagree with the thinking that it is "too early to reevaluate", as Solvadi, after 2 weeks, has a 65% estimated share of the NS5B+PI US market. Furthermore, ribavirin prescriptions have also grown dramatically since Solvadi's introduction. At the current prescription rate, sales of Solvadi appear to be annualizing at about $1.25 billion, or 45% of analysts 2014 estimates (I am forecasting $8 billion). As the next 2 weeks of reporting will reflect holiday shortened weeks, one should not expect significant sequential TRx growth (but if it were to happen, that would be very telling!). I continue to estimate GILD's EPS in 2015 at $7, and my price target remains $140. Len
    27 Dec 2013, 01:33 PM Reply Like
  • hneumann
    , contributor
    Comments (560) | Send Message
     
    Wow, $ 8 billion is a lot higher than estimates
    27 Dec 2013, 02:44 PM Reply Like
  • Vinman28
    , contributor
    Comments (2) | Send Message
     
    Its unfortunate we cant get above the 52 week high with all the great news...Its just gone up so fast.. I guess a rest would be healthy.
    27 Dec 2013, 04:33 PM Reply Like
  • LSYMD
    , contributor
    Comments (71) | Send Message
     
    I, too, would have expected the recent positive news in regard to sofosbuvir and the oncology portfolio, coupled with the overall Market strength, to send the stock to new highs. I am perplexed by the level of short interest in a company with such outstanding prospects (I view the stocks I am short in the fund as having very different underlying fundamentals!). One of the negative stories relates to the possibility of a patent suit loss (can't be proved, so it creates uncertainty). Another line of thinking relates to concern as to who the incremental buyer is at this level. Finally, there was some talk about a 2015 price war with AbbVie, which although I dismiss, cannot be proved at this time. I note that my assumption for average Solvadi realized pricing is $65,000 per prescription. If the Solvadi prescriptions continue to grow this impressively (with the exception of the holiday shortened weeks), the stock in my opinion will go much higher. It is not uncommon for stocks to pause near breakout highs pending resolution of the move. As I have previously stated, my expectation for 2014 Hepatitis C revenues is $8 billion, which is 2.8x consensus. Len
    30 Dec 2013, 03:14 PM Reply Like
  • STREETRE2
    , contributor
    Comments (151) | Send Message
     
    Does anyone else have a concern that the Affordable Care Act might taper interests in healthcare stocks next year? While on the positive side 30 million more new patients were to come into the market, we now hear there are formularies in the exchanges whereby if your drug is not listed, it is not covered. This is the same whether someone is in the bronze thru platinum plans. Furthermore, deductibles are up in some cases to $5,000 as are out of pockets. This will only grow as companies such as UPS announced to 15,000 employees they will no longer cover their spouses due to increased costs of Obamacare. And by the end of next year the Corporate mandates go into effect enhancing the above scenarios. How can this be good for drug companies not to mention the gap where more people have lost their insurance going into the new year vs getting insured?
    31 Dec 2013, 06:55 AM Reply Like
  • PEMINC
    , contributor
    Comments (114) | Send Message
     
    Streetre2:
    The patient population for HCV is different than many other disease groups. It is probably shares some patients with HIV, and also includes got a goodly number of Baby Boomers. So insurance may well come from Medicare and Medicaid. Plus, its truly a break-through improvement over previous therapies, and its fair to say that Sovaldi will be overall cheaper and more reliable as a therapy. I think there is a significant latent population who will jump at the chance to take it.

     

    Is this a no-brainer stock pick? Probably not, as evident from the arguments presented above, but if you believe in GILD management's experience and ability (think HIV) to execute on Sovaldi's potential, I think there is a good case here.
    31 Dec 2013, 12:34 PM Reply Like
  • LSYMD
    , contributor
    Comments (71) | Send Message
     
    In regard to the ACA, one must balance, as noted above, the addition of 30 million people becoming insured to those who will have higher co-pays and deductibles. My calculations suggest that the former significantly outweighs the latter, and so, at least in the short term, healthcare expenditure growth should increase. On the drug formulary side, 80% of prescriptions are now generic due to loss of patent protection of the phenomenal drugs, and drug classes, created between 1987-2002---sort of like when Parish, Bird and McHale retired from my Celtics. In regard to HCV, while it will be very expensive (I forecast it to become the largest drug category in history), it is competing with similarly priced inferior therapies (lower cure rates, more side effects) AND pharmacoeconomic studies suggest that curing Hep C is cost saving over the long run due to the cost of treating complications. As for the drug companies, it puts greater emphasis on research productivity in medical areas with unmet needs, eg oncology, CNS, nephrology, hepatology. Furthermore, especially in light of the greater influence of PBMs, SG&A expenses as a percent of revenues will continue to be lowered (not as good as revenue growth, but a positive for earnings). Len
    31 Dec 2013, 09:20 PM Reply Like
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