Can Gilead Beat AbbVie At Its Own Game?

Kanak Kanti De profile picture
Kanak Kanti De


  • AbbVie kicked off a price war with Gilead by signing a deal with Express Scripts.
  • Gilead, however, has countered the move with deals of its own.
  • Latest prescription data also shows that the AbbVie/Express Scripts deal is not having a major impact on Harvoni sales.

It has been just a little over a month since AbbVie (ABBV) took Gilead (NASDAQ:GILD) by surprise by cutting a deal with the U.S.'s largest pharmacy benefit manager Express Scripts (ESRX). The deal gave exclusive status to AbbVie's newly approved hepatitis C drug in exchange for a significant discount. The surprise move from AbbVie had an immediate impact on Gilead's shares, even though they still managed to finish sharply higher for the year.

Anyone who has followed Gilead in the past year or so would know that much of the company's strong financial performance has been driven by the success of first Sovaldi and then Harvoni. While the deal between AbbVie and Express Scripts took me by surprise, it has not changed my bullish stance on Gilead. Shortly after the deal was announced, I had argued that Harvoni's easier compliance and better safety profile gives it an edge over Viekira Pak. And within a month since the deal, there is now some data, although still limited, to assess whether Viekira Pak is having any major impact on Harvoni sales. The data suggests that in this short period, AbbVie's drug has not had any major impact. This does not weaken the bullish case for Gilead. In addition, GILD has also taken some steps to counter AbbVie's moves, which is good.

Prescription Data Suggests No Major Impact

According to the Symphony Health data compiled by Bloomberg, Harvoni saw a drop of 1.8% in prescriptions for its hepatitis C drug on a week-over-week basis for the week ended January 16, 2015. At the same time, AbbVie's drug had a week-over-week increase of 55%. Offhand, this data might indicate that AbbVie's move has paid off. However, that is far from true. At best, AbbVie's deal has had a minimal impact on Harvoni sales.

Firstly, Harvoni's

This article was written by

Kanak Kanti De profile picture
My name is Dr Kanak Kanti De, MBBS, MD, PhD, retired medical practitioner, cancer survivor, healthcare sector investor, over 30 years' experience in the sector both in India and the United States. I write/have written on Motley Fool, SeekingAlpha, Benzinga, and on Forbes. I am consistently ranked high on TipRanks, although I don't like their ranking system. My portfolio has consistently beat the various indices for years. Email me to discuss my articles, or for just an adda (Bengali for informal chat)

Disclosure: The author is long GILD. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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