Late on Friday, AbbVie (ABBV:Nasdaq) received approval for its
Hepatitis C (HCV) drug Viekira Pak by the FDA. The labelling
was in line with expectations, with a 12-week regimen
recommended for most patients and a 24-week dosage recommended
for some genotype 1a cirrhotics.
Pricing was also in line with consensus at $83,319 for 12-week
therapy. This is a 12% discount to Gilead’s (GILD:Nasdaq)
competitive drug Harvoni (set at $94,500) and slightly less
than Gilead’s other HCV drug Solvaldi (set at $84,000),
mainly because of the pill burden of Viekira Pak relative to
Harvoni/Solvadi and in some cases it will be needed to be
taken in combination with ribavirin.
Analysts estimate $2.5 billion in peak sales and a 20% market
share in the industry (which is a $20 billion market), which
could have upside in our view given the competitive labelling
and market share gains through PBMs. To this last point, last
night ABBV entered into an exclusive arrangement with PBM
Express Scripts (ESRX:Nasdaq) that will give Viekira Pak
exclusivity in genotype 1 patients (70% of the U.S. commercial
HCV population). Importantly, both of Gilead’s HCV drugs
(Solvaldi and Harvoni) as well as JNJ's (Olysio), will be
excluded from the formulary as of Jan.1 for most patients. The
discounted price is reported to be close to 15% and is a
multiple-year contract with no limitations for coverage
Again, this is an effort by ABBV to gain market share in this
highly-competitive space and we view it as a smart deal to
drive uptake for the company, which could lead to upside in
peak sales. We continue to like the ABBV story, the
underappreciated pipeline and strong execution by management.
Jim Cramer, Stephanie Link, and TheStreet Research Team
DISCLOSURE: At the time of publication, Action Alerts PLUS
was long ABBV.
Want your alerts faster than e-mail? Sign up for text
message alerts (click on the Premium tab at http://www.thestreet.c
om/alerts/ or follow Action Alerts PLUS on Twitter https://twitter.com/CramerAndLink.
With or without a Family Dollar tie-up.
We look to sell out Vale. We like Morgan Stanley's 2015 setup. UPS has meaningful positives.
We did more selling than buying this week as the market bounced back sharply and we set up for 2015.
Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Want more than one service? Sign up to one of our packaged services and take advantage of amazing savings!