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Jim Cramer's Action Alerts PLUS

Action Alerts PLUS

AbbVie Wins HCV Drug Approval

BY Jim Cramer and Stephanie Link | 12/22/14 - 08:03 AM EST
Stocks in Focus: ABBV

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 approval.

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.

Regards,

Jim Cramer, Stephanie Link, and TheStreet Research Team

DISCLOSURE: At the time of publication, Action Alerts PLUS was long ABBV.

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We Like the Dollar General Story
Stocks in Focus: DG

With or without a Family Dollar tie-up.

12/19/14 - 02:05 PM EST
Paring Vale Stake, Adding to Two Names
Stocks in Focus: VALE, MS, UPS

We look to sell out Vale. We like Morgan Stanley's 2015 setup. UPS has meaningful positives.

12/19/14 - 01:59 PM EST
Weekly Roundup

We did more selling than buying this week as the market bounced back sharply and we set up for 2015.

12/19/14 - 04:58 PM EST

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Action Alerts PLUS Holdings

Stocks we would buy right now

Symbol % Portfolio
Weighting
Industry
AIG 3.24% Insurance
DG 2.24% Retail
DOW 4.25% Chemicals
ESV 2.41% Energy
KMI 3.63% Energy
LEA 3.83% Automotive
LULU 1.94% Consumer Non-Durables
MCD 2.37% Leisure
MRK 2.38% Drugs
MS 1.96% Financial Services
PNRA 4.21% Leisure
RDS.A 4.12% Energy
TWTR 1.89% Internet
UN 2.72% Consumer Non-Durables
UPS 3.22% Transportation

Stocks we would buy on a pullback

Symbol % Portfolio
Weighting
Industry
AAPL 3.33% Consumer Durables
ABBV 2.29% Drugs
AXP 4.05% Financial Services
FB 3.79% Internet
GM 4.05% Automotive
GOOGL 4.44% Internet
JNJ 2.38% Drugs
MSFT 2.94% Computer Software & Services
SBUX 3.03% Leisure
STI 4.27% Banking
UTX 4.72% Aerospace/Defense

Stocks we would sell on strength

Symbol % Portfolio
Weighting
Industry
BAC 3.21% Banking
ETN 4.02% Industrial
VALE 1.01% Metals & Mining
WAG 3.06% Retail

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