We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Gilead & AbbVie Benefit from Merck's Decision to Drop Two HCV Programs?
Read MoreHide Full Article
Late last week, Merck (MRK - Free Report) announced its decision to discontinue the development of a couple of candidates in its hepatitis C virus (“HCV”) program - MK-3682B (grazoprevir/ruzasvir/ uprifosbuvir) and MK-3682C (ruzasvir/uprifosbuvir). The company’s decision was based on a review of available phase II efficacy data and the growing competition in the HCV market. Merck itself has a marketed product in the HCV market in the form of Zepatier (elbasvir and grazoprevir) which brought in sales of $895 million in the first six months of 2017 (including a $40 million favorable adjustment to rebate accruals due to mix of business). While Merck will continue to work on expanding Zepatier’s utilization across the world, uptake will be impacted by the ongoing decline in overall patient volumes in many markets and increased competition.
Gilead and AbbVie in HCV Spotlight
Merck’s announcement has now put the spotlight firmly on Gilead Sciences (GILD - Free Report) and AbbVie (ABBV - Free Report) , two key players in this market.
Gilead is the undisputed leader in the HCV market with its HCV products bringing in sales of $5.4 billion in the first half of 2017. The company revolutionized the treatment paradigm in the HCV market with the introduction of Sovaldi by cutting down the duration of treatment to as few as 12 weeks instead of the prior standard of care of up to 48 weeks. Moreover, the need for peg-interferon injections, which come with several side effects, was reduced or eliminated completely.
Gilead launched Harvoni next, the first once-daily single-tablet regimen for the treatment of the most prevalent HCV genotype in the United States. This was followed by the launch of Epclusa, the first all-oral, pan-genotypic, single-tablet regimen for the treatment of adults with genotype 1-6 chronic HCV infection. This year, Gilead gained approval for yet another HCV treatment, Vosevi.
Although Gilead ruled the HCV market for quite a few years, sales are declining given intense pricing pressure, growing competition, pricing scrutiny and a declining patient population. The approval of newer HCV products has resulted in a rapid increase in the number of patients who were treated and cured followed by a decline in the number of patients seeking care and being able to access HCV treatment. Gilead expects HCV net product sales in the range of $8.5 billion to $9.5 billion in 2017 (announced with Q2 results), representing quite a drop from last year’s HCV product sales of $14.8 billion.
Meanwhile, AbbVie’s HCV products include Mavyret (glecaprevir/pibrentasivr), Viekira Pak (ombitasvir, paritaprevir and ritonavir tablets co-packaged with dasabuvir tablets) and Viekira XR (dasabuvir, ombitasvir, paritaprevir and ritonavir). While Mavyret was approved recently, Viekira sales were $488 million in the first half of 2017. Mavyret, the company’s next generation HCV offering, should be a meaningful contributor to sales from 2018.
Other HCV drugs include Bristol-Myers Squibb Company’s (BMY - Free Report) Daklinza (daclastavir) and Janssen Therapeutics’s Olysio (simeprevir).
We remind investors that Merck is not the only company to have taken the decision to halt the development of HCV candidates. Last month, Johnson & Johnson (JNJ - Free Report) had announced its decision to terminate a collaboration agreement with Achillion Pharmaceuticals for HCV.
J&J’s Janssen Pharmaceuticals said that it would be discontinuing the development of the investigational HCV treatment regimen JNJ-4178, a combination of three direct acting antivirals: AL-335, odalasvir and simeprevir.
With both Merck and J&J dropping their investigational HCV treatments, Gilead and AbbVie should benefit from the lack of additional competition entering the market, at least in the near term. While the companies will continue to face challenges like declining patient volume and intense pricing pressure, the lack of additional entrants in the market should slow down the rate of decline in sales.
Gilead has been working on expanding the HCV market by encouraging baby boomers to get tested. According to the company, there has been an 80% increase in HCV antibody screening by baby boomers since the start of this initiative. Increased testing has led to an increase in diagnosis with about 190,000 people being newly diagnosed with HCV in 2016, up 32% from 2015. This represents a significant opportunity for the existing players in the HCV market.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Will Gilead & AbbVie Benefit from Merck's Decision to Drop Two HCV Programs?
Late last week, Merck (MRK - Free Report) announced its decision to discontinue the development of a couple of candidates in its hepatitis C virus (“HCV”) program - MK-3682B (grazoprevir/ruzasvir/ uprifosbuvir) and MK-3682C (ruzasvir/uprifosbuvir). The company’s decision was based on a review of available phase II efficacy data and the growing competition in the HCV market. Merck itself has a marketed product in the HCV market in the form of Zepatier (elbasvir and grazoprevir) which brought in sales of $895 million in the first six months of 2017 (including a $40 million favorable adjustment to rebate accruals due to mix of business). While Merck will continue to work on expanding Zepatier’s utilization across the world, uptake will be impacted by the ongoing decline in overall patient volumes in many markets and increased competition.
Gilead and AbbVie in HCV Spotlight
Merck’s announcement has now put the spotlight firmly on Gilead Sciences (GILD - Free Report) and AbbVie (ABBV - Free Report) , two key players in this market.
Gilead is the undisputed leader in the HCV market with its HCV products bringing in sales of $5.4 billion in the first half of 2017. The company revolutionized the treatment paradigm in the HCV market with the introduction of Sovaldi by cutting down the duration of treatment to as few as 12 weeks instead of the prior standard of care of up to 48 weeks. Moreover, the need for peg-interferon injections, which come with several side effects, was reduced or eliminated completely.
Gilead launched Harvoni next, the first once-daily single-tablet regimen for the treatment of the most prevalent HCV genotype in the United States. This was followed by the launch of Epclusa, the first all-oral, pan-genotypic, single-tablet regimen for the treatment of adults with genotype 1-6 chronic HCV infection. This year, Gilead gained approval for yet another HCV treatment, Vosevi.
Although Gilead ruled the HCV market for quite a few years, sales are declining given intense pricing pressure, growing competition, pricing scrutiny and a declining patient population. The approval of newer HCV products has resulted in a rapid increase in the number of patients who were treated and cured followed by a decline in the number of patients seeking care and being able to access HCV treatment. Gilead expects HCV net product sales in the range of $8.5 billion to $9.5 billion in 2017 (announced with Q2 results), representing quite a drop from last year’s HCV product sales of $14.8 billion.
Meanwhile, AbbVie’s HCV products include Mavyret (glecaprevir/pibrentasivr), Viekira Pak (ombitasvir, paritaprevir and ritonavir tablets co-packaged with dasabuvir tablets) and Viekira XR (dasabuvir, ombitasvir, paritaprevir and ritonavir). While Mavyret was approved recently, Viekira sales were $488 million in the first half of 2017. Mavyret, the company’s next generation HCV offering, should be a meaningful contributor to sales from 2018.
Other HCV drugs include Bristol-Myers Squibb Company’s (BMY - Free Report) Daklinza (daclastavir) and Janssen Therapeutics’s Olysio (simeprevir).
We remind investors that Merck is not the only company to have taken the decision to halt the development of HCV candidates. Last month, Johnson & Johnson (JNJ - Free Report) had announced its decision to terminate a collaboration agreement with Achillion Pharmaceuticals for HCV.
J&J’s Janssen Pharmaceuticals said that it would be discontinuing the development of the investigational HCV treatment regimen JNJ-4178, a combination of three direct acting antivirals: AL-335, odalasvir and simeprevir.
With both Merck and J&J dropping their investigational HCV treatments, Gilead and AbbVie should benefit from the lack of additional competition entering the market, at least in the near term. While the companies will continue to face challenges like declining patient volume and intense pricing pressure, the lack of additional entrants in the market should slow down the rate of decline in sales.
Gilead has been working on expanding the HCV market by encouraging baby boomers to get tested. According to the company, there has been an 80% increase in HCV antibody screening by baby boomers since the start of this initiative. Increased testing has led to an increase in diagnosis with about 190,000 people being newly diagnosed with HCV in 2016, up 32% from 2015. This represents a significant opportunity for the existing players in the HCV market.
Both Gilead and AbbVie are Zacks Rank #3 (Hold) stocks - you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>