Just weeks after AbbVie (ABBV) struck a deal to make its hepatitis-C treatment the only one approved by Express Scripts (ESRX), Gilead Sciences (GILD) has reached a similar deal with CVS (CVS). Citigroup’s Yaron Werber explains the significance:
Gilead Sciences This effectively evens the playing field against AbbVie's Viekira Pak which has received preferred placement on Express Scripts' national formulary covering 25m lives. CVS' national formulary covers 20m lives per Bloomberg. We believe that the discount that was offered by AbbVie was likely lower than the Street expected. Hence we believe that some of the concern that AbbVie offered a 25% cut on the price of Viekira Pak for 12 wks is likely too high. Instead we model a 25% gross to net discounts in the hepC market across all segments over time. That is reasonable to account for Medicaid and VA discounting. We believe that [Gilead Sciences] stock is attractive at current levels given that expectations for Harvoni have been recalibrated downwards
Shares of Gilead Sciences have gained 2.4% to $97.36 at 2:18 p.m. today, while AbbVie has dropped 2.2% to $64.45, CVS has fallen 1% to $94.17 and Express Scripts is off 0.4% at $84.28.
No comments:
Post a Comment