ABBV (and ENTA): The Corvette(s) to GILD’s Ferrari

Richard

We believe consensus incorrectly views GILD’s pending hepatitis C (HCV) regimen as having consistently greater efficacy than ABBV’s pending regimen; in this note we compare pivotal trial results for the two regimens side by side, and show that the ABBV alternative offers comparable efficacy

The GILD regimen is of 8 (rather than 12) week duration in some but not all type 1 patients; the ABBV regimen is of 12 week duration in all patients. Patients are required to use ribavirin (RBV) more often on ABBV than on GILD regimens. Both regimens are highly tolerable; there were no withdrawals for adverse events (AE’s) in GILD’s three main trials; across ABBV’s five main trials, two saw zero AE related withdrawals, one trial saw a 0.5% rate, one a 1.0% rate, and one a 1.9% rate

The GILD regimen is one pill once daily; the ABBV regimen is no more than three pills twice daily

On net, the ABBV regimen offers the same efficacy, at the cost of greater treatment duration and/or the addition of RBV-associated tolerability issues. Despite this narrow relative disadvantage vs. GILD, in an absolute sense the ABBV regimen is both sufficiently brief and highly tolerable – making it a viable alternative, especially for cost-sensitive payors

In this note we detail the efficacy and tolerability gap between PegIntron and Pegasys, the two predominant pegylated interferons (IFNs) that have been the mainstay of HCV therapy for more than a decade. We show that despite being substantially less effective and less tolerable than Pegasys, that PegIntron has captured 34% of global pegylated IFN sales to date

The ABBV HCV regimens are far more closely matched to the GILD HCV regimens than PegIntron was to Pegasys; accordingly barring the effect of additional competitive entrants, we would expect the ABBV HCV regimens to capture global share on par with that captured by PegIntron (i.e. more than 30%)

Allowing for the effect of competitive entrants (the first with at least comparable efficacy to ABBV comes from BMY in 2016, the second with potentially comparable efficacy from MRK in 2017), we’re confident ABBV can capture at least 20% of global sales. Current consensus appears to credit ABBV with less than 10% share of global sales

One component (ABT-450) of the ABBV regimen is licensed from ENTA; we believe cumulative royalties to ENTA should range between $900M and $3.5B. ENTA’s current enterprise value is roughly $665M

For our full research notes, please visit our published research site

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