GILD’s Generic Co-opetition: Little Impact on Global HCV Estimates, or to ABBV / ENTA Bull Case

Richard

GILD’s decision to authorize HCV generics in 91 lower income countries arguably reflects multiple considerations, including that generics were likely to soon appear in these countries with or without GILD’s authorization

By granting generic licenses to a core group of cooperating manufacturers, GILD increases the odds that these manufacturers will stay within the licensed countries; i.e. at the very least the expansion of HCV generics into countries wealthier than these 91 is delayed

And, by giving cooperating generic manufacturers a head start, cooperating manufacturers’ generics are more likely to crowd out demand which might have gone to ‘non-cooperating’ manufacturers, meaning GILD has at least some influence over a larger percentage of generic supply for a longer period of time

Of the 91 countries in which GILD has authorized generic versions of its HCV products, only four (India, Egypt, Pakistan, Vietnam) were included in our global HCV forecast. These countries accounted for approximately 9 percent of our global HCV estimate, and we had already earmarked two of these (India and Pakistan) as markets that were relatively likely to either go generic or be muted by ongoing conflicts

On net, we see GILD’s decision to authorize generics as a rational strategy that does little to alter our overall expectations regarding branded sales of current-generation HCV agents

We continue to believe that global expectations for HCV brand sales are reasonable, but that consensus gives far too little credit to ABBV’s regimens. The ABBV (and by extension, ENTA) regimens are as effective as the GILD regimens, with only modest differences in convenience and/or tolerability. We expect ABBV to capture more than 20 percent of global demand for current generation HCV treatments

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

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