One Down, Five to Go; Phase 3 HCV Data Flow
Begins with Positive SAPPHIRE-1 Results
¦ Bottom line: In-line with our expectations, ABBV/ENTA reported impressive
results from the first of six phase 3 studies for its all-oral regimen to treat
hepatitis C (HCV). SAPPHIRE-1 data shows SVR12 rates of 96% in
genotype 1 patients (95% in GT1a and 98% in GT1b, respectively), with
virologic relapse/breakthrough occurring in only 1.7% of patients. Further
details will be presented at EASL in April 2014 and the company continues
to expect regulatory submissions to take place in 2Q14.
¦ Additional trials will provide more color on ABBV's/ETNA's competitive
profile. Over the next 6-12 months, we will see significant amounts of data
from both ABBV's/ENTA's and GILD's pivotal clinical trials, and this will help
to define the competitive landscape in this market (Exhibit 1 and Exhibit 2).
We continue to believe that GILD has the advantage in reducing the daily pill
burden (both in terms of number of pills and once-daily vs. twice-daily
dosing), and possibly excluding ribavirin and reducing the overall duration of
therapy. That said, we see ABBV/ENTA having a very competitive efficacy
and safety profile and think other dynamics in the marketplace (e.g.
formularies, breath of commercial infrastructure, etc…) can allow for
ABBV/ENTA to obtain 15-20% market share.
¦ Peak ABBV HCV opportunity at ~$2B. We see the overall HCV market
expanding from current levels with increased HCV screening/diagnosis and
availability of effective all-oral regimens. While the US/EU market
opportunity is more near-term for ABBV/ENTA, we believe the Japanese
market is also compelling with ABBV entering in 2017. We assume a 2015
launch in the US/EU with global sales approaching $2 billion by 2017.
¦ Good economics to ENTA on ABT-450. ENTA will receive =$195M upon
filing ($45M) and approval ($155M). ENTA also will receive tiered 12%-16%
royalty rates on sales attributed to ABT-450 (4%-5% on combination sales