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These 2 Biotech Stocks Are Set To Split The $15 Billion Hepatitis C Market

Wayne Duggan

A recent report by Morgan Stanley predicts a greater than 40 percent growth in the Hepatitis C (HCV) market in 2015. Projections indicate that the HCV market could be worth $15 billion in upcoming years, with two-thirds of treatment occurring in the United States.

HCV Forerunners Gilead And AbbVie

Morgan Stanley projects that Gilead Sciences, Inc.’s (NASDAQ: GILD) Harvoni and Sovaldi and AbbVie Inc’s (NYSE: ABBV) soon-to-be-approved drug cocktail will account for a large part of the market share for HCV treatment in upcoming years. Analysts project $11 billion in sales for Gilead’s HCV business in 2015 and $10.5 billion in 2016. Projections for AbbVie’s HCV business the next two years total $3.6 billion and $4.0 billion respectively.

Related Link: Advances in HIV, Hep C Treatments Could Spark Renewed Interest In Biotech Stocks

Treatment Costs

As it stands, Gilead’s Sovaldi treatment costs patients about $1,000 per day for either 12 or 24 weeks. Harvoni treatment costs $1,125 per day for either eight, 12 or 24 weeks. Until AbbVie’s 4-pill daily HCV treatment officially launches (analysts predict mid-January), firm predictions for the market are difficult to make.

Will The HCV Market Be Taken By These Two?

Morgan Stanley analysts Matthew Harrison and David Risinger are forecasting a 75/25 percent split in market share between Gilead and AbbVie in 2015, but those number hinge heavily on AbbVie’s willingness to undercut Gilead’s prices via discounts and/or rebates. The analysts believe that AbbVie could choose to compete for as much as 40 percent of patients eligible for Gilead’s eight-week regimen.

Regardless of the market share split, analysts predict plenty of demand in the HCV market in 2015. The report suggests that 185,000 patients will receive HCV treatment in 2015, up 45 percent from 2014 and a whopping 219 percent from 2013.

Latest Ratings for GILD

Date Firm Action From To
Dec 2014 Morgan Stanley Maintains Equal-weight
Dec 2014 JP Morgan Maintains Overweight
Nov 2014 Nomura Maintains Buy

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