Gilead Sciences, Inc. (GILD), AbbVie Inc (ABBV): Which Company Needs a HCV Win?

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The upcoming all-oral hepatitis C treatments earned well-deserved attention for some staggering cure rates, particularly in patient groups who haven’t responded well to the current drugs. Merck & Co., Inc. (NYSE:MRK) was one of the big HCV players -- but that’s about to change with Gilead Sciences, Inc. (NASDAQ:GILD) and AbbVie Inc (NYSE:ABBV) leading the new guard. How much does an HCV foothold mean to the overall health of these companies?

Gilead Sciences, Inc. (NASDAQ:GILD)

Defending champion falls flat

The combo therapy used for most patients with ongoing HCV involves an interferon injection and the oral drug ribavirin. But patients with genotype 1 -- the most common genotype in the United States -- require the addition of a protease inhibitor to achieve the best possible cure rates.

Merck & Co., Inc. (NYSE:MRK) has historically held a front position in the HCV market with the ribavirin Rebetol, the branded interferon PegIntron, and the protease inhibitor Victrelis. But generic ribavirin became available nearly a decade ago -- and Merck & Co., Inc. (NYSE:MRK)’s lost most of its other ground to competitors.

PegIntron hit peak sales of $914 million in 2008 when Schering Plough was still independent. Sales last year had fallen to $653 million due to the rise of Roche’s competing Pegasys, which had 2012 sales of about $1.7 billion (using current exchange rates).

Victrelis was much faster at succumbing to competition. The drug launched concurrently with Vertex’s protease inhibitor Incivek in 2011. Incivek quickly took the market with sales of $950 million in 2011 and $1.16 billion in 2012. Victrelis had sales of $140 million and $502 million, respectively. But both protease inhibitors could suffer a massive drop when the all-oral drugs hit the market.

New guard’s drug dependence

Three companies have reported the best cure rates for genotype 1 patients: Gilead Sciences, Inc. (NASDAQ:GILD), AbbVie Inc (NYSE:ABBV), and Johnson and Johnson.

Let’s turn first to Gilead Sciences, Inc. (NASDAQ:GILD)’s sofosbuvir. The drug received a priority review designation from the Food and Drug Administration last month and has an expected PDUFA date of December 8.. Analyst estimates for sofosbuvir average out to around $6 billion by 2016, according to Bloomberg.

Gilead Sciences, Inc. (NASDAQ:GILD)’s total products sales were $9.4 billion last year and that included over a dozen products. The company’s portfolio includes a strong batch of HIV drugs, while the pipeline also features some promising cancer candidates.

AbbVie Inc (NYSE:ABBV)’s unnamed oral combo-therapy is running slightly behind Gilead Sciences, Inc. (NASDAQ:GILD) in the pipelines, but AbbVie Inc (NYSE:ABBV)’s in greater need of a win.

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