Epclusa Could Pose Significant Risk For Bristol-Myer’s Daklinza

+20.61%
Upside
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BMY
Bristol Myers Squibb

Gillead Sciences got FDA approval for its flagship drug Epclusa on June 28, 2016. Though Epclusa can be used treat Hepatitis C (HCV) of all Genotypes, it is priced to target HCV of Genotypes 2 and 3. We believe it could pose high risk for Bristol- Myers Daklinza.

Epclusa Is Priced To Target HCV Patients With Genotypes 2 And 3

  • Hepatitis C (HCV) is categorised into 6 genotypes. Genotype 1 is the most common affecting approximately 75% million HCV patients in the U.S., followed by Genotype 3 which affects approximately 20% Of HCV patients.
  • Epclusa won’t affect the sales of Genotype 1 drugs as it is more expensive than other alternatives such as Zepatier.
  • Genotype 2 and 3 is where Eplusa would have maximum impact as Genotype 3 patients are generally prescribed a combination therapy including Sovaldi and Bristol Myer’s (BMY) Daklinza
  • Combination therapies for Genotype 3 HCVcost approximately $200,000
  • Epclusa is priced at $74,600 to target genotype 2 and genotype 3.
  • Sales of genotype 1 drugs (Zepatier, Hanovi) are relatively safe, but Daklinza of Bristol-Myers Squibb faces significant risk as it focuses on Genotype 3.

What’s The Risk For Bristol-Myers Squibb?

  • BMY’s Daklinza’s sales in 2015 were $253 million and are expected to be $2.1 billion in 2016
  • Long term forecast, Sales could reach $3.2 billion by 2020
  • The estimated revenue contribution in 2016 is 10% of the total
  • If Daklinza loses half its sales by 2020, it would imply 10% downside to our estimate

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Bristol-Myers Squibb
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