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4Q14 Financial Markets Preview: Commercial race in HCV

4Q14 investor themes: pricing in HCV race, next steps in immunotherapy, HBV

HCV and cancer immunotherapy again top the list of milestones in 4Q14, as investors expect approval of three new HCV regimens plus clinical data for combos looking to challenge Gilead Sciences Inc. and AbbVie Inc. A plethora of cancer conferences will also be keeping portfolio managers busy with incremental, but probably not transformational, clinical data in immunotherapy.

Gilead's Harvoni is the first HCV approval expected, with an Oct. 10 PDUFA date. Harvoni is a fixed-dose combination of the company's Sovaldi sofosbuvir nucleotide analog HCV NS5B polymerase inhibitor and its ledipasvir HCV NS5A protein inhibitor. Last month, EMA's CHMP recommended approval of the combination.

AbbVie's regimen is expected to receive approval in late November or early December. The combination comprises the direct-acting antivirals ABT-450, ABT-267 and ABT-333, plus ritonavir.

Bristol-Myers Squibb Co. has a Nov. 30 PDUFA date for its combination of the HCV NS3 protease inhibitor asunaprevir and daclatasvir, a selective HCV NS5A protein inhibitor, to treat HCV genotype 1b.

Investors noted the controversy sparked by Gilead's $84,000 price tag for Sovaldi could reignite if Gilead prices Harvoni significantly higher than Sovaldi, and/or if AbbVie prices its combination at parity with Harvoni.

Gilead has steadfastly refused to reveal Harvoni's price, but management has said sofosbuvir contributes the "majority of value" to the fixed-dose combination - suggesting the new combo might not cost much more than Sovaldi.

Four buysiders told BioCentury they don't think AbbVie will start a price war.

"If you price something at a substantial discount to standard of care, you imply inferiority. And I can't see AbbVie saying 'ours is cheaper than Gilead because we aren't quite as good,'" Mann Bioinvest's Andy Smith told BioCentury. Smith holds stock in both AbbVie and Gilead.

OrbiMed's Sven Borho and Joep Muijrers of LSP-Life Sciences Partners agreed. One anonymous buysider, who could not speak on record about specific companies, said the list prices will likely be similar, but suggested AbbVie could try to gain market share by negotiating individual discounts with payers (see "Price Cuts in HCV," page 21).

If there is a pricing controversy, it would most likely be a 2015 overhang for industry - albeit a potentially large one. "I see that as the biggest

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