Victrelis by Merck (MRK) and Incivek by Vertex Pharmaceuticals (VRTX) have emerged as breakthrough hepatitis C therapies, creating all-oral combinations of direct antivirals with similar cure rates as previous cocktails, but safer and more convenient for patients, says Matthew Roden, Executive Director & Senior Analyst at UBS Investment Bank (UBS).
“It became clear that all-oral combinations of direct antivirals would perhaps give you at least as good cure rates as what the first-generation protease inhibitors were giving us, that the efficacy would at least be as good, but the safety, tolerability and convenience of all-oral combinations would be much more important for the hepatitis C community,” Roden said.
Roden also points to Gilead Sciences (GILD) as a leader in the development of next-generation hepatitis C drug development, and he says that’s been partially reflected in GILD shares this year. Roden also says GILD‘s therapies could represent net cost savings over time, and he says the company’s catalysts should further lead to equity upside.
“The key value driver here is the catalyst path in hepatitis C and in HIV. We’re positive on those, but also note that there is considerable upside to Street numbers over the next three years, which we think will protect investors from downside, while enabling relatively open-ended upside, up into the $80 range in our view,” Roden said.
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