Achillion Pharmaceuticals (ACHN) remains undervalued as investors continue focusing almost exclusively on Gilead Sciences (GILD) for hepatitis C treatment, a market so large that ACHN has the opportunity to find and penetrate segments Big Pharma is not expected to reach for years, says Brian Skorney, Senior Analyst at Robert W. Baird & Co.
“I think Gilead is a great powerhouse on hepatitis C, but the market opportunity is so large from a volume perspective that I just can’t see one company really dominating the market; to that extent, there will be pockets where pricing is going to have an opportunity to create a market where Gilead may not even want the price to penetrate for a number of years,” Skorney said.
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Skorney adds that GILD‘s recent acquisition of Pharmasset for HCV constitutes most of the market cap increase for the company, and Achillion‘s HCV treatment would come close to matching GILD‘s hepatitis profile.
“[A] name that I like a lot is Achillion, a hepatitis-C-focused company. I think they’re undervalued because of the focus on who’s really dominant in hepatitis C right now — is Gilead, and I certainly alluded to the acquisition they made in the space that’s created over probably about 50% of their market cap at this point,” Skorney said. “I think Achillion has a great opportunity with a regimen for hepatitis C that I think will come very close to matching Gilead‘s profile.”
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