Biotechnology:Quick 2Q14 Preview
GILD – EPS $2.14 (MSe) / $1.62 (cons): We are sig.ahead of cons on revs driven by Sovaldi ($3.6B vs prior $1.8B and cons of $2.3B). We have raised our FY14 Sovaldi est to ~$12B ($11B US) from $7.5B driven by our IMS analysis. IMS suggests ~71k pts have initiated US Sovaldi and we est 142k for FY14. Our qrtly ests of $2.4B for 3Q and $3.8B for 4Q represent slowing ahead of the Oct. all-oral launch. We are now $1.20 ahead of cons for 2014E EPS ($7.58 MSe) and $0.60 in 2015E EPS ($8.43 MSe). As a result of our HCV est.changes our DCF-based PT moves to $81 from $75.While we believe the near-term launch will continue to impress we remained concerned about the LT HCV tail.
AMGN – EPS $2.09 (MSe) / $2.07 (cons): We are ahead of cons on revs ($5.0B vs $4.9B) driven by Enbrel ($1.2B vs 1.15B), Neupogen ($316M vs $300M) and Prolia ($263M vs $250M). Unlike the 1Q inventory shifts that drove the stock downside, we do not expect 2Q inventory adj. and feel confident in our Enbrel est.given IMS trends (6.9% price incr. on 6/6). Investors remain focused on the Kyprolis readouts (2Q/3Q).
PCYC – US Imbruvica $93M (MSe) based on IMS: As we previously wrote, we see 2014 sales above guidance ($395M vs $295M), but remain concerned that sales could flatten into 2H. While a guidance update wouldn’t surprise us given IMS trends, a sig.stock reaction appears unlikely given LT concerns.
REGN – US Eylea $407M (MSe) / $417M (cons): Our unchanged US Eylea est.represents ~5% growth from our 1Q14 ex-inventory est. of $386M. Flat IMS growth for Lucentis suggests some risk to Eylea, but historical IMS error is +/-10%. Hitting Eylea guidance on a strong DME launch remains the main stock driver, in our view.
In-line EPS for BIIB ($2.80) and CELG ($0.89); no updates to IMGN or INFI: For Biogen, we are ahead on Tecfidera ($580M vs $558M) and Avonex ($753M vs 742M), but below on Tysabri ($423M vs $442M) based on IMS. We are now at the high-end of EPS guidance for 2014 ($11.45). For Celgene, we are below on Abraxane ($197M vs $215M). For ImmunoGen, IMS Kadcyla sales are tracking -6% Q/Q, though the IMS range is +/-10% vs actual. 2H MARIENNE data for ImmunoGen and 3Q RA/asthma data for Infinity are the key stock drivers, in our view.