Pharmacy benefit manager Express Scripts (ESRX) announced an update to its National Preferred Formulary, which will now include AbbVie's (ABBV) recently approved all-oral, interferon-free medication for hepatitis C, Viekira Pak.
We note that Viekira Pak was approved by the FDA on Dec 19 for the treatment of patients with chronic HCV genotype 1 infection, including those with cirrhosis, a type of advanced liver disease.
Thereafter, Express Scripts' independent Pharmacy & Therapeutics Committee determined Viekira Pak to be at least clinically equivalent to lead player Gilead Sciences’ (GILD) expensive HCV treatments, Sovaldi and Harvoni.
Consequently, Express Scripts will exclude Sovaldi, Harvoni and Johnson & Johnson’s (JNJ) HCV drug Olysio from its National Preferred Formulary beginning Jan 1, 2015. However, Sovaldi, Harvoni and Olysio will continue to be available for patients who have already begun treatment regimens.
As per estimates, approximately 75% of the approximately 3 million people in the U.S. with hepatitis C have a form of the virus known as genotype 1. Most of these patients now are covered by the Express Scripts National Preferred Formulary and will enjoy access to Viekira Pak.
Shares of Gilead Sciences suffered a significant blow on the news and plunged 14%. Sovaldi is off to a strong start recording sales of approximately $5.8 billion in the first six months of 2014. On the other hand, the news will be a significant boost for AbbVie’s new treatment Viekira Pak in the HCV market, which was previously dominated by Gilead Sciences.
Express Scripts currently has a Zacks Rank #3 (Hold). Both Gilead Sciences and AbbVie also carry a Zacks Rank #3. Right now, Charles River (CRL) looks attractive with a Zacks Rank #2 (Buy).
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