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BMY’s Hepatitis C Franchise May See a Drop in Revenues in 2016

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Hepatitis C franchise

Bristol-Myers Squibb’s (BMY) hepatitis C (or HCV) franchise comprises Daklinza and Sunvepra. On July 24, 2015, the FDA approved Daklinza in combination with Gilead Sciences’s (GILD) Sovaldi (sofosbuvir) as a therapy for genotype 3 HCV patients.

On February 2, 2016, the FDA further expanded the label of Daklinza-sofosbuvir combination therapy by extending its use for genotype 1 HCV patients. The drug is also approved for difficult-to-treat patient segments in genotype 1 and genotype 3 HCV patient categories such as those with HIV-1 co-infection, those who suffered from HCV recurrence after liver transplant, and those with advanced liver cirrhosis.

On January 28, 2016, Daklinza in combination with sofosbuvir had already secured approval from the European Commission (or EC) for genotype 1 and genotype 3 HCV patients.

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Revenue trend

In the first nine months of 2016, the US market contributed ~55.6% to the Bristol-Myers Squibb HCV franchise’s total revenues. The company expects its HCV franchise revenues to be lower in 2016 on a year-over-year (or YoY) basis due to a drop in demand.

In January 2017, pharmacy benefit managers are expected to prioritize Gilead Sciences’s Epclusa in their formularies. Further, the launch and access to Epclusa in the Japanese market may have a negative impact on Bristol-Myers Squibb’s HCV revenues from international markets.

Daklinza is also facing competition from other HCV players such as AbbVie (ABBV) and Merck (MRK).

If this trend continues, it could have a negative impact on Bristol-Myers Squibb (BMY) stock, as well as the iShares Core S&P 500 ETF (IVV). Bristol-Myers Squibb makes up ~0.50% of IVV’s total portfolio holdings.

In the next article, we’ll explore the growth prospects for Bristol-Myers Squibb’s leading immune-oncology drug, Opdivo.

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