Analyst Sees Gilead Sciences Inc. Vs. AbbVie Inc. 'Price War'

Gilead Sciences, Inc.

may continue to dominate the market for hepatitis C drugs but growing competition will result in lower prices, an analyst said Tuesday. Gilead fell sharply on Monday after Express Scripts Holding Co.

, a giant pharmacy benefits manager, chose AbbVie Inc.

as its exclusive supplier of a treatment for hepatitis C. Deutsche Bank's Robyn Karnauskas cut her target on Gilead by 12 percent to $125 on Tuesday, but maintained a Buy rating despite a "price war" for hepatitis drugs. A standard course of Gilead's Harvoni hepatitis treatment costs a reported $94,500; Gilead's Sovandi hepatitis drug, also affected by the Express Scripts decision, costs $84,000 per patient. AbbVie had priced its newly launched Viekira Pak hepatitis drug at a similar level, but offered a rumored discount of 40 percent to Express Scripts. http://blogs.wsj.com/pharmalot/2014/12/22/special-sale-price-docs-divided-over-discount-on-abbvie-hepatitis-c-drug/ Gilead "may be able to maintain its dominant position" in hepatitis C treatment with its Harvoni drug, albeit at lower prices, Karnauskas said. Karnausaks now expects the average Harvoni discount offered by Gilead will rise to between 30 percent and 40 percent, from 18 percent. Gilead currently supplies Harvoini at a 40 percent discount to the Veterans' Administration and at a 23 percent discount to Medicaid. Despite AbbVie's newly launched Viekira, Gilead is likely to capture a long-term market share of 50 percent according to Kanauskas, who cut that estimate Tuesday from 55 percent. Gilead is off more than 16 percent since the AbbVie announcement and traded Tuesday down 2.4 percent at $65.34. AbbVie changed hands recently down 2.4 percent at $65.34.