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This Small Biotech Will Profit From the Hep C Drug Race

By Brian Orelli, PhD and Max Macaluso - Mar 13, 2014 at 7:26PM

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Gilead and AbbVie are set to gain the most from developing new hepatitis C cocktails; Enanta Pharmaceuticals will benefit from AbbVie's sales.

Gilead Sciences ( GILD 1.20% ) and AbbVie ( ABBV 1.89% ) are in a race to get the first all-oral hepatitis C treatment for patients infected with genotype 1 hepatitis C virus. Gilead's cocktail is already submitted to the Food and Drug Administration, and AbbVie expects to submit its application in the second quarter.

Currently, patients have to take an injected medication called peginterferon, which causes annoying side effects that feel like the flu, so the all-oral cocktails will be a huge step forward, rewarding Gilead and AbbVie handsomely for their efforts.

There's a third player in this race that doesn't get as much attention: Enanta Pharmaceuticals ( ENTA -0.77% ), which helped develop one of the components of AbbVie's cocktail. The small biotech will benefit through double-digit royalties on ABT-450. Watch the video below for more information on Enanta's potential.

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Stocks Mentioned

Gilead Sciences, Inc. Stock Quote
Gilead Sciences, Inc.
$69.75 (1.20%) $0.82
AbbVie Inc. Stock Quote
AbbVie Inc.
$117.46 (1.89%) $2.18
Enanta Pharmaceuticals, Inc. Stock Quote
Enanta Pharmaceuticals, Inc.
$87.60 (-0.77%) $0.68

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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