Jan 20 update: Currently, C.E.S.I. does not own any Medivir shares (the author will likely stay out for a few more months)

Johnson & Johnson / Janssen accounts for the global sales of the Swedish pharmaceutical company Medivir. Their crown jewel is a HCV drug entitled Olysio. Simeprevir is the active pharmaceutical ingredient. My prediction is that this milestone in Swedish drug discovery will not end within a few days, weeks or months, as the market already seems to estimate! Due to the continued strong global market uptake for Olysio/Simeprevir, I am convinced that we still are turning pages of the first chapter of this story!

Most recent Medivir presentation: http://www.medivir.se/v5/images/pdf/2014/Carnegie-Small-Cap-Day-3-September-2014.pdf

Interim Report, January – June 2014:


  • Net turnover totalled SEK 772.2 million (SEK 218.8 m), of which SEK 662.4 million was contributed by royalties for simeprevir. Revenues from Medivir’s own pharmaceutical sales totalled SEK 109.2 million, SEK 21.7 million of which derived from sales of Olysio and SEK 87.5 million from sales of other pharmaceuticals. The profit/loss after tax was SEK 611.7 million (SEK 7.5 m).
  • Basic and diluted earnings per share totalled SEK 19.57 (SEK 0.24) and SEK 19.18 (SEK 0.24), respectively.
  • The cash flow from operating activities amounted to SEK 31.0 million (SEK -27.2 m), while liquid assets and short-term investments totalled SEK 430.4 million (SEK 279.9 m) at the period end.
Summary of the Group’s figures, continuing operations
(SEK m)
Q2 Q1-Q2 Full year
2014 2013 2014 2013 2013
Net turnover 564.0 40.7 772.2 218.8 446.1
Gross profit 518.8 23.5 700.9 183.8 374.3
Operating profit before depreciation and amortisation (EBITDA) 424.4 -46.9 521.2 43.6 76.4
Operating profit (EBIT) 416.2 -62.0 504.9 14.7 25.2
Profit/loss before tax 418.4 -62.1 508.7 14.5 27.7
Profit/loss after tax 327.8 -63.7 611.7 7.5 16.0
Operating margin, % 0.7 -152.3 0.7 6.7 5.6
Basic earnings per share, SEK 10.49 -2.04 19.57 0.24 0.51
Diluted earnings per share, SEK 10.28 -2.04 19.18 0.24 0.51
Cash flow from operating activities 88.7 -8.3 31.0 -27.2 43.0
Liquid assets and short-term investments at the period end 430.4 279.9 430.4 279.9 402.2

Significant events during Q2

  • Olysio (simeprevir) was approved within the EU for the treatment of adults with hepatitis C genotype 1 and 4 infection, and was launched by Medivir in Sweden, Denmark, Norway and Finland.
  • Adasuve was launched in Sweden, Norway, Finland and Denmark.
  • A supplemental New Drug Application for simeprevir in combination with sofosbuvir was submitted to the US FDA.
  • Final phase II COSMOS study data of simeprevir in combination with sofosbuvir was presented at EASL.
  • Two phase III trials evaluating combination treatment with simeprevir and sofosbuvir were initiated.
  • A new Board of Directors was elected at Medivir’s Annual General Meeting and Birgitta Stymne Göransson was elected Chairman of the Board.
  • Suscard was re-launched into the Swedish market.

Significant events after the end of Q2

  1. FDA granted Priority Review for simeprevir in combination with sofosbuvir supplementary New Drug Application.
  • Respiratory Syncytial Virus drug program was licensed from Boehringer Ingelheim.
  • Medivir’s Board of Directors has appointed Niklas Prager as new President and CEO of Medivir effective 1 September 2014.

* All figures refer to the Group, unless otherwise stated. Comparisons in the Interim Report are, unless otherwise stated, with the corresponding period in 2013. Cross Pharma was divested from the Group on 30 June 2013.

The hepatitis C market is predicted that the total turnover of 20 billion U.S. dollars to 2030!


My summary:

The long-awaited new CEO, Niklas Prager, states that “I will be focusing on further value creation and enhanced visibility of Medivir´s potential ”

Today (9/7/2014), it is a fact that Medivir´s sales dramatically exceeds many analyst´s estimates.

Once a week, new prescription metrics are published by “H3NPHLO” and “A White Prism” on twitter/internet). The author (Cutting Edge Sicence Invest),  takes no accountability of the quality / accuracy of these numbers!). Even this week (ending September 5th)  and despite the fact that Sovaldi (Sofosbuvir, Gilead Sciences Inc, Nasdaq, GILD) dominates the market, Olysio seems to successfully defend its current market share (~25%).

At the Carnegie Small cap presentation (September 3th), Rein Piir (EVP Corporate Affairs & IR – Investor Relations) verbally mentioned that the sales number of Q3 will increase relative Q2

During the autumn, Medivir´s business strategy is expected to be announced and all that it entails. How will the full year´s extreme liquid assets be invested?

The market cap (~ 4000 mSEK) is very low in relation to the estimated full years liquid assets: ~2000 mSEK (Q1+Q2 = 850 mSEK, Q3 >Q2 (according to Rein Piir) and Q3 ~ Q4 (Cutting Edge Science Invest estimate).

The recent 3 months share price has been very volatile (~111 SEK – ~150 SEK, 138 SEK september 5th ) https://www.avanza.se/aktier/om-aktien.html/5380/medivir-b

Source:  https://twitter.com/H3NPHLO/status/507168948287438848

Australia: Pharmaceutical Benefits Scheme (PBS) will subsidize Olysio but not Sovaldi. This is sad news from an open market- and the patient´s perspective. http://hcvadvocate.blogspot.se/2014/08/australia-pbac-decisions-mixed-bag-for.html

J & J / Janssen has recently signed an Olysio agreement with Spain.  http://www.elconfidencial.com/sociedad/2014-07-28/simeprevir-la-mejor-noticia-en-los-ultimos-25-anos-para-los-pacientes-de-hepatitis-c_166679/

Medivir is already approved in the United States, Canada, Russia, Japan and Europe. Soon, more countries will probably follow. Asia? Africa?  South America?

What primarily makes a full analysis of the competitor space within the HCV disease area extremely difficult and complicated is the fact that there are at least 6 genotypes, i. e. genetic strains, of hepatitis C virus:


The American Association for the Study of Liver Diseases (AASLD) genotype/recommended treatment chart will also delivers more insight into this complex disease are:


Today, the main and correct focus by analysts is the near future launch of new HCV drugs and combos:

http://clinicaltrials.gov/show/NCT01628692 (Simeprevir and Daclatasvir, interferon free)




Medivir is awaiting its phase III data (OPTIMIST, Simeprevir/ Sofosbuvir).

“Combination therapy with Simeprevir and sofosbuvir (Gilead, the main competitor with about 75% market share today) without interferon and ribavirin in the previous phase II study COSMOS demonstrated favorable safety and efficacy results in genotype 1-infected hepatitis C patients. The purpose of the OPTIMIST trials is to coat these good results and to investigate the possibility of shortening the treatment time to eight weeks to possibly further simplify this promising treatment regimen ” (www.medivir.se)

I believe Medivir´s Simeprevir/Sofosbuvir combo will face fierce competition within the US post launch of the competitors drugs. But. I still believe other combinations containing Simeprevir ( Gilead´s Sovaldi/Sofosbuvir exluded) might be better positioned in the drug hunters race for the 20 billion U.S. dollars (http://www.achillion.com/HCV_overview).

Selected new Simeprevir data:

  • The phase III ATTAIN study in treatment-experienced adult patients with chronic hepatitis C virus (HCV) and compensated liver disease achieved its primary efficacy endpoint by demonstrating non-inferiority of simeprevir compared to telaprevir when both are given in combination with PegIFN/RBV. Simeprevir demonstrated superior safety profile including fewer adverse events (AEs), fewer serious adverse events (SAEs) and less anemia versus telaprevir.
  • Pooled analysis of data from the phase III QUEST-1 and QUEST-2 studies confirmed efficacy in treatment-naïve genotype 1b HCV patients, with 85 percent (ITT analysis) of treatment-naïve patients achieving SVR12 when treated with simeprevir in combination with PegIFN/RBV, compared to 53 percent when treated with placebo in combination with PegIFN/RBV.
  • In the PROMISE phase III trial of prior relapse patients, a subgroup analysis of genotype 1b patients demonstrated that 86 percent (ITT analysis) of these patients achieved SVR12 when treated with simeprevir in combination with PegIFN/RBV, compared to 43 percent when treated with placebo in combination with PegIFN/RBV.



The cost debates are getting more intense, due to the larger and larger patient groups are lining up to get the new superior treatment regimes. But has the cost debate been properly reviewed by analysts?

CVS Caremark estimates Sovaldi alone will add $300 to everybody’s insurance premium, with megadrugs for other common diseases like cholesterol and diabetes coming.


In fact and surprisingly often, articles referring to future Gilead competitors do not even mention Olysio/ J&J/Janssen/Medivir.

The dedicated swedish (Avanza/Medivir) bloggers have highlighted and answered many key questions in the Olysio market share discussion. One of these bloggers, Prisma, comments (summarized and translated by C.E.S.I.):


“Today, Olysio is offering a treatment that costs 25-40% against competitors with high cure rates in genotype 1 and 4 with interferon-based treatment. The hype regarding interferon free treatment for a broader group of patients started primarily by analysts in the United States where insurance companies by law must offer the best treatment with the best side effect profile,  if approved by the FDA. Today, the market is focusing on the best treatment(s) – to a very high drug cost.

However, it seems that  US analysts forgot to take the non-insured patient community into consideration. Medicaid / care (100 million persons), prisons and veterans´ organizations are price sensitive! Analysts seem to have missed the fact that this type of drugs are so expensive for the community that the price often becomes a more important factor than convenience in drug recommendations. The key question is and will always be: To cure one patient in a comfortable regime or three in an uncomfortable regime?  In addition, Olysio cure rates are often better in its genotypes with interferon than e.g. Abbvie and BMS without supplimentary interferon. Most health care systems outside the United States are very price sensitive, thus in the future, Interferon-based therapy might still be attractive (as the price drops significantly). In addition and for  the majority of the current genotypes, the cure rates is equal or even higher.”

If J&J/Janssen/Medivir succesfully keeps a small market share, the yearly liquid assets will remain very high (multi-billions). I do believe that sales will decline, but only marginally or moderately.

Simeprevir/Olysio is also a key money maker for Johnson&Johnson. The following statement is extracted from the Johnson & Johnson´s 2014 Second-Quarter Results report:

“The strong sales results were primarily driven by new products including OLYSIO®/SOVRIAD® (simeprevir), for combination treatment of chronic hepatitis C in adult patients; XARELTO® (rivaroxaban), an oral anticoagulant; ZYTIGA®(abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration-resistant prostate cancer; INVOKANA® (canagliflozin), for the treatment of adults with type 2 diabetes; and IMBRUVICA® (ibrutinib), a kinase inhibitor for the treatment of mantle cell lymphoma and chronic lymphocytic leukemia in patients who have had at least one prior therapy.”


Johnson&Johnson/Janssen is not a one-trick pony. I expect that over time, the company and it´s world class sales force aggressively will nurture global sales by signing new deals with more countries and creatively drive sales of new combinations containing Simeprevir. The presumable (lowering) drug price strategy* will of likely also be applied by Johnson&Johnson/Janssen/Medivir.


0% global Market share within a few months? My prognosis and answer is simply “Very unlikely”.

In this link you´ll find Medivir´s entire research portfolio, but in this (first?) article, I choose not to comment upon additional potential near future share value triggers.


Let´s just state that Medivir’s research portfolio should mature as time goes by…

Medivir has recently introduced new drugs on the market: Adasuve (schizophrenia, the first inhalable drug for the treatment of agitation) and Suscard (angina, the most common heart disease in the Western world). Medivir has also in-licensed a RS-program from Boehringer Ingelheim

Jefferies has published this estimate of near future sales:

https://twitter.com/H3NPHLO/status/446265282802094080/photo/1 ,

but today’s figures are substantially higher:


Main risk: That the competitors near future launches very quickly results in a 0 % global market share for Olysio and Simeprevir (in various combos). Ok, new drugs and combos are entering the arena (Merck, Gilead, Abbvie etc, Bristol Myers Squibb etc.). Gilead will have an edge in the US with its (expensive) Ledispavir/Sofosbuvir (the Simeprevir/Sofosbuvir combo will also be expensive).

AbbVie, with the antiviral agents ABT-267, ABT-333 and ABT-450/ritonavir, will require multiple treatments per day (which might be classified as a difficult/complex practical procedure for the patient)




Miscellaneous risks (not mentioned above):

Risk 1: Gilead withdraws sales of Sovaldi (Sofosbuvir) after launch of the Sofosbuvir/Ledipasvir combo. I see this as highly unlikely. Primarily and to the best of my knowledge, Sovaldi is the biggest launch ever of a new drug in first-quarter sales .

Risk 2: External negative market factors (global crisis, war, global stock market collapse).

Risk 3: Unexpected toxicity findings post drug launches.  The probability should be low due to the short period of treatment (24 or 12 weeks, soon maybe 8!)

Update Jan 2015: The market does not embrace JNJ sufficiently and the sales has been lower than the market expected. Therefore C.E.S.I. awaits the right moment to re-enter Medivir.

Best regards, Cutting Edge Science Invest

Cutting Edge Science Invest is currently not a share holder (this post was slightly updated jan 20, 2015)

Cutting Edge Science Investor can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.

Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered.

In other words: Cutting Edge Science Invest´s provides personally biased information and at best also “general information and opinions”.

The article/post does not contain professional investment advices.  

Cutting Edge Science Invest also wants to point out that the real risks are those you never knew existed – until it was too late.

  1. DrB says:

    Very good summary about Medivir !

  2. Daddybone says:

    I have an other swedish bio company that are close to a big burst (BioInvent). Perhaps it could be intresting to cover aswell, that ofcourse if you are in to that stock?


    • Dear Daddybone. I have, in an introvert strategy, refused a few Biotechs. BioInvent is not one of them. However, I must perform a deep dive to make up my mind. Unfortunately, it will most likely take a few weeks. Currently, I am extremely bussy in learning CSS coding / homepage setup. I aim to comment in this subject ASAP. Maybe I even adapt it? Time will tell – as always! Good night 😉

  3. Daddybone says:

    It was a long shoot from my side since I think your informaton on the blog is top notch, Good night to you as always aswell 🙂

  4. Dear Daddybone, your long shoot has not yet reached its target. The object might hit bullseye 😉

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