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  • Celgene Looks Unstoppable [View article]
    Ray, I'm in agreement about the great growth story at Celgene.

    My concern about the stock is its valuation. Mgmt's insistence on using adjusted EPS rather than GAAP is at the heart of this problem. Looking at Q2, much of the discrepancy between GAAP and adjusted EPS comes from stock-based compensation to mgmt, and another important cause of the discrepancy is the cost of "upfront collaboration expense." Exec compensation is a real cost to shareholders if the stock appreciates, and upfront expense is a cash cost and should IMHO never be excluded from earnings. Amortization of intangibles and goodwill, which in today's permissive financial environment most of us add back to GAAP accounting, was a minority though non-trivial factor in Q2's reconciliation.

    I agree that Celgene, the corporation, looks unstoppable, but I'm neutral on CELG at current valuations. Good luck to CELG longs.
    Sep 15 09:10 AM | 4 Likes Like |Link to Comment
  • Gilead licenses Sovaldi to Indian firms [View news story]
    stunato: this is not a big worry IMHO. Gilead has lots of experience with this sort of program for other diseases. The licensees are responsible firms. The last thing they want to do is get sued by Gilead for diversion. Will there be someone somewhere in one of these poorer countries who has hep C, gets a prescription, and has a friend or relative in the US who also has hep C and diverts his/her Sovaldi/combo to that friend or relative? Yes. But it's a de minimus situation from Gilead's standpoint, and IAC helps someone needy - in the US rather than in a foreign country. Meanwhile this deal continues to burnish Gilead's image and bottom line.

    I believe this program by Gilead is also the correct behavior from a moral and ethical standpoint. Gilead takes from the rich and gives to the poor - Robin Hood.
    Sep 15 08:37 AM | 2 Likes Like |Link to Comment
  • It's Time To Marry Intel And Dump Qualcomm [View article]
    Alex, thanks for sharing these thoughts and for the analysis. I disagree, though, and think one can "date" both these names simultaneously. I still see INTC as too married to a floundering Windows franchise, tho, to be interested in it.
    Long QCOM.
    Sep 14 08:49 PM | 1 Like Like |Link to Comment
  • Challenging Consensus On PCSK9 Inhibitors: Focus On Regeneron And Amgen [View article]
    John Edwin, you're very welcome. GLTU!
    Sep 13 09:47 PM | Likes Like |Link to Comment
  • Biosimilars on the horizon in the U.S. [View news story]
    Biosimilars are taking very little market share in Europe. It's far too soon to tell, but at the very least, their presence should restrain price increases from entrenched brands.
    Sep 12 12:50 PM | Likes Like |Link to Comment
  • Uncertainty Prevails For Vertex [View article]
    I think the odds favor regulatory approvals WW for the combo and that sales will be super.

    I question your comment about leverage. The link to TR is less useful. Here are the liabilities per the co's Q2 press release:

    Liabilities and Shareholders' Equity
    Other liabilities $ 388,020 $ 422,377
    Accrued restructuring expense 18,984 28,353
    Deferred revenues 65,279 70,969
    Construction financing lease obligation 473,268 440,937
    Shareholders' equity 1,172,269 1,356,405
    Total liabilities and shareholders' equity $ 2,117,820 $ 2,319,041

    Common shares outstanding 237,331 233,789

    Shareholder equity was $1.17B. More impt, market cap is $22 B. How can anyone obsess about this level of debt - most of which is a construction financing lease obligation - when the company could sell some stock and pay off all its debt with minimal dilution to future EPS?

    I disagree with the tone of almost everything in this article.

    Long VRTX.
    Sep 11 05:58 PM | 1 Like Like |Link to Comment
  • Fewer injections result in fewer injection-related adverse events [View news story]
    It's probably unsurprising, but unless Mr. House is an expert in this topic, he may in the future wish to avoid the snark. There are more things that are or may be true in dealing with drugs, excipients, tolerance, etc. than a noob to a field may be aware of.

    Until you prove something in medicine and pharmacology, it's not necessarily so.
    Sep 11 11:59 AM | 2 Likes Like |Link to Comment
  • Gilead Sciences: The Shorts Did Indeed Get Squeezed -- What's Next? [View article]
    OTOH, there were many fewer shorts in GILD a year ago than there are now - only 59 MM. Why anyone would want to short this name, tax and other arbitrage reasons notwithstanding, is beyond my ken. I'm cautious on the market, but see GILD as a strong buy and hold, and 75 MM shares sold short as of just 2 weeks ago is IMHO just another reason to be long and strong this name.
    Sep 11 11:53 AM | 6 Likes Like |Link to Comment
  • Update: Still Time To Sell Both AT&T And Verizon As Sprint Steps Up Its Pricing Initiatives [View article]
    I think T is different from VZ and is more at risk. T has seen meaningful EPS estimate cuts for 2014 and 2015, but VZ has seen increasing estimates. VZ is now trading under 13X 2015 projected EPS with a dividend that is attractive and appropriate for all the range of expected interest rate possibilities for the next several years. VZ obviously has the best reputation in the industry. If VZ were an expensive stock, I would agree with the author. Now, I feel as though VZ has already discounted a price war.
    Sep 11 09:22 AM | 3 Likes Like |Link to Comment
  • Gilead Update: Good News Keeps On Coming; Much Higher Share Prices Appear Justified [View article]
    2 toe: I have nothing to add beyond my speculation in my article. We'll just have to see...
    Sep 10 09:10 PM | Likes Like |Link to Comment
  • Gilead Update: Good News Keeps On Coming; Much Higher Share Prices Appear Justified [View article]
    Tony: I don't have access to IMS data any more than you do, so I don't know how the initial sell-in for Zydelig has been. As of now, it has two indications that Imbruvica lacks. The follicular lymphoma indication for Zydelig is commercially important. Gilead has Zydelig in Phase 3 trials for frontline use in CLL, a major indication. It also stated, per this article, that it is intensively looking at combos of anti-cancer drugs at lower doses to achieve treatment goals with reduction of side effects and/or synergy in effectiveness. So I think that Zydelig has great potential. It was approved for lymphoma off of a Phase 2 study, meaning it is very effective. How the side effects will prove out in clinical practice is unclear to everyone, including Gilead. Right now its use is for terminal patients, so its oral nature makes it palatable. Re its potential re Imbruvica, PCYC owns about half of Imbruvica, while Gilead made a great deal from Calistoga to acquire idelalisib. (I have briefly discussed this topic in a prior article.)

    Re the VA deal for Imbruvica, certainly the VA has lots of elderly patients, and Imbruvica and Zydelig treat the elderly primarily. Absent an announcement, I have no comment. With Zydelig, Gilead has dipped its toes in the oncology water. They intend much more to follow.

    All the best.
    Sep 10 04:08 PM | Likes Like |Link to Comment
  • Gilead Update: Good News Keeps On Coming; Much Higher Share Prices Appear Justified [View article]
    '632, thanks for noticing, and for posting this here. Interesting - it is a bit of a "low content" blog post...
    Sep 10 11:50 AM | Likes Like |Link to Comment
  • Telefonica: A Superior Yield Play With A Target Price Of $25 [View article]
    Thanks, Achilles, for sharing your analysis with us. I went long a toehold in FEZ (large-cap European ETF), and think that if and when the ECB's money-printing operation ("QE Lite) really gets moving, then TEF and SAN, among many others, will outperform the US.
    Sep 10 07:57 AM | Likes Like |Link to Comment
  • Challenging Consensus On PCSK9 Inhibitors: Focus On Regeneron And Amgen [View article]
    Thanks, Paul. Your kind words are quite appreciated. Let's see what the future brings re other approaches to the PCSK9 field. My years of observation of and involvement in the pharma industry lead me to doubt that Sanofi, Pfizer and Lilly would be so involved in the injectibles if a small molecule was soon going to disrupt their business. Also, the usual rule is that proteins can do more than oral meds. Of course, time will be the arbiter here...
    Sep 9 10:14 PM | Likes Like |Link to Comment
  • Gilead Update: Good News Keeps On Coming; Much Higher Share Prices Appear Justified [View article]
    CSYJ, many thanks for reading so carefully and commenting in such detail. I'll try to respond comprehensively where relevant.

    1. This is what I said re the combo - not a prediction:

    I am hoping for, and half-expecting, FDA approval of Gilead's investigational sofosbuvir/ledipasvir combination product before the end of this quarter.

    2. Wyden-Grassley: No, I have not seen anything. Certainly Gilead is in contact with these august Senators, Henry Waxman's office, etc. I do believe Rep. Waxman is retiring.

    3. Re tadalafil, PAH is heavily a disease of females... I wouldn't expect ambrisentan to do much in that side effect realm, but don't really know...

    You probably are aware that sildenafil (Viagra) was initially tested as a vasodilator for CV disease, and that Pfizer switched focus during development when a number of male trials subjects noted a pleasurable side effect...
    Sep 9 06:28 PM | Likes Like |Link to Comment