Seeking Alpha

DoctoRx's  Instablog

  • on Healthcare
Send Message
Over 30 years of investing in individual stocks. Extensive business experience with small to mid-size companies, including as CEO. Many hundreds of blog posts on financial and economic matters since 2008. Focus on value with catalysts for upside price action. Background as a physician and... More
My blog:
View DoctoRx's Instablogs on:
  • Gilead Sciences Price Target Update

    A brief update on a short-term price target. On its web site, Gilead Sciences (NASDAQ:GILD) publishes analyst's EPS estimates for 2014, 2015 and 2016. Consensus estimates are as follows:

    Analyst Forecasts - EPS
     Last Month Revisions
    Fiscal Period MeanHighLowMedian# of Estimates#Up#DownMean % Change
    AnnualDec 1610.1513.707.5510.002319111.60
    AnnualDec 159.0712.027.009.232621015.56
    AnnualDec 147.679.165.007.982522021.52

    My sense is that given low and dropping interest rates available to owners of capital, an implied 10% earnings yield two years from now will be viewed as attractive, given Gilead's long-term growth potential. Thus I think that $100 is a reasonable short-term price target. Investors should be aware, though, that I do not leverage positions and do not own or intend to own any weekly or 1-2 month options on GILD. Thus I actually have bought GILD shares and long-term GILD naked calls this week.

    Disclosure: The author is long GILD.

    Additional disclosure: Not investment advice. I am not an investment adviser.

    Tags: GILD, Biotech
    Jul 29 10:39 AM | Link | 2 Comments
  • More Good News For Gilead

    More good news for Gilead Sciences (NASDAQ:GILD). The newsflow coming into earnings has been enhanced. Bloomberg News reports Gilead Drug Combination Cures Hepatitis C in HIV Patients. From the article:

    In a study of 223 HIV-infected patients, Solvadi combined with ribavirin cleared the most common U.S. strain of hepatitis C in 76 percent of newly treated patients over 24 weeks. Only seven participants stopped treatment because of side effects and there were no adverse effects on HIV treatment, according to a report in the Journal of the American Medical Association.

    Complications from hepatitis C are the leading cause of death for those with HIV, according to the research. In the past, treatment for 7 million patents co-infected with the viruses globally have been limited because older hepatitis C regimens that include interferon interact badly with HIV drugs, with more anemia, fatigue and depression, researchers said.

    This is "the first clinical trial to demonstrate that we can cure hepatitis C in patients with HIV co-infection without the use of interferon," said Mark Sulkowski, the study author and medical director of the John Hopkins Infectious Disease Center for Viral Hepatitis in Baltimore. "It represents a transformative step in our approach to this therapeutic area."

    This is nice to see, both for GILD and for patients. One of these days, I hope to see something similar appear using not Sovaldi plus ribavirin, but sofosbuvir (the drug in Sovaldi) plus ledipasvir, the combo awaiting FDA approval with a PDUFA date in October.

    Another bit of good news is steadily and rapidly-rising earnings estimates, from Yaoo! Finance:

    EPS TrendsCurrent Qtr.
    Jun 14
    Next Qtr.
    Sep 14
    Current Year
    Dec 14
    Next Year
    Dec 15
    Current Estimate1.771.616.718.22
    7 Days Ago1.701.576.488.00
    30 Days Ago1.591.506.287.78
    60 Days Ago1.591.496.197.71
    90 Days Ago1.

    GILD is trading at less than 11X consensus 2015 earnings. Since its historical P/E is more like 20-22, its valuation currently assumes that 2015 earnings are peak or near-peak and will decline.

    I remain comfortable that GILD has a reasonable margin of safety and believe that upside potential exceeds downside risk at current trading levels.

    Disclosure: The author is long GILD.

    Additional disclosure: Not investment advice. I am not an investment adviser.

    Jul 20 4:25 PM | Link | 5 Comments
  • Portola Sells Off On Hawkish Fed Comments, Fundamentals Unchanged

    I recently wrote an article about a development-stage biotech/biopharma company, Portola Pharmaceuticals (NASDAQ:PTLA). This was written shortly after a large run-up in the stock. Following Janet Yellen's hawkish statements about companies such as Portola, or yet riskier stocks, PTLA has taken a big dive to below $25, from $29-30 when I wrote that article. I have been buying the "dip" (which feels more like a crash). I came across this professional article yesterday:

    Apixaban Most Cost-Effective of New Oral Anticoagulants

    July 10, 2014

    As the disease burden of atrial fibrillation (NYSE:AF) increases along with the aging US population, cost-effectiveness of therapy is becoming an important consideration when deciding which anticoagulant therapy to prescribe. Although vitamin K antagonists (VKA), such as warfarin, have been traditionally the most inexpensive agents, their efficacy profile is less favorable than the novel oral anticoagulants (NOACs); other considerations, such as drug-drug interactions and tedious monitoring parameters also make VKAs less desirable than NOACs...

    Table. Comparison of Annual Cost Based on Major Events: Novel Oral Anticoagulants vs Warfarin
    per 100 PY
    Major bleeding
    per 100 PY
    +/- medical costs per patient per year,
    absent incident
    stroke/major bleeding
    Apixaban vs warfarin1.1 fewer2.1 fewer$1245 saved
    Dabigatran vs warfarin1.9 fewer0.7 more$555 saved
    Rivaroxaban vs warfarin0.8 fewer1.4 more$144 increased
    PY = patient years.

    Portola has in late-stage development an antidote that reverses Factor Xa inhibitors such as apixaban, a Xa inhibitor marketed in the U.S. as Eliquis by Bristol-Myers Squibb (NYSE:BMY) and Pfizer (NYSE:PFE).

    My guess is that its Xa inhibitor andexanet alfa is worth a good deal more than the company is now valued at, which is $1 B (which includes net cash). It has not been submitted for FDA approval, so anything could happen, but I think this stock is now a very interesting potential value in a rich market.

    Disclosure: The author is long PTLA.

    Additional disclosure: Not investment advice. I am not an investment adviser.

    Jul 15 1:32 PM | Link | 3 Comments
Full index of posts »
Latest Followers


More »

Latest Comments

Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.