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DoctoRx
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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
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  • That Was The Week That Was For Gilead, And It Was Another Good To Great One

    This his been quite a week, and set of weeks, for Gilead. Today it announced that CHMP is recommending up the chain, as it were, that Harvoni, the ledipasvir-sofosbuvir combo for hepatitis C, should be approved for marketing. Earlier in the week, positive Phase 3 data for TAF and an earlier-than-expected filing for Harvoni in Japan were reported. Last week, Zydelig was approved by the EC in Europe for CLL and, importantly, for follicular lymphoma. The big generic deal to bring Gilead's hep C drugs to needy patients in dozens of countries was inked. And while I haven't seen very recent numbers, as of late August, the analysts were raising their Q3 sales expectations for Sovaldi. The few negatives include shrinking short interest, down to 62 MM shares, and a negative Phase 2 study on simtuzumab for pancreatic cancer (for which expectations were on the floor to begin with).

    I am thinking that when investment committees meet Monday, they will see what a strong week Gilead had, and will extrapolate the CHMP opinion to FDA action, and raise their price targets again on GILD.

    The TAF data have received insufficient attention IMHO, and I want to discuss that in an article soon.

    I have been adding to my GILD positions and naked GILD calls this week.

    Disclosure: The author is long GILD.

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

    Tags: GILD, Biotech
    Sep 26 10:39 AM | Link | 3 Comments
  • GIlead's Simtuzumab Fails For Cancer

    Gilead Sciences (NASDAQ:GILD) announced today that the monoclonal antibody simtuzumab that it brought in-house failed in a Phase 2 trial for pancreatic cancer. I have written several times about Gilead's pipeline, but have said almost nothing about simtuzumab. This is because I have regarded its successful use in cancer as a long shot, and while I think is may be successful for the non-cancer uses such as liver and lung fibrosis, the end points for those trials are some years away.

    The stock is down just a little pre-open on this news, suggesting that this particular indication for simtuzumab meant little to analysts.

    The saying in pharmaceutical companies is that if a profitable company does not have failures in Phase 2, it is not doing enough trials. That saying may apply here.

    Gilead has been testing $100 from above; right now this round number looks to be acting as good support as $70 and $80 were on the way up during this year's surge.

    I continue to be heavily overweight GILD.

    Disclosure: The author is long GILD.

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

    Tags: GILD
    Sep 17 8:22 AM | Link | 3 Comments
  • 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
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