Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

More Good News For Gilead

|Includes:Gilead Sciences, Inc. (GILD)

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 Trends Current Qtr.
Jun 14
Next Qtr.
Sep 14
Current Year
Dec 14
Next Year
Dec 15
Current Estimate 1.77 1.61 6.71 8.22
7 Days Ago 1.70 1.57 6.48 8.00
30 Days Ago 1.59 1.50 6.28 7.78
60 Days Ago 1.59 1.49 6.19 7.71
90 Days Ago 1.01 1.01 4.09 6.00

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.

Stocks: GILD