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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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  • More Good News For Gilead 5 comments
    Jul 20, 2014 4:25 PM | about stocks: 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 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.

    Themes: Biotech, infectious diseases Stocks: GILD
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Comments (5)
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  • somedata1
    , contributor
    Comments (1574) | Send Message
    DoctorRx, you get me excited every time you publish an article about GILD. Thanks. I love GILD's HIV franchise, and I love even more with its HCV franchise now. I'm sure there will be something wonderful coming in its pipeline. And the management has the intention to make GILD a bigger pie. I put my money where my mouth is.


    20 Jul 2014, 05:50 PM Reply Like
  • pcaflisch
    , contributor
    Comments (251) | Send Message
    20 Jul 2014, 08:17 PM Reply Like
  • somedata1
    , contributor
    Comments (1574) | Send Message
    @pcaflishch, have you found a disruptive technology yet? Do you like 3D printing?
    20 Jul 2014, 08:31 PM Reply Like
  • pcaflisch
    , contributor
    Comments (251) | Send Message
    somedata1.....I really do like 3d printing. I was invested heavily for a couple of years. Got out as it was falling. Have not felt comfortable to get back in. Am now really nearly all in on Gilead.
    21 Jul 2014, 07:07 AM Reply Like
  • papita
    , contributor
    Comments (295) | Send Message
    DoctorRx, always a pleasure to read your work. Cab you comment at all on Biogen, another biotech holding of mine.


    Thank you.
    20 Jul 2014, 08:27 PM Reply Like
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