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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 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
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Comments (5)
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  • somedata1
    , contributor
    Comments (2064) | 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 (264) | Send Message
    20 Jul 2014, 08:17 PM Reply Like
  • somedata1
    , contributor
    Comments (2064) | 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 (264) | 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 (438) | 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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