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Ho Ho Harvoni: Gilead Sciences Is A Gift That Should Be Under Every Investor's Tree.
- Whether you're a value or a growth investor, GILD belongs in your portfolio.
- Gilead Sciences is at the forefront of worldwide HCV eradication with its combination tablet: Harvoni.
- Regardless of anticipated competition, Gilead is a rapidly growing, highly profitable and cash-gushing machine.
- GILD is one of my top picks to significantly outperform the S&P 500 in 2015.
- A relatively straightforward screen meant to help me find attractive growth stocks located only one result: Gilead Sciences.
- Although I have had mixed feelings about Gilead in the past, it compares favorably to wide variety of similar companies, including Biogen Idec, using several criteria.
- Based on Gilead's return on invested capital, estimated future earnings growth and forward price to earnings ratio, it should be included in nearly every growth portfolio.
- The drug pipeline is the lifeblood of all research-based companies.
- A thorough understanding of the potential embedded in a company's pipeline offers a glimpse into potential for future revenue and profits.
- Gilead Sciences currently has a real gem in development which I will detail below.
- GILD's forward P/E ratio (10) is well below its competitors (~19-35) and this is an anomaly as Gilead’s Free Cash Flow will continue to grow at >20% each year.
- EBIT margins are growing and this shows that Gilead has control over its cost base. These alone should ensure above average forward P/E and PEG ratios when compared to S&P.
- Gilead is on track to achieve US HCV revenue consensus of $2.75B in Q4 and $12B in 2015.
- The 2014 revenue consensus assumes a 25% market share for Abbvie’s HCV drug. This is a worst case scenario that assumes that all GT1b patients will switch to Abbvie.
- Recent results clearly show that Abbvie’s cure rates are 10% less than Gilead’s for GT1a patients but are very similar (99% vs 100%) for GT1b patients.
How To Beat The Market - My Best Large-Cap Stock Portfolio: Gilead Sciences
- I have developed a large-cap stock selection strategy that can beat the market by a large margin with lower risk.
- A 16-year simulation of the strategy has given an annualized return of 11.51%, while the S&P 500 index has increased only 3.07% during that period.
- I also focus in this article on the first ranked stock by that strategy, Gilead Sciences.
- Gilead has surged more than 40% this year, driven by the tremendous success of its hepatitis C treatment.
- Despite the significant surge in Gilead shares, the stock has further upside.
- The risk to Gilead’s hepatitis C treatment market share is minimal.
Gilead Sciences' Stock Forecast: Algorithmic And Fundamental Analysis
- Gilead Sciences has had one of its most successful years, with growth in Q3 2014 exceeding 100% growth over last year's Q3.
- Sovaldi currently profits on being the first to market; the single product is currently responsible for almost 50% of the company's revenues.
- The current product portfolio poses a high risk, and is dependent on competitors' failures/successes in the upcoming months.
- I Know First algorithmic forecast suggest the stock will increase in the next 3-7 days, but is no longer the optimal long-term investment.
- The Chronic Lymphocytic Leukemia market alone is projected to reach $3.3 billion across six major markets which represents sizeable revenue potential for Gilead.
- Zydelig performed well in its first partial quarter of availability.
- Zydelig will likely become a significant source of revenue for Gilead, and represents a critical entre into the lucrative oncology market.
- Gilead’s stock continues to be undervalued, and the company’s consistent innovation will propel the stock to at least $150 within one year.
A Comprehensive Comparison Of Gilead's Harvoni And AbbVie's Triple HCV Regimen: What The HCV Marketplace May Look Like In 2015 And Beyond
- Gilead's Harvoni will dominate AbbVie's HCV regimen in the market place because in all instances, Harvoni is the safer and more effective drug.
- Physicians’ primary concern is the well-being of their patients. AbbVie’s regimen requires ritonavir and ribavirin (most cases) which greatly increases side effects and risks of anemia. Harvoni is the best choice.
- As pricing decreases and regimens improve, more patients will be treated, but the sheer numbers will allow massive profits for at least a decade or more.
- Gilead shares have dropped 15% over AbbVie's regimen approval and loss of market share due to pricing. The time to buy Gilead is now. Assume 30%-50% upside in 2015.
- The stock price appreciation of biotech juggernaut Gilead Sciences has stalled recently as the biotech giant consolidates recent gains and as some worries about competition in hepatitis C space increases.
- I have seen a lot of comments and commentary around how AbbVie could be a major player in the hepatitis C arena in the medium term.
- My opinion is that those worries are unwarranted, the stock is ridiculously cheap and certainly a better long term buy than that of AbbVie.
Gilead Sciences: An Alpha Stock Through The Good And Bad Times
- This article uses the Capital Asset Pricing Model to compare the risk-return metrics of Gilead Sciences (GILD) against Allergan (AGN), Amgen (AMGN), Biogen (BIIB), and Novartis (NVS).
- Regression analysis demonstrates Gilead Sciences (GILD) to have a positive Jensen's Alpha value of 0.14% for the period 2006-09, and 0.02% for 2011-14.
- The study also shows that Gilead Sciences is the only company to yield a positive alpha value across both periods in question.
Sovaldi Versus Abbvie Combination: Analysis Of Abbvie Combination Impact On Sovaldi Market Share
- Sovaldi/Harvoni made by Gilead is currently the standard of care for the treatment of hepatitis C viral infection (genotypes 1,2,3,4). It is projected to achieve $12 billion revenue in 2014.
- Abbvie combination consisting of 3 or 4 drugs is expected to be FDA approved for hepatitis C viral (HCV) therapy for genotype 1 by December 22, 2014.
- There is much controversy and misunderstanding regarding the potential impact of ABBV combination on the market share of Sovaldi/Harvoni.
- In this article, I review the potential impact of ABBV combination on the market share based on epidemiological data and safety and efficacy of the two competing drug combinations.
- Because of the superior safety and efficacy profile of Sovaldi/Harvoni and its efficacy in all genotypes, Sovaldi/Harvoni is expected to have 85-90% of the market share.
Gilead Sciences - Investigating Earnings Predictability
- Those who are bullish on the outlook for shares of Gilead Sciences point to their low forward earnings multiple and the company's high projected earnings growth rate.
- However, Gilead also has a high coefficient variance of future earnings expectations, which means that analyst estimates vary widely about the firm's earnings potential in 2015.
- This article explains why investors should consider coefficient variance of future earnings as a tool when analyzing potential investment opportunities.
- It also highlights a potential reason why Gilead shares appear to be so undervalued based on traditional GARP analysis (which ignores the variability of future earnings).
Gilead Sciences: Is Gilead Taking The Lead? - A Bullish Fundamental & Algorithmic Perspective
- Gilead Sciences is an American biotechnology company with a distinguished product pipe line that, in recent years, has enjoyed high revenue, earnings-per-share, and net income growth.
- In Q3 2014, Gilead grew year-over-year in a multitude of ways domestically and internationally; it also announced new research accomplishments, and maintained positive – if slightly slower – full-year guidance.
- While some analysts believe Gilead’s growth will come to an end because of technicals and inherent risk, fundamental analysis indicates that Gilead will keep thriving.
- I Know First’s algorithm predicts a bullish forecast for GILD in the 1-month and 3-month time frames.
- Biotech juggernaut Gilead Sciences is giving investors a great buying opportunity for the second time in 2014 after a recent 15% pullback in the stock price.
- Even as the stock has declined recently, earnings estimates have increased for 2015 and the company has plenty of positive catalysts ahead.
- Gilead is one of the cheapest large cap growth plays in the market and I believe over the next 12 months the shares could rise 50% from current levels.
Be Careful With Gilead - It May Be Time To Take Profits
- Gilead is a wonderful company trading at a reasonable valuation.
- Yet Gilead's explosive growth has created extremely lofty expectations.
- Last quarter's results were disappointing - the stock has considerable downside if earnings continue to disappoint.
- This article examines the bear case for Gilead - high growth companies are always risky.
- You don't have to be a genius to identify valuation mispricings.
- Gilead is a company that holds a lot of risk but also a lot of promise.
- Let's take a look at the company's most recent performance and assign a valuation to the company.
Today, 10:23 AM
- Chimerix (CMRX +5%) and ContraVir (OTCQB:CTRV +14.5%) enter into a strategic collaboration to develop and commercialize CMX157, a potent analog of the antiviral drug tenofovir DF (Gilead Sciences' (GILD +2.4%) Viread).
- Under the terms of the agreement, Chimerix licenses CMX157 to ContraVir in exchange for an upfront payment of 120K shares of ContraVir preferred stock with a stated value of $1.2M and up to ~$20M in clinical, regulatory and initial commercial milestones for the U.S. and Europe. Chimerix will also receive royalties on commercial sales as well as additional milestones in these territories.
- CMX157 is a novel lipid acyclic nucleoside phosphonate that delivers high intracellular concentrations of the antiviral agent tenofovir diphosphate. In in vitro studies, CMX157 was 200-fold more potent than tenofovir against all major HIV subtypes resistant to current therapies. The structure of CMX157 results in lower circulating levels of tenofovir which lowers its systemic exposure and reduces the potential for renal side effects.
- The next step in the development of CMX157 is a Phase 2 trial.
Fri, Dec. 12, 11:51 AM
- According to Ben Levisohn, weekly prescriptions for Harvoni (ledipasvir/sofosbuvir) and Sovaldi (sofosbuvir) have to average ~6,500 per week for the remainder of December in order for Gilead Sciences (GILD +1.6%) to hit the consensus U.S. revenue estimate of $2.75B. The average to date is 6,597. Total Q4 prescriptions need to come in at ~85K in order to hit the revenue number.
- Harvoni prescriptions last week were 5,642, up almost 45% from the previous week and 29% from two weeks ago.
- Sovaldi prescriptions were 3,553, up almost 32% from the week before and up 3% from two weeks ago.
- Overall consensus view for Q4 is EPS of $2.23 on revenues of $6.7B.
Wed, Dec. 10, 4:10 PM
- The Southeastern Pennsylvania Transportation Authority (Septa) files a suit in the U.S. District Court for the Eastern District of Pennsylvania against Gilead Sciences (NASDAQ:GILD). The suit, which accuses Gilead of price gouging with its $84,000 full regimen list price for Sovaldi, seeks class action status. The plaintiff(s) seek monetary damages.
- Septa has spent $2.4M on Sovaldi this year for members of its health plans it funds for employees and retirees. It does not specify how many people have been treated with the HCV medication, but it is clearly feeling budgetary pain.
- Sovaldi, which the company began selling in December, is the most successful drug launch in history, generating over $8.6B in revenue in nine months.
- Although the average discount for Sovaldi in the U.S. is 20% or more, the company will still have to defend its pricing considering that it sells it in Egypt for $900 for a full regimen.
Thu, Dec. 4, 8:43 AM
- It appears that the Veterans Administration and Gilead Sciences (NASDAQ:GILD) have agreed on a price of $594 per dose for its HCV drug Sovaldi (sofosbuvir). This represents a discount of almost 41% from the $1,000 per pill list price.
- Earlier this year, the company established a 23% discount to U.S. Government health plans but agreed to extend more substantial discounts to the VA and Department of Defense after facing intense criticism from the medical community and government representatives.
- The looming competition from AbbVie (NYSE:ABBV) may have influenced the situation as well.
Wed, Dec. 3, 3:36 PM
- Actelion Ltd (OTCPK:ALIOF) (OTC:ALIOY) submits a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for Uptravi (selexipag) for the treatment of patients with pulmonary arterial hypertension (PAH).
- Selexipag is selective IP prostacyclin receptor agonist. Prostacyclin activates the IP receptor inducing vasodilation and inhibiting proliferation of vascular smooth muscle cells. If approved, it will be the first such drug cleared for use in PAH.
- In April 2008, the company signed a license agreement with Nippon Shinyaku under which Actelion has global development and commercialization rights to selexipag outside of Japan. The firms will be partners in Japan.
- Actelion plans to submit an NDA to the FDA shortly.
- PAH-related tickers: (GSK -0.8%)(GILD -1.9%)(MSTX -1.5%)(ARNA +1.7%)(OTCPK:BAYRY -1.8%)(UTHR -1.2%)
Mon, Dec. 1, 10:52 AM
- Gilead Sciences (GILD +1%) will allow Mylan (MYL -0.8%) subsidiary Mylan Laboratories Limited to manufacture and distribute its HIV drug tenofovir alafenamide (TAF) as either a single agent or in an approved combination. The license covers 112 countries and 30M HIV sufferers.
- TAF is currently in Phase 3 development. Gilead currently manufactures drugs containing tenofovir under the brand names Viread and Truvada.
Fri, Nov. 28, 12:12 PM
- According to UBS analyst Matthew Roden, total prescriptions for Gilead Sciences' (GILD +0.3%) Harvoni for the week ending November 21 was 4,366 (+21%). Scripts for Harvoni and Sovaldi were 7,813 (+5%). Bloomberg consensus view for Q4 Harvoni sales is $1.8B.
- RBC's Michael Yee cites a Q4 consensus for Harvoni + Sovaldi of ~$3.6B and, if current momentum continues, a 2015 consensus of ~$12B.
Wed, Nov. 26, 9:22 AM
- The Drugs for Neglected Diseases initiative ((DNDi))and Medecins Sans Frontieres take exception to the $125M that Gilead Sciences (NASDAQ:GILD) paid to Knight Therapeutics (OTC:KHTRF) for its priority review voucher (PRV) that it received from the FDA in connection to its approval of Impavido (miltefosine) for leishmaniasis. The humanitarian groups cry foul over Knight's windfall because the R&D for miltefosine was largely conducted by a division of the World Health Organization (WHO/TDR - Special Programme for Research and Training in Tropical Diseases) in the mid-1990s using private and public funding. Since then, DNDi and partners have invested money in clinical studies of the drug.
- The groups are asking Knight and commercialization partner Endo Health Solutions to disclose the drug's manufacturing cost and to price it accordingly with minimal profit margin in order to make it affordable for the countries that need it. They argue that "the PRV mechanism, which aims to stimulate or at least reward drug development for neglected diseases, currently contains no access provisions and fails to ensure that only entities that invested in R&D are awarded the vouchers."
Fri, Nov. 21, 8:48 AM
- The European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) adopts a positive opinion supporting approval of AbbVie's (NYSE:ABBV) Viekirax (a combination of ombitasvir, paritaprevir and ritonavir) plus Exviera (dasabuvir), with or without ribavirin, for patients with chronic HCV genotype 1 infection and Viekirax only, with ribavirin, for patients with HCV genotype 4 infection. A final decision by the European Commission usually takes about 60 days.
- The FDA tagged Viekirax a Breakthrough Therapy and granted priority review of AbbVie's NDA in June.
- Related tickers: (NASDAQ:ENTA) (NASDAQ:GILD) (NYSE:MRK) (NYSE:BMY) (NASDAQ:RGLS) (NASDAQ:CNAT) (NASDAQ:ACHN)
- Previously: Enanta declines HCV drug co-development option with AbbVie
- Previously: AbbVie presents HCV/HIV and liver transplant HCV data
Thu, Nov. 20, 12:04 PM
- France's hard line negotiations with Gilead Sciences (GILD -0.1%) over Sovaldi (sofosbuvir) pricing paid off. The agreed-upon price per box will be €13,667 which is €5,000 lower than the original price. The full 12-week regimen cost will be €41,000 or ~$51,000. This is the lowest price in Europe and will go down further if volume targets are hit.
- Sovaldi's full regimen price in the U.K. is ~$57,000 and ~$66,000 in Germany. It's $84,000 in the U.S. but this is the list price.
- Recently-approved Harvoni (ledipasvir and sofosbuvir) is available in France on a temporary basis at €48,000 for a full regimen (€16,000 per box). Negotiations over long-term pricing are underway.
Thu, Nov. 20, 7:41 AM
- According to IMS Health (NYSE:IMS) global drug spending will top $1T this year led by Gilead's (NASDAQ:GILD) Sovaldi (sofosbuvir) for hep C and new cancer drugs. The projected spend of $1.06T represents a 7% increase from last year.
- By 2018, drug spending is projected to rise to $1.3T. Hepatitis C and cancer meds will add ~$100B each, while diabetes care will contribute $78B. Leading the charge in cancer will be Roche's (OTCQX:RHHBY) Perjeta (pertuzumab) and Kadcyla (ado-trastuzumab emtansine), Pharmacyclics' (NASDAQ:PCYC) Imbruvica (ibrutinib) and Amgen's (NASDAQ:AMGN) Kyprolis (carfilzomib).
- The ever-increasing tab for meds will be controversial because payers' budgets are being stressed while drug developers defend their prices citing high development costs.
- There is already some push back in cancer. Britain's National Institute for Health and Care Excellence (NICE), which sets guidelines for the National Health Service on costs, procedures and technologies, is balking at approving Roche's Gazyvaro (obinutuzumab) and Kadcyla citing their high cost relative to additional benefits over existing therapies.
- Previously: Roche's Gazyvaro not NICE in the UK
- ETFs: IBB, BIB, IRY, BIS, IXJ, DRGS
Wed, Nov. 19, 3:59 PM
- Gilead Sciences (GILD -1.2%) purchases an FDA voucher from Canadian drug distributor Knight Therapeutics for $125M. The voucher, awarded to Knight for developing a drug to treat the parasitic disease leishmaniasis, can be used by Gilead for faster agency approval for any drug, reducing the review period from 10 months down to six.
- The FDA initiated its voucher program to incentivize drug makers to develop meds for neglected tropical diseases. A company intending to use one must notify the agency at least a year before it submits an application.
- The transaction may signal the ramp up of a secondary market for the vouchers considering the value of a shorter review period. A subsidiary of Regeneron purchased one in July for $67.5M from a subsidiary of BioMarin Pharmaceuticals. It intends to use it in its BLA for alirocumab.
- Previously: Biotechs to use priority review voucher for cholesterol-lowering drug candidate
Tue, Nov. 18, 10:15 AM
Fri, Nov. 14, 12:00 PM| 41 Comments
Thu, Nov. 13, 11:19 AM
- Gilead Sciences (GILD -2.8%) prices its $4B aggregate principal amount of senior notes. The three tranches are: $500M at 2.35% maturing February 2020, $1,750M at 3.5% maturing February 2025 and $1,750M at 4.5% maturing February 2045.
- Proceeds will be used for general corporate purposes which may include the repayment of existing debt, working capital and stock repurchases.
Tue, Nov. 11, 11:03 AM
- At The Liver Meeting in Boston, Gilead Sciences (GILD +1.1%) presented results from several Phase 2 and Phase 3 trials evaluating Harvoni (ledipasvir 90 mg/sofosbuvir 400 mg) for the treatment of chronic HCV infection in patients with limited or no treatment options, including decompensated cirrhosis, HCV recurrence following liver transplantation and patients refractory to other direct-acting antivirals.
- In a pooled analysis of Phase 2 and Phase 3 open-label studies involving more than 500 HCV-1 patients with compensated cirrhosis who received Harvoni alone or with ribavirin (RBV) for 12 or 24 weeks, 96% achieved SVR12.
- In a Phase 2 open-label study evaluating patients with decompensated cirrhosis and those with HCV recurrence after a liver transplant, 87% of those receiving Harvoni + RBV for 12 weeks achieved SVR12 compared to 89% of the treatment arm receiving a 24-week regimen (subgroup analysis of 108 HCV genotype 1 and 4 patients).
- In another subgroup analysis from the same Phase 2 trial, response rates for patients who developed HCV (genotypes 1 and 4) recurrence following liver transplantation who were treated with Harvoni + RBV were analyzed. SVR12 rates for non-cirrhotic patients were 96% and 98%, respectively, for the 12- and 24-week regimens. For patients with compensated cirrhosis, the SVR12 rate was 96% for both regimens. For patients with decompensated cirrhosis, the SVR12 rate was 81% for both regimens.
- In two studies of HCV patients who failed prior therapy, those receiving Harvoni + RBV for 12 weeks achieved SVR12 rates of 96% and 98%. Those receiving Harvoni alone for 24 weeks (Study GS-US-337-0121) achieved an SVR12 rate of 97%.
- HCV-related tickers: (BMY -0.1%)(MRK +1.4%)(ABBV +0.3%)(JNJ +0.2%)(ACHN -0.6%)(RGLS -2.7%)(CNAT -1.1%)(ENTA -0.4%)
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