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jstratt

jstratt
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  • My Top 3 Fabulous Pharma Stocks [View article]
    I am glad you mentioned BMY as I think it illustrates why some growth stocks may be less risky than others.

    BMY had $19 bil of revenue 10 yrs ago and today has $15 bil. Yet it trades at a 50 PE based on Optivo. It may hit a HR for huge gains or it may be that the wind is blowing in and is just an out.

    AMGN and GILD as an example might be lower risk opportunities. Some of the richest valuations I see are on zero growth companies that suddenly expect to fly to the moon like PFE, LLY and BMY.
    Jun 10, 2015. 12:09 PM | Likes Like |Link to Comment
  • Gilead Sciences: P/E And The Pipeline Beyond HCV [View article]
    on a lighter note

    GILD is missing a large part of the Liver disease market. They need to develop a treatment for ASH (Alcoholic hepatitis). One pill a day chased with a Budweiser.

    I am only half kidding. Liver health is liver health and alcohol issues are probably greater than everything else combined. I would enjoy seeing them estimate the size and duration of that market.
    Jun 10, 2015. 11:35 AM | Likes Like |Link to Comment
  • Why I Bought The Dip In Amgen: Focus On Repatha And Other Aspects Of The Pipeline [View article]
    Some significant changes have occurred in a week.

    An advisory panel is likely to limit the market in the US significantly over the market outlined in the article for Repatha.

    AMGN stock is likely to trade lower before rising is a guess. However AMGN is growing and trading at a reasonable PE before Repatha.

    I am not medically trained but I have to think that the group of people it is likely to be approved for, really needs this alternative. A slower growth rate for Repatha isnt all bad.

    Longer term investors have the ability to invest in a successful long term winner at a reasonable price and build a position. I still like the projected 2016 growth in AMGN vs the price of shares.

    AMGN is a good investment without PCSK9 and PCSK9 is likely to build profit in a solid upward path.
    Jun 10, 2015. 10:11 AM | Likes Like |Link to Comment
  • Regeneron up 1.1% as trading reopens after Ad Comm approval [View news story]
    If a Dr wanted to prescribe Praluent to a patient who had very high cholesterol but not family inherited as the label restricts... what would happen?

    If a patient said cholesterol is high in my entire family, its genetic what would happen?

    AMGN got a less restrictive label submitted for approval in Europe. It could be interesting to see the difference in uptake.
    Jun 10, 2015. 08:18 AM | Likes Like |Link to Comment
  • Gilead Sciences' (GILD) Management Presents at Goldman Sachs Healthcare Conference (Transcript) [View article]
    Perhaps Howard Liang could listen or read this interview since he is a GILD analyst. With a little multiplication he might find out how far off his $2.1 billion estimate in HCV revenue is.

    Just forgetting that 2Q is above 1Q volume he could take the 70,000 patients treated in a quarter X a lazy computation $90,000 list price = $6.30 bil X 54% ( assuming every last dollar of discount was claimed ) = $3.4 bil.

    Even using overly conservative assumptions he is off by 40%.
    Jun 10, 2015. 12:07 AM | 3 Likes Like |Link to Comment
  • Gilead: So Much More Than HCV [View article]
    You are technically correct.

    I was referring to the treatment rate. Today brought more news of increased treatment prospects in Europe and Japan. Both Robin W at Wm Blair conference and John Milligan at GS conference were positive on Europe with things mentioned like "increased budgets" and "aggressive uptakes".

    In Japan I note the g2 estimates increased from 200k to 225k and sales have begun for those patients. I think I remember a Brazil mention as well.
    Jun 9, 2015. 03:53 PM | 1 Like Like |Link to Comment
  • Why I Bought The Dip In Amgen: Focus On Repatha And Other Aspects Of The Pipeline [View article]
    I thought it was a good time to buy some more AMGN as price dropped preceding FDA panel outcomes. Interesting the different news flows regarding PCSK9 drugs between Europe and the US.

    AMGN first hit the current level last October when earnings were about 10% lower.
    Jun 9, 2015. 03:33 PM | Likes Like |Link to Comment
  • Gilead Sciences: P/E And The Pipeline Beyond HCV [View article]
    Milligan also mentioned a strong political commitment in Europe including increased budgets in some cases.

    He also said regarding discounting that more discounting will fall into this quarter as agreements in many cases were concluded in Feb and had not taken full effect in 1Q.

    He also mentioned

    - starting off last yr 140k patient treated this year 70k in 1Q or double the pace and sees no reason that wont continue
    - that Harvoni has an advantage in genotype 1a over MRK
    - Japan 225k geno 2 patients which are typlically older 60s, more progression and separately 800k geno 1 patients
    - Harvoni can treat more difficult or fragile patients as fewer complications
    - GILD HCV performance in field matching lab results/expectations
    Jun 9, 2015. 02:55 PM | 5 Likes Like |Link to Comment
  • Gilead Sciences: P/E And The Pipeline Beyond HCV [View article]
    I would note that GILD has had an upward bias for several days but held in check by the market. My guess is with 21 days left in the quarter the estimates would seem to need to be revised upward. Especially by the private institutional advisors.

    The timing of the increase was in conjunction with the Wm Blair conference where Robin W did indicate that they see an " aggressive uptake to Harvoni in Europe"

    Receptos seems like an unlikely match for GILD acquisition to me. They are expensive, have little revenue and dont match GILDs current pipeline thrust. Ulcerative Colitis and Crohn's are tangential and MS is outside GILD's desired wheel house IMO. GILD would only buy if they thought they were buying a cornerstone drug.

    All that said I would not discount your Receptos theory completely. Possibly with 2 investor conferences today some thought an opportunity on news existed as well.
    Jun 9, 2015. 02:15 PM | 3 Likes Like |Link to Comment
  • AstraZeneca should bag Receptos analyst says, but others are circling [View news story]
    That is a huge price for a company that basically doesnt have any revenue. I would like to learn more about the product science that justifies such a valuation.
    Jun 9, 2015. 12:48 PM | 4 Likes Like |Link to Comment
  • Gilead Sciences: P/E And The Pipeline Beyond HCV [View article]
    Thanks for a great article!

    GILD should hire the author as he has done the best job of explaining the pipeline in a clear succinct manner and with a proper longer term view.

    GILD tried to build a case for the pipeline on the 1Q earnings call but they need to continue to allow it to be seen as something of value. As an example readers of this article are typically quite knowledgeable and yet how many knew that

    "Gilead has 30 ongoing or planned clinical studies in oncology, including 10 Phase 3 studies."
    Jun 9, 2015. 12:34 PM | 6 Likes Like |Link to Comment
  • Gilead: So Much More Than HCV [View article]
    Excellent article!

    GILD is at a point where people are insistent that results will drop. It is certainly possible but GILD has a lot of strengths and the pipeline is one. Some others to consider...

    I will go back to my stable pharma company with no growth expected, trading at an estimated 14.5 PE. GILDs $114 / 14.5 = $7.86 ongoing EPS estimate. This in a year many think EPS will exceed $12.00 share.

    GILD grew Cash flow from operating activities by $5.7 bil last quarter which is an annual rate of $22.8 bil. It could be higher this quarter but lets just use $18 bil of capital to invest. GILD could buy 5% of its stock, pay dividend and invest $8 bil in an acquisition. I will estimate 10% EPS growth from cash investments.

    I see growth in non HCV and the pipeline. The introduction of TAF should increase HIV business and margins as an example. I will estimate 5%-10% growth.

    HCV cannot grow forever and will have competition. At the same time HCV is still growing and fairly rapidly on a worldwide basis. GILD shares are priced as if a decline was already in progress.

    I dont have a hard time seeing $12.00 in EPS being fairly valued at a 12 PE and think that is conservative.

    The decline everyone thinks they see may not appear
    Jun 9, 2015. 10:20 AM | 7 Likes Like |Link to Comment
  • Expanding Further On Gilead Sciences [View article]
    >> - competition wise MRK has a lower effectiveness in genotype 1a and other GILD advantages suggest advantages for GILD <<

    I suspected you would respond to that statement when I wrote it. We just have differing opinions as I think the best medication will win out. People and their Dr's arent stupid and a 3% lower effectiveness rate is important. Milligan thinks the difference is greater than that for 1a (85% vs 95%).

    Also I will say that pharma companies do tend to price so that the overall market for a drug class is not reduced. It could be different this time but it is not likely to be.

    At launch in 2016 only Harvoni will have a large quantity of successful experiences and data giving a true success rate. Only Harvoni will have all the agreements and bugs worked out of a distribution system.

    Only Harvoni will have a brand awareness that is unbeatable as it is known for quality and excellence. All of the publicity for having a high price has been the equivalent of $100MM in advertizing.

    The first to market always has a big advantage and GILD will have a 15-24 month advantage with a superior expected efficacy.

    How did it work out for ABBV and Viekira Pac in 2015? The largest PBM in the country cant force many people to take it. Why will 2016 be any different?
    Jun 8, 2015. 05:32 PM | 1 Like Like |Link to Comment
  • Expanding Further On Gilead Sciences [View article]
    I should add that the above is a sober view of GILD. For now I am unwilling to sell a growing company for less than 10X estimated 2015 EPS.

    If GILD paid out a dividend at the same rate as MRK on my expected 2015 earnings it would be about $6.50 or a 5.7% return.
    Jun 8, 2015. 12:52 PM | 1 Like Like |Link to Comment
  • Expanding Further On Gilead Sciences [View article]
    133

    I agree and had been considering the same line of reasoning. Some thoughts...

    - a huge beat in 2Q should dominate GILD price action near term

    - I dont have a problem seeing a 15% drop in HCV revenue once the market peaks, but I question when that begins and the length of the drop

    - competition wise MRK has a lower effectiveness in genotype 1a and other GILD advantages suggest advantages for GILD

    - Pricing is more of a concern longer term and my guess is it could drop 20% over time perhaps even rather quickly then stabilize.

    - Leave some room in forecasts for the view that HCV budgets are increasing around the world and that any budget will be utilized.

    I consider a HCV range for 2018 of 10% annual drop $13.1 bil to $11.5 bil which is an $18 billion peak less 20% for pricing and 20% for volume. A $12.3 bil midpoint estimate.

    The huge cash flows will be invested and ameliorate a decline in HCV revenues and GILD becomes more like a MRK/PFE/LLY moving forward trading at a 15 PE with largely static revenues and EPS.

    I view the GILD present value given such a scenario at about $140.
    Jun 8, 2015. 12:28 PM | Likes Like |Link to Comment
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