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Gilead: What Its New Hire Means For Its Cancer Pipeline

|Includes: Gilead Sciences, Inc. (GILD)

Gilead: What Its New Hire Means For Its Cancer Pipeline.

By Ben Levisohn

RBC's Michael Yee and John Chung think Gilead Sciences' (NASDAQ:GILD) hiring of Pilippe Bishop to work in hematology and oncology is a good sign for Gilead's cancer research. They explain:

The point we are making is that it's clear Gilead will begin to increase (or at least revitalize) their efforts on the hematology/oncology landscape including determining an immuno-oncology strategy for Gilead. Notably Dr Roy Banes was a SVP and key person working on the oncology strategy for Gilead from 2012-2013 and previously was at Amgen (NASDAQ:AMGN) as head of hematology oncology for 10 years - but left to go to Merck (NYSE:MRK) last year to help lead their PD-1 strategy. So the hire of Dr Bishop today re-invigorates a leader to help determine Gilead's path in oncology.

Contrary to some investors' view that Gilead would de-emphasize oncology, it is our call that Gilead will seek to increase their focus on this area or at least figure out what Gilead wants to do and what it wants to be. This will likely include evaluating numerous Phase I/II public and private companies particularly in immuno-oncology (NYSE:IO) as this is obviously a rapidly evolving - but huge opportunity over the next 5-10 years and Gilead with all its billions of dollars in resources and infrastructure (they have a sales force selling Zydelig….) should at least try to be a player in this market…

Our call on Gilead is the stock should generally grind higher and perhaps back to its highs on 1) relief rally after AbbVie (NYSE:ABBV) prices rationally by 12/22, 2) continued solid Hep C scripts into Q1:15, 3) it's still cheap and company has aggressively been buying back stock, 4) overall consensus estimates are probably a bit too low still.

Disclosure: The author is long GILD.