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Brief Comments On Portola And Gilead

|Includes: Portola Pharmaceuticals (PTLA)

I recently wrote my first article on Portola (NASDAQ:PTLA), a biotech/biopharma company with two lead products. One is focused on the oral anticoagulant market as a Factor Xa inhibitor, and the other is an intravenous antidote to the same product. PTLA today announced a renewed, phase 3 collaboration with Daiichi Sankyo, a major company developing a Xa inhibitor, yet PTLA took a 10% hit.

In my bullish SA article on Portola, I warned that the stock was quite risky. It has been on a tear. My guess is that this plunge today was due to profit-taking, and I bought a little more PTLA today near the lows. Could there have been a brokerage downgrade or "red chip" stock advisory suggesting selling PTLA today to account for the move down? I do not know, but it's possible.

My main investment activity today was to increase my overweight position in Gilead Sciences (NASDAQ:GILD). I sold about half my positions in Celgene (NASDAQ:CELG) and Pharmacyclics (NASDAQ:PCYC), both for about 10% short-term profits in trading accounts (no tax incurred on the gains) and plowed them mostly back into GILD shares, some in-the-money 2015 LEAP calls on GILD, plus cash reserves plus PTLA as well as Verizon (NYSE:VZ).

Time and SA editors permitting, I'll have much more to say about GILD soon, in a pre-earnings article. In a generally rich market, this is one of the few stocks that I think is materially below fair value.

Disclosure: The author is long GILD, PTLA, CELG, PCYC.

Additional disclosure: Not investment advice. I am not an investment adviser.