Gilead Sciences (NASDAQ: GILD) is a research-based biopharmaceutical company based in Foster City, California. Gilead develops treatments for life-threatening diseases, specifically focusing on therapies for HIV/AIDS, liver diseases, and cancers. The biopharmaceutical company released impressive test results for a hepatitis C drug on November 11th, just two weeks after they released a Q3 report that topped analysts¹ expectations.
Gilead released third quarter earnings on October 28th. Total revenue for the third quarter was $6.04 billion, an impressive year-over-year increase from $2.78 billion. Earnings per share on a diluted basis were $1.67, also a large increase from $0.47 in the same quarter of last year.
Gilead in the News
On November 11th, Gilead Sciences released impressive test results for their newest hepatitis C drug, Harvoni. The study reported that 96% of a 500-person patient pool with advanced liver disease ³sustained virologic response² from Havarti, meaning they were cured of the infection. Hepatitis C is a chronic disease that can be cured and affects 3.2 million Americans.
Harvoni was approved by the FDA and Health Canada in October 2014. Gilead touts the drug as the ³first and only hepatitis C treatment to provide a complete regimen in a single tablet, taken orally once daily for eight, 12, or 24 weeks.² Gilead is working to ensure that everyone can afford access to Harvoni by partnering with seven generic pharmaceutical producers based in India. Providing generic versions of the drug will expand the market into 91 countries, which Gilead reports represents ³more than half of the global hepatitis C-infected population.²
Merck & Company (NYSE: MRK), another American pharmaceutical company based in New Jersey, also developed a drug for hepatitis. The drug is a combination of existing medications and intended to be administered in a four week regimen. However, a study released on November 11th reported that the Merck drug was only successful in 39% of patients participating in the study.
Shares of Gilead Sciences opened at $107.50 on Tuesday, November 11th. The pharmaceutical company has a 1-year high of $116.83 and a 1-year low of $63.50. The daily moving average is $107.70 and it has a 50 day moving average of $106.41. The market cap for Gilead is $162.95 billion and its P/E ratio is 19.24.
A Financial Expert¹s Opinion
On November 11th, Robyn Karnauskas of Deutsche Bank maintained a Buy rating on Gilead Sciences with a price target of $142. Karnauskas compared the hepatitis C drugs produced by both Gilead and Merck, noting that the sustained viral response was higher with Harvoni than it was in Merck¹s drug. Karnauskas does ³not think that [doctors] will be confident in Merck¹s² drug. Consequently, she continued, ³Gilead¹s [Harvoni] will remain dominant LT in the difficult-to-treat patients. We model 55% mkt share LT in refractory patients, 20% for ABBV and 25% for other regimens including Merck¹s.²
Karnauskas has rated Gilead Sciences 16 times with a success rate of 94% and an average return of +39.9% per Gilead recommendation.
Robyn Karnauskas¹s Past Recommendations
Karnauskas has a history of rating pharmaceutical stocks such as Biogen Idec (NASDAQ: BIIB) and Aegerion (NASDAQ: AEGR), helping her earn an overall success rate of 75% with an average return of +14.8% per recommendation.
Karnauskas last rated Biogen Idec with a Buy on October 22nd when shares were $309.07. Now, shares are $324.59. Successful recommendations such as this has helped earned Karnauskas an 86% success rate recommending Biogen with an average return of +18.9% per recommendation.
However, Karnauskas rated Aegerion a Buy on February 26th when shares were $54.76. Now, shares are down to $21.56. She has rated the stock five times with a negative average return of -43.9%.
Gilead Sciences ran a very successful test with its new Harvoni drug for Hepatitis C. Karnauskas sees great potential, but do you trust her latest recommendation based on her history of financial advice?