This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Gilead's Got to Prove It's No One-Trick Pony

Stocks in this article: GILD

To understand Gilead Sciences (GILD) today, you have to forget about HIV and focus instead on the heart.

Gilead's $1 billion tender offer for CV Therapeutics (CVTX) will add a drug for chronic angina to its medicine chest. Marry that to a Gilead pipeline drug for high blood pressure with important phase III data looming, and you've got a company taking big steps into the cardiovascular disease arena.

This diversification away from Gilead's comfort zone in HIV has investors -- even some of the company's most bullish supporters -- nervous. Investors have come to love Gilead for two main reasons: 1) the market-leading domination and growth of its HIV drug franchise; and 2) operating leverage that is the envy of the bio-pharmaceutical sector.

A move into the cardiovascular disease arena, if not done well, threatens to disrupt all that. And right now, the Street is not entirely convinced that Gilead can be as good outside of HIV as it is inside. Gilead's $2.5 billion purchase of Myogen in 2006, which brought with it the pulmonary disease drug Letairis, has been a disappointment to date. What's to say that the latest push into cardiovascular medicine won't also under-perform?

The worry inherent in that question is clearly evident in the company's stock price. Since announcing the tender offer for CV Therapeutics on March 12, Gilead shares have stood still at $44 while the biotech sector as a whole, measured by the Nasdaq Biotechnology Index and the AMEX Biotechnology Index, has moved up 11% and 17%, respectively, through March 27.

1 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs