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 Sciences Firing On All Cylinders

Stocks in this article: GILD BMY GSK

Second, investors worry about competition. Gilead continues to aggressively develop novel HIV therapies. In late August, the company will likely receive final FDA approval for the Quad, a once-daily combination therapy that incorporates the integrase inhibitor elvitegravir with cobicistat -- a drug that "boosts" drug blood levels -- with Truvada (itself a combination of two drugs that forms the "backbone" of nearly all HIV regimens.) Although widely expected, the Quad approval and launch will be an incremental positive that accelerates the shift away from dependence on the lower margin Atripla, Gilead's current flagship HIV therapy.

Gilead's primary competitor is dolutegravir, an integrase inhibitor developed by ViiV Healthcare -- a partnership between GlaxoSmithKline (GSK) and Pfizer (PFE) -- that doesn't require boosting and has a very high barrier to developing resistance mutations. Although dolutegravir itself looks promising and likely slightly superior to elvitegravir, ViiV must combine the drug with Epzicom, a two-drug regimen rarely used by physicians due to concerns about long-term side effects. I don't consider dolutegravir a major threat unless the companies can find a better treatment backbone with which to pair the drug.

Importantly for the franchise, Gilead has quietly advanced a next generation version of tenofovir, encoded GS-7340, into Phase II trials. Management believes GS-7340 is more potent and may have fewer side effects than tenofovir, which the company sells both as Viread and as part of Truvada. Regardless of the incremental clinical improvements, GS-7340's key characteristic is its long patent life (Viread's patent expires in 2018.) Investors should keep a close eye on this drug.

Judging by the questions from analysts on Gilead's conference call, Wall Street remains obsessed with the hepatitis C. As I have said before, I'm skeptical the hepatitis C market will develop into the massive growth opportunity forecast by the bulls. Nonetheless, Gilead's R&D progress has been impressive.

I expect the company will be first-to-market with an all-oral regimen, an accomplishment few people, myself included, would have predicted two years ago. In fact, it's hard to believe that Gilead finalized the $11 billion Pharmasset purchase just six months ago.

As I predicted, Gilead appears to have effectively shut Bristol-Myers Squibb (BMY) out of the hepatitis C race. The company has initiated Phase III trials of GS-7977, the nucleotide inhibitor acquired with Pharmasset, in combination with the antiviral drug ribavirin for treatment naive (FISSION), interferon-intolerant (POSITRON), and treatment-experienced (FUSION) genotype 2/3 hepatitis C patients. Data from those studies should be available by early 2013.

2 of 3

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 17,912.95 +108.15 0.61%
S&P 500 2,075.58 +4.93 0.24%
NASDAQ 4,778.4320 +13.0520 0.27%

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