This Day On The Street
Continue to site
ADVERTISEMENT
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

Gilead Sciences Firing On All Cylinders

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 - Get Report) 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 - Get Report) 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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BMY $59.88 -0.25%
GSK $40.82 0.86%
GILD $106.22 -0.69%
AAPL $110.55 0.78%
FB $88.14 1.10%

Markets

Chart of I:DJI
DOW 16,394.44 +108.93 0.67%
S&P 500 1,958.73 +18.22 0.94%
NASDAQ 4,746.6860 +49.15 1.05%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs