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

Does This Drug Maker For Hepatitis C Have More Upside?

When a drug maker reports curing 100 percent of study patients enrolled in a study, it is a reason for its stock to rally. Gilead Sciences (GILD) reported that all of its patients were cured from Hepatitis C after taking two Gilead drugs and a generically available pill.

Gilead is trading at a new high:

Anyone who missed the run-up and would want to participate in its rise should ask a few questions. First, investors need to scrutinize the study and evaluate the likelihood of the product being launched to market. Second, valuation still matters. Now that more enthusiasm is priced in the stock, shares could now be too expensive.

Using Kapitall Number Cruncher, the tool reports that Gilead has a Price of Profit of 19, a market capitalization of $57.6 billion, and a price to book ratio of 6.5x. Plotting Gilead in Kapitall’s “Compare Multiple Companies” launch tool, Gilead may be seen as having the second-largest market cap compared to its peers. Amgen and Abbott, who is Gilead’s closest competitor, has a bigger market cap:

Caution:

Gilead’s Hepatitis study had just 25 patients enrolled, which is statistically insignificant. The study also looked at data only four weeks after the treatment was completed. Regulators usually wait 12 or 24 weeks after the treatment to confirm a patient is cured.

Competition:

Abbott has a cocktail of a combination of 5 drugs for hepatitis treatment. Vertex (VRTX) and Merck (MRK) have treatments that have a cure rate of up to 75%, but the failure rate is 25%.

Brystol-Myers (BMY) had a drug in the works during the summer, but it failed because of safety issues. Another hepatitis drug was reportedly curing 94% of patients 12 weeks after they were treated. This is arguably a better statistic than that of Gilead’s study.

Final Words:

If Gilead confirms its solid results for Hepatitis C, the company’s shares will soar even higher. Investors who are cautious might want to wait for more data.

1 of 2

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

Markets

DOW 17,596.35 -350.33 -1.95%
S&P 500 2,057.64 -43.85 -2.09%
NASDAQ 4,958.4680 -122.0370 -2.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs