Were you quick enough to get that fleeting discount on Gilead Sciences ( GILD) on Wednesday morning? Shares of the Foster City, Calif.-based biotech firm dipped briefly in premarket trading Wednesday, reacting to Roche's drastic cutback in guidance for 2008 Tamiflu pandemic flu sales. But just as fast, investors bought the Gilead dip, and rightly so, because high-quality and profitable biotechs don't go on sale often. Gilead shares closed Tuesday at 43.15. After Roche reported in the early morning hours stateside, Gilead dipped very briefly to $42, but quickly rallied. The stock was recently up more than 3% to $44.55 in Wednesday trading. Roche guided to Tamiflu pandemic sales of CHF100-150 million in 2008, a dramatic 90%-plus reduction from 2007 pandemic sales of CHF1.5 billion, due primarily to the fact that government stockpiling of Tamiflu against bird flu is wrapping up. Roche pays royalties to Gilead based on Tamiflu sales. Those royalties flow directly to Gilead's bottom line, which is why some Gilead investors (and just about every analyst who follows the company) went into Roche's earnings report Wednesday with a great deal of trepidation. But as I wrote on RealMoney Tuesday, "I'm not one of the worry warts. I don't think you need Tamiflu royalties to like the Gilead story. Sure, the money helps because it goes right to the bottom line, but it's like the maraschino cherry on a hot fudge sundae -- still delicious without." There's a whole lot to like about Gilead without big Tamiflu royalty revenue -- strong fourth-quarter earnings and above-consensus revenue forecasts for 2008, the launch of the HIV drug Atripla in Europe, continued growth in the pulmonary drug Letairis and two new likely drug approvals and launches this year. And with this Tamiflu overhang removed, the stock should head higher.
KRAS is hot. No, KRAS isn't a hipster San Francisco radio station, it's a human gene that may help doctors determine in advance which colon cancer patients respond best to targeted therapies.
Is it just me, or does Carl Icahn's continued efforts to force Biogen Idec ( BIIB)to sell itself seem to be a replay of the activist investor's unsuccessful attempt to accomplish the same thing with ImClone? As my colleague Elizabeth Trotta