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.

For the year, Gilead shares are down 14% through March 27. Only Celgene ( CELG) has a worse year-to-date performance among the big-cap biotech stocks ( Genentech excluded.)

Gilead shares closed Monday up $2.8% at $45.62.

Improving that performance, at least in the near term, is going to hinge on a single drug in Gilead's pipeline. That drug is called darusentan, which Gilead acquired when it bought Myogen.

Darusentan is designed to treat resistant hypertension, defined as high blood pressure that is not alleviated by treatment with a stable of other drugs. The number of Americans currently diagnosed with resistant hypertension ranges widely from 2 million to 5 million, depending on the study or survey you read. That makes it equally hard to gauge the commercial potential of darusentan, but broadly speaking, the drug could generate sales of $500 million up to more than $1 billion.

Gilead's purchase of CV Therapeutics, which comes with an approximate 170-person sales force selling Ranexa for chronic angina, lays the foundation for a potential darusentan launch in 2011. Of course, darusentan has to be approved first, which means two phase III studies have to have positive results.

Gilead is expected to present data from the first of these two darusentan phase III trials at the American Society of Hypertension meeting May 6-9. However, the company may release the darusentan data earlier, perhaps as early as next month.

Right now, investors are eyeing the darusentan data as a make-or-break referendum on Gilead's decision to acquire CV Therapeutics and invest seriously in cardiovascular drugs.

If the darusentan data are positive, then Gilead's decision to buy CV Therapeutics will be seen as a good strategic move -- and the stock should move higher.

But if something bad happens to darusentan, confidence in Gilead management's ability to execute outside of HIV will once again be questioned, and Gilead shares could continue to underperform the big-cap biotech group, including Biogen Idec ( BIIB), Amgen ( AMGN), and Genzyme ( GENZ).

In a relatively large phase II study conducted in 2006 (and subsequently published in October 2007), a once-daily 300mg dose of darusentan resulted in an 11.5-mmHG reduction in systolic blood pressure, adjusted for placebo, and a 6.3-mmHG reduction in diastolic blood pressure, also placebo adjusted. Both results were statistically significant.

After 10 weeks of treatment in this study, 51.3% of patients treated with darusentan achieved a pre-determined clinical goal for lowered systolic blood pressure compared to 33.3% of placebo-treated patients. This result, while trending in darusentan's favor, was not statistically significant, however.

On the safety side of this phase II study, 17% of darusentan patients reported mild to moderate peripheral edema, or swelling of the extremities, usually the legs. That compared to a 5% reported incidence of edema in placebo patients.

No increase in liver toxicity or decrease in liver function were reported in the phase II study.

The first phase III study of darusentan mimics the design of this successful phase II study, with more patients enrolled and a treatment period of 14 weeks instead of 10 weeks. Darusentan essentially needs to replicate the efficacy and safety results of the phase II study to be successful.

The biggest concern about the phase III studies is darusentan's safety. In particular, investors will be eyeing any edema or liver toxicity caused by the drug. Significant toxicity could either make it more difficult for darusentan to be approved, or make doctors hesitant to use the drug on their patients, thereby pinching sales.

Analysts have mixed views on the pending darusentan data and their effect on Gilead's stock price.

"Our take is that a neutral to negative outcome is already implied in Gilead shares at current levels, and we think the risk-reward of owning Gilead shares into the data is becoming more favorable," wrote JP Morgan biotech analyst Geoff Meacham in a note to clients Monday. Meacham has an "overweight" rating on Gilead.

Morgan Stanley analyst Sapna Srivastava is more cautious, even though she, too, has an overweight rating on Gilead:

"We see darusentan Phase III data, expected imminently, as a near term risk, compounding our long-term concerns on the stock and exacerbated by the CV Therapeutics acquisition," she wrote in a research note last week.
At the time of publication, Feuerstein's Biotech Select model portfolio was long Gilead Sciences, Celgene and Amgen.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.