Why Gilead Sciences (GILD) Stock Is Down Today

Updated from 11:13 a.m. with closing price.

NEW YORK (TheStreet) -- Shares of Gilead Sciences  (GILD) fell -1.4% to $105.36 at the closing bell on Friday after Bloomberg reported the company is close to a deal with generic drugmakers to bring cheaper versions of its $84,000 hepatitis C drug Sovaldi to approximately 80 developing nations, including India, Pakistan and Indonesia.

See why one investment manager says fears about lower emerging market pricing for Gilead's hepatitis drug are overblown:


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The licensing deal could go into effect as soon as the middle of this month. It would permit the generic drugmakers to manufacture Sovaldi and another experimental pill that combines Sovaldi with another Gilead hepatitis drug, executive vice president Gregg Alton told Bloomberg.

Gilead intends to sell Sovaldi directly in certain lower income countries, including India, at $900 for 12 weeks of therapy. Sovaldi sells in the U.S. for the controversial price of $1,000 apiece, or $84,000 for 12 weeks. Patients who take Sovaldi stay on it for either 12 weeks or 24 weeks.

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More than 34.2 million shares changed hands Friday, compared to the average volume of 12,293,000. The stock hit an intraday low of $97.55.

Separately, TheStreet Ratings team rates GILEAD SCIENCES INC as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate GILEAD SCIENCES INC (GILD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • GILD's very impressive revenue growth greatly exceeded the industry average of 43.4%. Since the same quarter one year prior, revenues leaped by 136.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 378.26% and other important driving factors, this stock has surged by 77.87% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GILD should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • GILEAD SCIENCES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GILEAD SCIENCES INC increased its bottom line by earning $1.83 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($8.03 versus $1.83).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 373.1% when compared to the same quarter one year prior, rising from $772.61 million to $3,655.59 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, GILEAD SCIENCES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: GILD Ratings Report

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