Gilead (GILD) Could Be Set for More Gain than Pain - Barron's
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Price: $67.08 +0.07%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 4.2%
Revenue Growth %: -0.6%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 4.2%
Revenue Growth %: -0.6%
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Gilead Sciences Inc. (Nasdaq: GILD) is showing some strength this morning following a bullish article in Barron's over the weekend.
Gilead leads in the U.S. market for human immunodeficiency virus, or HIV, treatments. The pharma has two once-a-day treatments, Atripla and Truvada, that combine multiple drugs, including two other Gilead formulations, Viread and Emtriva, according to Barron's.
Once-a-day treatments are favored by doctor's to help keep patients on track, without worrying about several doses per day.
The market seems more focused more on expiration of patents rather than the potential of its new drugs, Barron's argues. Bristol-Myers Squibb's (NYSE: BMY) drug, Sustiva, which is used in Atripla, will lose protection in 2015. Viread will see its protection evaporate in 2017. Further, Barron's notes that "analysts expect losses in revenue from Emtriva, Truvada and Atripla by 2021."
Looking forward, Barron's notes that investor may be missing several new drug combos that could boost revs to $9 billion next year, from the $8.28 billion expected. The number would also increase expected EPS from $3.96 to $4.53.
In late-summer, the U.S. FDA is expected to green light Btripla, a combo of Truvada and a Johnson & Johnson (NYSE: JNJ) approved drug. The Street is bearish on the potential due to resistance of advanced HIV patients to the drug. Gilead also struck a better deal on the drug than it had with Bristol-Myers.
One other concern is the expected downward pressure from new healthcare legislation, but analysts have already priced the potential into their estimates.
This year, Gilead is expected to continue buying back shares, tacking on to the $4 billion spent last year in retiring about 10 percent of outstanding common. With $3.1 billion of free cash flow expected to be generated this year, M&A of early-stage products may also be in the works.
Risks include a recent subpoena in Northern California and the potential for the FDA not to approve Btripla or the Quad.
Gilead is up over 1 percent on the session.
Gilead leads in the U.S. market for human immunodeficiency virus, or HIV, treatments. The pharma has two once-a-day treatments, Atripla and Truvada, that combine multiple drugs, including two other Gilead formulations, Viread and Emtriva, according to Barron's.
Once-a-day treatments are favored by doctor's to help keep patients on track, without worrying about several doses per day.
The market seems more focused more on expiration of patents rather than the potential of its new drugs, Barron's argues. Bristol-Myers Squibb's (NYSE: BMY) drug, Sustiva, which is used in Atripla, will lose protection in 2015. Viread will see its protection evaporate in 2017. Further, Barron's notes that "analysts expect losses in revenue from Emtriva, Truvada and Atripla by 2021."
Looking forward, Barron's notes that investor may be missing several new drug combos that could boost revs to $9 billion next year, from the $8.28 billion expected. The number would also increase expected EPS from $3.96 to $4.53.
In late-summer, the U.S. FDA is expected to green light Btripla, a combo of Truvada and a Johnson & Johnson (NYSE: JNJ) approved drug. The Street is bearish on the potential due to resistance of advanced HIV patients to the drug. Gilead also struck a better deal on the drug than it had with Bristol-Myers.
One other concern is the expected downward pressure from new healthcare legislation, but analysts have already priced the potential into their estimates.
This year, Gilead is expected to continue buying back shares, tacking on to the $4 billion spent last year in retiring about 10 percent of outstanding common. With $3.1 billion of free cash flow expected to be generated this year, M&A of early-stage products may also be in the works.
Risks include a recent subpoena in Northern California and the potential for the FDA not to approve Btripla or the Quad.
Gilead is up over 1 percent on the session.
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