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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?


To: Brian Sullivan who wrote (54018)6/10/2014 10:04:09 AM
From: Paul Senior  Respond to of 78644
 
Gilead: It's clear now that GILD's purchase of Pharmasset in 2011 is a winner for GL and likely transformative for the company. How profitable Sovaldi will be and for how long, I will leave to the analysts to predict and rely on.

In yesterday's Barron's:

Gilead, meanwhile, has one of the fastest-growing bottom lines of any drug maker in the S&P 500, and one of the lowest price-to-earnings ratios, at less than 11 times 2015 earnings estimates.Hepatitis C is one of the biggest market opportunities for drug makers. The viral infection affects roughly 2.7 million Americans, causing liver damage that can lead to cancer and organ failure. The potential market for effective oral therapies -- which are easier to use and tolerate than the current batch of injected drugs -- is believed to be worth tens of billions of dollars.That's a huge pie to split, and analysts argue the market is big enough to handle several players. Right now, Gilead leads them all. Its drug Sovaldi received FDA approval in December and generated sales of $2.3 billion during the first quarter. The company is leading efforts to develop a two-drug combination pill....Gilead's bottom line is expected to grow at an explosive rate, says Bernstein Research analyst Geoffrey Porges. He sees per-share profit rising to $10 a share in 2016. The consensus estimate calls for earnings of $6.22 per share this year.What worries investors, however, is what happens to Gilead after 2016 as rival hepatitis C drugs hit a market some see shrinking as patients are cured. These were concernsthat Barrons.com shared late last year.


For me, as I said in prior post, I'm not now worried about GILD post 2015.

I'll take more shares today.