Bull Of The Day: Gilead Sciences

With the market facing some choppiness of late, many investors are taking another look at some of the strong sectors that have been leading the market for much of 2013. One such segment is undoubtedly biotechnology, as this key corner of the healthcare world has been a star performer for much of the year. After all, many biotechnology ETFs have added more than 35% so far this year -- compared to a gain of close to 15% for the S&P 500 -- and remain well positioned for further gains to close out 2013 as well.

Yet while a broad sector approach may be one way to target this impressive corner of the market, looking solely at some of the large caps in the space may also be an interesting play. That's because these large biotech firms have actually beaten out their broader ETF counterparts by pretty wide margins as well, suggesting that these large-cap firms are leading the way in the biotechnology world. One such company that fits this bill is Gilead Sciences (GILD), a massive nearly $100 billion market cap behemoth in the biotech space. The firm has already added more than 60% so far this year, and based on some of GILD’s fundamentals, the company could definitely see more gains to close out 2013 as well.

Gilead in Focus

Gilead is a California-based biopharmaceutical company that seeks to develop and commercialize therapies for life threatening diseases. The firm currently has a lineup of products for HIV, liver disease, the flu, respiratory diseases, among others. Furthermore, unlike a number of big pharma companies, Gilead has a solid product pipeline, as a number of drugs are in Phase III, while several more are in Phase II. Combine this with Gilead’s track record of buying out promising small caps, and the firm could have a long-term recipe for success.

Earnings Estimates

Analysts are certainly buying into this story, as estimate revisions are moving higher across the board for GILD. Current-quarter and next-quarter figures saw three revisions higher, while current-year and next-year estimates also saw three revisions higher. Not a single estimate went lower in the past 90 days, suggesting total agreement among covering analysts. Thanks to this, GILD is now looking at a double-digit earnings growth rate for the current-year time frame, coming in at 10.8%. Meanwhile, earnings growth is now expected to be at 26.8% for the next five years, eclipsing the strong 15% growth rate in the past five.

With the universal move higher in earnings expectations, which is pushing the consensus estimate higher, the future is still looking good for GILD, even with its recent price surge. That is why we have assigned Gilead Sciences a Zacks Rank No. 1 (Strong Buy). We are looking for additional outperformance from this giant in the months ahead as well.
Bottom Line

Gilead also has a solid Zacks Recommendation of "Outperform," and there is positive sentiment swirling around the broader biotechnology space. The industry rank is currently in the top half of the market, while other large caps in the space have top ranks, too. Given the bullish perception of the space, along with the solid drug lineup, and investors may continue to have a winner with GILD to close out the year. The company is loved by analysts and it could make for an interesting addition to a portfolio if these positive trends continue.

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Yes, Gilead Did It Again

Biotechnology accomplishments as we see them and love to write about them are those that act as rings in the chain of the fast advancement in the management of condemning diseases, not just developing and marketing more me-too drugs.

Here is a story told by the National Institute of health and posted in JAMA about an all-oral hepatitis C drug regimen where a majority of hepatitis C viral (HCV) infected patients with liver damage were cured following a six-month course of all-oral treatment. The combination therapy comprised the investigational drug sofosbuvir, with the antiviral drug ribavirin. The company behind the treatment is Gilead Sciences. (GILD).

The results were remarkable considering the fact that the patients had advanced disease with scarred liver and most were from a category known to be resistant to current treatments. The results were announced by the National Institutes Of Health (NIH), as scientists from the National Institute of Allergy and Infectious Diseases (NIAID) and the NIH Clinical Center, which are parts of the National Institutes of Health, have led the trial.

The findings, which appeared in the Aug. 28 issue of the Journal of the American Medical Association ((JAMA)) demonstrate that the regimen was highly effective in clearing the virus and was well tolerated in a group of patients who historically have had unfavorable prognoses.

The study involved 60 volunteers with genotype-1 HCV, which is less responsive to interferon-based treatment.

Fifty of the 60 participants were African-American. NIAID researcher Shyam Kottilil, M.D., Ph.D., the principal investigator of the trial said, "While African-Americans make up about 13 percent of the U.S. population, they represent more than 22 percent of people with chronic HCV infection and, compared to whites, have lower cure rates with traditional HCV therapy."

Dr. Kottilil tried to draw attention to the fact that several recently completed studies testing interferon-free regimens have yielded promising results, but unlike this study, most volunteers in those studies were white. Also, the new study enrolled people with severe liver damage as well as those with mild or moderately scarred livers.

The first part of the two parts study enrolled ten people with mild or moderate liver fibrosis. Volunteers received oral ribavirin at a dosage based on their weight along with the experimental drug sofosbuvir, also in pill form developed by Gilead Sciences taken daily for six months.

Nine of the ten volunteers completed the course of therapy. The hepatitis C virus was undetectable in all nine volunteers 12 weeks after the end of therapy and continued undetectable when they were tested again 24 weeks after finishing therapy.

Dr. Kottilil explained, "HCV does not integrate itself into human DNA. If the virus cannot be detected for a period of 12 weeks after stopping therapy, the patient is considered cured."

The second part of the study enrolled 50 volunteers, Thirteen had liver damage rated serious. Twenty-five received ribavirin based on their weight, and 25 received a low dose (600 milligrams per day). All received sofosbuvir.

At four, 12 and 24 weeks after the end of treatment, HCV levels were undetectable in 24 of the volunteers in the high dose arm when treatment ended. Of those, 17 continued to have undetectable virus levels 24 weeks later and were considered cured of infection. In the low-dose arm, three volunteers dropped out of the study. Of the remaining 22, all responded to the treatment, but only 12 were considered cured at 24 weeks after the end of treatment.

Commenting on the result in general, Dr. Kottilil said, "We saw an overall cure rate of about 70 percent using regimens that did not include interferon," He added, "This is an encouraging result, especially considering the proportion of volunteers who had characteristics such as being male, having HCV genotype-1 infection, being African-American and having advanced liver damage - all are recognized as predictors of poor response to treatment."

Additional trials are underway to further determine if regimens without interferon or ribavirin can help people with chronic HCV infection, particularly those who have both HIV and HCV infections, said Dr. Kottilil. These trials include two studies in which volunteers with or without HIV infection take a combination of HCV drugs (but no interferon or ribavirin) for periods of three months or less.

Information about these trials is available at clinicaltrials.gov using the identifiers NCT01805882 and NCT01878799.

Prohost Comments: This story might partially explain the reason why we consider Gilead as the model of firms that we seek to find and invest in. The firm specialized in Viral diseases and began by creating what amounted to miraculous achievement, turning a deadly killer disease, AIDS, into a chronic disease. It courageously paid a huge amount of money, over $11 billion, to put its hands on molecules for HCV infection, knowing in fact that it will develop these molecules in a way that extracts the best out of them, including treating hopeless cases with poor prognosis.

We agree with the NIAID Director and study co-author Anthony S. Fauci, M.D. that there is a pressing need for hepatitis C virus treatments that are less burdensome to the patient, have fewer side effects and take less time to complete.

The number of patients suffering from HCV infection is overwhelming. More than 3 million Americans suffer this liver infection - a major cause of cirrhosis, a leading cause for liver transplantation and in many cases end with liver cancer. People die from HCV and it seems that HCV claims the lives of 15,000 people every year in the U.S.

Gilead's success and fame is based on its strong scientific fundamentals, excellent management abilities and, more important, its persistent efforts towards improvement. Gilead is ready to spend enormous time and money and do whatever it takes to perfect its specialized treatments. It is one of the few largest biotech firms in spite of the fact that it is still at the beginning of the road towards fulfilling its ambitious goals.

Disclosure: Long GILD.

FORWARD-LOOKING: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our "opinions" and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.

View the original article here

Yes, Gilead Did It Again

Biotechnology accomplishments as we see them and love to write about them are those that act as rings in the chain of the fast advancement in the management of condemning diseases, not just developing and marketing more me-too drugs.

Here is a story told by the National Institute of health and posted in JAMA about an all-oral hepatitis C drug regimen where a majority of hepatitis C viral (HCV) infected patients with liver damage were cured following a six-month course of all-oral treatment. The combination therapy comprised the investigational drug sofosbuvir, with the antiviral drug ribavirin. The company behind the treatment is Gilead Sciences. (GILD).

The results were remarkable considering the fact that the patients had advanced disease with scarred liver and most were from a category known to be resistant to current treatments. The results were announced by the National Institutes Of Health (NIH), as scientists from the National Institute of Allergy and Infectious Diseases (NIAID) and the NIH Clinical Center, which are parts of the National Institutes of Health, have led the trial.

The findings, which appeared in the Aug. 28 issue of the Journal of the American Medical Association ((JAMA)) demonstrate that the regimen was highly effective in clearing the virus and was well tolerated in a group of patients who historically have had unfavorable prognoses.

The study involved 60 volunteers with genotype-1 HCV, which is less responsive to interferon-based treatment.

Fifty of the 60 participants were African-American. NIAID researcher Shyam Kottilil, M.D., Ph.D., the principal investigator of the trial said, "While African-Americans make up about 13 percent of the U.S. population, they represent more than 22 percent of people with chronic HCV infection and, compared to whites, have lower cure rates with traditional HCV therapy."

Dr. Kottilil tried to draw attention to the fact that several recently completed studies testing interferon-free regimens have yielded promising results, but unlike this study, most volunteers in those studies were white. Also, the new study enrolled people with severe liver damage as well as those with mild or moderately scarred livers.

The first part of the two parts study enrolled ten people with mild or moderate liver fibrosis. Volunteers received oral ribavirin at a dosage based on their weight along with the experimental drug sofosbuvir, also in pill form developed by Gilead Sciences taken daily for six months.

Nine of the ten volunteers completed the course of therapy. The hepatitis C virus was undetectable in all nine volunteers 12 weeks after the end of therapy and continued undetectable when they were tested again 24 weeks after finishing therapy.

Dr. Kottilil explained, "HCV does not integrate itself into human DNA. If the virus cannot be detected for a period of 12 weeks after stopping therapy, the patient is considered cured."

The second part of the study enrolled 50 volunteers, Thirteen had liver damage rated serious. Twenty-five received ribavirin based on their weight, and 25 received a low dose (600 milligrams per day). All received sofosbuvir.

At four, 12 and 24 weeks after the end of treatment, HCV levels were undetectable in 24 of the volunteers in the high dose arm when treatment ended. Of those, 17 continued to have undetectable virus levels 24 weeks later and were considered cured of infection. In the low-dose arm, three volunteers dropped out of the study. Of the remaining 22, all responded to the treatment, but only 12 were considered cured at 24 weeks after the end of treatment.

Commenting on the result in general, Dr. Kottilil said, "We saw an overall cure rate of about 70 percent using regimens that did not include interferon," He added, "This is an encouraging result, especially considering the proportion of volunteers who had characteristics such as being male, having HCV genotype-1 infection, being African-American and having advanced liver damage - all are recognized as predictors of poor response to treatment."

Additional trials are underway to further determine if regimens without interferon or ribavirin can help people with chronic HCV infection, particularly those who have both HIV and HCV infections, said Dr. Kottilil. These trials include two studies in which volunteers with or without HIV infection take a combination of HCV drugs (but no interferon or ribavirin) for periods of three months or less.

Information about these trials is available at clinicaltrials.gov using the identifiers NCT01805882 and NCT01878799.

Prohost Comments: This story might partially explain the reason why we consider Gilead as the model of firms that we seek to find and invest in. The firm specialized in Viral diseases and began by creating what amounted to miraculous achievement, turning a deadly killer disease, AIDS, into a chronic disease. It courageously paid a huge amount of money, over $11 billion, to put its hands on molecules for HCV infection, knowing in fact that it will develop these molecules in a way that extracts the best out of them, including treating hopeless cases with poor prognosis.

We agree with the NIAID Director and study co-author Anthony S. Fauci, M.D. that there is a pressing need for hepatitis C virus treatments that are less burdensome to the patient, have fewer side effects and take less time to complete.

The number of patients suffering from HCV infection is overwhelming. More than 3 million Americans suffer this liver infection - a major cause of cirrhosis, a leading cause for liver transplantation and in many cases end with liver cancer. People die from HCV and it seems that HCV claims the lives of 15,000 people every year in the U.S.

Gilead's success and fame is based on its strong scientific fundamentals, excellent management abilities and, more important, its persistent efforts towards improvement. Gilead is ready to spend enormous time and money and do whatever it takes to perfect its specialized treatments. It is one of the few largest biotech firms in spite of the fact that it is still at the beginning of the road towards fulfilling its ambitious goals.

Disclosure: Long GILD.

FORWARD-LOOKING: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our "opinions" and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.

View the original article here