Gilead Sciences, Inc. (GILD)

jfosu (71.03) Submitted: 3/24/08 1:19 PM : Start Price: $34.81 GILD Score: 54.29

From a small cap in the mid 90s to a large pharma player today this company has always shown it knows how to stay ahead of the game. Just look at its HIV franchise - Gilead currently produces the ONLY once a day HIV pill on the market. Already approved and in use here, it was also approved in the EU in December. This drug keeps HIV at undetectable levels in nearly 85% of those who take it. There is simply nothing to compete with it produced by any other company. As a doctor I know I would never prescribe anything else the first time around. I know this is the consensus of essentially all doctors as well. While this drug will continue to dominate the market for at least the next 5 years (they have patent rights through 2021) GILD is already working on the next generation of HIV drugs. One that I particularly like is an integrase inhibitor. It's primary benefit is that if you are HIV- and your partner is HIV+ you should be able to have sex with your partner and stay HIV- if you are on this drug. This has huge ramifications around the world, especially in Sub-Sahara Africa where nearly 100% of cases are heterosexual. Why would I bring Africa up? Well, not that it directly affects the stock price, but GILD sells its drugs at manufacture cost to WHO, USAID, and other nonprofits as well as directly to African governments. It's great to see a company achieving so much success do so much good for those in need.

Amgen proved last year that you cannot be one dimensional as a bio/pharma company. No worries here. One of their older generation HIV drugs, tenovir, has been shown through extensive clinical and epidemiologic evidence to be highly effective against hepatitis B. It is expected to be approved by the FDA within a few months and will be the most effective drug on the market with an added kicker. In the drug's defining clinical trial, of the 2123 people who were on the drug 12-18 months not one person developed resistance to the drug. Why and will it hold up when it's in the general population I have no idea but that finding will push this drug to the forefront of the field making it the prescription of choice by doctors.

To further diversify, late in 2006 GILD acquired two companies that focus on respiratory and cardiopulmonary diseases. This year will be the first year in which results of these acquisitions will be recognized. GILD completed two phase III trials in 2007 from these companies - one for pulmonary arterial hypertension and the other for cystic fibrosis. Both of these drugs should be seeking approval in the USA and EU this year. The drugs were fast tracked by the FDA and if that's done usually you're money.

Finally, GILD is the patent owner of a drug known as tamiflu. Sold by GlaxoSmithKline, GILD's deal with them still enables them to see a fair share of the revenue. Why is this important? Well, the flu is ubiquitous and there's always a need for treatment. Tamiflu, though old by drug standards, is still the main prescription for the flu. Additionally, there have been some preliminary epidemiologic reports that have shown Tamiflu to have some effectiveness against the H5N1 avian flu. How effective, well no one really knows and I personally think not very, but governments around the world, particularly in developed countries, have kept tamiflu stockpiled just in case. Tamiflu only has a 3 year shelf life so governments must continually buy new stocks of the drug. This gives a steady stream of income to GILD, whether the avian flu comes to fruition or not.

I have owned this stock in my personal portfolio and always recommend it to friends+family. I'm doing the same to you folks! You won't get rich quick but based on past performance and future guidance you'll beat the market year in year out.

Report this Post Replies: 0 | Reply