Stocks Of Gilead Sciences (NASDAQ:GILD) Fell By 20 Percent


Gilead Sciences (NASDAQ:GILD) is rolling high these days. The company has become an advertisement of success. Gilead launched its new drug for hepatitis C in the market nine months back, and the total sales have reached $8.5 billion as of now. Investors expect the company to go even higher, for the second generation of the Gilead’s hepatitis C drug is waiting for FDA’s approval. As soon as it gets the approval, the company will be as good as gold.

However, there are some concerns regarding the future sales of Gilead, especially when AbbVie (NYSE:ABBV) announced that its new drug, Viekira Pak, will be an exclusive treatment for those patients who have genotype 1 hepatitis C.  What is more interesting to note here is the fact that a number of healthcare companies have implied that they would prefer AbbVie’s drug over Gilead. This caused the ranking of AbbVie go up. The stocks of Gilead Sciences (NASDAQ:GILD), on the other hand, fell down by 20 percent as soon as the news hit the market.

Around 150 million individuals all across the globe are suffering from hepatitis C. When Gilead launched its Sovadi drug last year, not only was it a blessing for the infected people but it was also a game changer for the company. Before that, the patients were given a combination of drugs, including Incivek of Vertex Pharmaceuticals (NASDAQ:VRTX). Where this combination of drugs had its advantages, it certainly had a number of side-effects too, which included ribavirin and pegisterferon.  The treatment was quite painful as well, for it involved injections. Moreover, the success rate was 80 percent.

As a result, when Gilead announced its Sovadi drug, the patients as well as doctors happily welcomed it.  The drug’s success rate was 90 percent, and its side effects were also less severe than that of Incivek.  Where Sovadi had a number of advantages, it also had a set back; the drug was far more expensive than other drugs in the market. The cost of one pill is $1000.

Same is the case with other drugs of Gilead Sciences (NASDAQ:GILD). The company recently introduced a new drug, Harvoni, which is a combination of Ledipasvir and Savaldi. The cure rate is 99 percent, but here again the costs of a 12 week treatments come to a total of $94,500.

The healthcare industry was looking an affordable alternative, and it got one, when AbbVie received its FDA approval last week. Market experts are of the view that this new drug will reduce Gilead’s user base by almost 25 million, which means lower revenues for the coming quarters.

As far as the current stock prices of Gilead Sciences (NASDAQ:GILD) are concerned, the shares are being traded in the range of $96.13 to $97.3. The company has a total market capitalization of $146 billion with a beta of 1.18. The EPS (earnings per share) of the company is quite high, which may be the only good news for its investors right now.


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