Gilead Sciences: At Least Management’s Feeling Optimistic

If this year’s biotech rally were a high-school kegger, Gilead Sciences (GILD) would play the part of the geek refused entry to the party.

Owen Hoffmann / patrickmcmullan.

Consider: Shares of Gilead Sciences have risen just 3% so far in 2014, lagging Amgen’s (AMGN) 10% rise and Bioegen Idec’s (BIIB) 26% advance. The SPDR S&P Biotech ETF (XBI) has risen 24% so far this year.

That hasn’t dampened management’s confidence any, however, especially in regards to Sovaldi, Gilead’s hot-selling Hepatitis C drug. Deutsche Bank’s Robyn Karnauskas and Alethia Young have the takeaway from their meeting with management:

[Gilead] believes that they have the dominant regimen [in Sovaldi] with greater convenience, high efficacy, and no breakthrough/resistance. [AbbVie (ABBV)] did show v low levels (~>1%) of breakthrough. They also think [AbbVie] is competitive enough to NOT compete on a dramatically lower price. Mgmt thinks it's hard to speculate on who will use the [AbbVie] regimen. In their experience in HIV competitors have found ways to take some small share, for example sometimes hospitals split use of drugs. One difference in Ph3 programs & potential doc detailing points is that [AbbVie] did a separate cirrhotic trial (Turquoise-II) vs. Gilead that included cirrhotics (~15%) in their study. Company still believes 90% is achievable, but not a prediction.

Shares of Gilead have risen 3.1% to $77.77, while AbbVie has gained 2.4% to $53.20, Amgen has advanced 2.3% to $126.67 and Biogen Idec is up 2.1% at $352.77. The SPDR S&P Biotech ETF has gained 3.1% to $162.17.