Gilead Sciences, Inc. (NASDAQ: GILD)
If you follow my work, you know that I’m a big follower of Gilead Sciences. If you’re into biotech stocks, I’m not sure how you couldn’t follow them. The company is the world’s leader in HCV and HIV treatments; making them one of the strongest stock picks in the industry; and they’ve gotten even stronger. On Wednesday, the company received approval for premium pricing of Sovaldi in Japan. Today, we’ll talk about the approval and what it means, how investors reacted in the market, and what we can expect to see from GILD moving forward.
Drug Pricing Authority of Japan Allows Premium Pricing Of GILD Sovaldi!
The news came in yesterday that Gilead’s key hepatitis C drug, Sovaldi, has been approved for premium pricing in Japan. On Wednesday, the pricing for Sovaldi in Japan was announced; and proved to be about $15,000 higher than Citigroup expected it to be. Here’s what the pricing will look at…
- Daily – $514
- Total Treatment Cost – $43,000 for the entire 12 week treatment
As you can see from the information above, the pricing in Japan is far less than the $84,000 pricing we’re seeing in the United States. Nonetheless, the drug was approved for a much higher price in Japan than anyone seemed to have expected.
How GILD Reacted In The Market
As we have come to expect most of the time good news comes out about a particular asset, Gilead Sciences stock was up. As a matter of fact, it’s been up more than 2% Wednesday and Thursday, and it seems like we may be seeing the beginning of a breakout today. Currently (11:08), GILD is trading at $110.02 per share after a gain of 1.18% so far today.
What We Can Expect To See Moving Forward
Moving forward, I’m expecting to see gains out of GILD in both the short term and long term outlooks. Here’s how I see it…
- Short Term – In the short term, we’ll most likely see gains as a result of investor excitement over pricing in Japan as well as reminders of great earnings and industry leadership. While we’re likely to see dips in the value of the stock here and there, for the most part, we should see pretty solid upward movement from GILD.
- Long Term – In my humble opinion, Gilead Sciences is a great stock for the long run, even if it’s bought at current pricing. The bottom line is that even with competitors like AbbVie Inc (NYSE: ABBV), Gilead Sciences still maintains control over the HCV market; and that’s not likely to change any time soon. Now, Japan has approved higher than expected pricing. So, we can expect to see more revenue from the region than we once expected. The bottom line is that GILD is fundamentally sound and should see pretty incredible growth in the long run.
What Do You Think?