In the absence of a large short position, I don't think that anything less than a spectacular earnings beat will move the stock dramatically. This would have to involve scripts well above forecast(possible) or discounting levels well below forecasts (unlikely). The large imbalance in the put/call ratio tells me that this is a stock which one should probably sell a few days before earnings and buy back a few days after earnings. If they beat substantially on earnings, the institutions don't say, "Wow! I have to buy this stock right now!" They will wait until it sells off as the retail investors cash out before adding.
Still lost less than the other 4 major biotechs in the IBB. And, on an options expiration day, all moves tend to be exaggerated. (i.e. When a stock like this, with a lot of in-the-money calls starts to head in the wrong direction, it tends to keep going in that direction. Fortunately, there were some puts to be cashed in along the way.)
That worked. 1200 @ average of 100.84, sold half @ 101.46, kept half in the belief that this will reach 103.50 sometime before earnings. Today, once again, all five of the major biotechs did worse than the IBB itself, although GILD was down less than the others. Suggests to me that the large holders have been, in effect, shorting these stocks by selling calls.
No, although it may be a swell investment for all I know. I owned 1,000 shares @ 16.50 in early 2013. It bounced a bit and eventually settled in at around 18, which wasn't a strong enough performance to make me add more, or a weak enough performance to make me sell. In October 2013, they had some kind of major disappointment and I sold my shares for an average of 7.40. (When I hold a stock on a premise and the premise is disproven, I get out.) This turned out not to be a mistake since later that month it dropped to 2.20. In fact, it took to almost February of this year before it reclaimed the 8 level definitively. Of course, if you'd bought it at 2.20 and held it to the present, you'd have done very well. But, as the French say, "The scorched cat fears the fire".
I think that, in spite of Carolyn's prediction, and whatever happens with the markets, this will pop a bit in the last 15 minutes. I'm going to buy some and try to sell half just before the bell.
Undoubtedly the case. In a sense, the very large biotechs are handicapped by being seen as "too big to get bought".
More realistically, if the stock breaks above here on earnings, all those calls will tend to drag it back down again.
Yes, and looking at the May options, I'd say that the stock is also supported here by a heavy dose of optimism about the upcoming earnings release.
Not really. Biotechs are about 35% of my IRA, which is certainly an overweight allocation. But running the numbers, I find that, in total, they are down 2.7% since the biotech top of 3/20. That's less than the IBB is down and a lot less than I'd be down if I had any of the large biotechs other than GILD and CELG. Since the S&P is almost exactly where it was on 3/20, I don't think a 2.7% loss is enough to offset the upside possibilities in these stocks.
On 3/31, I noted that the biotechs had peaked on 3/20 and that, relatively speaking, GILD had held up much better than the other large cap stocks. Revisiting those numbers today, I find that this is now even truer. The IBB has recovered most of its losses since 3/20 and is now down only about 3.5% (vs -8.42% on 3/31) GILD is now up about 1% from 3/20, which doesn't seem too inspiring ... until you look at the other large cap biotechs: CELG - 10%. AMGN - 3%. BIIB - 10.3%. REGN - 7.5%. VRTX - 5.2%. ICPT - 10.8%.
It seems like GILD's huge cashflow (and the resultant buybacks and dividend) are shielding it from the selloff among these larger biotechs. Note that all of these stocks, with the exception of AMGN, have recovered much less than the IBB.
I own none of the above companies, but am still pretty heavily invested in biotechs. With the exception of INCY and MDVN, these are mostly smaller cap stocks. Of the 16 I hold, 11 are down since 3/20, 4 are up, and 1 is even. By far the best performer among these has been HZNP, a stock which was pointed out to me by a poster on this board as worth a look. The weakest has been ZSPH (down over 20% since 3/20), which I own as a hedge against a larger position in RLYP. Given the increased risk in these smaller cap stocks, it's surprising that they seem to be actually performing better, as a group, than the large caps. So far.
Thanks for posting this, Durango. I suspect that the disproportionate drop in international sales is really due to currency translation. The US figures would seem to indicate that Xtandi is supplanting Zytiga more quickly than expected in the pre-chemo setting.
No, it's one pestiferous pudding brained simpleton posting over and over under different id's.
After hours on Friday, Dec. 19, ESRX announced that they were excluding Harvoni from their formulary in favor of VeikiraPak (sp?). By the close of market Monday, GILD had dropped over $15. Was this the weekend that capitalism was invented? The margin on Harvoni, like most pharmaceuticals, is over 95%. Which is why many pharma companies manage to make handsome profits even when they sell their products for less than $850 for a course of treatment. The idea that ESRX is less ethical than GILD -or more ethical - is silly. You cannot argue that lower prices make the drug more accessible and then fault ESRX for agitating for lower prices.
If you really wanted to make a mythical stock advisor believable, you would stop short of post hoc price "predictions" carried out to two decimal places. Only the mentally deficient would believe this. And only the mentally deficient would believe that anyone would believe this.
I'd say that a median increase in progression-free survival form 5.7 months to 19.4 months is substantial. And I challenge you to name a single insurer who does not cover Xtandi.
I note that during their last cc, their projections for this quarter included $5-7 billion in ex-US sales. (across all product lines) This might make the foreign exchange effect somewhat larger than your estimates.
However, all those here who observe that the effect of ESRX driving down the cost of Harvoni has been to extend treatment to more patients would have to concede that the PBMs have made Gilead an even better contributor to public wellbeing than they intended to be. Incidentally, I don't see too many people on this board arguing for $850 Harvoni. Or too many on the Celgene board arguing for $500 Revlimid. However, with margins in the area of 95%, one could make plenty of money selling $850 Harvoni or $500 Revlimid. No doubt Gilead wouldn't have spent $11 billion acquiring Pharmasset if they didn't envision charging a very high price for the drug. But the pricing level is not dependent on the wonderfulness of the drug, but the relative wealth of the patient pool (or their insurers) and the lack of a competitive alternative.
PS You might note that Goldman-Sachs, the arch villain of manipulation, has consistently had a very low price target for GILD. In April of last year, just before the stock went on a great run, they lowered their price target from 77 to 68. In the latter part of last year, they included GILD on their list of "most over-valued stocks", by which they apparently meant stocks which had most dramatically exceeded Goldman-Sachs' valuations, which are, of course, the only reality. (i.e. "We're not wrong - the market is wrong.") However, if G-S's low price targets were intended to let them accumulate large blocks of shares cheaply, they obviously didn't work, since the shares moved relentlessly up after the G-S downgrade. After last quarter's earnings release on February 4, Goldman, which had finally adjusted its price target to a more realistic level, again lowered it to $85. The Credit-Suisse downgrade was more significant than any of these because C-S had been among the most bullish analysts on GILD. The point is, analysts' ratings have a lot more to do with trying not to look foolish than with manipulating stock prices.
This nonsense is a variation on the old "big guys driving stock price down to get your shares cheap" theme. Why wouldn't they upgrade the stock in order to sell their shares to you at a higher price? That would make a lot more sense. In fact, analysts are very reluctant to downgrade a stock when earnings disappoint since it is, in effect, an admission that they were wrong. Note that after last quarter's earnings, several analysts lowered their price targets for GILD by $5 - a couple actually raised them - but only Credit-Suisse downgraded. The lowered price targets are a way of saying that thing aren't quite as rosy as they thought without actually saying that they have overestimated earnings.