According to David Stockman's Contra Corner web story about the runup in IBB...
Sovaldi and Harvoni represent most of Gilead's $15 billion income and cost patients up to $1,000 day!!
According to Stockman:
"...Nowhere was this disconnect more extreme than in the biotech sector. When the IBB hit its peak of $400 on July 20, the 150 companies in the NASDAQ biotech index had a collective market cap of $1.2 trillion. By contrast, they had posted only $21 billion of trailing year earnings, implying a PE multiple of 57X.
Moreover, Gilead alone had $15 billion of LTM net income or 71% of all the profits for the entire basket of 150 companies.
And then comes the clincher. Gilead’s blockbuster hepatitis C drugs, Sovaldi and Harvoni, account for virtually all of its profits, and for reasons that are not hard to fathom. These drugs are truly miracle cures, but they often cost patients up to $1,000 per day!..."
So if this TT-034 is successful I'm hoping Benitec will bring it online for a number that's much more affordable to patients.
Does anyone know why IBM carries so much debt. Is it to avoid a hostile takeover? I see a lot of big corps with very high debt multiples. Seems risky to me. What happens when the interest rate goes up?.
Don't forget that all these shares most likely have warrants attached. The shares represented by these warrants may be sold immediately, therby increasing selling pressure on the share price. Because of growing market awareness of the future potential of stem cell therapy and because of the growing percentage of institutional ownership of this company, in my opinion it is unlikely the share price will drop to former lows, but there will be negative impact on share price if the warrants are converted and sold.