Citigroup’s Robyn Karnauskas and team sums up the latest IMS data on Gilead Sciences’ (GILD) hepatitis-C drugs:
IMS released data for the week ending 3/4/2016 this AM. GILD HCV continues to hold ground at 94% share…
GILD HCV: franchise was slightly down w/w in terms of new starts and holds 94% share among the new patients. We are in week #5 of new competition launch. However, new pt. starts are tracking 3% below last Q (QTD). Total scripts are tracking ~9% below last Q and pointing to 1Q’16 sales at $2.16B vs. est. and $2.46B consensus. VA sales are a big unknown as lack of budget impacted Q4’15 sales. We do not think IMS fully captures VA sales and their annual budget of $1.5B (for HCV) could be the differentiating factor. In Q4’15, IMS projected volume decline of 10% but actual decline was 27% due to lower VA sales.
Apple’s net profits dropped 22% to $10.5 billion from $13.6 billion in the same quarter a year ago.
Gross margins fell to 39.4% from 40.8%, not so bad, but for its third quarter, Apple is predicting a continuing decline in margins, to 37.5%.
The new model SE will further stress margins and Apple will have a hard time to maintain its margin and profitability.
Knowing that the phone is the lifeblood of Apple, the margin concerns are real concerns for the stock value.
By Ben Levisohn
Leerink’s Geoffrey Porges was already bullish on shares of Gilead Sciences (GILD)–he was tied for the seventh highest price target among analysts covering the stock–but he’s even more so today. After raising his target price to $130 from $125, he has the third highest price target on the biotech giant. Porges explains why he’s optimistic:
We recently resumed coverage of Gilead Sciences (GILD) with an Outperform rating driven in large part by our more positive view of the company’s HIV franchise; after revisiting our underlying assumptions and incorporating recent developments, we remain positive overall about the stock and raise our price target to $130 (from $125). Central to our core thesis regarding the HIV franchise is a positive outlook on the next-generation TAF-containing products near-term and those based on GS9883 mid- to long-term. Clinical data and current treatment unmet needs continue to support likely strong demand and market uptake of combination therapies of both. ...
Almost text book trading, bounced off 50 % retracement, bounce up to gap from earnings miss, then next leg down to 85, 61.8 % retracement level. Folks interested in trading should study this; it's an important lesson.
Earnings were bad, but the miss was not so large to justify the large gap down.
I think Gilead's inaction to fill the earnings gap from increased competition and increased discounts is getting priced in. With the cash on hand investor's would like to see a clear path to maintain the current earnings levels.
I'm a long term investor, have been in Gilead for ten years, and will hold another ten, at least. Got quite a few shares, and of course it hurt,
You're correct, the average estimate target price already came down to 125. Obviously the gentleman above hasn't experienced earnings drying off with the subsequent share price drop. Watch and learn. Investing in markets is very expensive until you learned your lessons...
The message is clear and the writing is on the wall. Apple topped out and has nowhere to go. It will take years for Apple to catch up with innovation, if ever, and as revenue drops the PE will sky-rock quickly. Right now Apple is a one trick pony, and the symptoms observed at Apple have been observed at Blackberry, Nokia, Microsoft, etc. There is no more innovation at Apple and the great marketing machine at Apple can take the products only so far, the Ipad is proving itself a fad, Apple pay a flop nobody is using, Iwatch a flop nobody is using and the only product, the Iphone is becoming a true commodity, and eventually will be replaced by a new innovation by an upcoming new company. Apple is on borrowed time.