Today in the news:
A Call For Pricey Treatment For Millions With Hepatitis-C
Express Scripts Trying To Shame Gilead Into Reducing Sovaldi Price: Who Is Really The Greedy One?
Stock Doctor
Summary
- Investors should use the public shaming campaign by Express Scripts to add Gilead shares at a considerable discount.
- Express Scripts is not really concerned about the rising price of drugs for Americans, but more about how it will impact its own bottom line.
- Gilead may reduce their price once competition hits the market, but will still be priced at a premium due to the better efficacy and lower pill burden of their treatment.
There is little doubt by investors that Gilead (GILD) has developed a miracle drug for hepatitis C treatment. With the initial US prescription data for Sovaldi tracking to bring in $5-$9 billion in its first year on the market, the popularity and success of the drug is unprecedented. Building on this success, Gilead recently submitted the Sovaldi/NS5A inhibitor ledipasvir drug combination to the FDA, which was granted breakthrough therapy designation, and treats the most frequent genotype 1 strain. Although others, such as AbbVie (ABBV), Merck (MRK), and Bristol Meyers Squibb (BMY) are working on their own hepatitis C treatments, there is little argument among analysts that Gilead's treatment is superior. So with nothing but good news flowing out of Gilead and money flowing in just as fast, why is the stock being pressured down? Investors are reacting to political posturing and recurring comments from Express Scripts (ESRX) medical director, Steve Miller critiquing the $84,000 Sovaldi price tag. Investors should use the public shaming campaign by Express Scripts to add Gilead shares at a considerable discount. To be fair, Express Scripts is not really concerned about the rising price of drugs for Americans, but more about how it will impact its own bottom line.
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