Gilead Sciences, Inc.(NASDAQ:GILD) came under the spotlight of Jim Cramer’s Stop Trading segment today on CNBC, and the investor showed confidence in the company and stock, despite the potential threat of increased competition in the Hepatitis C treatment market from AbbVie Inc (NYSE:ABBV).
“It [Gilead Sciences, Inc.(NASDAQ:GILD)] could be selling at ten times earnings. If the insurers pay, and there is no competition; and the FDA doesn’t like to approve me-too drugs, when they’ve got a drug that’s working. So just keep this in mind as you see Gilead go higher, there’s a lot of growth money in it, and it’s being rewarded, and that money’s then going to continue to come into the growth funds [...],” Cramer said during the segment.
Gilead Sciences, Inc.(NASDAQ:GILD)’s stock has soared 35% this year to top $100 on the strength of their Sovaldi HCV treatment, which costs $84,000 for a full treatment and has netted the company $5.75 billion in sales in the first six months since the drug hit the market in December of last year.
Those costs have launched Senate investigations into the drug’s pricing on one hand, while on the other hand, the U.K’s National Institute for Health and Care Excellence has just approved the drug for treatment of affected sub-groups of patients there as being cost-effective (the drug will be sold by Gilead Sciences, Inc.(NASDAQ:GILD) at a 30% discount in the U.K compared to U.S prices).
AbbVie, meanwhile, is in the process of seeking FDA approval for their own all-oral HCV treatment. The FDA has fast-tracked their application with priority review status, and a judgement will be rendered on the drug by October 21, six months after the application was filed.
Hedge Fund legend Julian Robertson has over 440,000 shares of Gilead, according to Tiger Management’s latest 13F filing.