David Avery used to keep half his 401(k) account in bonds and cash. Last year, the 35-year-old computer programmer moved his entire portfolio into stocks, with one recent purchase being Enanta Pharmaceuticals, ENTA -1.05% a small biotechnology company that posted a loss last quarter.

"I could see it going maybe 50% at a minimum, just being conservative," says Mr. Avery, who is the co-founder of an investment club in Augusta, Ga. "If the market does well, I could see it double easily."

Small investors, well known for poor market timing, are flocking back to stocks. Does that mean it is time to sell?

What did you mean by "SEPR"?

You seem to be willing to accept the sell-side projections for GILD’s HIV franchise—lock, stock, and barrel; however, if something should go wrong with the TAF program, those numbers won’t hold up.

(1) Base case - secondary warehousing - growth in new patient starts slows Q2-Q3 then picks up again Q4 - $10.80B, up
from $7.32B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $8.18B, up from $5.44B
(3) Sovaldi new patient starts level off for rest of year - $15.54B, up from $10.26B
(4) Week over week NRx changes match those seen with Incivek+Victrelis at same point in launch - $14.34B, up from
$9.39B

**BOTTOM LINE: We believe GILD shares have stalled of late in part due to concerns regarding a potential slowdown in
uptake this year as initial ''warehoused'' patients go through treatment and other untreated patients await the all-oral
regimen. While we fully expect this will happen at some point, with each week of growth we believe the chance for 2014
sales to exceed even high expectations increases, and the large long-term opportunity within this market - especially
once GILD has a more optimal all-oral regimen - becomes clearer and clearer.

(1) Base case secondary warehousing growth in new patient starts slows Q2Q3 then picks up again Q4 $ 7.32B, up from $6.82B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) $ 5.44B, up from $4.97B
(3) Sovaldi new patient starts level off for rest of year $10.26B, up from $9.44B
(4) Week over week NRx changes match those seen with Incivek+Victrelis at same point in launch $9.39B, up from $9.21B

ABBV believes there is little to no chance they will end up with only a 10% HCV
market share: We asked why expectations for HCV are so skewed towards GILD., with
Street models reflecting only 10-15% share of the market to GILD’s 90%. Management
continues to point to their strong efficacy data in their Phase 3 trials, and believes that SVR
rates will override convenience. They also stated that investor concerns around RBV may
not be that material. In both ABBV's and GILD's trials the safety and tolerability was not
different with or without RBV. Regarding the sustainability of the market, management
stated that they believe the G7 markets should be sizeable for at least the next 10 years,
and that the market could be $10-$14 bn in size for many years (with a maximum capacity
in the G7 at around 200,000-250,000 patients annually if not a bit higher). While ultimately
there will be pricing pressure with new competitors longer-term, there is certainly an
advantage for ABBV and GILD being first. Management did not back off from a $3-4 bn
projection.
We continue to believe that there is significant upside to Street models for ABBV’s Hep C
franchise, and with the launch expected in 2H14, we expect upside pressure to long-term
forecasts.

Second Gen Hep C competition with MRK: We continue to field pushback on ABBV’s
HepC regimen in part due to competition from MRK’s regimen, despite the limited amount
of value ascribed to shares. We asked ABBV their view of the competition, particularly
from MRK. Regarding timing, ABBV just entered Phase 2 for their next-gen regimen
before the end of 2013 and they are targeting a 2017 launch. This compares to MRK nextgen
launch around 2016. Therefore ABBV will be on the market for around 2 years with
their first gen regimen before MRK launches, and about 6 months behind MRK with their
2nd generation Hep C drug.
ABBV has shown that their next-gen regimen is pan-genotypic (works in G1-G6) in in vitro
studies. We will likely see some of the pre-clinical data this year. MRK is also targeting a
pan-genotypic regimen however MRK has not started a trial in G3 patients (they have
February 26, 2014 AbbVie Inc. (ABBV)
Goldman Sachs Global Investment Research 4
started P2 G1 and G2) – one possibility suggested by ABBV was that the higher dose is
needed for G3 patients but that dose had safety issues.

**The week's total prescriptions for Sovaldi were 5,291, up 10.9% vs. last week's 4,714.
**The week's new prescriptions for Sovaldi were 3,434, , up 8.9% vs. last week's 3,128.

**Plugging these new numbers into our proprietary Sovaldi projector, we believe U.S. Sovaldi sales could reach the following
under these scenarios:
(1) Base case secondary warehousing growth in new patient starts slows Q2Q3 then picks up again Q4 $ 7.32B, up from $6.82B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) $ 5.44B, up from $4.97B
(3) Sovaldi new patient starts level off for rest of year $10.26B, up from $9.44B
(4) Week over week NRx changes match those seen with Incivek+Victrelis at same point in launch $9.39B, up from $9.21B

**BOTTOM LINE: Though there have been some concerns raised recently about the sustainability of the Sovaldi launch, the
drug continues to show no signs of slowing down, with this week's prescription data showing considerable continued growth
in total scrips, retained growth in new patient starts, and sales tracking at over $7B worldwide in a base case that allows for
substantial slowdowns in uptake rates during the middle of the year. We remain buyers of GILD and believe that the worries
over eventual prescription flattening this year miss the ''big picture'' evidence of the very large longterm
market opportunity.

Not sure why you put quotation marks around the word colossal insofar as GILD’s HIV franchise is selling at an annualized rate of $10B. However, in 2017 Viread will be off-patent in major jurisdictions and the longer-running patents covering Emtriva are weak.

Higher than expected Sovaldi sales in GT1, specifically, are bearish for ENTA, as we’ve discussed previously. (Higher than expected Sovaldi sales in GT2 and GT3 have no material effect on ENTA.)

The EMA’s compassionate-use allowance of Sovaldi + Ledipasvir is a non-issue, IMO; the EMA previously allowed compassionate use of Sovaldi + BMY’s Daclatasvir, but actual sales are de minimis.

Notably, even as Sovaldi’s US scripts continue on a rocket-ship trajectory, sell-side analysts are inching ever closer to the market-share and sales numbers in my ENTA valuation model—the latest example is BofA (#msg-97629251).

I would suggest that there is no such low-hanging fruit to be harvested. The most consequential unknown in GILD’s future is not Sovaldi (or Sovaldi + Ledispavir), but rather is TAF—the lifecycle management replacement for Viread that will determine the status of GILD’s colossal HIV franchise 5-10 years out. Investors who are long GILD at the current valuation are thus making a bullish bet on the prospects of TAF, whether they realize it or not.

TEVA—3TW Conversion
TEVA’s Copaxone completed its first month on the
market (though only 2.5 wks of IMS data) and we’re
watching the launch closely. The week’s NRxs ended
with 3TW 40mg 142 vs. 2,301 for daily dosing—or
~6% of NRxs. Management has guided to 30,000
patients on Copaxone 3TW by the end of May ’14
(30%-50% conversion rate), which seems aggressive.

TEVA-Copaxone: -2% W/W, -22% Y/Y. Continuing to lose share to BIIB’s Tecfidera; will watch 3TW Copaxone as scripts emerge
since management guides toward a 30-50% patient conversion rate and Copaxone comprises approx. 20% of TEVA revenues.
Following the negative CHMP opinion of laquinimod, we see bleak prospects for a pipeline replacement therapy in MS.

Such an assertion doesn’t mean much unless one specifies a time period in which the purported buyout will occur.

**The week's total prescriptions for Sovaldi were 4,714, up 14.1% vs. last week's 4,051.
**The week's new prescriptions for Sovaldi were 3,128, up 9.0% vs. last week's 2,848.

(1) Base case - secondary warehousing - growth in new patient starts slows Q2-Q3 then picks up again Q4 - $6.82B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $4.97B
(3) Sovaldi new patient starts level off for rest of year - $9.44B
(4) Week over week NRx changes match those seen with Incivek+Victrelis at same point in launch - $9.21B

**Separately, we note today that CHMP provided an opinion on the use of the fixed-dose combination of
ledipasvir/sofosbuvir, in response to a request from Sweden. The combination of ledipasvir and sofosbuvir may be used
in compassionate-use programs, at the level of individual EU countries, for patients who are at a high risk of liver
decompensation or death (less than 12 months if untreated). We read this as an incremental positive for GILD-- as fixed
dose combination can now be used in a subgroup of European GT-1 patients without a prior marketing authorization -
helping clinicians gain experience with the combo before full approval.

51,785 shares traded in PPHMP. Seems to be some demand surprised anyone?

My instinct says that when you see a big-cap stock with dramatically accelerating earnings, with a potential slowdown only several years in the future, the mainstream mutual funds and pension funds will be drawn to it like moths to a flame.

It’s difficult to believe that GILD’s prospects are under-appreciated by any sell-side analysts.

Gilead Files for U.S. Approval of Ledipasvir/Sofosbuvir Fixed-Dose Combination Tablet for Genotype 1 Hepatitis C


-- If Approved, Fixed-Dose Combination Would be First Oral Treatment Regimen for Patients with Genotype 1 HCV Infection, Eliminating Need for Both

Quote:
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The buyout hallucinations have reached new heights this weekend.
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I would add that many, many hallucinations have reached heights this weekend.

If the company thought that it had anything of real value in the near future it would not have sold 10% of the company at less than 2 in January. Nor would it file to pay over 10% on a new preferred issue that would further dilute the existing shareholders if the company become more valuable. All of the indications are that the company continues to be "in trouble" with no likelihood of any significant upside for a very long time.

But if one would read this board, that clearly is not the take away. I wonder how many paid pumpers there are here?

Dew, if you don't mind me asking... What's your take on this finance tactic??

Apparently, some ENTA investors and prospective investors are more bearish than I am

such generosity while talks are presumably going on

From a tax standpoint, a buyout announced one month from now wouldn’t be any better for ENTA’s public shareholders than a buyout announced today. (ENTA’s IPO was on 3/20/13.)

Guggenheim Securities

We outline our top ideas for 2014 in our biotechnology-coverage universe.

We highlight Gilead Sciences (ticker: GILD) (rated at Buy), Celgene (CELG) (rated at Buy), Alexion Pharmaceuticals (ALXN) (rated at Buy), Incyte (INCY) (rated at Buy), Celldex Therapeutics (CLDX) (rated at Buy), Merrimack Pharmaceuticals (MACK) (rated at Buy), Verastem (VSTM) (rated at Buy), Five Prime Therapeutics (FPRX) (rated at Buy) and Tetralogic Pharmaceuticals (TLOG) (rated at Buy).

Re: NBIX

It's just regaining what it lost back in Sept.
I don't think this is an overreaction.

Neurocrine Biosciences, Inc. (NBIX) announced today that NBI-98854, a small molecule VMAT2 inhibitor, showed a statistically significant and clinically meaningful reduction in tardive dyskinesia symptoms in the Phase IIb Kinect 2 study. The pre-specified primary endpoint was the change-from-baseline in the Abnormal Involuntary Movement Scale (AIMS) at Week 6 as assessed by central blinded video raters.

At Week 6, AIMS scores were reduced by 2.6 points in the NBI-98854 intention-to-treat (ITT) group compared to a reduction of 0.2 points in the placebo arm (p= 50% improvement from baseline) was 49% in the NBI-98854 ITT group compared to 18% in placebo (p=0.002). In the per-protocol (PP) group AIMS scores were reduced by 3.3 points for those subjects taking NBI-98854 (p

"The profound response in this Kinect 2 study demonstrates the potential of NBI-98854 as both a safe and highly effective treatment for patients suffering from tardive dyskinesia," said Christopher F. O'Brien, Chief Medical Officer of Neurocrine Biosciences. "It is clear from these results that the use of blinded central AIMS raters coupled with the ability to titrate up to 75 mg of NBI-98854 were both critical to the success of this trial."

Dimensional Fund Advisors is unusual. Its fans are true believers, bordering on evangelical, yet it is hardly a household name like other fund firms of its size. (About 85% of DFA's assets are in mutual funds, making it the eighth-largest fund family, sandwiched between JPMorgan and Oppenheimer Funds.) That relative anonymity is by design: The firm doesn't advertise; it sells its funds only through advisors who have undergone a rigorous screening; it doesn't sell its funds on most brokerage platforms; and it's privately held. Because its funds are essentially quantitative -- driven by computer models, rather than by individual security selection -- there are no star managers. Though it doesn't eschew the press, it's careful to work only with reporters who "get" what it does; this was the first time a reporter had been invited to the College.

And yet its overall performance is headline-worthy. More than 75% of its funds have beaten their category benchmarks over the past 15 years, and 80% over five years, according to Morningstar -- remarkable for what some investors wrongly dismiss as index investing. Its process is simple and repeatable -- and yet no other firm has tried emulating it. When asked why, co-founder, chairman, and co-CEO David Booth, 67, draws a surprising analogy to Star Wars, and Luke Skywalker's inability to harness the power of the Force until his devotion was deep and unwavering. "We are believers down to our toes," Booth says.

The force, in this case, is the theory of efficient markets, first put forth by Fama in 1965. Dimensional's funds all operate on the same principles -- that it's hard to beat the market, and impossible to do it consistently, by stock-picking. There are, however, various factors that can be exploited to provide market-beating returns. That, along with sophisticated trading strategies, a keen eye toward tax-efficiency, and low expenses (the average DFA fund charges just 0.39%) has led to Dimensional's success.

....

THE FIRM TAKES its academic bent seriously. DFA began where Fama's research began -- on the assumption that stock-picking is too inconsistent and unpredictable to be a reasonable method of beating the market. Sure, every year, some active managers will outperform; some will even outperform several years in a row. But that doesn't indicate skill, Fama says. "With 3,000-plus active managers, some are going to look good -- but that's what you'd expect as a matter of chance," he says. "It's very difficult to tell luck from skill." Even to the extent that skill is involved, stock-picking is not a repeatable process with the consistency and persistence of returns that would enable investors to anticipate which managers are likely to outperform -- especially given the cost of making those bets. "Active management is a zero-sum game, and that's before costs," Fama says. "That's not opinion. That's math."

The firm began with a focus on small and micro-cap stocks, a specialty that it's still best known for. Small stocks underperformed for the first nine years of its existence, yet DFA grew to a $4 billion firm by 1990.

In 1992, Fama and French published their three-factor model, which incorporated and expanded on the established capital asset-pricing model, demonstrating that low-priced (value) stocks and small-company stocks have higher average returns. Dimensional incorporated the three-factor model into its funds right away.

Dimensional is overwhelmingly equity-driven, with 78% of its assets in stocks. Though most of Fama and French's work has been in equities, their method can be applied to fixed income -- bonds have two factors, maturity and credit quality -- and Dimensional offers 20 bond funds. But many advisors use other firms for their fixed-income allocation.

no matter what holding Momenta has been a bad decision over the last years.

End of story.

Although the magnitude of an insider’s sales relative to his overall position in the stock is worth taking into account, the absolute magnitude of insider sales is more consequential, IMO, especially for a company like GILD where almost all of the officers and directors are selling hefty amounts.