Biotech Values

[Rocky3]

You still think GILD should be trading for $160-180/sh?

Not sure that I ever used "should." I still think that it is possible with some clarity on length of market opportunity in HCV. I know that I said last spring that 15 times projected $7.50 earnings for 2014 (now looking a little low) would be a reasonable price ($112.50).

The major short/mid term unknowns are the price from ABBV and then the market (drug, not stock) reaction.

So far I am happy with the stock price since March/April and actually hope that it goes to the low 90s soon in order to reload mid/long term in-the-money options. I did not do that after my August ones expired and have regretted it. Of course, I hope the price then rebounds before mid-January when the next set expires.

I assume you still think that the executive stock sales and the HIV risks are too great. I think both issues are non-events, especially the stock sales. HIV sales continue to go up now and the patent issues will not go away, but I think will be minor compared to HCV competeion and market duration. I still think HCV sales for GILD could be $14-16B in '15 or'16. So 14 times earnings of $11 or $12/sh are surely not out of the question. Lots of things do have to go GILD's way for that to happen. JMO,

Any thoughts on JNJ's pricing comments? It might be able to keep some sales if used with Sovaldi and priced at $10-20K, but I really doubt that they would do that. It would also affect ABBV sales if they do.