Replies to post #175936 on Biotech Values

[Rocky3]

Seems to me gild stock price has been in down mode since 3/7. 3/7 week 13 nrx number was down from week 12th and trx showed a slow down from all previous weeks. What is your view?

I have no real idea why GILD did not react stronger in February to the great Rx numbers or why it went down in early March. The March 7 numbers were not known until the following week, so it is unlikely that they were the cause of the decline starting on 3/7. The prior weeks of Rx's had exceed estimates by so much that I think the market was just uncertain what the long term sale projections should really be. This issue has been debated here at great length. There are good arguments that the analysts (and the companies, including ABBV/ENTA) are overstating estimated sales and earnings greatly in 2017-2020 due to smaller number of people who will be treated then, either because they will be treated 2014-2016, or the treatment will be too expensive for those with no current problems. I still am on the side of the analysts, but I understand the argument.

IMO, the last couple big down days (Friday and Monday) were industry issues, driven by political concerns about the price of Sov. Again, it should be a short lived issue, but markets are markets and they can move more and longer than anyone can estimate. The script numbers give a lot of comfort as to 1st and 2nd quarter sales and earnings, but say nothing about what might happen in 2016-18 and thereafter. Of course, there is the argument that the market doesn't understand what the current Rx numbers mean for sales and earnings, and will adjust after Q1 earnings. I hope that is true, but seems a little too hopeful to me.

Again, JMO.