Hello my friends I know it has been quite some time, I have been busy being punched in the face by Gilead Sciences (NASDAQ:GILD) lol. Before I move on I have not been literally punched in the face by an executive of Gilead haha, I would probably win. But the main point I will get to this article today, and the reason for my title is because Gilead came out on Friday with a bit of lets say off the wall news….. yes it was that bad. As you all know if you have been following the biotech industry Gilead has been able to come up with pills that can cure patients of the Hepatitis C virus. Gilead’s drug to treat patients with Hep C ( I will short it from now on for easier flow… I know I am a nice guy :/) is known as Sovaldi. The point though is that Gilead is combining it with another drug compound known as GS-5816, and this all oral-pill combination will be able to cure patients with hep C. Sounds all dandy now doesn’t it? (spoiler alert it gets bad lol). The problem though is that there has been tons of headlines slamming Gilead for putting an $84,000 dollar per course treatment to help patients cure hep C.
We can sit here and debate this issue all day but in my honest opinion you can’t put a price target on life. I understand on the one point that many patients won’t be able to obtain the drug for treatment, but hopefully that’s what Insurance is for. It’s not like insurance companies don’t gouge consumers now with crazy out of this world prices. If a drug will save one of their customers then they should do it, regardless of the price tag. ( I know I know alas we don’t live in a Utopia world unfortunately lol, so this is a pipe dream). Now $84,000 dollars seems bad enough but why is this an issue now? Look at Biomarin Pharmaceuticals (NASDAQ:BMRN) it has been pricing rare disease drugs at such outrageous amounts yet nobody has said a peep about it and other rare drug disease companies. You think Gilead charging $84,000 per course of treatment is a lot? Heck one course of treatment with Gilead’s Sovaldi , and you are cured of the Hep C virus. Biomarin’s Vimzim drug will cost patients $380,000 per year as noted by this article by “The Street“!
So why on earth is Gilead’s drug receiving so much backlash? Biomarin’s drug and other rare disease companies charge a larger amount and don’t even cure the patients, yet Gilead charges a lot less and there is a huge backlash against it? Why ? Because it is not targeting a rare disease, and so it must be punished? The main reason why I brought this point up is for two reasons! For one the biotech Sector took a big hit on this news on Friday March 21st 2014 because of this incident. Secondly I would like to be gracious host (okay yah that was a corny line lol) and provide investors with the opportunity to purchase the biotech names that took a big hit on this news the last 2 trading days. Especially today there were two RNAi biotechs that were hit really bad today one was Tekmira Pharmaceuticals (NASDAQ:TKMR) and the other was Arrowhead Research Corp (NASDAQ:ARWR). Both of these RNAi biotechs fell by more than 15% today , along with the whole biotech sector that got hit in the gut by the news of Gilead Sciences. The reason for Tekmira and Arrowhead dropping more than most other biotechs is because they are each creating treatments for the hepatitis b market, and possibly hep C in the future. So these two stocks were viewed in a more negative light as opposed to all the other biotechnology stocks.
As I have mentioned on many occasions before when the market creates a panic and investors are fearful it is a good time to do what I have just created called……….Biotech pickbasketing” (Don’t worry I won’t trademark that haha) , which in essence means to buy up more shares on your favorite biotech names. The selloff over this was irrational, just like the selloffs when there is danger over in Russia , don’t worry I won’t talk politics that is not my intention. One key thing to note though my friends is that the fundamentals of these companies won’t change! Gilead still makes a lot of money, and is still a good long term name despite this short term hype selloff. If you learn anything out of this today (no it’s not that I can create a wall of text, believe I can make it longer rofl) is that selloffs are irrational and can never be explained fully, but investors buying good multiple low value stocks in a sea of red is rational. That is something we can control, which is time, that is on our side. This is because while we took a “punch in the gut” from Gilead now, longer term we have done our due diligence and the stocks we have chosen will chug higher regardless of selloff hype. If you want to check out a good article explaining more about the recent Gilead Hep C news, check out this article from Forbes. I hope you all enjoyed this article today, and have learned something new. Don’t forget to checkout “The Blacklist” tonight on NBC, yes I’m hooked lol I admit it! Have a great night, and don’t let this Gilead punch to the stomach ruin your appetite, things will get better. Invest Wisely, and Remember “Due Diligence Creates The Best Picks In The Biotech Sector”!