How ‘At-Risk’ Is Gilead’s HIV/AIDS Drug Dominance? (GILD, MRK, GSK)

After a recent failure to breakout at resistance on the stock chart, Gilead’s shares have backed off and are now back under what had been a lower resistance level.  We cannot help but wonder just how ‘at-risk’ Gilead is to competition on its war on AIDS and HIV as the company’s hope is go from a 3-cocktail drug to Quad as a 4-cocktail drug to treat AIDS and HIV. Maybe the answer is “not at all,” but maybe it is becoming “more at-risk than in the past.”

A recent deal announced between Chimerix, a Research Triangle Park, North Carolina-based outfit, and Merck & Co. (NYSE: MRK) will send Chimerix a $17.5 million upfront payment plus up to $151 million in additional payments based on milestones.   Merck effectively gains rights to its mid-stage antiviral program called CMX157 which could act as a new drug for future HIV cocktail treatments.

Earlier this year came news that a Merck cancer drug brought some hope as a new very small study involving the drug Zolinza, according to Bloomberg, could effectively ward off dormant HIV from immune cells that current therapy cannot fight.

Gilead’s Truvada has recently been given FDA approval as the first agent for HIV prevention in uninfected adults. Still, GlaxoSmithKline PLC (NYSE: GSK) said shortly before Truvada’s approval that a study of its HIV drug candidate called Dolutegravir showed that it was more effective than Gilead’s Atripla.

At $51.50, Gilead’s consensus analyst price target is almost $59.75 and its 52-week range is $34.45 to $56.50.  Thomson Reuters shows that revenue expectations are expected to grow from $9.21 billion in 2012 to $9.93 billion in 2013.  Earnings are also expected to grow from $3.77 EPS in 2012 to $4.42 EPS in 2013.

JON C. OGG