Tuesday after the markets close, Gilead Sciences Inc. (NASDAQ: GILD) will report its fourth-quarter financial results. Thomson Reuters has consensus estimates of $2.22 in earnings per share (EPS) and $6.72 billion in revenue. In the fourth quarter of 2013, the company posted $0.55 in EPS on $3.12 billion in revenue.

Gilead has been dealing with a recent price and distribution war over hepatitis C drugs. In mid-December, Express Scripts Holding Co. (NASDAQ: ESRX) partnered with AbbVie Inc. (NYSE: ABBV) to exclusively distribute AbbVie’s hepatitis C drug, almost immediately following its FDA approval. This directly competes with Gilead’s cash cow, Sovaldi, and the recently approved Harvoni treatments. After the announcement of AbbVie and Express Scripts distribution partnership, Gilead shares dropped nearly 18%. However, since this time the share price has made a strong recovery to that previous price level.

In early January, Gilead was picked up by health benefits company Anthem Inc. (NYSE: ANTM) to provide its hepatitis C drug as the primary option for patients. As a part of this deal, the price of Gilead’s treatment will be effectively lowered.

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For a little background about Anthem, according to Bloomberg, in 2013 Anthem’s employers’ plans served roughly 30 million people in the United States, which was greater than any other for-profit insurer. The deal was the result of favorable pricing from Gilead due to the AbbVie and Express alliance, among other factors.

Another development was that Gilead’s Harvoni was given a preferred status by UnitedHealth Group Inc. (NYSE: UNH). This matters, because UnitedHealth is the largest health insurer in the country, and the company claims to serve some 45 million people in health benefits in total.

Gilead still has a lot of issues around its Sovaldi pricing, and now the lines have been drawn by distributors and pharmacy benefit managers. The stock was last seen up almost 12% year-to-date, and investors keep pointing out that it is valued at only 10 to 12 times earnings.

In mid-to-late January, a few analysts weighed in on Gilead:

• Needham had a Buy rating with a price target of $120.
• Nomura reiterated a Buy rating with a price target of $146.
• Maxim Group had a Buy rating with a price target of $127.

Shares of Gilead were down almost 2% to $104.26 midday Tuesday. The stock has a consensus analyst price target of $122.58 and a 52-week trading range of $63.50 to $116.83.

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