For a variety of reasons, the cases of chronic hepatitis in the United States have surged dramatically over the past 20 years. Currently, it is estimated that more than 3.2 million Americans are infected with hepatitis C, and approximately 75% to 85% will develop a chronic infection. The worst news for those with the disease is that there is no actual vaccine that serves as a cure.

The good news for patients, is that there is very effective treatments that work very well. The HIV epidemic that started in the 1980s gave the medical community a good blueprint on how to deal with a widespread health problem. That knowledge, combined with current drugs and those in the pipeline, are helping patients and driving revenues at top biotech and pharmaceutical companies.

A new research report from UBS focuses on four top companies that are making great strides in treatments for patients, and generating gigantic revenues and revenue possibilities.

Gilead Sciences Inc. (NASDAQ: GILD) is one of UBS’s top stock picks. The company crushed second-quarter earnings, as its leading drug Sovaldi continues massive sales. During the quarter, revenue for Sovaldi, Gilead’s drug to treat hepatitis C, delivered product sales of $3.48 billion, exceeding average analysts’ estimates of $2.92 billion. Wall Street analysts are also looking for positive data on the company’s Phase 3 HIV “TAF” (son-of-Viread) pivotal data, which could come as early as this month. Viread is Gilead’s hepatitis B and HIV drug, which will go off patent in 2018.

UBS points out that Gilead is trading at just 8.8 times 2016 earnings versus the company’s peers, which are trading at 16.2 times, and that consensus earnings numbers for the company show a stunning 55% compound annual growth rate. The UBS price target for the stock is $130, and Thomson/First Call consensus target is $112.43. Gilead closed Friday at $103.66.

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AbbVie Inc. (NYSE: ABBV) has finally completed its exhaustive pursuit of Shire pharmaceutical, and reported much better than expected growth and sales in Humira, one of its top-selling drugs. The company has also thrown its hat in the ring in the race of oral interferon-free combination therapies for hepatitis C, and this could be a huge catalyst for the company in the next few years.

AbbVie has finished up its Phase 3 clinical-trial program for its all-oral hepatitis C drug cocktail. AbbVie’s drugs only have to be taken for 12 weeks in most cases and do not require peginterferon. Investors are paid a very solid 2.9% dividend. The UBS price target for the stock, which is rated Buy, is $67. The consensus figure is at $67.38, and shares closed trading on Friday at $57.88.

Achillion Pharmaceuticals Inc. (NASDAQ: ACHN) may be a small cap home run for investors. The company is developing a drug in the same class as Idenix’s, which Merck paid a sizable premium for, and many observers see it as the only real buyout target left in this field. The company’s drug candidates for treating chronic HCV infection are Sovaprevir, a NS3/4A protease inhibitor that has completed a Phase 2a clinical trial; ACH-3102, a NS5A inhibitor that is in Phase 2a clinical trial; ACH-3422, a NS5B nucleotide polymerase inhibitor that has completed preclinical studies; and ACH-2684, a NS3/4A protease inhibitor that has completed Phase 1a and 1b clinical trials.

Many on Wall Street feel the company is close to completion on a marketable product. The Wall Street consensus price target for the stock is posted at $12.80. Shares closed trading on Friday at $12.18.

Merck & Co. Inc. (NYSE: MRK) has enjoyed an outstanding year for investors, its stock up more than 20%. It remains a solid health care stock and is also on the UBS equity focus list. Next year’s earnings per share are expected to jump 4.55%. For the next five years, earnings gains for Merck are expected to be at almost 4%, a huge rise over recent years’ dismal performance.

The company’s purchase of Idenix this summer for $3.85 billion was to acquire its HCV pipeline, and could pay off huge in the future. Merck pays shareholders a very solid 2.95% dividend. UBS has a $68 price target, and the consensus target is $61.83. Merck closed Friday at $61.94 a share.

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The treatment of hepatitis C is undergoing a dramatic transformation. Newer medicines have higher cure rates, with fewer side effects and shorter treatment durations than older drugs. Rapid scientific advances the past few years have fueled a flurry of acquisitions, licensing deals and partnerships among drug companies jockeying for position. For aggressive growth investors, it makes good sense in the portfolio.

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