Gilead Sciences Shares Dropped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biotechnology company Gilead Sciences (Nasdaq: GILD  ) plunged 15% Friday after it reported disappointing trial results for its experimental hepatitis C drug.

So what: Gilead said that most of the hepatitis C genotype 1 patients it treated with its GS-7977 drug relapsed after a course of treatment, triggering fresh concerns over the drug's efficacy in some patients. Naturally, the news bodes well for rival hep C treatment developers Vertex Pharmaceuticals (Nasdaq: VRTX  ) and Achillion Pharmaceuticals (Nasdaq: ACHN  ) , whose shares are both up big today.

Now what: I'd look into this pullback as a possible buying opportunity. While Gilead was certainly dealt a setback, all companies in the hep C drug race will likely face the same challenge of treating the hepatitis C genotype 1 population with just one drug. Given the fact that it already has several drugs in its pipeline it can possibly combine with GS-7977, Gilead still seems like the smart bet to be the first to market.

Interested in more info on Gilead? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Gilead and Vertex. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (2) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 17, 2012, at 6:13 PM, Dekabrist wrote:

    I agree. I also look at pharma and biotech as similar to oil exploration companies: occasional huge gyrations followed hopefully by striking success and long-term sustained growth. It helps, of course, that GILD has other proven lines. Wouldn't surprise me if the stock clawed back the 15 % fall on Monday, once most the market comes to the same conclusion as Brian.

  • Report this Comment On February 17, 2012, at 9:34 PM, musicbrain wrote:

    Another of two articles in one day, praising and excusing the dishonest and deceitful release of false information from GILD. And, yet, you defend them. Are you perhaps on the payroll of the company?

    Vertex's Invicek cures 90-95% of genotype 1, a first of its kind, with an 8-12 week course of the drug, unmatched by any other Hep C drug out there. As the other Motley author, you fail to mention that. This puts into question which side your bread is buttered on.

    Your article and comments are complete rubbish, and Motley Fool has shown itself to me to be a totally unrealiable source, pandering to something other than the truth.

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