While many are popping champagne corks to welcome in the new year, we know that many fellow Fools (probably too many of us) will be wondering which companies could be the best bets for our portfolios in 2015. To help us figure that out, we asked three Motley Fools to tell us what companies they would like to own in the new year. Read on to see which stocks they picked.
Keith Speights: Gilead Sciences (NASDAQ:GILD) was a great biotech stock to own in 2014, with its share price jumping over 30%. Is Gilead still a smart biotech buy headed into 2015? Yep. Here are three simple reasons why.
First, Gilead trades at a trailing price-to-earnings multiple of less than 18. Look at other biotechs' valuations: You'd be hard-pressed to find another company in the industry so attractively priced right now.
Second, Gilead's powerhouse HIV franchise continues to rock. Yes, the biggest moneymaker in the group, Atripla, suffered declining year-over-year sales in the most recent quarter. However, up-and-comers such as Complera/Eviplera and Stribild more than compensated for that decrease. Overall, sales for Gilead's HIV franchise climbed more than 17% last quarter compared to the third quarter of 2014.
Third, hepatitis C drugs Sovaldi and Harvoni should continue to drive fantastic growth for Gilead. Concerns about payer pushback and the prospect of challengers in the near term won't derail the success of these two drugs, in my view. The good news is that these concerns have helped contain Gilead's share price, making the stock worth serious consideration for investors looking for a solid biotech buy for the new near.
Leo Sun: AbbVie (NYSE:ABBV), the maker of the blockbuster arthritis drug Humira, is a solid biotech play for 2015. Humira, which generated worldwide sales of $10.7 billion in 2013, accounted for 63% of AbbVie's top line during the first nine months of 2014.
Granted, AbbVie's dependence on a single drug is worrisome, but sales are still climbing -- up 20% year over year, to $9.18 billion, in the first nine months of 2014. The U.S. patent for Humira will expire in 2016, but the most advanced biosimilar, Cadila Healthcare's Exemptia, is not expected to enter the U.S. market until 2019. Humira's European patent won't expire until 2018. That gives AbbVie three to four years to properly diversify its top line.
AbbVie's best hope is for its newly-approved hepatitis C regimen (Viekira Pak, a cocktail requiring up to six pills) to steal market share from Gilead's Harvoni, a more convenient once-daily pill for genotype 1, the most common form of hepatitis C. One way AbbVie could accomplish this is by undercutting Harvoni's controversial 12-week regimen price tag of $94,500. Analysts believe AbbVie's hep C revenue could hit $2 billion by next year, and its ramp-up is definitely worth keeping a close eye on. All said, AbbVie is a solid biotech stock that won't slow anytime soon.
Todd Campbell: I agree with Keith and Leo that those two stocks could be solid performers, but I'd also encourage investors to spend a little time getting to know Celgene (NASDAQ:CELG) over the holidays.
Celgene markets Revlimid, a top-selling treatment for multiple myeloma; Abraxane, a cancer medicine with $212 million in sales last quarter; and Pomalyst, a third-line treatment for multiple myeloma that saw sales double in the past year to $181 million.
Those three drugs offer plenty of reasons to like Celgene in 2015, but investors might also benefit from rising sales of Celgene's newest drug. This past fall, regulators approved oral pill Otezla to treat psoriasis. More than 7 million people suffer from psoriasis in the U.S. alone, so Celgene thinks Otezla could have billion-dollar potential someday. In addition, investors should also keep a look out for potential label expansion for Revlimid. The U.S. Food and Drug Administration is scheduled in February to decide whether to approve Revlimid's use in previously untreated multiple myeloma. Approval could offer Celgene a nice boost in 2015.
Keith Speights owns shares of Celgene and Gilead Sciences. Leo Sun owns shares of Gilead Sciences. Todd Campbell owns shares of Celgene and Gilead Sciences. The Motley Fool recommends Celgene and Gilead Sciences. The Motley Fool owns shares of Gilead Sciences. 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 Motley Fool has a disclosure policy.