Gilead (GILD) Down on Missed Estimates-Is the  Worst Finally Over for the Stock?

Despite its stock being down over 30% from Q1 highs and earnings downgrades in April as a fallout from healthcare reform, the Company still disappoints Wall Street with Net Income of $712.1M or 79 cents a share up from $571M or 61 cents a share from a in the year ago quarter.Total Revenue for the quarter  came in at $1.93B lower than the $1.96B forecast ($0.02 per share)up 17% from a year ago.Gilead gave a total year revenue  forecast  in the range of $7.4B a slight drop from previous guidance. Sales of AIDS drugs Truvada and Atripla were below forecasts. The Company has a strong balance sheet with $4.2B in cash and stockholder equity of  $46.7B. GILD remains compelling value.

On Friday Jeffries and Co. dropped their price target og GILD from $48 to $38 citing concerns about their pipeline and potential competition of their leading HIV therapies. The stock opened Wednesday at $32.50 above its low for the week.

On a technical basis the chart puts the stock down to January 2007 levels in the  low 30’s and now has a PEG ratio of 0.69. The PE is forecasted in the 10 range with the P/S in the 4 range. The potential  negative development is a new competition such as a new AIDS drug from Glaxo but there is the  potential for more stock buybacks with the huge $3B cash position. The stock is attractive for longer term investors.

Today’s Wall Street Journal had a front page story on the Gilead  HIV drug tenovir (Viread) in a gel form which is provided at no charge to participants in a South African study. The gel is applied by woman before and after sex as a preventive measure can cut the chance of infection  by 39% and genital herpes virus by 51%.

New Gel Cuts Risk of HIV Infection –

Meridian Biosciences (VIVO) Sales Down on Increased Dx Competition and Influenza Weakness; Announces Acquisition in Molecular Biology Tools

Meridian Biosciences reported Q3 Sales of $33.9M a decrease of 11% compared to last year. Earnings were $6.4M or $0.16 diluted per share compared to $0.21 in the same Q last year.Cash and short term  investments were $58.2M with total assets of $110M. The sales shortfall was attributed to weakness in influenza diagnostics and increased competition for their C.difficie assays. Recently the Company received approval for a new diagnostic platform called illumigene initially for C.difficile.

The Company also acquired Bioline for $23.3 M in cash, a UK Company focuesd in molecu;lar biology reagents for life science research with sales in Europe and the U.S. Annual Revenues for Bioline are about $12M and the acquisition is expected to be accretive to VIVO earnings. Current quarter life science Revenue is $6.5M.

The Company pays a Dividend of 4.2% highly unusual among  the  small caps in the  diagnostic industry. Earnings estimates for next fiscal year ending Sep ’11 are in the $0.81-$1.00 range. The current P/S ration is about 5.8.

The stock closed down 0.6% at $17.91 near its Q2 ’09 lows.The 52 week high is $26.20. The stock opened Wednesday at $18.16 up 1.4%.


We will be attending the AACC (American Association of Clinical Chemistry)  Meeting next week and will provide more updates on technology and companies.One issue that has already come up is LDT (lab-developed tests) or “home brew” which are test performed in a central lab and not as an FDA approved kit.(see  story below). This LDT  issue got hot with the FDA when a few genetic test developers announced marketing of  direct to consumer tests for genetic risk assessment.

FDA Says All Options on the Table at LDT Meeting | GenomeWeb Daily News | DxPGx | GenomeWeb

Raygent » Genetic Testing Gets a Boost From Medco(MHS)

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