2/4/15 After the Bell

ECB Impasse with Greece Hits Market Near Close…….. NASDAQ 4221 Down 0.19%

Oil Plunges 9% to $48.74 on Inventory Rise

Biotech Stocks Try To Recover But Get Hit By ECB News At Close

  • ETFs down about 1.6% , XBI Down 1.9%, XLV down 1.24%
  • Gilead (GILD) closes at $98.43 above lows of $95.81
  • Cramer Touts Celgene Corp. (CELG) as “Safe”  biotech Play with support from Citigroup analyst Yaron Werber
  • Sell-off is orderly with some green among Rayno Picks: ALXN PCYC RHHBY VRTX


Gilead (GILD) Earnings Lead Biotechs Down-HCV Pricing Concerns Remain

Despite beating on earnings of $2.43 a share on revenues of $7.3B compared to estimates of $2.16 a share and revenues of $6.67B, Gilead Sciences (GILD) stock dropped 10% to $96 on concerns about gross margin and discounts from list price. Competition from Abbvie’s (ABBV) has caused healthcare providers to negotiate discounts on Gilead HCV drugs Harvoni and Sovaldi. Concerns about HCV pricing have been around for several months but for the first time it was disclosed in a Gilead Conference call last night. The “gross to net”adjustment in HCV drug sales will average 46% in 2015 up sharply from 22% in 2014. The Company also announced a first time dividend of 43 cents a share and a $15B buyback. Gilead Sciences has grown up to be a big pharma but still has a robust product pipeline in HCV, HIV and Oncology.

Technicals show a base for GILD at $90 in December during the last sell-off. Stock is recovering to the $99 level after the severe sell-off.

MOmentum Biotechs in Free Fall

Risk is off in speculative biopharmaceutical stocks with most clinical stage immune-oncology stocks in the red off 3-5%: AGIO BLUE JUNO KITE NLNK etc . Large caps and mid-caps were also down. ETFs were down about 3% in early trading.

As we posted in January the manic seasonal phase of the biotech bull market may ebb as evidenced in the sell-off of speculative stocks.

Update at the close.

Disclosure: Long GILD

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