Sometimes Washington triggers a stock move that can hand us outsized gains. That's exactly what happened with Gilead Sciences Inc. (Nasdaq: GILD).
In March 2014, U.S. Rep. Henry Waxman (D-CA) lashed out at the cost of Gilead's newly approved Hepatitis C (HCV) drug, Sovaldi. Sovaldi runs $84,000, or $1,000 a pill.
But Waxman missed the obvious. Sovaldi (and its newer version Harvoni) cures 90% of HCV patients. That means patients can avoid the need for a liver transplant – an operation that runs $250,000 if an organ donor is found. And that price doesn't include antirejection drugs and antibiotics people must take for the rest of their lives.
Still, Gilead sold off on fears that its high cost would make Medicare look to another HCV drug maker with a less expensive solution. GILD stock lost 13% of its value in a matter of days.
Wall Street was dead wrong…
Medicare actually spent $4.6 billion on Hepatitis C treatments in the first six months of this year. That's almost as much as the agency spent in all of 2014. Gilead accounted for 66% of all covered prescriptions.
Simply put, Gilead dominates the HCV sector. And as I'll show you today, opportunities for the firm are growing faster…
The Profit Power of Gilead's (GILD) HCV Domination
HCV is known as a "silent killer" because it often takes many years for symptoms to emerge. In the worst case, the body can't fight the blood-borne infection, which begins to destroy the liver, causing cirrhosis or cancer.
According to the World Health Organization, 130 million to 150 million people globally have HCV, including up to 3 million here in the United States. Between 350,000 to 500,000 people die each year from HCV-related causes.
The U.S. Centers for Disease Control recommends that every one of the nation's roughly 76.5 million Baby Boomers get tested for HCV. Federal officials are worried that many got the disease through contaminated blood supplies.
Gilead's pair of HCV products make up about 60% of its revenue and brought in $4.8 billion in revenue in the third quarter. Overall, the products generated $12.5 billion in 2014 and $9.5 billion in the first six months of 2015. That makes the pair among the most successful new drugs ever launched.
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.