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Gilead: Speculation Play At Best

Summary

Declining revenues, declining earnings, and declining sentiment, is what Gilead investors have to look forward to.

Medivation was a company that produced cancer treating products that could have helped Gilead bolster the third leg of its product revenue segments.

Gilead is one of the more expensive large cap biotech companies out there based on its Phase 3 pipeline products alone.

With investors looking for Gilead (NASDAQ:GILD) to make a bold move lately it feels the cries have fallen on deaf ears as the company has done nothing material to ease the concerns. So what do investors have to look forward to now? Declining revenues, declining earnings, and declining sentiment, that's what they have to look forward to.

With Pfizer (NYSE:PFE) locking up Medivation (NASDAQ:MDVN) from the reach of Gilead and other potential suitors it may have actually been the final nail in the coffin for Gilead. The deal ended up costing Pfizer nearly $14B while Gilead only has about $8.8B in cash on hand immediately available and about $15.9B tied up to long-term marketable securities as of the most recent quarter. Medivation was a company that produced cancer treating products that could have helped Gilead bolster the third leg of its product revenue segments as Gilead's cancer franchise is a bit weak.

Medivation produces a commercially available prostate cancer drug named Xtandi, which should make roughly $5.7B in revenue in four years' time. Aside from Medivation's already commercially available product it had quite a few cancer treatments in the pipeline which could have helped Gilead's pipeline. A breast cancer (Talazoparib) product and immune-oncology (Pidilizumab) product were in the pipeline which could have helped out Gilead. Medivation proved to be just too expensive for Gilead to purchase so in the end Gilead's move to stand pat was probably ill-advised.

So with one acquisition target vanquished I believe management is trying to do what's prudent with shareholder's money and focus on the pipeline either through innovation or...


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