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The Idiocy Of Gilead's Undervaluation

Yet again doubts arise about Gilead's (GILD) continued ability to generate sales growth and maintain its huge profit margin. Much of these doubts were implied during GILD's 2014 Q4 conference call where analysts asked a litany of questions around patient access restrictions to Gilead's HCV franchise of Sovaldi/Harvoni, price discounts of Sovaldi/Harvoni, system capacity etc. Evidencing much of this doubt was the selloff of GILD in the aftermarket hours after the Q4 earnings release. Of note was GILD's 2015 guidance. What I found exceptionally interesting was that during the call no analysts addressed the gross profit margin, as stated in the 2015 guidance, which ranged from 87% to 90%. This range is astonishing and would be incredible if GILD wasn't already hitting this mark. Also, analysts did not seek to gauge the chances of Sovaldi/Harvoni's approval in Japan around mid-2015, which I think, based on approval in the United States… Read More …