The company’s recent earnings announcement reinforced all this belief, as did Wall Street’s muted reaction to earnings.
The company: Gilead Sciences (NASDAQ: GILD).
Until December 2013, Gilead was known as the dominant, cash-rich and very large market leader in HIV treatments and other products generating more than $10 billion a year in revenue.
That month, the company received approval and began shipping Sovaldi, the first-ever cure for hepatitis C. Less than a year later, Gilead introduced Harvoni, the evolution of Sovaldi. Taken just once a day, Harvoni eliminates the need for other drugs in most hepatitis C patients.
Gilead’s 2014 sales more than doubled to $24 billion. Profits increased even faster. The stock moved with these results, then stalled when Wall Street biopharma analysts saw a competitor from AbbVie (NYSE: ABBV).
Competition? Hardly. The Harvoni/Sovaldi franchise outsold AbbVie’s hepatitis C offer, Viekira Pak, between 10 and 20 to one.