Who’d have thunk it? After lagging for much of the year, Gilead Sciences (GILD) is now outperforming the other big biotech stocks like Amgen (AMGN) and Biogen Idec (BIIB).
Bloomberg Shares of Gilead have gained 6.4% this year, while Amgen has dropped 0.8% and Biogen Idec has risen 3.6%. The iShares Nasdaq Biotechnology ETF (IBB) has advanced 1.4% so far this year.
Gilead Sciences big earnings beat has certainly helped, as well as the fact that it lagged earlier this year. Sovaldi, too, looks like the blockbuster everyone expected. And now, Gilead has announced that it’s buying back even more shares. Barclays analyst Ying Huang and team call Gilead’s buyback “a good use of the cash flow generated by Sovaldi.” They explain:
[Gilead] announced that its Board approved the repurchase of up to $5bn of the company's common stock. This new share repurchase program will expire 3 years after the completion of the current repurchase program…In January 2011 the [Gilead] Board approved the repurchase of $5bn in shares, which has ~$2.9bn left and is expected to be completed by September 2014…However, we expect [Gilead] to accelerate the share repurchase given the recent share weakness and the apparent lack of opportunities in the business development front…In light of the strength of [Gilead's] HIV and HCV franchises, we expect the company to further increase its share buyback at some point in the future.
Shares of Gilead Sciences have gained 1.3% to $79.82 at 11:24 a.m., while Amgen has risen 0.4% to $113.17, Biogen Idec has advanced 1.8% to $289.19 and the iShares Nasdaq Biotechnology ETF is up 1.2% at $230.10.
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