Buy Calls on Gilead Sciences


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Buy Calls on Gilead Sciences

Now that the world has its first preventative drug for HIV, Truvada, is it time to buy calls on Gilead Sciences - GILD, the folks who own the patent? Or is it too late to buy calls on Gilead Sciences because the market already reacted to the news of FDA approval? Remember that both fundamentals and market sentiment drive stock prices. We have yet to see if this $11,000 a year drug will sell widely enough to make Gilead Sciences a profit. And we have yet to see how the market will react once this drug is in continual use. Gilead Sciences has been listed on NASDAQ for twenty years and for the first six it was a penny stock.

The company specializes in the development of anti-viral treatments and currently has fourteen products on the market. Its focus has been on HIV, hepatitis B, and influenza. The stock’s pre-recession high was around $56 and it regained the $50 range, coming up from $35 a share, early in 2012. Gilead Sciences only gapped up fifty cents on the news of FDA approval for the drug. Concerns are that it is so expensive that those most at risk will not be able to afford it and neither will government programs aimed at treating HIV in the same populations. Before deciding to jump in and buy calls on Gilead Sciences one may do well to consider how to trade stock options on this Gilead Sciences over time.

When Will We Know How Profitable Truvada Is for Gilead Sciences?

How many people will use Truvada and how much money will Gilead Sciences make per patient? It turns out that Truvada has already been on the market for eight years as a treatment for HIV. It was the finding that the drug seemed to prevent infection that lead to trials and FDA approval for this use. Studies indicate that partners of HIV infected persons can reduce their risk of catching HIV by seventy-five percent by taking Truvada. The drug is not perfect but is the first med proven to reduce the chance of getting HIV in exposed people. There are fifty thousand new cases of HIV in the USA every year. What is it worth reduce this number by three fourths or even half? The average yearly cost of treating a person with HIV in the USA is around $20,000. It appears that for half this amount one can cut the risk of catching the disease significantly.

However, if one chooses to treat a million or so gay men in hopes of reducing the number who get HIV the cost would run around $11 Billion for Truvada in order to prevent 25,000 cases a year, which would cost $500 million more each year to treat. If you believe that health insurance companies and various government agencies will pay for Truvada you probably want to buy calls on Gilead Sciences. If you believe that HMOs will act as they always do and put barriers in the way of those who want the drug and that a cash strapped America will not have the wherewithal to pay for the drug you will probably not buy calls on Gilead Sciences.

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Buy Calls on Gilead Sciences

  1. 1. By
  2. 2. By www.Options-Trading-Education.comNow that the world has itsfirst preventative drug forHIV, Truvada, is it time tobuy calls on Gilead Sciences- GILD, the folks who ownthe patent?
  3. 3. By www.Options-Trading-Education.comOr is it too late to buy callson Gilead Sciences becausethe market already reactedto the news of FDAapproval?
  4. 4. By www.Options-Trading-Education.comRemember that bothfundamentals andmarket sentiment drivestock prices.
  5. 5. By www.Options-Trading-Education.comWe have yet to see if this$11,000 a year drug will sellwidely enough to makeGilead Sciences a profit.
  6. 6. By www.Options-Trading-Education.comAnd we have yet to seehow the market will reactonce this drug is incontinual use.
  7. 7. By www.Options-Trading-Education.comGilead Sciences has beenlisted on NASDAQ fortwenty years and for thefirst six it was a pennystock.
  8. 8. By www.Options-Trading-Education.comThe company specializesin the development ofanti-viral treatments andcurrently has fourteenproducts on the market.
  9. 9. By www.Options-Trading-Education.comIts focus has been onHIV, hepatitis B, and influenza.
  10. 10. By www.Options-Trading-Education.comThe stock’s pre-recessionhigh was around $56 andit regained the $50 range,coming up from $35 ashare, early in 2012.
  11. 11. By www.Options-Trading-Education.comGilead Sciences onlygapped up fifty cents onthe news of FDAapproval for the drug.
  12. 12. By www.Options-Trading-Education.comConcerns are that it is soexpensive that those most atrisk will not be able to affordit and neither willgovernment programsaimed at treating HIV in thesame populations.
  13. 13. By www.Options-Trading-Education.comBefore deciding to jump inand buy calls on GileadSciences one may do well toconsider how to trade stockoptions on this GileadSciences over time.
  14. 14. By
  15. 15. By www.Options-Trading-Education.comHow many people will useTruvada and how muchmoney will Gilead Sciencesmake per patient?
  16. 16. By www.Options-Trading-Education.comIt turns out that Truvada hasalready been on the marketfor eight years as atreatment for HIV.
  17. 17. By www.Options-Trading-Education.comIt was the finding that thedrug seemed to preventinfection that lead to trialsand FDA approval for thisuse.
  18. 18. By www.Options-Trading-Education.comStudies indicate thatpartners of HIV infectedpersons can reduce theirrisk of catching HIV byseventy-five percent bytaking Truvada.
  19. 19. By www.Options-Trading-Education.comThe drug is not perfect butis the first med proven toreduce the chance of gettingHIV in exposed people.
  20. 20. By www.Options-Trading-Education.comThere are fifty thousandnew cases of HIV in the USAevery year. What is it worthreduce this number by threefourths or even half?
  21. 21. By www.Options-Trading-Education.comThe average yearly cost oftreating a person with HIVin the USA is around$20,000.
  22. 22. By www.Options-Trading-Education.comIt appears that for half thisamount one can cut the riskof catching the diseasesignificantly.
  23. 23. By www.Options-Trading-Education.comHowever, if one chooses to treata million or so gay men in hopesof reducing the number who getHIV the cost would run around$11 Billion for Truvada in orderto prevent 25,000 cases a year,which would cost $500 millionmore each year to treat.
  24. 24. By www.Options-Trading-Education.comIf you believe that healthinsurance companies andvarious governmentagencies will pay forTruvada you probably wantto buy calls on GileadSciences.
  25. 25. By www.Options-Trading-Education.comIf you believe that HMOs willact as they always do and putbarriers in the way of those whowant the drug and that a cashstrapped America will not havethe wherewithal to pay for thedrug you will probably not buycalls on Gilead Sciences.
  26. 26. For more insights and usefulinformation regarding options and options trading,