Gilead Sciences, Inc. (GILD), Bristol Myers Squibb Co. (BMY): The Best Healthcare Bet

Abbott Laboratories (NYSE:ABT) is also working on an oral drug trio (a combination of ABT-450, ABT-333 and ABT 267) for the treatment of HCV. The mid-stage results of company’s Aviator trial were released late last year and showed unprecedented cure rates in HCV patients. According to released data approximately 93% patients who had failed previous therapies showed SVR (Sustained Virologic Response). This high success rate after 12 week treatment, and especially without the use of ribavirin, is a good sign for Abbott Laboratories (NYSE:ABT).

The most successful combination for the treatment of HCV is Sofobuvir and Bristol Myers Squibb Co. (NYSE:BMY)’s Daclastavir. This is the only combination with a 100% success rate while not using Interferon or Ribavirin. However, there are very little chances that this combination will get approval. BMY and Gilead both want to completely control their products and market their own complete treatment. There is always the possibility that doctors will use this combination off-label, but even then the costs will be too high for the masses.

According to Bloomberg, there are approximately 3 million Americans infected with the virus and over 170 million infected patients worldwide. The market can grow to over $20 billion by 2020 and Gilead will continue to be the market leader. The Street expects Gilead’s HCV sales to exceed $4 billion by 2020, with Abbott Laboratories (NYSE:ABT) in second at around $3 billion and Bristol Myers Squibb Co. (NYSE:BMY) garnering around $1 billion to $1.5 billion. Positive outcomes from the December hearing can further increase Gilead’s market share.

Bottom-line

Gilead is one of the best long term bets in the healthcare sector. The company has the strongest HCV pipeline, which can earn the company around $4 billion by 2020. Gilead’s value has already increased almost 160% in the last two years, and it doesn’t plan on stopping here. At current valuations Gilead is still a bargain and investors should consider it a long term option for its stellar HCV franchise, AIDS-therapy domination, and a rich pipeline.

Mohsin Saeed has no position in any stocks mentioned. The Motley Fool recommends Gilead Sciences (NASDAQ:GILD). Mohsin is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article The Best Healthcare Bet originally appeared on Fool.com is written by Mohsin Saeed.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.