Barron’s reported last week on two of our favorite biotech stocks, Celgene and Gilead Sciences. Both have amazing drugs that attack serious diseases (Hepatitis C, blood cancer, HIV) responsible for illness often leading to death. Both have had significant revenue and profit growth albeit with a concentrated set of drugs. Consequently, the market has currently assigned them lower prices than it might otherwise.
According to Barron’s, Celgene is looking to the future with both new uses for its current drugs and new drugs in the pipeline. Meanwhile there are significant untapped foreign markets. Gilead Sciences has adeptly bought experimental drugs prior to their FDA approval and is expected to use its significant future cash flow to buy more.
The recent overall market pessimism has driven prices to attractive levels and both companies are the kind of growth at a reasonable price stocks we like to find and hold.
Griffin Portfolio Management Corp. holds Celgene and Gilead Sciences in both client and employee personal accounts.