Gilead's Strong Fundamentals Should ContinueBusiness continues to look strong for Gilead Sciences (GILD). The company's tenofovir-based HIV products (Viread, Truvada and Atripla) are number one and widening their lead. The clinical data continues to support the switching of patients from older generation molecules such as abacavir and lamivudine to Gilead's franchise. Also driving impressive trends are revised HIV treatment guidelines from the U.S. Department of Health and Human Services recommending only Truvada (and Atripla) as the backbone of choice in naïve patients.These new guidelines, put into place in November 2008, downgraded Epzicom to an alternative medication based on cardiovascular risk and high rates of virologic failure. Finally, the new FDA chief, Margaret Hamburg, a former New York City Health Commissioner, has significant experience in combating infectious disease, such as HIV/AIDS, and we believe that this type of focused leadership only further adds to the ...

Gilead to Acquire CV Therapeutics for $1.4 BillionIn a surprise move this morning, Gilead Sciences (GILD) announced it has signed a definitive agreement to acquire CV Therapeutics, often referred to as "CVT" (CVTX) for $1.4 billion, or $20 per share. The news comes a month after CVT rejected an unsolicited bid from Astellas Pharmaceuticals for $1.0 billion, or $16 per share. Once the deal closes, CV Therapeutics will become a wholly-owned subsidiary of Gilead.We are surprised by the announcement this morning considering the move is outside Gilead's core focus of infectious diseases such as HIV and Hepatitis C. CV Therapeutics' leading product, Ranexa, is indicated for the treatment of chronic angina.The HIV/AIDS franchise drugs -- Viread, Truvada and Atripla -- accounted for 81% of Gilead's $5.3 billion in revenues in 2008. Gilead management is making a bold move to diversify its ...

CV Therapeutics, Inc. (CVTX) is a biopharmaceutical company focused on applying molecular cardiology to the discovery, development and commercialization of novel, small molecule drugs for the treatment of cardiovascular diseases. CVT currently has several potential growth drivers.

The company received some very positive news on November 5, 2008 when the FDA approved the company's key drug, Ranexa, for use in the first-line indication for chronic angina. The new expanded label removed previous cautionary language limiting use with other cardiovascular medications, and now allows management to promote the drug with added claims on arrhythmias, atrial fibrillation, and a reduction in hemoglobin A1c. Ranexa prescriptions grew nicely in the third quarter 2008, and all systems are go for significantly improved sales in 2009 thanks to the newly expanded label.

We are encouraged by the strong fundamentals at CVT and believe the shares are looking attractive at prices below $8.

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