With a heavy heart, I have to tell you that I have sold all my Gilead Sciences shares today. What’s the reason behind this?
See what Hillary Diane Rodham Clinton, former First Lady and Secretary of State, nominee of the Democratic Party for President of the United States, told a crowd last week in Cleveland, Ohio:
„Your tax dollars helped support the research that is used to create those drugs in the first place. Your tax dollars support the Food and Drug Administration that tests those drugs to determine whether or not they are safe and effective to be able to go to market. And then we end up in America paying the highest price for those drugs that we have helped to create. We have got to take this on.“
What’s the background?
Biotech company Gilead Sciences has made a mint of money on selling their HCV drugs for $1,000 per pill – no secret that it’s much cheaper in other countries around the world.
Over the last year, Mrs. Clinton didn’t grow tired of telling her potential voters that she’s not delighted.
At the beginning of 2015, India rejected the patent application for Gilead’s blockbuster drug Harvoni, so now all companies can sell generic medications with the same (!) ingredient for much cheaper price.
She’s not yet President. She would need majority in Congress. PhRMA and the rest of the pharmaceutical lobby are very powerful in the United States, as I have told you in a former article about Gilead. Gilead has a P/E ratio of 7.
I don’t know what is going to happen, but I don’t want to take that risk, as there are hundreds of other great companies to buy. With Clinton getting President of the United States, I just don’t feel well being the owner of a company that takes $1,000 for one pill.
See the costs of standard 12-week Harvoni treatment in the US, Canada, Europe, India, Egypt and Australia.
It’s time to say goodbye after 364 days being an owner of Gilead. I don’t want to mess with Mrs. Clinton.
Don’t worry. I will reinvest the cash.
PS: I also sold Amgen today for the same reason.
Of course I won’t stop investing in the health care market, as I am sure it will continue being one of the best performing sectors over decades. At the moment, I feel well positioned with Johnson & Johnson, Cerner and Stericycle (33% of my portfolio).