With shares of Gilead Sciences falling in Wednesday trading after reporting better-than-expected earnings, TheStreet senior columnist Adam Feuerstein breaks down what has investors spooked. Though it was a great quarter, Feuerstein says the decline in shares is tied to Gilead’s outlook on 2015 and its comments about drug pricing. Feuerstein explains that Gilead is having to offer relatively large discounts to insurance companies for hepatitis C drugs. That, he says, plays into investors’ concerns about the biotech sector this year over whether biotech companies can sustain premium drug pricing when insurance companies and pharmacy benefit managers are trying to get larger discounts. While Feuerstein acknowledges this will be an important issue to watch, Gilead is among a number of great biotech companies and investors should expect volatility within the group.
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