$GILD Shares Tumble On Drug Warning; Baird Says Buy

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Biotech Stocks

Gilead Shares Tumble On Drug Warning; Baird Says Buy

 Two drugs that account for more than half of Gilead Sciences, Inc.’s (NASDAQ: GILD) sales may also cause abnormally slow heartbeats, according to a warning sent by the company on Friday.

Shares of Gilead were lower by more than 3 percent in pre-market trading.

According to the warning, two of Gilead’s Hepatitis C drugs, Sovaldi and Harvoni, may have adverse reactions when mixed with amiodarone, a drug that treats heart rhythm problems.

Harvoni’s $2.1 billion and Sovaldi’s $1.73 billion account for more than half of the company’s total $7.31 billion in revenues.

Baird analysts shrugged off the label changes in a note out Monday, saying that the label changes are “not meaningful.” In fact, the analysts recommended that investors use “near-term stock weakness as a buying opportunity.” The analysts pegged the adverse drug reaction rate at less than 1 percent of treated patients.

Baird reiterated its price target of $126.

Gilead has gained more than 40 percent over the past year, as the biotech sector has outperformed the broader market.

Shares closed Friday at $102.29, but were below $100 in pre-market trading.

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