Retirement portfolios were once stuffed with big names like Pfizer, Merck, and Lilly. Now, more managers are getting their pharma fix from biotech firm Gilead. "It has a lot of the characteristics that people found attractive in Pfizer ten years ago, but can't get from them today," says Alex Motola, who oversees the Thornburg Core Growth Fund. "Quite frankly, there aren't many opportunities in pharma anymore -- but Gilead is one."
Gilead boasts an industry-leading HIV franchise, which it has bolstered through improvements in formulations, like once a day dosages. BMO Capital Markets analyst Jason Zhang forecasted that by the end of 2009, 75% of U.S. HIV patients will be using Gilead's drugs. Its stock took a hit in early May after a bad trial of a blood pressure drug, but analysts mostly scoffed at the setback -- and cheered the stock's new low as an entry point for investors.
--M.K.
