This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

January 20, 2012 - Gilead Sciences, Inc., (GILD-NASDAQ) a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutics for the treatment of life threatening diseases worldwide.

It also manufactures Tamiflu, an oral antiviral for the treatment and prevention of influenza A and B; Macugen, an intravitreal injection for the treatment of neovascular age-related macular degeneration; and Lexiscan/Rapiscan, an injection used as a pharmacologic stress agent in radionuclide myocardial perfusion imaging.

Its products under the Phase III clinical trials consist of Cobicistat, a pharmacoenhancer that is under evaluation as a boosting agent for HIV medicines; Elvitegravir, an oral integrase inhibitor being evaluated as part of combination therapy for HIV; Integrase Single-Tablet, a "Quad" regimen of elvitegravir, cobicistat, tenofovir disoproxil fumarate, and emtricitabine for the treatment of HIV/AIDS in treatment-naive patients; and Aztreonam for inhalation solution for the treatment of cystic fibrosis patients with Pseudomonas aeruginosa.

The company's Phase II clinical trials products are Cicletanine, Ranolazine, and Aztreonam, as well as GS 9190, GS 9256, and GS 9451. Its Phase I clinical trial products include GS 7340, GS 5885, GS 6620, GS 9620, and GS 6624. The company was founded in 1987 and is headquartered in Foster City, California.

The latest news on Gilead is its high bid for Pharmasset. It won this coveted prize last November. The company makes experimental hepatitis C drugs. GILD paid $137 a share or a premium of 89% because there was an intense bidding war. As of January 12, GILD owned 95% of Pharmasset shares. Total cost will be about $11 billion. Why was it so determined to win?

Because Pharmasset Inc. has three potential hepatitis C treatments in clinical testing, including a candidate labeled PSI-7977 in late-stage testing. Analysts see promise in the drug because doctors may be able prescribe the pill in a combination with other treatments that does not involve interferon, an injection that comes with rough side effects.

Hepatitis C is a virus that can lead to life-threatening liver damage and is the main cause of liver transplants in the United States. Analysts expect it to become a bigger health problem as baby boomers age.

As many as 170 million people worldwide have the disease, according to some analysts. It's transmitted via infected blood. More than 350,000 people from related illnesses each year. Estimates for the size of the market for a new hepatitis drug could be as much as $16.5 billion by 2015 and grow to $20 billion by 2020.

Earnings should have finished at $3.93 in 2011, up 6.5% from last year. Next year, 15 analysts have a consensus estimate of $4.14, higher by 5.3%. But with the new acquisition of Pharmasset, those numbers could be quickly moved up if efficacies from the combination of exisiting drugs and new ones developed by Pharamasset show solid results.

- Essential Numbers:
- Trailing P/E: 13.11
- Price to sales ratio: 4.12
- Price to book: 5.55
- Operating margin: 47.98%
- Profit margin: 33.82%
- Return on assets: 20.37%
- Return on equity: 45.47%
- Total cash: $2.26 billion
- Total cash per share: $3.01
- Total debt: $3.89 billion
- Total debt/equity: 62.44%
- Current ratio: 2.76
- Book value per share: $8.09
- Beta: .46
- 52 week change in price: 15.99%
- Shares outstanding: 751.14 million
- Float: 745.03 million
- Held by insiders: .8
- Held by institutions: 89.2%
- Dividend: 0

Gilead stock is just starting to break out of a trading range that's lasted for about 15 months. Investors like the aggressiveness of management to go after Pharmasset. The question remains as to how and when the new acquisition will pay off.