Gilead Shares Tumble on Drug Warning, Baird Says Buy

Two drugs that account for more than half of Gilead Sciences, Inc.'s GILD sales may also cause abnormally slow heartbeats, according to a warning sent by the company on Friday. Shares of Gilead are lower by more than 3 percent in premarket 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 today, 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.