Second quarter earnings season is upon us and Cowen & Co. is counting on the biotechnology sector to deliver. Out of the 20 stocks covered by Cowen in the biotechnology sector, we have highlighted three companies covered by analyst Phil Nadeau: Gilead Sciences, Inc. (NASDAQ:GILD), GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH), and Ariad Pharmaceuticals, Inc.(NASDAQ:ARIA).

Phil Nadeau has an 80% success rate recommending stocks and a +43.5% average return per rating when measured over one year with no benchmark.

Gilead Sciences, which increased 18% over the second quarter, is one of Cowen's favorite stocks heading into Q2 earnings with earnings scheduled to be released on July 28. Nadeau is forecasting second quarter revenue of $7.3 billion, marking potential 12% year-over-year increase.

Sales of Gilead's hepatitis C therapies, Harvoni and Sovaldi, will be the highlight of the quarterly report. Phil Nadeau notes, “Q2 HCV sales are tracking more or less in line with consensus ($4.3B, -5.5% Q/Q). We expect an increase in average U.S. gross-to-net will lead to a Q/Q decline in reported U.S. revenue that will be partially offset by continued growth in Europe.” The analyst estimates that 23,500 patients in Europe began the Harvoni or Sovaldi regimen over the second quarter, marking a 12% potential growth in patient volume.

Nadeau concluded, “Gilead remains undervalued, though we think visibility on a growth driver in GILD's pipeline is likely necessary for the stock to re-rate.” The stock is trading at a “deep discount” compared to other large cap biotech stocks and “the sustainability of GILD's revenues is better than investors appreciate.”

Phil Nadeau currently has an Outperform rating on Gilead with a $125 price target. When measured over one-year and no benchmark, Nadeau has an 89% success rate recommending the stock and a +14.8% average return per GILD rating.