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.

GW Pharmaceuticals is another Cowen & Co favorite heading into second quarter earnings. The biotechnology company is reporting earnings on August 8 and the analyst is focusing on Epidiolex, a pipeline drug for epilepsy. The drug is in Phase III testing and recent data suggests the drug is “effective in a range of refractory pediatric epilepsies.” Looking forward, Phil Nadeau notes the possibility of Epidiolex receiving Orphan drug designation. Nadeau remains “hopeful that Epidiolex’s Ph. III trials will succeed, and drive outperformance in GWPH shares.”

Nadeau is looking to Sativex, the company’s lead drug, to drive revenue in the earnings report. Sativex treats the symptoms of severe spasticity due to multiple sclerosis and Nadeau expects 1.4 million euros in royalties from EU sales. GW Pharmaceuticals is currently testing the drug to treat cancer pain, though in January one of the trials failed to meet its primary endpoint. More data on these trials is expected in the second half of the year, but the analyst does not find much value in the program.

Phil Nadeau currently has an Outperform rating on GW Pharma with a $135 price target. He has a 100% success rate recommending the stock with a +63.8% average return per GWPH rating when measured over one year with no benchmark.

Finally, Ariad Pharmaceuticals is expected to report earnings in early August, but Phil Nadeau does not expect to see any groundbreaking results. The report will focus on Iclusig; Ariad’s lead drug used to treat specific forms of leukemia.

Nadeau expects second quarter Iclusig sales of $29.5 million, marking a potential 23% increase from the previous quarter. The analyst partially attributes this estimate to a 9% price increase in the drug implemented in February. Nadeau’s estimate is slightly above the general analyst consensus of $27.7 million, though Nadeau notes that his estimate “may be a bit of a stretch” because the company only added a “relatively modest number of net patients to therapy in the U.S.” Nadeau assumes this trend will be reflected in the second quarter.

Going forward, Ariad plans to initiate three trials of Iclusig to help expand the use of the drug. Nadeau expects Iclusig to achieve $315 million in worldwide sales by 2017. “Unfortunately,” Nadeau qualified, “our analysis suggests that the stock is fairly valued, and we rate shares Market Perform.” He does not provide a price target. Nadeau has only issued Market Perform ratings for Ariad so he does not have a success rate or an average return rating the company.