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Gilead (GILD) Gains 19% YTD: What to Expect in The Second Half?

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Shares of Gilead Sciences, Inc. (GILD - Free Report) have gained 19% in the year so far compared with the industry’s growth of only 0.4%.

Zacks Investment ResearchImage Source: Zacks Investment Research

The company has performed reasonably well in the first six months, driven by incremental sales of Veklury (remdesivir) for the treatment of COVID-19.  Veklury is indicated for adults and pediatric patients (12 years of age and older and weighing at least 40 kg) for the treatment of COVID-19 requiring hospitalization. Demand has been strong as the pandemic continues due to new deadly variants and the same is expected to prevail for some time. This, in turn, will boost demand for Veklury as vaccination across the world will take some time and the need for hospitalization will continue.

Meanwhile, Gilead’s efforts to diversify its portfolio are impressive as the legacy HCV business declines and the HIV business faces challenges amid the pandemic, even though Biktarvy’s performance has been good. Loss of Atripla and Truvada’s exclusivity is also affecting sales.

Gilead acquired oncology company, Immunomedics, in 2020, which added breast cancer drug, Trodelvy (sacituzumab govitecan-hziy), a first-in-class antibody-drug conjugate (ADC), to its portfolio. The addition of Trodelvy will accelerate the company’s efforts to develop a strong and diverse oncology portfolio. The drug has also been approved for urothelial cancer.

Gilead has also entered strategic collaborations in the oncology space to bolster its pipeline. In 2020, it entered an agreement with Jounce Therapeutics, Inc. (JNCE - Free Report) to exclusively license its JTX-1811 program, an anti-CCR8 antibody. The FDA recently cleared the Investigational New Drug (IND) application for JTX-1811. The IND clearance triggers a $25.0-million milestone payment to Jounce. JTX-1811 will be referred to as GS-1811 in the company’s pipeline.

Earlier, Gilead acquired Kite Pharma to foray into the emerging field of cell therapy. Kite’s chimeric antigen receptor (CAR) T-cell therapy, Yescarta, is approved for the treatment of refractory aggressive non-Hodgkin lymphoma. The company continues to strive hard to expand Yescarta’s label, which should generate more sales. The FDA also granted accelerated approval to another CAR T-cell therapy, Tecartus (brexucabtagene autoleucel9), for the treatment of adult patients with relapsed or refractory mantle cell lymphoma (MCL).

The company has also expanded its collaboration with Novo Nordisk (NVO - Free Report) for developing treatments for non-alcoholic steatohepatitis (NASH).

Concurrently, the company is taking steps to strengthen its HIV franchise amid the challenges. In March 2021, it entered an agreement with Merck (MRK - Free Report) to jointly develop and commercialize long-acting treatments in HIV that combine the former’s investigational capsid inhibitor, lenacapavir, and the latter’s investigational nucleoside reverse transcriptase translocation inhibitor, islatravir.

Gilead has recently completed the submission of a New Drug Application (NDA) to the FDA seeking approval of lenacapavir for the treatment of HIV-1 infection in heavily treatment-experienced (HTE) people with multi-drug resistant (MDR) HIV-1 infection.

Veklury and the oncology portfolio should maintain momentum for the company in the second half as the HIV business faces challenges.

Gilead currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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