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Gilead (GILD) Gains 21% in a Year: Will the Trend Continue?
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Shares of Gilead Sciences, Inc. (GILD - Free Report) have gained 21% in the past year against the industry’s decline of 7.3%.
Gilead has a strong HIV portfolio with Biktarvy and Descovy. Biktarvy remains the leading treatment for those seeking to switch to a new regimen in the United States as well as those starting treatments in both the United States and Europe. Gilead’s HIV franchise recently got a boost with the FDA’s approval of lenacapavir under the brand name, in combination with other antiretroviral(s), for the treatment of HIV-1 infection in heavily treatment-experienced (HTE) adults with multi-drug resistant (MDR) HIV-1 infection.
Most antivirals act on just one stage of viral replication. Sunlenca is designed to inhibit HIV at multiple stages of its lifecycle and has no known cross-resistance to other existing drug classes. In addition, Sunlenca is the only HIV treatment option administered twice a year, acting as a big advantage over the existing treatments and enabling Gilead to capture market share. It was also approved by the European Commission.
Image Source: Zacks Investment Research
Gilead is making efforts to develop its oncology business to diversify its revenue base as competition in the HIV business is stiff.
The Cell Therapy franchise comprising Yescarta and Tecartus is slowly and steadily gaining traction. The uptake of the breast cancer drug Trodelvy has been strong and has boosted the top line.
The European Medicines Agency (EMA) recently validated a type II variation Marketing Authorization Application (MAA) for Trodelvy (sacituzumab govitecan-hziy) for the treatment of adult patients with unresectable or metastatic hormone receptor (HR)-positive, human epidermal growth factor receptor 2 (HER2)-negative (IHC 0, IHC 1+ or IHC 2+/ISH–) breast cancer patients who have received endocrine-based therapy and at least two additional systemic therapies in the metastatic setting.
In October 2022, the FDA accepted for priority review the supplemental biologics license application (sBLA) for Trodelvy for the treatment of adult patients with unresectable locally advanced or metastatic HR+/HER2-negative (IHC 0, IHC 1+ or IHC 2+/ISH–) breast cancer who have received endocrine-based therapy and at least two additional systemic therapies in the metastatic setting. The target action date is next month.
The oncology space is lucrative and Gilead can capitalize on it, thereby creating a revenue growth driver in addition to the HIV franchise.
The company is also sitting on a huge cash balance. As of Sep 30, 2022, Gilead had $6.9 billion in cash, cash equivalents and marketable debt securities. Potential acquisitions to further expand its portfolio/pipeline bode well for the stock.
Gilead recently announced that it will acquire the remaining rights to GS-1811 (formerly JTX-1811) from Jounce Therapeutics . Both companies amended their existing license agreement for GS-1811, which will enable Gilead to buy out any remaining contingent payments potentially due under the license agreement executed in August 2020. As part of the transaction, certain operational obligations of the parties related to GS-1811 set forth in the license agreement have also been terminated.
Gilead will be solely responsible for all further research, development and commercialization of GS-1811 globally. In exchange, Jounce will receive proceeds of $67 million for this transaction but will no longer be entitled to receive the remaining contingent payments of up to $645 million in milestones and high single-digit to mid-teens royalties based upon worldwide sales under the original license agreement.
The transaction will further strengthen Gilead’s pipeline.
However, competition is stiff in the HIV space from the likes of GSK plc (GSK - Free Report) , and hence the approval of new treatments holds the key.
GSK’s HIV franchise recorded 7% growth in the third quarter. Growth was driven by new HIV products Dovato, Cabenuva, Rukobia, Juluca and Apretude and a favorable U.S. pricing mix.
Image: Shutterstock
Gilead (GILD) Gains 21% in a Year: Will the Trend Continue?
Shares of Gilead Sciences, Inc. (GILD - Free Report) have gained 21% in the past year against the industry’s decline of 7.3%.
Gilead has a strong HIV portfolio with Biktarvy and Descovy. Biktarvy remains the leading treatment for those seeking to switch to a new regimen in the United States as well as those starting treatments in both the United States and Europe. Gilead’s HIV franchise recently got a boost with the FDA’s approval of lenacapavir under the brand name, in combination with other antiretroviral(s), for the treatment of HIV-1 infection in heavily treatment-experienced (HTE) adults with multi-drug resistant (MDR) HIV-1 infection.
Most antivirals act on just one stage of viral replication. Sunlenca is designed to inhibit HIV at multiple stages of its lifecycle and has no known cross-resistance to other existing drug classes. In addition, Sunlenca is the only HIV treatment option administered twice a year, acting as a big advantage over the existing treatments and enabling Gilead to capture market share. It was also approved by the European Commission.
Image Source: Zacks Investment Research
Gilead is making efforts to develop its oncology business to diversify its revenue base as competition in the HIV business is stiff.
The Cell Therapy franchise comprising Yescarta and Tecartus is slowly and steadily gaining traction. The uptake of the breast cancer drug Trodelvy has been strong and has boosted the top line.
The European Medicines Agency (EMA) recently validated a type II variation Marketing Authorization Application (MAA) for Trodelvy (sacituzumab govitecan-hziy) for the treatment of adult patients with unresectable or metastatic hormone receptor (HR)-positive, human epidermal growth factor receptor 2 (HER2)-negative (IHC 0, IHC 1+ or IHC 2+/ISH–) breast cancer patients who have received endocrine-based therapy and at least two additional systemic therapies in the metastatic setting.
In October 2022, the FDA accepted for priority review the supplemental biologics license application (sBLA) for Trodelvy for the treatment of adult patients with unresectable locally advanced or metastatic HR+/HER2-negative (IHC 0, IHC 1+ or IHC 2+/ISH–) breast cancer who have received endocrine-based therapy and at least two additional systemic therapies in the metastatic setting. The target action date is next month.
The oncology space is lucrative and Gilead can capitalize on it, thereby creating a revenue growth driver in addition to the HIV franchise.
The company is also sitting on a huge cash balance. As of Sep 30, 2022, Gilead had $6.9 billion in cash, cash equivalents and marketable debt securities. Potential acquisitions to further expand its portfolio/pipeline bode well for the stock.
Gilead Sciences, Inc. Price and Consensus
Gilead Sciences, Inc. price-consensus-chart | Gilead Sciences, Inc. Quote
Gilead recently announced that it will acquire the remaining rights to GS-1811 (formerly JTX-1811) from Jounce Therapeutics . Both companies amended their existing license agreement for GS-1811, which will enable Gilead to buy out any remaining contingent payments potentially due under the license agreement executed in August 2020. As part of the transaction, certain operational obligations of the parties related to GS-1811 set forth in the license agreement have also been terminated.
Gilead will be solely responsible for all further research, development and commercialization of GS-1811 globally. In exchange, Jounce will receive proceeds of $67 million for this transaction but will no longer be entitled to receive the remaining contingent payments of up to $645 million in milestones and high single-digit to mid-teens royalties based upon worldwide sales under the original license agreement.
The transaction will further strengthen Gilead’s pipeline.
However, competition is stiff in the HIV space from the likes of GSK plc (GSK - Free Report) , and hence the approval of new treatments holds the key.
GSK’s HIV franchise recorded 7% growth in the third quarter. Growth was driven by new HIV products Dovato, Cabenuva, Rukobia, Juluca and Apretude and a favorable U.S. pricing mix.
Gilead currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.