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Gilead (GILD) Outperforms Industry in 6 Months: What Lies Ahead?
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Gilead Sciences, Inc.’s (GILD - Free Report) shares have gained 3.7% in the past six months against the industry’s decline of 9.6%.
While returns are still negative on a year-to-date basis, the company is looking to offset these losses as its oncology portfolio witnesses robust uptake.
Image Source: Zacks Investment Research
Gilead Sciences has a strong HIV portfolio. The HIV franchise maintains momentum for the company on the back of the continued robust performance of the once-daily single-tablet regimen, Biktarvy (bictegravir 50 mg/emtricitabine 200 mg/tenofovir alafenamide 25 mg, BIC/FTC/TAF), for HIV-1 infection. Biktarvy has become the number-one prescribed regimen for both treatment-naïve and switch patients. Biktarvy gained a market share of 2% year over year in the United States, increasing to more than 47% in the third quarter.
Despite the availability of other regimens, including generics, Descovy, for pre-exposure prophylaxis in HIV, has also seen strong growth due to its strong clinical profile.
The approval of lenacapavir by the FDA and the European Commission, under the brand name Sunlenca, in combination with other antiretroviral(s) in adults with multi-drug-resistant HIV infection, for whom it is otherwise not possible to construct a suppressive anti-viral regimen, has broadened its market-leading portfolio.
Gilead is now targeting the lucrative oncology market and aims to expand beyond the virology business. CAR T cell therapies Yescarta and Tecartus continue to gain traction and solidify the firm’s presence in this space. Label expansion of these therapies should further propel Gilead’s Cell Therapy franchise.
Its acquisition of an oncology company added Trodelvy (sacituzumabgovitecan-hziy), a first-in-class antibody-drug conjugate, to its portfolio. The addition of Trodelvy has accelerated the GILD’s efforts to develop a strong and diverse oncology portfolio and reduce dependence on its virology business. The drug is approved as a third-line treatment for metastatic triple-negative breast cancer. This market represents significant market potential as it is a difficult to treat this cancer type. The uptake of the drug has been phenomenal and Gilead’s efforts to expand the drug’s label (promising data in endometrial cancer and lung cancer) should yield positive results.
The company has also made strategic collaborations to advance its oncology pipeline. The partnership with Arcellx was recently expanded to develop CART-ddBCMA to treat lymphomas. Gilead has also partnered with Arcus to evaluate the combinations of domvanalimab plus zimberelimab (doublet) and domvanalimab plus zimberelimab and etrumadenant (triplet) versus zimberelimab monotherapy in patients with first-line, metastatic PD-L1-high non-small cell lung cancer.
While the loss of revenues from a decline in COVID-19 treatment Veklury sales dented the top line in 2023, GILD’s efforts to strengthen its HIV and oncology portfolios are encouraging.
The company’s efforts to return value to shareholders through share repurchases and dividends are also commendable. During the third quarter of 2023, Gilead repaid $2.3 billion of debt, paid dividends of $953 million and repurchased $300 million of common stock.
However, competition for the core HIV franchise from the likes of GSK plc (GSK - Free Report) might limit market share gains. Strong patient demand for the oral two-drug regimen (Oral 2DR- Dovato, Juluca) and long-acting medicines (Cabenuva and Apretude) drove GSK’s HIV franchise in the first nine months of 2023, which increased 14%.
Also, the FDA is investigating the identified risk of T-cell malignancy in patients who received treatment with CAR T-cell immunotherapies after receiving reports of T-cell malignancies in patients who received treatment with BCMA- or CD19-directed autologous CAR T-cell immunotherapies. The agency has determined that the risk of T-cell malignancies is applicable to all currently approved BCMA-directed and CD19-directed genetically modified autologous CAR T-cell immunotherapies, which include Yescarta and Tecartus.
Any unfavorable outcome from this investigation will be detrimental to the prospects of both therapies.
Nevertheless, Gilead should gain further inroads in the oncology market in 2024 as Trodelvy propels growth and additional label expansion of the drug (lung cancer) will fuel sales. Biktarvy should also maintain momentum in 2024. GILD has a deep pipeline with 60 ongoing clinical programs spanning virology, oncology and inflammation.
Entrada’s loss per share estimate for 2023 has narrowed from $2.07 to 9 cents in the past 60 days. The same for 2024 has narrowed from $2.35 to $2.04 during the same time frame.
Dynavax’s loss per share estimate for 2023 has narrowed from 23 cents to 12 cents in the past 30 days. Earnings estimate for 2024 rose from 3 cents to 18 cents during the same period. Shares of DVAX have risen 27.4% year to date.
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Gilead (GILD) Outperforms Industry in 6 Months: What Lies Ahead?
Gilead Sciences, Inc.’s (GILD - Free Report) shares have gained 3.7% in the past six months against the industry’s decline of 9.6%.
While returns are still negative on a year-to-date basis, the company is looking to offset these losses as its oncology portfolio witnesses robust uptake.
Image Source: Zacks Investment Research
Gilead Sciences has a strong HIV portfolio. The HIV franchise maintains momentum for the company on the back of the continued robust performance of the once-daily single-tablet regimen, Biktarvy (bictegravir 50 mg/emtricitabine 200 mg/tenofovir alafenamide 25 mg, BIC/FTC/TAF), for HIV-1 infection. Biktarvy has become the number-one prescribed regimen for both treatment-naïve and switch patients. Biktarvy gained a market share of 2% year over year in the United States, increasing to more than 47% in the third quarter.
Despite the availability of other regimens, including generics, Descovy, for pre-exposure prophylaxis in HIV, has also seen strong growth due to its strong clinical profile.
The approval of lenacapavir by the FDA and the European Commission, under the brand name Sunlenca, in combination with other antiretroviral(s) in adults with multi-drug-resistant HIV infection, for whom it is otherwise not possible to construct a suppressive anti-viral regimen, has broadened its market-leading portfolio.
Gilead is now targeting the lucrative oncology market and aims to expand beyond the virology business. CAR T cell therapies Yescarta and Tecartus continue to gain traction and solidify the firm’s presence in this space. Label expansion of these therapies should further propel Gilead’s Cell Therapy franchise.
Its acquisition of an oncology company added Trodelvy (sacituzumabgovitecan-hziy), a first-in-class antibody-drug conjugate, to its portfolio. The addition of Trodelvy has accelerated the GILD’s efforts to develop a strong and diverse oncology portfolio and reduce dependence on its virology business. The drug is approved as a third-line treatment for metastatic triple-negative breast cancer. This market represents significant market potential as it is a difficult to treat this cancer type. The uptake of the drug has been phenomenal and Gilead’s efforts to expand the drug’s label (promising data in endometrial cancer and lung cancer) should yield positive results.
The company has also made strategic collaborations to advance its oncology pipeline. The partnership with Arcellx was recently expanded to develop CART-ddBCMA to treat lymphomas. Gilead has also partnered with Arcus to evaluate the combinations of domvanalimab plus zimberelimab (doublet) and domvanalimab plus zimberelimab and etrumadenant (triplet) versus zimberelimab monotherapy in patients with first-line, metastatic PD-L1-high non-small cell lung cancer.
While the loss of revenues from a decline in COVID-19 treatment Veklury sales dented the top line in 2023, GILD’s efforts to strengthen its HIV and oncology portfolios are encouraging.
The company’s efforts to return value to shareholders through share repurchases and dividends are also commendable. During the third quarter of 2023, Gilead repaid $2.3 billion of debt, paid dividends of $953 million and repurchased $300 million of common stock.
However, competition for the core HIV franchise from the likes of GSK plc (GSK - Free Report) might limit market share gains. Strong patient demand for the oral two-drug regimen (Oral 2DR- Dovato, Juluca) and long-acting medicines (Cabenuva and Apretude) drove GSK’s HIV franchise in the first nine months of 2023, which increased 14%.
Also, the FDA is investigating the identified risk of T-cell malignancy in patients who received treatment with CAR T-cell immunotherapies after receiving reports of T-cell malignancies in patients who received treatment with BCMA- or CD19-directed autologous CAR T-cell immunotherapies. The agency has determined that the risk of T-cell malignancies is applicable to all currently approved BCMA-directed and CD19-directed genetically modified autologous CAR T-cell immunotherapies, which include Yescarta and Tecartus.
Any unfavorable outcome from this investigation will be detrimental to the prospects of both therapies.
Nevertheless, Gilead should gain further inroads in the oncology market in 2024 as Trodelvy propels growth and additional label expansion of the drug (lung cancer) will fuel sales. Biktarvy should also maintain momentum in 2024. GILD has a deep pipeline with 60 ongoing clinical programs spanning virology, oncology and inflammation.
Zacks Rank and Stocks to Consider
Gilead currently has a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the overall healthcare sector are Entrada Therapeutics (TRDA - Free Report) and Dynavax Technologies (DVAX - Free Report) . TRDA sports a Zacks Rank #1 (Strong Buy) and DVAX carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Entrada’s loss per share estimate for 2023 has narrowed from $2.07 to 9 cents in the past 60 days. The same for 2024 has narrowed from $2.35 to $2.04 during the same time frame.
Dynavax’s loss per share estimate for 2023 has narrowed from 23 cents to 12 cents in the past 30 days. Earnings estimate for 2024 rose from 3 cents to 18 cents during the same period. Shares of DVAX have risen 27.4% year to date.