Gilead (GILD) Gains 34% in 12 Months: Will the Trend Continue?

Shares of Gilead Sciences, Inc. GILDs have gained 34.5% over the past year against the industry’s decline of 14.1%.

Gilead reported better-than-expected fourth-quarter results last month, driven by continued robust demand for its HIV portfolio with further share growth for lead therapy Biktarvy and oncology revenue driven by the cell therapy franchise and Trodelvy.

In addition, the 2023 guidance impressed investors.

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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 for those initiating treatment in both the United States and Europe. Sales from this franchise were $17.2 billion in 2022, up 5% from 2021.

In addition, Gilead’s HIV franchise received a boost with the FDA approval of lencapavir under the brand name Sunlenca in combination with other antiretroviral agents for the treatment of HIV-1 infection in heavily treated (HTE) adults with multidrug-resistant (MDR) HIV-1 infection.

Most antiviral drugs only work at one stage of virus replication. Sunlenca is designed to inhibit HIV at multiple stages of its life cycle and has no known cross-resistance to other existing drug classes. In addition, Sunlenca is the only biannual HIV treatment option, acting as a major advantage over existing treatments and allowing Gilead to capture market share. It was also approved by the European Commission. Therefore, sales in 2023 are expected to get a boost from Sunlenca’s additional revenue.

The oncology business delivered stellar results in 2022 and fueled the top line. Sales of the Cell Therapy franchise, which includes Yescarta and Tecartus, increased 68% to $1.5 billion in 2022 from 2021, primarily due to higher demand for Yescarta in R/R LBCL as well as Tecartus in R/ R ALL and MCL.

Uptake of breast cancer drug Trodelvy was strong in 2022. Trodelvy sales increased 79% in 2022 from 2021, reflecting continued adoption in metastatic triple-negative breast cancer (“TNBC”) in the United States and Europe.

It is also making efforts to strengthen its pipeline. Gilead entered into a strategic collaboration with Arcellx, Inc. to co-develop and co-commercialize CART-ddBMCA, a late-stage clinical asset for the treatment of multiple myeloma.

Gilead also entered into an agreement to acquire Tmunity Therapeutics Inc., a private clinical-stage biotech company, which will provide its wholly-owned company Kite with preclinical and clinical programs, including an “armored” CAR T technology platform that has the potential to be applied to a variety of CAR Ts to improve antitumor activity as well as rapid manufacturing processes.

Therefore, Gilead should show excellent performance in 2023 on the back of its legacy HIV business and the strong entry of its oncology business.

However, competition from people like GSK plc GSK is tough.

Strong patient demand for new HIV drugs (Dovato, Cabenuva, Juluca, Rukobia and Apretude) boosted GSK’s HIV franchise in 2022.

Gilead currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the overall healthcare sector are Novo Nordisk NGOs and Ligand therapy LGND. Both have a Zacks Rank #1 (Strong Buy) right now. You can see the full list of today’s Zacks #1 Rank stocks here.

Over the past 30 days, estimates for Novo Nordisk’s 2023 earnings per share rose from $4.20 to $4.43, and 2024 earnings rose 29 cents to $5.19.

Ligand’s 2023 earnings per share estimates increased to $4.32 from $3.30 in the past 30 days. LGND has beaten revenue estimates in one of the last four reported quarters.

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