Gilead Sciences (GILD) stock price has staged a strong comeback this year, helped by strong earnings and a recent $40 million settlement with American authorities. It has risen for two consecutive weeks, reaching a high of $84, its highest point since January and a few points below its all-time high of $89.
Market leader in HIV
Gilead Sciences is a top pharmaceutical company with a market cap of over $104 billion annual revenue of over $27 billion, up from $22 billion a few years ago.
The company is known for its experience and expertise in the HIV industry. While HIV stopped making headlines, it is still a popular disease affecting over 1.2 million patients. Over 30,000 people acquire the disease each year.
Gilead has developed many therapies to take care of HIV patients. Some of the most notable ones are Truvada, Sunlenca, Odefsey, and Biktarvy.
One of its top challenges is that most of its HIV drugs are nearing patent expiration in the US and the European Union, which will lead to more generic drugs. Descovy’s patent will expire in 2026 in Europe and 2031 in the United States while Complera will explore in 2026 and 2025 in the two places, respectively.
HIV is an important business for Gilead Sciences. In the last financial year, the division made over $18.1 billion of its $27 billion of revenues. Most of this revenue came from the United States, where it sells its drugs at a big premium.
Biktarvy, its most important drug, brought in $11 billion in 2023. A 30-day supply costs between $3,500 and $4,000, meaning that customers without insurance can pay $42,000 a year. Biktarvy’s patents will expire in 2033.
Gilead Sciences is also a big player in other illnesses like viral Hepatitis, where it offers drugs like Epclusa, Vemlidy, Hervoni, and Viread. It is also an oncology specialist with drugs like Yescarta, Trodelvy, and Tecartus.
These divisions are significantly smaller than its HIV business. Its oncology division brought in $2.9 billion in 2023 while its liver disease had $2.7 billion. Earlier this year, the company acquired CymaBay Therapeutics to boost its liver business.
GILD is still growing
The most recent financial results showed that Gilead Sciences’ revenue rose to over $6.9 billion in the second quarter from $6.599 billion in the same period last year. Its half-year revenues rose from $12.9 billion to $13.6 billion.
As in its other periods, this revenue was driven by the HIV business, which brought in over $4.7 billion in sales. It was followed by its oncology and liver businesses.
Gilead, like other companies in the pharmaceutical industry, is a highly profitable company. Its quarterly profits rose to $1.6 billion.
Gilead expects that its business will continue doing well this year. It expects its annual revenue will be between $27.1 billion and $27.5 billion while its non-GAAP diluted EPS will be between $3.6 and $3.90.
As part of its growth strategy, the company recently unveiled lenacapavir, a drug that cut HIV infections by 96% compared to other treatments. This is important because the drug will be injected twice a year and is more effective than Truvada, which is taken once daily. Analysts believe that lenacapavir presents a $4 billion opportunity for the firm.
According to Yahoo Finance, Gilead Sciences, analysts expect that its revenue will rise to $27.95 in 2025 while its earnings per share will jump to $7.18.
What is unclear, however, is whether the company has more upside from here. The average stock estimate among investors is $82.33, lower than the current $83.90.
Analysts at Cantor Fitzgerald, Truist, and Needham have a neutral rating on the stock while Piper Sandler and RBC have overweight and sector perform ratings.
Gilead has a forward dividend yield of 3.7%, a 64% payout ratio, and has grown its payouts for over 8 years.
Gilead Sciences stock analysis
Gilead Sciences stock | Chart by TradingView
The weekly chart shows that the GILD share price has been in a strong recovery after its lenacapavir results. It moved above the key resistance point at $83.22, its highest swing in December 2022 and January this year.
Gilead has moved above the 50-week and 100-week Exponential Moving Averages (EMA). Also, the MACD indicator has moved above the neutral point and is at its highest point in April last year. The Relative Strength Index (RSI) has jumped to the overbought point at 69, its highest level since January 2023.
Therefore, the short-term outlook for Gilead is bullish, with the next point to watch will be at $89, its highest point in June 2015. This price is about 6.55 above the current level. A move above that level will point to more upside, with the next target being at $100.
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