Gilead Sciences, Inc.
) hit a 52-week high of $46.37 on Mar 12. The announcement of
impressive fourth quarter 2012 earnings results and upbeat sales
guidance last month, combined with positive pipeline-related
news, have buoyed this biopharmaceutical stock.
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Moreover, this Zacks Rank #2 (Buy) company has delivered positive
earnings surprises in 3 of the last 4 quarters. The long-term
expected earnings growth rate for this stock is 21.7%.
Strong 4Q and Upbeat Sales Guidance
On Feb 4, 2013 Gilead reported higher-than-expected revenues and
earnings for the final quarter of 2012. Better-than-expected
earnings came on the back of higher revenues. Revenues climbed
17.6% to $2.59 billion. The increase in total revenue was
attributable to higher product sales, which climbed 18%.
Driven by its strong product portfolio, Gilead gave a positive
outlook for 2013 product revenue. The company expects 2013
product revenue in the range of $10-$10.2 billion, reflecting an
increase of 6%-9% over 2012 levels.
Encouraging Pipeline News
Gilead has announced positive news related to its pipeline over
the last month. In Feb 2013, Gilead announced encouraging
top-line results from 2 phase III studies (Fission and Neutrino)
on its chronic hepatitis C virus (HCV) candidate sofosbuvir. Also
in Feb 2013, Gilead presented encouraging top-line data from a
phase III study (Fusion) on sofosbuvir, combined with ribavirin,
in patients suffering from genotypes 2 or 3 of the chronic
hepatitis C virus (HCV). Through this study, Gilead is aiming to
develop an all-oral treatment regimen to combat HCV.
Gilead intends to seek regulatory approvals for the candidate in
the US and EU in the second quarter of 2013. Successful
development of sofosbuvir would not only boost Gilead's top line,
but also will strengthen its position in the lucrative HCV
market. A huge population suffers from HCV infection across the
world. However, the treated population is much lower. This leaves
the field open for new treatments. Apart from Gilead, companies
Johnson & Johnson
) are also developing therapies to combat HCV.
Apart from sofosbuvir, Gilead has also received encouraging news
regarding its HIV pipeline earlier this month. Moreover, the
company's chronic angina drug, Ranexa recently fared well in a
phase IV study, which evaluated Ranexa in patients with chronic
angina and/or type II diabetes. If Ranexa is approved for the
indication then the sales potential of the drug would be boosted
as the type II diabetes market offers significant commercial
The successful development and commercialization of the
diversified pipeline should further enhance Gilead's top line.
Other Stocks to Consider
Apart from Gilead, other Zacks #2 Ranked biopharma stocks include
Kythera Biopharmaceuticals, Inc.