Gilead Sciences Inc. (GILD): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Gilead's third-quarter earnings of $1.79 per share surpassed the Zacks Consensus Estimate of $1.64. Moreover, reported earnings were way above the year-ago figure of $0.49 per share. Total revenues of $6.04 billion was no comparison to the year-ago figure of $2.78 billion. However, we are concerned about the slowdown in company s blockbuster HCV drug, Sovaldi sales (down 19.7% sequentially), due to physicians delaying the initiation of treatments in the U.S. in anticipation of Harvoni's approval. Harvoni is priced at $94,500 for a 12-week treatment, a price comparable to Sovaldi regimen. We prefer to be on the sidelines until we get more visibility on Harvoni uptake. Thus we maintain a Neutral recommendation on the stock.

Overview:

Gilead Sciences, Inc., a biopharmaceutical company, focuses on the discovery, development and commercialization of drugs for treating HIV/AIDS, liver diseases such as hepatitis B virus (HBV) and hepatitis C virus (HCV), respiratory, oncology /inflammation and cardiovascular related diseases. Lead products at Gilead include HCV therapy, Sovaldi, apart from Truvada, Viread, Atripla, Complera, Stribild and Emtriva for the treatment of HIV in adults. Besides the HIV franchise, Gilead's other products include AmBisome (treatment of fungal infection) and Letairis (treatment of pulmonary arterial hypertension). Gilead's portfolio also includes Cayston (improvement of respiratory symptoms in patients suffering from cystic fibrosis with pseudomonas aeruginosa) and Ranexa (chronic angina). The FDA approval of Zydelig (idelalisib 150 mg) for treating three cancer forms has further boosted Gilead's product portfolio.

The U.S. approval of HCV therapy, Sovaldi, in Dec 2013 is a big positive for Gilead as the drug offers significant commercial potential. The European approval of the drug came in Jan 2014. Sovaldi is also available in Canada. The drug is off to a strong start recording sales of approximately $5.8 billion in the first six months of 2014. The U.S. approval of Harvoni (Sovaldi plus ledipasvir) will further boost Gilead's top line.

Gilead operates in North America, South America, Europe and Asia-Pacific. Total revenues at Gilead came in at $11.20 billion in 2013, up 15%. Strong sales of the company's antiviral products contributed to the increase. In 2013, total antiviral products accounted for 86.5% of product sales. Total product sales climbed 15% to $10.80 billion in 2013. The company, founded in 1987, is headquartered in Foster City, CA.



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

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