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

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Summary:
Gilead reported strong second quarter results, with both revenues as well as earnings beating expectations by huge margins The company's second-quarter adjusted earnings of $2.32 per share blew past the Zacks Consensus Estimate of $1.61. The massive earnings outperformance was attributable to the exceptional performance of Sovaldi in its second full quarter in the market. Sovaldi's strong sales ($3.48 billion) helped Gilead record total revenues of $6.53 billion, easily surpassing the Zacks Consensus Estimate. We are also positive on the FDA approval of Zydelig. We believe that the current price represents an attractive entry point for long-term investors with plenty of scope for appreciation. Consequently, we upgrade the stock to Outperform.

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.

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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