Gilead Steady at Neutral - Analyst Blog
November 17 2011 - 6:00AM
Zacks
We have maintained a Neutral rating on Gilead Sciences,
Inc. (GILD) following appraisal of third quarter 2011
results.
The third quarter was a good one for Gilead, a leading maker of
HIV drugs, on all fronts, namely commercial, regulatory and
strategic. Gilead’s adjusted earnings per share of 97 cents for the
third quarter of 2011 beat the Zacks Consensus Estimate by a penny.
Earnings were also above the year-earlier earnings of 86 cents. The
earnings growth was driven by strong product sales in the reported
quarter.
Third quarter revenues were up 9.4% from the prior-year quarter
to $2.12 billion. Total revenues edged past the Zacks Consensus
Estimate of $2.11 billion. Revenues were, however, below the $2.14
billion recorded in the sequentially preceding quarter. Strong
product sales were offset by a decline in royalty, contract and
other revenues.
Gilead’s strategy of creating fixed-dose combinations of
existing HIV/AIDS drugs has been a resounding success. Gilead’s
most popular HIV combination medicines, Truvada and Atripla, have
allowed the company to maintain robust growth in HIV product sales.
While Truvada is a combination of Gilead’s Viread and Emtriva,
Atripla is a combination of Truvada and Bristol Myers
Squibb’s (BMY) Sustiva.
In August 2011, Gilead received approval for Complera, a
fixed-dose combination of Truvada and Johnson and
Johnson’s (JNJ) HIV drug Edurant which was approved in May
2011. Complera is also expected to be approved in the EU, where it
will be marketed as Eviplera, by the end of this year.
Gilead filed the new drug application (NDA) for approval of its
investigational HIV combination pill, Quad, in late October 2011.
The much anticipated Quad pill is a combination of Gilead’s
pipeline candidate elvitegravir, cobicistat and Truvada. In the
third quarter of 2011, Gilead announced positive data from two late
stage studies of Quad, study 102 and 103. The NDA included data
from both study 102 and 103. Gilead will request the FDA to grant
priority review status to the NDA, which if granted is expected to
lead to approval of Quad before mid 2012. We believe the positive
outcomes of these studies will ensure the regulatory nod. On
approval, Quad has the potential to reach blockbuster status and
become a market leading HIV medicine. Quad together with
Complera/Eviplera will further fortify the HIV franchise and help
mitigate the impact of the upcoming patent expirations.
Other drugs in development for HIV include elvitegravir and
cobicistat which have also shown positive data. Besides, Gilead is
hoping to build one of the largest HCV pipelines and is conducting
eight mid-stage trials, three of which evaluate all oral interferon
regimens and five evaluate interferon's daily regimens. These
proprietary drug combinations aim to reduce treatment duration to
12-16 weeks and spare the use of pegylated interferon associated
with some serious side effects. Other pipeline candidates like GS
6624, being studied for idiopathic pulmonary fibrosis (IPF),
oncology, myelofibrosis and liver fibrosis, and GS 1101 being
studied as a single agent in refractory indolent non-Hodgkin’s
lymphoma (NHL) and in combination with rituximab in chronic
lymphocytic leukemia (CLL) also hold promise.
However, we are concerned about patent challenges against the
company’s key HIV drugs. Most of Gilead’s important products are
facing patent challenges from companies seeking to launch generic
versions of those drugs.
BRISTOL-MYERS (BMY): Free Stock Analysis Report
GILEAD SCIENCES (GILD): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
Zacks Investment Research
Gilead Sciences (NASDAQ:GILD)
Historical Stock Chart
From May 2024 to Jun 2024
Gilead Sciences (NASDAQ:GILD)
Historical Stock Chart
From Jun 2023 to Jun 2024