Gilead Sciences, Inc.   

GILD Details

Gilead Sciences, Inc. (NASDAQ: GILD) is a biopharmaceutical company, which is engaged in the development of therapies to prevent and treat human immunodeficiency virus (HIV), Acquired Immune Deficiency Syndrome (AIDS), liver diseases, cancer, inflammatory and respiratory diseases, and cardiovascular ailments.

Regulatory Approvals:  On October 01, 2021, GILD's subsidiary Kite Pharma, Inc. received approval from the US Food and Drug Administration (FDA) for Tecartus (brexucabtagene autoleucel) to treat patients above 18 years of age with relapsed or refractory B-cell precursor acute lymphoblastic leukaemia (ALL). Tecartus, designated as a breakthrough therapy by FDA, is the first and only chimeric antigen receptor (CAR) T-cell treatment approved for adults with ALL.

Previously, on September 27, 2021, Health Canada approved Trodelvy (sacituzumab govitecan-hziy) to treat adults with unresectable locally advanced or metastatic triple-negative breast cancer (TNBC) who have received two or more prior therapies, at least one of which was for metastatic disease. Trodelvy has been approved for use under Project Orbis, a global collaborative review program for high-impact cancer marketing applications developed by the FDA's Oncology Center of Excellence (OCE) in collaboration with international regulatory bodies.

Q2FY21 Results: The company reported a 20.88% growth in net revenue to USD 6.22 billion in Q2FY21 (ended June 30, 2021) compared to USD 5.14 billion in Q2FY20. The Product sales, which accounted for 98.95% of the total revenue in Q2FY21, reported YoY growth of 21.41%. GILD reported a net income of USD 1.52 billion in Q2FY21 vs. a net loss of USD 3.34 billion in Q2FY20. As of June 30, 2021, the company had cash & cash equivalents (including short-term marketable securities) of USD 6.53 billion and total debt of USD 30.18 billion.

Key Risks: In H1FY21, HIV products contributed 61% of GILD's total revenue. Therefore, any decline in demand due to competitive products or changes in the treatment paradigm of HIV could hurt the company's financials. In addition, the biopharmaceutical industry is highly regulated, which mandates the company to comply with stringent regulatory norms both within and outside the US, violations of which can lead to approval delays, recalls, or even suspensions.

Outlook: In FY21, GILD expects its product sales to range between USD 24.4 – 25.0 billion, including Veklury sales to the tune of USD 2.7 – 3.1 billion. It also predicts its GAAP EPS to range between USD 4.70 – 5.05, along with a non-GAAP EPS of USD 6.90 – 7.25.

Valuation Methodology:  Price/Earnings Per Share Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

GILD Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: GILD's stock price has increased 1.57% past six months and is currently leaning towards the higher band of the 52-week range of USD 56.56 to USD 73.34. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is at 40.22. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 74.92. Considering the slight uptick in the stock price, decent fundamentals, positive outlook, and associated risks, we recommend a "Hold" rating on the stock at the current price of USD 67.93, down 0.33% as of October 15, 2021, 12.46 PM ET.

* All forecasted figures and Industry Information have been taken from REFINITIV.

* The reference data in this report has been partly sourced from REFINITIV.