What You Need To Know
Gilead Sciences (NASDAQ: GILD), in its third-quarter report, conveyed a steady progress in its offerings and market strategies. Lenacapavir, the company's notable drug, maintains a stable and predictable drug-drug interaction (DDI) profile, ensuring ongoing programs remain unaffected. The drug, marketed as Sunlenca, is successfully being rolled out for specific patient groups in the U.S. and is expanding into other markets including Japan and Europe, eyeing potential use in preventative treatments by late 2025.
Gilead also clarified that Trodelvy, a drug targeting the TROP2 antigen in cancer cells, stands distinct from other similar antibody-drug conjugates, with unique safety profiles and potential efficacy. The company sees the unique attributes of Trodelvy as a differentiator within the TROP2 space, and it maintains confidence in its strategic approach amidst a competitive landscape.
Fragmented Healthcare System Poses Challenge
Meanwhile, the uptake of CAR T therapies, a form of cancer treatment, specifically for large B cell lymphoma, is being challenged by the fragmented US healthcare system and the scarcity of authorized centers for treatment administration. Gilead identifies the fragmented healthcare system as a significant hurdle. Expanding the network of treatment centers is a strategic priority to improve access and uptake.
For HIV treatment, sales growth is now in sync with the actual market demand, moving away from previously advantageous pricing trends. Long-acting HIV combinations are being developed with patient needs in mind, aiming to provide options that extend beyond the current treatment-experienced population.
For patients who require an alternative to HIV treatment Biktarvy due to tolerability concerns or other factors, Gilead presents a combination therapy featuring lenacapavir and bictegravir.
Gilead has shown solid growth in its core areas, with significant advancements in its oncology pipeline. The expansion of indications for existing treatments and promising trial results for new therapies underscore the company's ongoing commitment to addressing critical areas of unmet medical need.
During a Q&A session, the team at Gilead expressed confidence in their diversified portfolio, highlighting the progress and strategic planning in various therapeutic areas, particularly in Virology and Oncology. They remain committed to addressing market dynamics, overcoming treatment barriers, and providing new therapeutic options based on evolving standards of care and clinical data.
Why This Is Important for Retail Investors
Drug Pipeline Success: The successful launch and international expansion of Sunlenca (lenacapavir) suggest Gilead Sciences is strengthening its drug pipeline, which can be a sign of the company's growth and potential for long-term returns.
Unique Product Offerings: Gilead's emphasis on the distinct nature of Trodelvy could indicate a competitive edge in the oncology market, possibly leading to increased market share and revenues that benefit investors.
Market Alignment: The alignment of HIV sales growth with market demand indicates stability and predictability in revenue streams. For retail investors, consistent performance can be a key factor in investment decision-making.
Overcoming Healthcare Barriers: Gilead's acknowledgment and addressing of the barriers to CAR T therapy adoption demonstrate proactive management. As these barriers are overcome, there could be an expansion in treatment accessibility and uptake, potentially boosting the company's financial outcomes.
Product Diversification: Offering alternative therapies for patients switching from Biktarvy demonstrates Gilead's commitment to meeting diverse patient needs. This diversification can cater to a broader customer base, driving sales and potentially enhancing investor returns.
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Gilead Sciences Poised for Busy 2024 with Multiple Clinical Updates
Gilead Sciences has reported sustained growth, marking two years of consistent performance improvements in its base business. The company's commercial efforts led to a 5% increase Y/Y in the third quarter total product sales (excl. Veklury) and a 10% rise Y/Y for the first nine months of 2023. This growth is attributed to the strong performance of its virology and oncology therapies. Biktarvy, Gilead's HIV treatment, saw a notable 12% increase from the previous year, contributing to a 9% growth in the HIV sector.
Oncology also experienced significant growth, with a 33% increase in the third quarter, now generating an annual revenue exceeding $3 billion. This surge is driven by the adoption of Trodelvy and Gilead's cell therapies. The company's clinical portfolio continues to expand with 60 programs across various therapeutic areas, including the European Commission's approval of Trodelvy for certain breast cancers and promising trial results for multiple oncology treatments.
In virology, Gilead is advancing with promising data from HIV treatment studies and is on track to present more findings in early 2024. The company is also progressing in HIV prevention, with trials moving forward ahead of schedule. For COVID-19, Gilead completed enrollment for a trial of obeldesivir and received regulatory approvals for Veklury's extended use.
Overall, Gilead's robust pipeline includes 27 Phase 2 and 19 Phase 3 programs, with expectations for a flurry of study updates in 2024. The quarter's results showcase Gilead's commitment to advancing healthcare and delivering value to communities, patients, and investors.
How Can You Use This Information?
Here are some of the investing ideas that can be explored using this information:
Investors interested in growth can focus on Gilead's robust pipeline, including 27 Phase 2 and 19 Phase 3 programs, which indicate potential for future revenue streams. The significant year-over-year growth in oncology and virology sales, particularly the uptake of Biktarvy and Trodelvy, positions Gilead as a company with strong growth prospects.
Growth investing focuses on stocks of companies expected to grow at an above-average rate compared to other stocks in the market; learn more in our article titled 'What is Growth Investing?'.
With GILD stock exhibiting a 7% increase in the past month, momentum investors may find Gilead Sciences attractive. The company's consistent performance, backed by successful product launches and clinical trial results, could continue to drive positive investor sentiment and share price momentum.
Momentum investing rides the wave of existing market trends by buying assets that have shown an upward price trend and selling those in a downtrend.
For income-focused investors, Gilead's consistent growth and potential for long-term stability might offer an attractive dividend yield. If the company maintains its profitability and cash flow, it may continue to provide sustainable dividends.
Dividend investing targets companies that regularly distribute a portion of their earnings to shareholders as dividends.
Investors looking to diversify into the healthcare sector could consider Gilead as a key player, especially given its strong position in HIV and oncology markets. With healthcare being less cyclical and more defensive, Gilead could offer resilience during market volatility.
Sector Rotation is the practice of shifting investment capital from one industry sector to another to take advantage of the economic cycle.
Gilead's commitment to research and development, as evidenced by its extensive clinical pipeline and the recent approvals of its innovative therapies, makes it a candidate for investors who seek to invest in companies at the forefront of medical innovation.
Innovation-focused investing seeks out companies that are leaders in technological advancement, offering potential for significant growth as they develop new products and services.
Read What Others Are Saying
The Wall Street Journal: Gilead Sciences Results Beat Estimates - WSJ
What you should read next:
Some investors prefer to invest in stocks via an exchange-traded fund for ease and reduced risk. Some popular ETFs include the following:
Large-Caps: Vanguard Mega Cap ETF (MGC)
Mid-Caps: Vanguard Mid-Cap ETF (VO)
Small-Caps: Vanguard Small-Cap ETF (VB)
Growth: iShares Core S&P U.S. Growth ETF (IUSG)
Value: iShares Core S&P US Value ETF (IUSV)
Investing with Insight
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Some highlights you’ll want to know include:
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