GILD - Gilead Sciences: Strategic Gains From Lenacapavir And Trodelvy Justify A Buy Rating

2024-06-24 09:41:40 ET

Summary

• Gilead Sciences reported positive Phase 3 data for lenacapavir, a biannual HIV PrEP therapy, leading to a 12% stock boost.
• Q1 earnings showed growth in HIV product sales, with Trodelvy's notable 39% increase, and total revenue beating estimates by $350 million.
• Financially, Gilead has a current ratio just over one, indicating the ability to meet short-term obligations, despite high leverage and substantial debt.
• Given Gilead's recent clinical successes and robust financial health, I am upgrading GILD from a hold to a buy.

Overview

I last looked at Gilead Sciences ( GILD ) in February, following their acquisition of liver disease developer CymaBay Therapeutics. I concluded that while the newly acquired seladelpar (PDUFA date of August 14 for primary biliary cholagitis) made sense for Gilead, the price they paid seemed steep. I ended with a hold recommendation. Since then, the company has reported Q1 earnings and a clinical victory in twice-yearly HIV PrEP therapy. ...

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