During the past 12 months, Gilead Sciences (GILD) stock has declined more than 13%. Contrary to this, many biotech ETFs showed double-digit growth during the same period. Gilead Sciences, which is losing protection for some of its essential drugs, is also facing a drop in its hepatitis C drugs. This causes investors to be cautious about the Gilead Science’s future.
This will likely lead to some short-term revenue reduction. While Gilead Sciences spends about $5 billion a year on research and development and makes acquisitions, it causes significant sales and marketing expenditures. New promising drugs will emerge as a result of all this.
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The revenues and profits of Gilead Sciences rose by 10% (to $ 24.35 billion) and fourteen percent (to $8.95 billion), respectively, in 2020. However, Veklury (remdesivir) brought to market for COVID-19 was the primary factor for sales growth. This drug’s demand will likely decline after mass vaccinations begin. This means that nearly $2.8 billion of the annual revenue of the American firm is at stake.
Gilead Science’s hepatitis C drugs’ sales are dropping 30% each year, as more and more patients are being cured and therefore no longer need treatment. Furthermore, Gilead Sciences’ HIV drug revenues have declined, as two of their HIV drugs are no longer protected by their patents (Truvada and Atripla). The Gilead Sciences-produced Biktarvy product has become one of the United States’ most popular HIV treatments, with one in two Americans living with HIV taking this brand. This drug has patent protection until 2033.
Investing in Gilead Sciences is paramount for investors as they continue to make acquisitions and invest in new developments. For example, Gilead Sciences has partnered with Merck to develop a combination therapy (islatravir and lenacapavir) for HIV treatment. The joint venture is aiming to total $ 2 billion in revenue. Gilead Sciences will earn 65% of anticipated sales.
As a consequence of the acquisition of Biotech Immunomedics last year, Gilead Sciences offers the Trodelvy immunotherapy to treat metastatic breast cancer. Aside from treating non-small cell lung cancer, the Gilead Science also plans to extend its effects to other types of breast cancer. Targeted therapy will hold a market value of over $90 billion in such a scenario. MYR Pharmaceuticals, which sells the hepatitis D treatment Hepcludex, was acquired by Gilead Sciences last year.
The Gilead Science builds its portfolio of drugs intending to build a long-term company. Gilead Sciences has demonstrated its financial stability by buying back $ 1.5 billion shares every year and is paying out dividends of almost $ 3.5 billion, which provides a return on shares of 4.14 %.
Gilead Sciences Inc. (GILD) closed the last trading day up 0.14% at $65.11. Shares were traded at a volume of 5.83 million. During the day, the stock wavered between $64.235 and $65.25. Earnings per share for GILD were 0.06. The stock has lost -2.00% of its value in the last five sessions and moved 1.88% in the first half of the year. However, it gained 11.76% for the year. Over the last 50 days, the stock’s 50-day moving average was $64.89. It is above the 200-day moving average of $65.03. Additionally, the RSI for this stock stands at 51.30.