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Gilead Gains 6.8% YTD as HIV Franchise Maintains Momentum

Zacks Equity Research

Shares of Gilead Sciences, Inc. GILD have gained 6.9% in the year so far, outperforming the 2.1% growth for the industry.

It is a biopharmaceutical company, focused on developing drugs for the treatment of human immunodeficiency virus (HIV) and liver diseases.

Gilead is a dominant player in the HIV market, with an impressive portfolio for the same. The company was the first to bring to market a single-tablet regimen (STR) — Atripla — for the treatment of HIV. Other notable STRs for HIV in the market include Complera/Eviplera and Stribild, among others.

Meanwhile, Gilead is looking to fortify its dominant position in the HIV market by developing drugs with improved long-term safety profiles. The TAF-based products — Genvoya, Odefsey and Descovy — are performing well, with strong adoption in the United States and Europe. Descovy-based regimens continue to gain share and now account for approximately 80% of Gilead's total U.S. treatment prescription volumes.

The company received a major boost, when the FDA approved its once-daily single tablet regimen (“STR”), Biktarvy (bictegravir 50mg/emtricitabine 200mg/tenofovir alafenamide 25mg, BIC/FTC/TAF), for HIV-1 infection. The approval significantly boosts Gilead’s HIV franchise. The approval of this new HIV therapy will pose stiff competition to GlaxoSmith’s GSK existing therapies — Tivicay and Triumeq.

Gilead shifted focus to the HIV franchise, and newer avenues like CAR-T therapy and NASH, owing to the declining HCV franchise. The company’s efforts to diversify its revenue base is impressive as well.

Gilead acquired Kite Pharma to foray into the emerging domain of cell therapy. The approval of lead candidate, Yescarta, for the treatment of refractory aggressive non-Hodgkin lymphoma, which includes diffuse large B-cell lymphoma (DLBCL), transformed follicular lymphoma (TFL) and primary mediastinal B-cell lymphoma (PMBCL), is a significant boost for the company.

Gilead has a robust pipeline, with several programs currently under development, ranging from phase I through phase III. Inflammation is one of the three emerging areas, and the company has been developing a pipeline targeting inflammatory diseases. Galapagos GLPG and Gilead entered a global collaboration for the development and commercialization of filgotinib in inflammatory indications.

Phase III studies on filgotinib for the treatment of rheumatoid arthritis (RA) and Crohn's disease are currently ongoing. Based on the positive data from the ongoing trials, Gilead plans to progress with filgotinib in the RA indication for regulatory approval in Europe in the second half of this year. The successful development and commercialization of the candidate will boost growth for the company.

Further, Gilead and Denmark-based pharma giant Novo Nordisk A/S NVO intend to collaborate to develop treatments for NASH.

Meanwhile, softness in the HCV franchise has stabilized in the first quarter.

We expect investors to focus on further pipeline updates from the company.

Zacks Rank

Gilead currently carries a Zacks Rank #2 (Buy). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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