The healthcare firm Gilead Sciences Inc. (GILD) has lost nearly 5 percent of its stock over the past year. This arose even after the company’s drug was approved for COVID-19 therapy.
Gilead Sciences specializes in the prevention of HIV as well as infectious diseases, including hepatitis C. The conventional portfolio of the company, however, can no longer support fast growth rates. Overall, in the third quarter of 2020, Gilead Sciences’ revenues rose 18 percent year on year to $6.49 billion, but much of the increase was provided by Veklury, the first FDA-approved medicine to treat COVID-19. After only gaining regulatory approval less than seven months ago, Veklury reported revenue of $873 million in the period. In the third quarter, Gilead Sciences’ profits would have risen just 2 percent year-on-year without the drug.
Patients are also in demand for Biktarvy, the number 1 drug for HIV therapy, and Gilead Sciences’ hepatitis C medicines. The sales of Gilead Sciences are expected to continue to decline in the latter category. The drug provided by the organization for hepatitis C is so successful that the target population is steadily declining.
Gilead Sciences also requires new medicines that, over several more quarters, will be able to drive high profits. To broaden its assets, the firm has made several primary acquisitions. In October last year, for $21 billion, Gilead Sciences completed the purchase of Immunomedics. Trodelvy, targeted at treating an advanced form of breast cancer, is the company’s primary medication. Compared to chemotherapy, Trodelvy decreased the risk of mortality by 52 percent in clinical trials. The medicine has taken in $73 million since its commercial introduction nearly five months ago.
The purchase of the German firm MYR Pharmaceuticals for EUR 1.15 billion in cash was announced by Gilead Sciences in December. MYR’s portfolio includes Hepcludex, the first and only drug approved for the treatment of chronic hepatitis D by the European Medicines Agency. Hepcludex has been 99 percent effective in purifying patients’ blood in clinical trials. About 15 million people in the world actually live with chronic hepatitis D.
The conventional markets in Gilead Sciences are no longer rising as quickly as they used to. For this cause, the company spends a great deal in acquisitions and in its own technologies (now there are about 17 late-stage developments). These contributions lay the groundwork for success in the long term. But for investors who like to gain now, it is critical that Gilead Sciences is a stable dividend payer. Every year, the company pays shareholders $0.68 per share, resulting in an annual return of 4.6%.
Gilead Sciences, Inc. (GILD) rose by 3% to close the session at $61.95 on Wednesday.