Gilead Sciences, Inc. discovers, develops, and commercializes medicines in areas of unmet medical need in North America, South America, Europe, and the Asia-Pacific. The company’s products include Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, Tybost, and Vitekta for the treatment of human immunodeficiency virus (HIV) infection in adults; and Harvoni, Sovaldi, Viread, and Hepsera products for the treatment of liver disease. It also offers Zydelig, a PI3K delta inhibitor, in combination with rituximab, for the treatment of certain blood cancers; Letairis, an endothelin receptor antagonist for the treatment of pulmonary arterial hypertension; Ranexa, a tablet used for the treatment of chronic angina; Lexiscan/Rapiscan injection for use as a pharmacologic stress agent in radionuclide myocardial perfusion imaging; Cayston, an inhaled antibiotic for the treatment of respiratory systems in cystic fibrosis patients; and Tamiflu, an oral antiviral capsule for the treatment and prevention of influenza A and B. In addition, the company provides other products, such as AmBisome, an antifungal agent to treat serious invasive fungal infections; and Macugen, an anti-angiogenic oligonucleotide to treat neovascular age-related macular degeneration. Further, it has product candidates in various stages of development for the treatment of HIV/AIDS and liver diseases, such as hepatitis B virus and hepatitis C virus; inflammation/oncology; serious cardiovascular; and respiratory conditions. The company markets its products through its commercial teams and/or in conjunction with third-party distributors and corporate partners. Gilead Sciences, Inc. has collaborations with Bristol-Myers Squibb Company, Janssen R&D Ireland, and Japan Tobacco Inc. to develop and commercialize various products. The company was founded in 1987 and is headquartered in Foster City, California.
(Summary) (Company) (Chart)
27 September 2015
1yr Target $125.06
Payout Ratio 18.04%
1yr Cap Gain 27.26%
1yr Tot Return 29.01%
EPS (ttm) $9.53
EPS next yr $11.60
EPS next 5yr 16.73%
1yr Potential $194.06
Market Cap $144.10 Bil
Revenues $29.19 Bil
Earnings $15.04 Bil
Profit Margin 51.52%
1yr EarnGR 306.07%
3yr EarnGR 59.97%
5yr EarnGR 39.12%
1yr DivGR ---
3yr DivGR ---
5yr DivGR ---
Quick Ratio 1.80
Current Ratio 2.00
The Company's History
Gilead debuted on the NASDAQ in January 1992. Its IPO raised $86.25 million in proceeds.
In June 1996, Gilead launched Vistide (cidofovir injection) for the treatment of cytomegalovirus (CMV) retinitis in patients with AIDS. The company cooperated with Pharmacia & Upjohn to market the product outside the United States.
In March 1999, Gilead acquired NeXstar Pharmaceuticals of Boulder, Colorado following two years of negotiations with the company. At the time, NeXstar's annual sales of $130 million was three times Gilead's sales. NeXstar's two revenue-generating drugs were AmBisome, an injectable fungal treatment, and DaunoXome, an oncology drug taken by HIV patients. Also in 1999, Roche announced first approval of Tamiflu (oseltamivir) for the treatment of influenza. Tamiflu was originally discovered by Gilead and licensed to Roche for late-phase development and marketing. Viread (tenofovir) achieved first approval in 2001 for the treatment of HIV.
In January 2003, Gilead completed its acquisition of Triangle Pharmaceuticals. The company also announced its first full year of profitability. Later that year Hepsera (adefovir) was approved for the treatment of chronic hepatitis B, and Emtriva (emtricitabine) for the treatment of HIV.
In 2004, Gilead launched Truvada, a fixed-dose combination of tenofovir and emtricitabine.
In November 2005, George W. Bush urged Congress to pass $7.1 billion in emergency funding to prepare for the possible bird flu pandemic, of which $1 billion is solely dedicated to the purchase, and distribution of Tamiflu.
In July 2006, the U.S. Food and Drug Administration (FDA) approved Atripla, a once a day single tablet regimen for HIV, combining Sustiva (efavirenz), a Bristol-Myers Squibb product, and Truvada (emtricitabine and tenofovir disoproxil fumarate), a Gilead product.
Gilead purchased Raylo Chemicals, Inc. in November 2006 for a price of $133.3 million. Raylo Chemical, based in Edmonton, Alberta, was a wholly owned subsidiary of Degussa AG, a German company. Raylo Chemical was a custom manufacturer of active pharmaceutical ingredients and advanced intermediates for the pharmaceutical and biopharmaceutical industries.
In 2006, Gilead completed two acquisitions that allowed the company to branch out from its historical antiviral franchise into the cardiovascular and respiratory therapeutic arenas.
Myogen, based in Boulder, Colorado, was completing Phase 3 studies of ambrisentan—now marketed as "Letairis"—an orally available endothelin receptor antagonist. The U.S. FDA subsequently approved ambrisentan for the treatment of pulmonary arterial hypertension in June 2007.
Under an agreement with GlaxoSmithKline, Myogen marketed Flolan (epoprostenol sodium) in the United States for the treatment of primary pulmonary hypertension. Additionally, Myogen was developing (in Phase 3 studies) darusentan, also an endothelin receptor antagonist, for the potential treatment of resistant hypertension.
The other acquisition was Corus Pharma. Corus's lead product candidate, aztreonam lysine for inhalation, is an antibiotic with activity against gram-negative bacteria including Pseudomonas aeruginosa, which can cause lung infections in patients with cystic fibrosis. The product is in Phase 3 studies. Gilead also obtained an inhalation formulation of two antibiotics for treatment of respiratory infections.
Gilead expanded its move into respiratory therapeutics in 2007 by entering into a licensing agreement with Parion for an epithelial sodium channel inhibitor for the treatment of pulmonary diseases, including cystic fibrosis, chronic obstructive pulmonary disease and bronchiectasis.
In 2009, Gilead acquired CV Therapeutics for about $1.4B. This acquisition brought Ranexa and Lexiscan as commercial products. In 2009 the company received the award for one of the Fastest Growing Companies by Fortune. In the same year they were also named as one America's Top Companies to work for by Forbes.
On July 16, 2012, The Food and Drug Administration approved the first drug shown to reduce the risk of HIV infection manufactured by Gilead Sciences. The pill Truvada as a preventive measure (PrEP) for people who are at high risk of getting HIV through sexual activity.
Citing a market capitalization of US$113 billion and stock appreciation of 100%, and describing their 2011 purchase of Pharmasset for $11 billion as “one of the best pharma acquisitions ever”, Gilead Sciences was reported as the number 4 ranked drug company of 2013 by Forbes Magazine. The strong performance of Gilead in 2013 has also been linked to the FDA approval, and strong sales performance, of their “potentially revolutionary” Hepatitis-C drug Sovaldi. with US 4Q’13 sales estimated by Deutsche Bank at $53M.
This company was included in my list of best ideas this past week and it's been on my radar for months. And I don't really know why I haven't had a position in this company. But I rectified that situation this past week. I think this is probably one of the few great biotechnology companies out there, and those few are really pharmaceutical companies. The idea that they are niche research companies dabbling in the new world of biotechnology is just fantasy. These companies are now "Big Pharma" and to not see them as that is just foolishness.
I intend to build on the position that I've started in a rather ambitious way. Recent comments by politicians stating that medicines are over priced and need to be reduced has pushed the drug companies lower and the biotechnology companies even lower. I see this as a rare opportunity to take advantage of these low prices and stock up on these securities. And that's exactly what I'm doing.
I expect that these securities may pull back even further as the politicians begin to gang up on these companies and blame them for the failure of The Affordable Care Act to control drug costs. That said, these companies and their products are going to be critical to the future health of the United States and their future discoveries will enhance the health of the entire world.
Based upon my expectations of future revenues, earnings and the company's recent announcement to begin distributing a quarterly dividend, I expect to be a shareholder in Gilead Sciences for many years to come.