The New Gilead Is Shaping Up
Jan. 9, 2020 5:27 AM ET|4 comments | About: Gilead Sciences, Inc. (GILD)
Out of Ignorance
Out of Ignorance
Prospective Gilead growth drivers from 2017 are still just "prospective Gilead growth drivers", save one.
Gilead's bold foray into immunotherapy has so far netted it an FDA approval, a BLA, a pipeline and a dynamic role in one of tomorrow's great technologies.
Gilead's expansion into China remains very much a work in progress, likely a long range project.
Gilead's key non-HIV, non-HCV molecules from 2017, filgotinib and selonsertib, have advanced in opposite directions.
Gilead's near-term revenue generators are counteracted by its decliners.
After penning dozens of optimistic Gilead (NASDAQ:GILD) articles, I had gotten over it (mostly). Of late the only time I have given Gilead any thought is with lingering regret when I peruse my dividend growth stocks. I still maintain a position in Gilead; I still have flickers of hope.
Review of a competing gene therapy company for a possible article rekindled enough interest in its competitor Gilead for me to check out Gilead's most recent earnings CC. I was intrigued by what I found; I switched my article project to this current effort.
My string of optimistic Gilead articles ran from March 2016's "Gilead's Harvoni: A Fair Deal" to December 2017's "Gilead's 2018 And Beyond - Buckle Up For A New Gilead". After a two year hiatus, the "Beyond" envisioned in the December 2017 article title is upon us
The new Gilead is forming as I write. It is a big story getting bigger on a regular basis. The first thing that struck me when I reviewed the Q3 2019 earnings call was the cast of characters. Gone from managing the Q3 2017 earnings were CEO Milligan, EVP Meyers, President Kevin Young, EVP and CSO Bischofberger, and EVP Oncology Therapeutics and Cell Therapy Riva. CFO Washington, the lone survivor, is on her way out.
The recent Q3 2019 earnings call featured: CEO O'Day (formerly CEO at Roche (OTCQX:RHHBY), joined Gilead in March 2019), CCO Mercier (from Bristol-Myers Squibb (BMY) in May 2019), Brainard promoted to Senior Vice President, HIV and Emerging Viral Infections, and John Sundy, SVP Inflammation and Respiratory Diseases. CFO Washington also attended for either her last or penultimate time.
Prospective Gilead growth drivers from 2017 are still just "prospective Gilead growth drivers", save one
The three engines for Gilead to power forward in 2018 and beyond cited in "Gilead's 2018 And Beyond - Buckle Up For A New Gilead" were:
...HIV, immunotherapy and expansion into China.
As shown by the Q4 2018 earnings slide below, HIV has lived up to, if not surpassed, expectations. Gilead's 2017 HIV revenues were ~$13 billion; for 2018 ~$14.6 billion.
Per its periodic revenue earnings call guidances, for 2019 HIV revenues are slated to increase by a midpoint of $1.7 billion for the year. This would show Gilead's 2019 HIV revenue at ~$16.3 billion and would mark the company's third year of double-digit HIV revenue growth.
There can be no doubt that HIV's role as a revenue generator is on target. At least one of Gilead's expected growth drivers from late 2017 is firmly in the "check" box. This is a franchise which should provide CEO O'Day considerable resources to manage the new Gilead's more challenging, and more exciting, endeavors.
At the 9/10/19 Morgan Stanley Global Healthcare Conference (MSGHC), O'Day identified Gilead's existing success in HIV as a legacy he had to build from. He cited ongoing efforts to expand PrEP and single-tablet regimens as Gilead's task at hand to grow HIV in the short term. Further out on the horizon are exciting prospects for Gilead's long-acting capcid inhibitor GS-6207 and more distantly cures.
As for immunotherapy and China as growth drivers - not quite yet and "incomplete" as discussed below.