Founded in 1987, Gilead Sciences (GILD) is one of
the world’s leading biotech companies. The firm operates in more than 35
countries worldwide, researching, manufacturing, and distributing various
medications to treat HIV/AIDs, liver diseases, and immune, respiratory, and
cardiovascular diseases.
Gilead has historically focused on antiviral products for
infectious diseases, which made up 84% of sales in 2018:
- HIV: 67% of sales
- Hepatitis C: 17%
- Cancer: 1% (new drug launch)
- Other drugs (cardiovascular, oncology, etc.): 14%
The company’s drug portfolio is fairly concentrated, with
its top five products generating nearly 60% of its revenue. Gilead’s largest
drugs are:
- Genvoya (21% of 2018 sales – HIV)
- Truvada (14% – HIV)
- Epclusa (9% – hepatitis C)
- Descovy (7% – HIV)
- Odefsey (7% – HIV)
- Atripla (6% – HIV)
- Harvoni (6% – hepatitis C)
Geographically, Gilead is focused on the U.S. market:
- US: 75% of sales
- Europe: 17%
- Other International: 8%
In 2018, Gilead’s total sales declined 15%, causing its net
income to fall by 26%. The main culprit was continued declines in its hepatitis
C drug franchise (down 59% in 2018) which the company helped pioneer modern
treatments for with Harvoni and Sovaldi.
Since these drugs cure patients after one course of
treatment (and have faced many rival drug launches in recent years), they have
rapidly lost market share. Gilead’s new HIV medications have only been able to
modestly offset these large scale revenue declines.
Going forward, Gilead hopes to diversify into oncology
(cancer) treatments, thanks to its 2017 purchase of Kite Pharmaceuticals, a
leader in the field of T-cell cancer therapy, for approximately $12 billion. As
of February 2019, management expected Gilead’s overall 2019 revenue to be about
flat compared to 2018.
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