February 18, 2019

Gilead’s (GILD) Dividend is Solid, But Growth Challenges Linger


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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