Gilead - source of healing during hurting economy

With 13 products on the market, 4000 employees worldwide, operating in more than 20 locations across the globe, Gilead Sciences (GILD) is well positioned as a dominating player in the HIV/AIDS drug market. The company, ranked #1 by BusinessWeek among the 50 best-performing companies in 2009 (up from #2 in the previous year), discovers easy treatments for patients and delivers outstanding returns for shareholders.

I know Gilead Sciences (GILD) is not a small-cap biotech. However, I can’t help but talk about it after reviewing the company’s recent stunning balance sheet that disclosed eye-catching earnings that will be of interest to many healthcare sector investors out there. Gilead was among the first companies to develop once-a-day tablets for HIV patients, eliminating the need to administer cocktails of medications through intravenous infusions with complex dosing schedules, thereby encouraging exposure and compliance to treatment. Because of this, approximately 8 out of 10 newly diagnosed HIV patients in the US today are initiated on Gilead’s drugs, which usually stay with the patients for years to come.

Less than two weeks ago, Gilead reported positive 4Q earnings with $2.03 billion in revenue, 42% more compared to last year’s figure, yielding $802.2 million in profit, or 87 cents per share, from $560 million, or 59 cents per share, thanks to strong sales of their HIV/AIDS drugs, Atripla, Truvada, and Viread, which grew 50, 19, and 10%, respectively, compared to 4Q2008. The company's announcement exceeded analysts’ expectation of a profit of 85 cents per share and $1.93 billion in revenue according to a Thomson Reuters estimate.


In addition to the HIV/AIDS market, the company also received income from their high blood pressure drug Letairis (44% increase to $52.2 million), and chest pain drug Ranexa ($46 million). Gilead will also be collecting royalty payments for Tamiflu, the first first neuraminidase inhibitor tablet for the treatment and prevention of flu, from Hoffmann-La Roche.

http://www.gilead.com/product_chart

As a whole in 2009, Gilead’s profit grew 33% to $2.64 billion, or $2.82 per share, from $1.98 billion, or $2.06 per share. Revenue rose 31%, to $7.01 billion from $5.34 billion.


In the US alone, 56,300 people were estimated to contract HIV infection in the year of 2006, and at present only about 50% of infected people are being treated. Gilead’s popular medications will continue to provide an easy and uncomplicated way to treat patients in this growing disease pool. Complementary to the core HIV/AIDS drug collection, the company also boasts a wide range of products specific for liver, cardiovascular, respiratory, and eye diseases, and has no shortage of drug candidates in clinical trials (4 in phase III, 8 in phase II, and 5 in phase I). These will ensure that, amid other giants, the company remains in the spotlight - one that investors should not miss.