Gilead Sciences, Inc. (NASDAQ:GILD) has been in a severe correction. However, this period follows a dramatic bull market that saw the stock gain about 500% over 6 years. For long-term investors, this is a ride-it-out process that should only be truncated if the underlying fundamental promise of the company has wavered from its course. So, that’s the question we would like to address here.
Two events have taken place in the past 48 hours that bear upon this question. But, to understand the significance here, we need to take a moment to review.
Gilead Sciences, Inc. (NASDAQ:GILD) acquired a leading CAR-T name last year – Kite Pharma, Inc. (KITE) – for approximately $11.9 billion. The move was widely criticized. However, recent data suggests that this skepticism was somewhat undeserved.
Specifically, KITE just announced updated results from its ZUMA-3, a single-arm Phase 1/2 study evaluating KTE-X19 (formerly KTE-C19), an investigational CD19 chimeric antigen receptor T (CAR T) cell therapy, in adult patients with relapsed or refractory acute lymphoblastic leukemia (ALL). With a median follow-up of 15.1 months (range 3.7 – 28.6 months) following a single infusion of KTE-X19, 69 percent of evaluable patients (n=25/36) achieved complete tumor remission, defined as complete remission (CR) or CR with incomplete hematological recovery (CRi). The rate of undetectable minimal residual disease (MRD) in patients who achieved complete tumor remission was 100 percent. Detailed results from this ongoing study were presented today at the Annual Meeting of the American Society of Hematology (ASH; Abstract #897).
In other words, GILD’s nearly $12B CAR-T acquisition appears to be well on its way toward effectively “retiring” ALL from the worry list for humankind. As we see it, the Street may be somewhat unjustifiably unresponsive to this accomplishment at this point. Stay tuned.
Secondly, according to its release this week, the company is seeing unprecedented traction in one of the most important markets on the planet: China.
GILD just announced that the National Medical Products Administration (NMPA) has approved Harvoni (ledipasvir 90 mg/sofosbuvir 400 mg) in China for the treatment of chronic hepatitis C virus (HCV) genotype 1-6 infection in adults and adolescents aged 12 to 18 years.
According to the release, Hepatitis C is a significant public health challenge. Nearly 10 million people in China are estimated to have chronic HCV, with approximately 58 percent having HCV genotype 1 infection.
“The multicenter clinical trials in China have shown that the once-daily single tablet treatment regimen of Harvoni achieved a 100% SVR12 (defined as undetectable HCV RNA 12 weeks after completing therapy) rate in treatment patients with genotype 1 HCV infection,” said Professor Lai Wei, Peking University People’s Hospital and Institute of Hepatology, Beijing.
The test of $60/share looks to be in the cards as we see it. But a glance at a weekly chart suggests this could be a major opportunity for new prospective shareholders when it happens.
We believe this stock should be on the radar for just such an opportunity at this point.
Big Top Circus
Gilead Sciences, Inc. (NASDAQ:GILD) promulgates itself as a biopharmaceutical company that discovers, develops, and commercializes therapeutics in the areas of unmet medical needs in the United States, Europe, and internationally.
The company’s products include Biktarvy, Descovy, Odefsey, Genvoya, Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, and Tybost for the treatment of human immunodeficiency virus (HIV) infection in adults; and Vosevi, Vemlidy, Epclusa, Harvoni, Sovaldi, Viread, and Hepsera products for treating liver diseases.
It also provides Yescarta, a chimeric antigen receptor T cell therapy for adult patients with relapsed or refractory large B-cell lymphoma; Zydelig, a PI3K delta inhibitor for certain blood cancers; Letairis, an oral formulation of an endothelin receptor antagonist for pulmonary arterial hypertension; Ranexa, a tablet to treat chronic angina; and Lexiscan, an injection for use as a pharmacologic stress agent in radionuclide myocardial perfusion imaging.
In addition, the company offers Cayston, an inhaled antibiotic for the treatment of respiratory systems in cystic fibrosis patients; Tamiflu, an oral antiviral capsule for the treatment and prevention of influenza A and B; 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, hematology/oncology, inflammation/respiratory diseases, and others.
The company markets its products through its commercial teams; and in conjunction with third-party distributors and corporate partners. Gilead Sciences, Inc. has collaboration agreements with Bristol-Myers Squibb Company; Janssen Sciences Ireland UC; Japan Tobacco Inc.; Galapagos NV; and AELIX Therapeutics S.L.
Gilead Sciences, Inc. (NASDAQ:GILD) managed to rope in revenues totaling $5.6B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -14.3%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($29.3B against $10.1B).