Gilead Sciences (GILD) Stock: Should I Buy It Now?

By Amit Chowdhry ● June 30, 2020
  • Should you buy Gilead Sciences, Inc. (NASDAQ: GILD) now? Here is some information to help you decide.

Gilead Sciences, Inc. (NASDAQ: GILD) is a biopharmaceutical company that engages in the R&D and commercialization of medicines in areas of unmet medical needs. And the company focuses on human immunodeficiency virus, acquired immunodeficiency syndrome, liver diseases, hematology, oncology, and inflammation and respiratory diseases. Some of the company’s antiviral brands include Harvoni, Genvoya, Epclusa, Truvada, Atripla, Descovy, Stribild, Viread, Odefsey, Complera/Eviplera, Sovaldi, and Vosevi.

Gilead’s stock price has seen an uptick over the last few months as it has been focusing on developing trials for hospitalized patients with moderate COVID-19 pneumonia. In April, Gilead had reported its first-quarter 2020 results. Gilead reported $5.5 billion for the quarter compared to $5.2 billion for the same period in 2019.

$275 Million Deal For 49.9% Stake In Pionyr Immunotherapeutics

Gilead Sciences, Inc. (NASDAQ: GILD) recently announced that it will be acquiring a 49.9% stake in Pionyr Immunotherapeutics Inc. for $275 million. Pionyr Immunotherapeutics is a privately-held company that is developing first-in-class cancer immunotherapies. And Gilead will gain an exclusive option to purchase the remainder of Pionyr. Under the agreement, Pionyr’s shareholders may also receive up to an additional $1.47 billion in option exercise fees and future milestone payments.

Pionyr’s Myeloid Tuning therapies are known for having the potential to treat patients who currently do not benefit from checkpoint inhibitor therapies. And PY314 and PY159 have demonstrated preclinical efficacy, suggesting potential in solid tumors in combination with established anti-PD(L)-1 agents.

Plus Pionyr plans to file investigational new drug (IND) applications with the U.S. Food and Drug Administration for both PY314 and PY159 in the third quarter of this year. Pending Phase 1b results from either candidate (or sooner if Gilead chooses), Gilead can exercise its exclusive option to acquire the remainder of Pionyr.

Coronavirus Treatment Remdesivir To Cost $3,120 Per Patient With Private Insurance

Earlier this week, Gilead Sciences had announced the pricing for its coronavirus treatment remdesivir will cost hospitals $3,120 for a typical U.S. patient with commercial insurance, according to CNBC.

The pricing was announced as the company is preparing to start charging for the antiviral drug next month. And Gilead has been donating doses to the U.S. government for distribution since it had received emergency use authorization last month.

Remdesivir will be sold for $390 per vial to governments “of developed countries” around the world and the price for U.S. private insurance companies will be at $520 per vial. Within the U.S., this means Gilead will charge a smaller price for government programs and a higher price for private insurance companies.

“Whether you’re covered by a private insurer, whether you’re covered by a government insurer, whether you’re uninsured with Covid-19, there will not be an issue for access with remdesivir,” said Gilead CEO Daniel O’Day in an interview with CNBC’s Meg Tirrell.

What about individuals who are not insured? They will be covered under provisions of the CARES Act said a senior official in the Department of Health and Human Services said on a conference call. And for privately insured people, out-of-pocket costs will be determined by individual insurance plans.

O’Day pointed out that the $390 per vial price for the government was determined based on developed countries with the lowest purchasing power. And this was to avoid negotiations with each country — which could have potentially slowed down access to the drug. Gilead also entered into agreements with generic manufacturers for providing the drug at substantially lower costs in developing countries.

The majority of patients treated with remdesivir will receive a 5-day treatment course using 6 vials of remdesivir. So this brings the government cost to $2,340 for patients on the 5-day treatment and $3,120 for patients through commercial insurance. The 10-day treatment course uses an average of about 11 vials — which would cost governments $4,290 per patient and $5,720 for a U.S. patient with private insurance.

Gilead Sciences, Inc. (NASDAQ: GILD) Stock Performance as of 06/30/2020:
1 day: Down about 0.17%
5 day: Down about 1.47%
1 month: Down about 4.2%
3 month: Down about 1.8%
6 month: Up about 14.83%
YTD: Up about 14.3%
1 year: Up about 9.92%
5 year: Down about 36.95%
Since IPO (January 1992): Up nearly 20,000%

Should You Buy Gilead Sciences, Inc. (NASDAQ: GILD) Now?

Case From The Bulls:

The bulls are saying that Gilead’s pipeline of products could start to see more blockbuster product launches. And Gilead’s single-tablet regimens for HIV and next-generation products with long-term safety profiles are helping boost the company’s market share.

Case From The Bears:

The bears are saying that Gilead will need to rapidly convert HIV patients to newer products in order to avoid a hit to its sales when key patents start expiring next year. Atripla is expected to become a generic competitor to Gilead’s newer HIV products by 2021. Plus competing hepatitis C regimens are giving pharmacy benefit managers the ability to aggressively negotiate.

Disclosure: I own a small number of Gilead Sciences, Inc. (NASDAQ: GILD) shares. I wrote this article myself and I do not have any business relationship with any company whose stock I write about. I am not a financial advisor and all articles are my opinion. You should do your own due diligence and consider talking to a financial professional before investing.