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Gilead Sciences Inc GILD

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Gilead Deepens Ties With Arcus and Expands Oncology Pipeline; Shares Remain Undervalued

Karen Andersen, CFA Sector Strategist

Analyst Note

| Karen Andersen, CFA |

Gilead is paying $725 million to partner Arcus after deciding to exercise options on four oncology programs in clinical development, significantly broadening Gilead's non-cell therapy oncology pipeline and creating new potential in-house combination regimens. We don't expect any significant changes to our $81 per share fair value estimate, with the firm's HIV portfolio and pipeline, as well as novel oncology drugs, providing a strong foundation for Gilead's wide moat. As data for Gilead's cancer drug Trodelvy and the Arcus oncology drugs is released over the next few months, we expect more recognition of Gilead's ability to successfully expand beyond infectious diseases, and we think shares look undervalued at recent prices.

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Company Profile

Business Description

Gilead Sciences develops and markets therapies to treat life-threatening infectious diseases, with the core of its portfolio focused on HIV and hepatitis B and C. The acquisitions of Corus Pharma, Myogen, CV Therapeutics, Arresto Biosciences, and Calistoga have broadened this focus to include pulmonary and cardiovascular diseases and cancer. Gilead's acquisition of Pharmasset brought rights to hepatitis C drug Sovaldi, which is also part of combination drug Harvoni, and the Kite, Forty Seven, and Immunomedics acquisitions boost Gilead's exposure to cell therapy and noncell therapy in oncology.

333 Lakeside Drive
Foster, CA, 94404
T +1 650 574-3000
Sector Healthcare
Industry Drug Manufacturers - General
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 13,600