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Friday, May 20, 2022

Stock not to be skipped: Gilead Sciences Inc. (GILD)

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Gilead Sciences Inc. (NASDAQ: GILD) is a pharmaceutical company best recognized for developing successful HIV and hepatitis C medications. In the last two years, the business has also released Veklury, antiviral medication for the treatment of COVID-19. However, some investors are concerned that the company’s portfolio is not sufficiently diversified.

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Gilead Sciences’ revenues were $22 billion in 2019 before the pandemic, but have plummeted by $3 million since then, despite Veklury’s earnings giving the business a lift last year. Gilead Sciences’ principal business is HIV medications, although sales of these treatments have been flat in recent years.

Gilead Sciences’ overall revenues in the first quarter of 2022 were $6.5 billion, up 3% year over year. HIV medicines ($3.7 million) and Velkury ($1.5 billion) accounted for the majority of this income. In that instance, in the first quarter, the company’s other medications only brought in $1.3 billion. However, there is some good news: year on year, sales of HIV medications jumped by just 1.6 percent, while sales of other items grew by more than 4.5 percent. 

Despite the fact that HIV medications are the company’s core business, Gilead Sciences’ lack of diversification remains a serious issue. As a result, the firm is working hard to diversify its portfolio. It paid $4.9 billion to buy the immuno-oncology startup Forty-Seven in 2020. Magrolimab, the core asset purchased in the acquisition, is a cancer treatment now in clinical studies.

Gilead now has a buffer and a respectable, if not diverse, portfolio that it may leverage to make additional acquisitions.

Gilead Sciences Inc.(GILD) stock rose 0.16 percent on Tuesday, closing at $61.78. The total number of shares traded was 9.72 million, which was lower than the average volume of 10.42 million for the previous three months. The stock fluctuated between $61.56 and $62.54 throughout the trading session. The earnings per share ratio for the firm was 3.58.

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