Gilead Sciences Rallies 27.2% in Six Months: Buy or Sell the Stock?

Shares of Gilead Sciences, Inc. GILD have gained 27.2% in the past six months against the industry’s decline of 2.2%. The stock has also outperformed the sector and the S&P 500 index in this time frame.

Gilead Outperforms Industry, Sector & S&P 500 Index

It has been an eventful year for GILD so far. The company recently obtained FDA approval for its twice-yearly injectable HIV-1 capsid inhibitor, lenacapavir, for the prevention of HIV. This groundbreaking injectable therapy marks the first and only twice-yearly pre-exposure prophylaxis (PrEP) option available in the United States.

Let's delve further into GILD’s strengths and weaknesses to analyze how to play the stock at present.

Lenacapavir Approval Boosts GILD’s HIV Franchise

Gilead has a market-leading portfolio of HIV treatments. Flagship drug Biktarvy accounts for over 51% share of the treatment market in the United States and should maintain momentum.

Descovy (FTC 200 mg/TAF 25 mg) for PrEP is also witnessing good uptake. It maintains over 40% market share in the PrEP market in the United States.

The recent FDA approval of lenacapavir under the brand name Yeztugo solidifies GILD’s HIV portfolio as its other prevention drug, Truvada, faces generic competition.

At present, there are two FDA-approved daily oral medications for PrEP — Truvada and Descovy.

As the first long-acting injectable PrEP administered just twice a year, Yeztugo addresses persistent barriers, such as challenges with daily oral PrEP, adherence, stigma and healthcare access, which have limited broader PrEP adoption.

This approval also represents a paradigm shift in HIV prevention and is expected to catalyze uptake among populations that have historically been underserved by existing prevention tools. Yeztugo has a competitive advantage as it needs to be taken only twice a year, unlike daily oral pills, and addresses a broad population.

The European Medicines Agency has also validated the Marketing Authorization Application for twice-yearly lenacapavir for HIV prevention.

Livdelzi Strengthens GILD’s Liver Disease Portfolio

GILD’s diverse portfolio also includes drugs for liver, hematology/oncology and inflammation/respiratory diseases.

The FDA approval of seladelpar for the treatment of primary biliary cholangitis (PBC) has strengthened GILD’s liver disease portfolio and validated its CymaBay acquisition. The drug's initial uptake is encouraging.

The candidate was approved under the brand name Livdelzi. Gilead also recently received conditional marketing authorization from the European Commission for seladelpar for the treatment of PBC.

Challenges for GILD’s Oncology Business

Gilead’s oncology portfolio, comprising the Cell Therapy franchise and breast cancer drug Trodelvy, has diversified its overall business. However, the Cell Therapy franchise, comprising Yescarta and Tecartus, is currently under pressure due to competitive headwinds in the United States and Europe that are expected to continue in 2025.

Breast cancer drug Trodelvy’s sales were lower than expected in the first quarter due to inventory dynamics.

Nonetheless, Gilead announced positive top-line results from the phase III ASCENT-03 study on Trodelvy, which showed highly statistically significant and clinically meaningful improvement in progression-free survival in patients with first-line metastatic triple-negative breast cancer (mTNBC) who are not candidates for checkpoint inhibitors.

The potential launch of anito-cel in multiple myeloma and Trodelvy in first-line mTNBC in 2026 will strengthen the company’s oncology business.

GILD’s Valuation and Estimate Revision

According to the price/earnings ratio, GILD’s shares currently trade at 13.62x forward earnings, lower than the large-cap pharma industry’s average of 15.01X but higher than its mean of 10.52X.

Earnings estimates for GILD have moved north in the past 60 days. The bottom-line estimate for 2025 has inched up to $7.92 from $7.91, while that for 2026 has improved to $8.48 from $8.39.

Invest in GILD

Large biotech companies are generally considered safe havens for investors interested in this sector as they are well-equipped to weather the uncertain macroenvironment.

Gilead’s efforts to constantly innovate its HIV portfolio should enable it to maintain growth amid competition from GSK plc GSK. The approval of Yeztugo for PrEP is a major boost for the company.

GSK’s HIV portfolio sales are being driven by strong patient demand for Cabenuva, Apretude and Dovato.

GILD has also collaborated with Merck MRK to evaluate the investigational combination of islatravir and lenacapavir for the treatment of HIV.

Gilead’s strategic deals and acquisitions to diversify its business are encouraging. We recommend the stock to prospective investors, as we believe there is more room for growth following Yeztugo approval, even though Biktarvy sales are expected to be under pressure due to the redesign of Medicare Part D.

Another positive factor for both prospective and existing investors is the company’s attractive dividend yield. Gilead has been consistently increasing and paying out dividends. The company declared a quarterly dividend of $0.79 per share of common stock for the second quarter of 2025. Its strong cash position (as of March 31, 2025, GILD had $7.9 billion of cash, cash equivalents and marketable debt securities) indicates that the current yield of 2.83% is sustainable.

Gilead presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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