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Gilead Is Creating A Coronavirus Drug Stockpile — Is Gilead Stock A Buy? FacebookTwitterLinkedInShare Licensing ALLISON GATLIN10:00 AM ET 05/28/2020 Biotech company Gilead Sciences (GILD) gained an emergency authorization for its coronavirus treatment in early May as hopes for GILD stock continue to rise. Now, the biotech company is scrambling to supply enough of the drug known as remdesivir to fuel clinical studies, compassionate use and expanded access programs, and emergency use for patients with Covid-19, the respiratory illness caused by the new form of coronavirus. Throughout these efforts, GILD stock has been volatile. Gilead is also trying to stake its claim in HIV treatments. It's facing off against an outlet mostly owned by GlaxoSmithKline (GSK) called ViiV Healthcare. Biotech company Gilead is also pushing into cancer drugs after wrapping its takeover of Forty Seven. All in all, should investors consider buying GILD stock right now? IBD Newsletters Get exclusive IBD analysis and action news daily. SIGN UP NOW! A Fundamental Look At GILD Stock Gilead used to be a powerhouse in treating hepatitis C. The drug called Sovaldi gained Food and Drug Administration approval in 2013. The following year, it raked in $10.3 billion in sales. Gilead also had success with drugs dubbed Harvoni and Epclusa. About 95% of hepatitis C patients can now be cured with treatment. In 2016, sales in Gilead's formerly bullish hepatitis C unit tumbled 23% as the number of cures increased. That trend has continued ever since despite the addition of a new hepatitis C drug known as Vosevi. In the wake of that hepatitis C drug sales cliff, earnings have painted a dim picture. Adjusted earnings per share have declined for 14 of the past 16 quarters. In the first quarter, Gilead eked out a 1% earnings gain to $1.68 per share. That beat estimates by 10 cents. Sales rose 5% to $5.55 billion and also topped expectations. But that also added onto a growing trend of flat or single-digit percentage increase in sales growth. Further, Gilead is withholding its 2020 outlook due to uncertainty amid the coronavirus pandemic. Following its first-quarter earnings report on April 30, GILD stock slipped 4.8% on May 1. Analysts polled by Zacks Investment Research expect these trends to continue in the second quarter. On average, they expect adjusted Gilead earnings of $1.58 per share on $5.36 billion in sales. Earnings would dive about 13% and sales would dip almost 6%. Looking For Better Growth This volatile trend doesn't put GILD stock in line with CAN SLIM rules for investing. Growth stock investors should look for stocks with 20%-25% or better earnings growth in the most recent quarter. Notably, Gilead's after-tax margin rose in the first quarter to 38.6%. That shrugged off a two-quarter trend of declines. Taking into account fundamental and technical measures, GILD stock had a Composite Rating of 85 as of May 27. That puts shares in the top 15% of all stocks, but trails better-rated biotech companies like Vertex Pharmaceuticals (VRTX). Annual Metrics: What Does 2019 Tell Us? In 2019, Gilead earnings were $6.63 per share, minus certain items. That edged down a fraction on a year-over-year basis. Operating cash flow came out to $6.69 per share — less than 1% ahead of profit. The fastest-growing companies have operating cash flow at least 20% above earnings per share. But sales inched up 1% to $22.45 billion. That was the first time sales rose since 2015. Less bullishly, Gilead's annual pretax margin hit 47.6% — its lowest in six years. Pretax margin also slowed for the fourth year running. When looking for strong stocks, it's smart to consider those with accelerating pretax margins. In 2020, analysts expect Gilead to earn $6.41 per share on $22.26 billion in sales. Earnings would slide 2% and sales would be flat. GILD Stock Technical Analysis: A Cup-With-Handle Shares of GILD stock are currently forming a cup-with-handle base and a buy point at 85.89. But as of the close on May 27, GILD stock was below that entry. Shares were also well above their 200-day moving average, but remained below their 50-day line. Gilead's relative strength line has mostly declined since 2014 — meaning it has lagged the S&P 500 during that period. But that trend appears to be reversing now. Gilead has an RS Rating of 85, putting its 12-month performance in the top 15% of all stocks. Leading stocks tend to have RS Ratings of 80 or above. Gilead stock ranks No. 49 out of nearly 600 publicly traded biotech stocks by Composite Rating in IBD's Stock Checkup. Keep tabs on those scores by visiting IBD Digital. Which Mutual Funds Are Investing In Gilead? Fidelity Contrafund remains a long-term key investor in GILD stock. The largest actively managed mutual fund in the world increased its holding in GILD stock in December and March. Further, more funds are either adding GILD stock or increasing their positions than cutting their holdings, as of late March. Several of those adding funds have A ratings. GILD Stock News: Coronavirus Treatment Gets FDA Nod On May 1, Gilead gained Food and Drug Administration emergency use authorization for remdesivir in coronavirus treatment. Physicians can administer remdesivir intravenously each day for five days or 10 days in patients hospitalized with Covid-19. In late April, Gilead said a Phase 3 study of its coronavirus treatment showed a five-day regimen of remdesivir was just as effective as a 10-day course of the drug in severe Covid-19 patients. Further, the National Institute of Allergy and Infectious Diseases said remdesivir cut down on the time to recovery by 31% in hospitalized patients with the respiratory illness. Now, Gilead says it's creating a stockpile of the experimental coronavirus treatment. The company plans to have more than 500,000 courses of remdesivir by Oct. 1 and 1 million by year's end. Further, Gilead says it plans to donate its existing supply of remdesivir for compassionate use, expanded access or clinical studies. Results from compassionate-use of the drug have been promising as well. These programs allow access to a drug for patients who can't enroll in a study. In early April, Gilead said 53 patients who received remdesivir under compassionate-use programs showed a clinical improvement of 84% after 28 days of follow-up. Across all patients, 68% showed improvement in oxygen support class over a median follow-up of 18 days. The European Medicines Agency recommended compassionate use of remdesivir based on laboratory tests. Although remdesivir isn't approved anywhere, this will allow patients in some European countries to access the experimental coronavirus treatment in serious cases. Will GILD Stock Fly On Coronavirus Treatment? In mid-March, Gilead said it had become swamped with compassionate-use requests for remdesivir in U.S. patients with Covid-19. So, the biotech company suspended that program and, instead, put together an expanded-use program. Further, Chief Executive Daniel O'Day said in late March the biotech company expects to have initial results from clinical tests of its coronavirus treatment within "the coming weeks." On March 13, GILD stock popped on the test results for its coronavirus treatment in patients sickened on the Diamond Princess cruise ship in Japan. A total of 17 passengers received intravenous remdesivir once a day for 10 days to treat it. By the end of the test, all were still alive and more than half recovered. That sent GILD stock up 3.2%. Shares also popped on March 2 after the biotech company announced its $4.9 billion plan to buy Forty Seven, a cancer-focused player. Forty Seven is currently testing an immuno-oncology drug in blood cancers and solid tumors. Acquisitions Bolster Gilead's Pipeline The addition of Forty Seven wrapped on April 7, and helps bolster Gilead's pipeline of oncology drugs. In 2017, Gilead spent $11.9 billion to acquire Kite Pharma, the maker of Yescarta, a CAR-T drug. CAR-T drugs also target cancer by training the immune system. In late February, GILD stock rose nearly 5% after a World Health Organization representative said the biotech company's experimental coronavirus treatment, remdesivir, might be the best candidate for treating Covid-19. Also that day, documents showed China's National Medical Products Administration had accepted the application for Yescarta, in treating a form of blood cancer known as large B-cell lymphoma. The application was filed by a joint venture known as Fosun Kite Biotechnology. In early February, GILD stock rose 5% in a single day after the biotech company said it would send remdesivir to China to test it as a coronavirus treatment. The drug previously showed promise in a 35-year-old U.S. patient with a new form of coronavirus. Biotech Company Announces Partnerships The FDA granted a Gilead drug a speedier priority review in the treatment of mantle cell lymphoma, a type of blood cancer. That drug, KTE-X19, is being developed by Gilead's Kite. In December, Gilead and Japan-based pharma Eisai entered into a collaboration agreement for the co-promotion of a drug called filgotinib as a rheumatoid arthritis treatment, pending approval. Gilead announced it submitted an application for filgotinib approval to U.S. regulators. The biotech company also announced China approved chronic hepatitis C treatment Vosevi. In November, Gilead said a pooled analysis showed strong results for filgotinib in rheumatoid arthritis treatment. Filgotinib is being developed with Galapagos (GLPG). The two companies announced a collaboration deal in August 2019. Under terms of that deal, Gilead paid Galapagos $3.95 billion up front. Gilead also made a $1.1 billion equity investment in the other biotech company. The deal was initially announced July 14, 2019. Gilead will have access to six drugs in clinical studies and 20 preclinical medicines. So, Is Gilead Stock A Buy? Based on CAN SLIM investing principles, the short answer is no. Gilead stock is not a buy right now based on the metrics that other big winning stocks showed at the beginning of major price runs. Investors should look for stocks that beat expectations while growing sales and earnings. Shares of GILD stock hadn't yet topped a buy point out of a cup-with-handle base as of the close on May 27. Further, the biotech company reported single-digit sales and earnings growth in the first quarter. The company also is poised to report sliding sales and earnings in the second quarter. (Related: See other stocks near a buy zone.) It will be key to watch for data from Gilead's study of remdesivir in moderate Covid-19 patients. The results of that coronavirus treatment study are expected later this month. Is it time to buy or sell these other large-cap stocks? Keep tabs on IBD analysis. Follow Allison Gatlin on Twitter at @IBD_AGatlin. |
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| aus der Diskussion: | GILEAD SCIENCES 885823 |
| Autor (Datum des Eintrages): | mr11x (28.05.20 22:12:45) |
| Beitrag: | 2,872 von 3,632 (ID:63837011) |
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