Gilead Sciences (NASDAQ: GILD) has shifted from a period of stagnant growth, driven by slowing hepatitis C revenues and declining sales of its COVID-19 therapy Veklury, to a turnaround led by new HIV and oncology drugs. The pharmaceutical stock is up more than 12% so far this year and more than 5% over the past month. The driver for the bounce is the company's best second-quarter growth in three years.
That growth was led by its HIV therapies; breast cancer drug Trodelvy; and Livdelz, used to treat primary biliary cholangitis (PBC), an autoimmune disease of the liver. This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.
For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Here are three reasons that Gilead's turnaround has Wall Street excited. HIV treatment and HIV preexposure prophylaxis (PrEP) therapies remain Gilead's highest-margin cash drivers.
Its treatment Biktarvy continues to deliver strong baseline revenue with $3.8 billion in second-quarter sales, up 7% year over year, and it maintains more than 52% of U.S. market share. The rollout of twice-yearly injectables such as Yeztugo expands the PrEP market; long-acting formulations increase adherence and secure durable, high-margin, sticky revenue for years to come. On top of that, Gilead and partner Merck (NYSE: MRK) are close to an approval for the first weekly pill to treat HIV.
This drug is a combination of Gilead's lenacapavir and Merck's islatravir. The Prescription Drug User Fee Act (PDUFA) action date for the combination therapy is Aug. 27. In the second quarter, Gilead reported overall sales of $7.8 billion, up 10% year over year.
That included HIV-related sales of $5.7 billion, up 12% year over year and 13% from the prior quarter. The key, though, was that the company's PrEP sales exceeded $1 billion for the first time, led by $801 million in Descovy sales, up 60% from the same quarter a year ago. Oncology now provides Gilead a second pillar of organic top-line growth.
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