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Portfolio and Pipeline Set Gilead Apart

It already had a solid lineup even before news of its potential COVID-19 treatment.

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Gilead Sciences (GILD) generates stellar profit margins with its HIV and HCV portfolio, which requires only a small salesforce and inexpensive manufacturing. We think its portfolio and pipeline support a wide economic moat, but Gilead needs HCV market stabilization, strong continued innovation in HIV, solid pipeline data, and smart future acquisitions to return to growth.

Gilead’s tenofovir (TDF) molecule--in Viread, Truvada, and older single-tablet regimens--historically formed the heart of the company’s $17 billion HIV franchise. The newest combo pills--replacing TDF with TAF--reduce bone and kidney safety issues and are seeing rapid uptake. Gilead’s biggest competitive threat in HIV is Glaxo (GSK), whose Triumeq saw rapid growth in 2015. Also, Glaxo has launched two-drug regimens based on its integrase inhibitor Tivicay (Juluca in 2017 and Dovato in 2019) that also bypass Gilead’s drugs. However, Gilead’s Genvoya (2015), Odefsey (2016), Descovy (2016), and Biktarvy (2018) launches push patent protection into the late 2020s and are boosting the company’s market share.

Karen Andersen does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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