Can Veklury Sales Retain Momemtum for Gilead (GILD) in 2022?
Solid sales from Veklury cushion Gilead (GILD) in 2021 amid COVID-19. However, new oral antivirals in the market might hurt sales. GILD now shifts focus to oncology as the virology...
Gilead Sciences, Inc. GILD has put up a strong performance in 2021 so far owing to a solid contribution from its COVID-19 treatment Veklury (remdesivir).
Shares of this biotech giant have gained 25.1% in the year against the industry’s 20.4% decline.
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Sales of Veklury came in at $1.9 billion for the third quarter of 2021 as cases surged mainly amid the Delta variant. In the first nine months of 2021, Veklury sales came in at $4.2 billion.
Evidently, Gilead upped its annual revenue guidance and projections for Veklury sales.
Gilead recently announced that the European Commission (EC) expanded the label for Veklury for use in the early stages of COVID-19 to help prevent disease progression in high-risk patients in the EU amid the rising cases of infection and the emergence of new variants like Omicron.
Veklury sales most likely increased in the fourth quarter of the year as well.
However, the drug now faces stiff competition from other treatments, especially oral pills which are much easier than those requiring administration by a healthcare professional.
The FDA recently granted an Emergency Use Authorization (EUA) to Merck’s MRK and Ridgeback Biotherapeutics’ molnupiravir, an investigational oral antiviral, for the treatment of high-risk adults with mild to moderate COVID-19.
Merck also entered into a procurement agreement with the U.S. Government under which, it agreed to supply 3.1 million courses of molnupiravir to the U.S. administration, upon gaining an EUA from the FDA.
The regulatory body also authorized the emergency use of Pfizer’s PFE oral antiviral treatment Paxlovid for treating mild-to-moderate COVID-19 in adults and pediatric patients. In November 2021, Pfizer announced an agreement with the U.S. government to supply 10 million treatment courses of Paxlovid, with delivery fulfillment expected to be completed in 2022.
Hence, Veklury sales might be affected next year facing competition from these oral antivirals.
Nonetheless, Gilead has a strong HIV portfolio. Its HIV therapy Biktarvy continues to drive growth despite the ongoing impact of the pandemic and should maintain the momentum. However, the loss of exclusivity of Truvada and Atripla has affected the HIV franchise’s performance.
Competition is intense in the HIV market from GlaxoSmithKline GSK and others.
Glaxo reported 8% growth in its HIV franchise in the third quarter, driven by its new HIV products Dovato, Juluca, Rukobia and Cabenuva.
Gilead is also looking to develop additional treatments to maintain its dominance in this space.
The decline in its legacy HCV business and an increasing competition in the HIV business propelled Gilead to diversify into the lucrative oncology space, which promises great potential despite fierce competition.
To that end, Gilead made a good progress of late. It recently exercised its options for three programs in the Arcus Biosciences, Inc. clinical-stage oncology portfolio. The programs include both anti-TIGIT molecules domvanalimab and AB308, besides etrumadenant ((A2a/A2b Adenosine Receptor Antagonist) and quemliclustat (small Molecule CD73 Inhibitor).
Breast cancer drug Trodelvy (added through the Immunomedics acquisition) also continues to perform well.
Hence, in 2022, we expect Gilead to focus more on the oncology space. Strategic deals/acquisitions might be in the pipeline as well.
Gilead currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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