Gilead Sciences, Inc. (GILD)

(3 January 2017)

GILD Business Summary

This biopharmaceutical company is engaged in the discovery, development and commercialization of treatments to fight viral, bacterial and fungal infections, respiratory disorders, cardiovascular conditions and cancer.

GILD Fundamentals

• Price to Earnings: 6.64
• Earnings Per Share: $11.45
• Market Cap: 94.3B
• Current Ratio: 1.93
• Return on Equity: 93.73%
• Dividend Yield: 1.27%
• Cash to Debt Ratio: 0.45

Balance Sheet ($ in Millions)

• Total Assets increased $4,893.
• Total Liabilities increased $1,183.
• Total Stockholder Equity decreased $1,753.

Income Statement ($ in Millions)

• Total Revenues decreased $795.
• Income from Operations decreased $1,186.
• Net Income decreased $1,267.

Cash Flow Statement ($ in Millions)

• Net Cash provided by operating activities decreased $2,272.
• Net Cash used in investing activities decreased $727.
• Net Cash used in financing activities increased $5,633.
• Cash and Cash Equivalents at end of period decreased $4,156.

Added Notes

• Announced positive results from four international Phase 3 clinical studies (POLARIS-1, POLARIS-2, POLARIS-3 and POLARIS-4) evaluating an investigational, once-daily, fixed-dose combination of sofosbuvir, velpatasvir and voxilaprevir, a pangenotypic NS3/4A protease inhibitor, for the treatment of genotype 1-6 chronic HCV infection. The primary endpoint for all these studies was sustained virologic response rates at 12 weeks after treatment (SVR12).
• Announced positive results from Phase 2 clinical study of GS-4997 (selonsertib), an investigational inhibitor of apoptosis signal-regulating kinase 1 (ASK1), in nonalcoholic steatohepatitis (NASH). GS-4997 demonstrated anti-fibrotic activity in an open-label Phase 2 clinical trial that included 72 patients with NASH and moderate to severe (F2-F3) liver fibrosis, who received treatment with GS-4997 alone or in combination with simtuzumab.
• Total revenues were $7.5 billion for the third quarter of 2016, compared to $8.3 billion in the third quarter of 2015, primarily due to lower product sales, which were $7.4 billion compared to $8.2 billion in the same quarter of 2015.
• Research and development (R&D) expenses were $1.1 billion for the third quarter of 2016, compared to $743 million in the third quarter of 2015, primarily due to the overall progression of our clinical studies, including a $200 million milestone expense associated with our purchase of Nimbus Apollo, Inc. (Nimbus).

Sentiment

• Love this as a value play. GILD has seen recent declines due to contracts running up on certain drugs, as well as increased effectiveness of those drugs on patients, making them less prone to buy more. However, GILD has tremendous balance sheets, and is only trading at around 7 times earnings.
• It’s free cash flows are extremely comforting, and I believe, with their next line of drugs in the pipeline, GILD will regain it’s share value and see the share price increase into the $85  – $90 range within the next year.