Gilead Lookin’ Good

March 30th, 2009 | Sources: Fortune


When Gilead Sciences agreed to acquire CV Therapeutics for $1.4 billion in cash, the prize was Ranexa, the first totally new anti-angina drug approved for first line therapy in 30 years.

Gilead believes Ranexa can boost its cardiovascular business as it gathers itself to launch its hypertension drug Darusentan, which looks solid late in Phase III.

gileadBut unlike other pharmaceutical players that are using acquisition as a primary growth strategy, Gilead also generates growth internally.

California-based Gilead has been on Fortune’s list of Fastest Growing Companies for 3 out of the last 4 years. Its stock has doubled since 2004, and it’s down only 10% since the Feds played Russian roulette with Lehman Brothers and the chamber turned out to be loaded.

The S&P has dropped 47% since then.

The secret to Gilead’s success is a trio of HIV treatments which drove nearly 90% of its $5.3 billion revenues in 2008.

These drugs all leverage Gilead’s proprietary compound, tenofovir, which is prescribed in one form or another for 80% of new HIV patients in the US, and nearly that many in the EU.

goodstuff1New HHS guidelines now list these drugs, and no others, as the preferred backbone therapy for HIV/AIDS.

Patients find Gilead’s one-a-day combo pills, Truvada and Atripla easier to manage, so they’re more likely to stick with the plan and that drives better outcomes.

Gilead also stands to benefit from evidence-driven public policy shifts towards earlier detection and treatment of HIV which will increase the size of the treated population and the duration of therapy.

“Gilead identified the importance of convenience, less frequent dosing, and combination pills earlier than anyone else,” said Geoffrey Porges, an analyst at Sanford Bernstein.


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