Stock Analysis & Valuation Gilead Sciences, Inc. (GILD.SW)

• Previous Close: CHF66.00
• Sector Valuation Confidence Level: High

Valuation method	Value, CHF	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	33.50	-49
Graham Formula	86.80	32

Strategic Investment Analysis

Company Overview

Gilead Sciences, Inc. (GILD.SW) is a leading research-based biopharmaceutical company headquartered in Foster City, California, and listed on the Swiss Exchange (SIX). Specializing in the discovery, development, and commercialization of innovative medicines, Gilead focuses on addressing unmet medical needs in HIV, liver diseases, oncology, and inflammatory diseases. The company's flagship products include Biktarvy and Genvoya for HIV treatment, Veklury (remdesivir) for COVID-19, and Epclusa for hepatitis C. Gilead has also made significant strides in oncology with therapies like Yescarta and Tecartus, which are CAR-T cell therapies for blood cancers. With a robust pipeline and strategic collaborations with firms like Arcus Biosciences and Galapagos, Gilead continues to expand its therapeutic reach. The company's strong revenue base, driven by its antiviral portfolio and growing oncology segment, positions it as a key player in the global biopharmaceutical industry.

Investment Summary

Gilead Sciences presents a mixed investment profile. On the positive side, the company boasts a strong portfolio of antiviral therapies, particularly in HIV and hepatitis C, which generate consistent revenue. The acquisition of Immunomedics has bolstered its oncology pipeline with Trodelvy, offering growth potential. However, Gilead faces challenges, including declining sales of its hepatitis C drugs due to increased competition and curing patients. The company's reliance on Veklury (remdesivir) for COVID-19 is also a short-term revenue driver with uncertain long-term sustainability. Gilead's strong operating cash flow (CHF 11.38 billion in FY2021) and dividend payout (CHF 13.44 per share) provide shareholder value, but investors should monitor pipeline progress and competitive pressures in its core markets.

Competitive Analysis

Gilead Sciences holds a dominant position in the HIV treatment market, with Biktarvy being a top-selling antiretroviral therapy. Its hepatitis C franchise, though facing declining sales, once revolutionized treatment with high cure rates. The company's recent push into oncology, particularly with CAR-T therapies (Yescarta, Tecartus), positions it against larger oncology-focused biopharma firms. Gilead's competitive advantage lies in its deep expertise in virology and its ability to bring transformative therapies to market quickly. However, it faces intense competition in HIV from GlaxoSmithKline's ViiV Healthcare, which has a strong pipeline of long-acting therapies. In oncology, Gilead competes with giants like Bristol-Myers Squibb and Merck, which have broader portfolios and greater resources. Gilead's strategy of targeted acquisitions (e.g., Immunomedics, Kite Pharma) helps it enter new markets but requires successful integration. The company's collaborations, such as with Galapagos in inflammation, diversify its pipeline but also expose it to partnership risks. Overall, Gilead's strong cash flow and established products provide stability, but its growth depends on successful pipeline execution in competitive therapeutic areas.

Major Competitors

• GlaxoSmithKline plc (GSK.L): GSK's ViiV Healthcare is a major competitor in HIV, with products like Dolutegravir-based regimens and long-acting injectables. GSK's strength lies in its innovative HIV pipeline, but it lacks Gilead's breadth in liver diseases and oncology. GSK's broader vaccine and pharmaceutical portfolio provides diversification, but its HIV focus is narrower than Gilead's.
• Bristol-Myers Squibb Company (BMY): BMS is a leader in oncology with blockbusters like Opdivo and Yervoy. It competes with Gilead in cell therapy (via its acquisition of Celgene) and has a broader oncology portfolio. However, BMS lacks Gilead's strong presence in antiviral therapies. BMS's financial scale and pipeline depth make it a formidable competitor in oncology but less so in virology.
• Merck & Co., Inc. (MRK): Merck is a key competitor in oncology (Keytruda) and vaccines, but its HIV portfolio (e.g., Isentress) is smaller than Gilead's. Merck's strength lies in its immuno-oncology leadership, but it trails Gilead in antiviral therapies. Merck's robust R&D budget and diversified pipeline pose long-term competition, especially in oncology.
• AbbVie Inc. (ABBV): AbbVie competes with Gilead in hepatitis C (Mavyret) and immunology (Humira). While AbbVie's HCV sales have declined like Gilead's, its immunology franchise is a strong revenue driver. AbbVie lacks Gilead's HIV dominance but has a growing oncology presence (e.g., Imbruvica). Its diversified portfolio offsets some competitive pressures.
• Regeneron Pharmaceuticals, Inc. (REGN): Regeneron is a biotech leader in immunology (Dupixent) and oncology (Libtayo). It competes indirectly with Gilead in inflammation and oncology but lacks antiviral therapies. Regeneron's strength is its innovative pipeline and strong R&D capabilities, but its narrower focus limits direct competition with Gilead's broader portfolio.