FOSTER CITY, Calif. & BURLINGAME, Calif. – Gilead Sciences, Inc. (NASDAQ: NASDAQ:GILD) and Genesis Therapeutics, Inc. have announced a strategic collaboration focused on the discovery and development of new small molecule therapies. The partnership will utilize Genesis' artificial intelligence (AI) platform, GEMS (Genesis Exploration of Molecular Space), to generate and optimize molecules for targets specified by Gilead.
Under the agreement, Genesis will receive an upfront payment of $35 million for three targets, with the option for Gilead to nominate additional targets for a fee. Genesis may also earn milestone payments and royalties on net sales of any commercialized products resulting from the collaboration.
The collaboration aims to leverage generative AI to accelerate the discovery of molecules for challenging targets, a process traditionally hindered by the lack of sufficient training data for machine learning methods. Dr. Flavius Martin of Gilead expressed optimism about the potential to address unmet patient needs through this partnership. Similarly, Dr. Evan Feinberg of Genesis highlighted the capability of their physical AI platform to enable drug discovery for difficult targets.
This transaction is expected to impact Gilead's 2024 earnings per share (EPS) by approximately $0.02, affecting both GAAP and non-GAAP EPS.
Genesis Therapeutics specializes in AI-driven small molecule drug discovery, integrating advanced AI methods to target complex diseases. Gilead Sciences has a history of breakthroughs in medicine, targeting severe diseases like HIV, hepatitis, COVID-19, and cancer.
The collaboration is subject to risks and uncertainties, including the realization of anticipated benefits, clinical trial outcomes, regulatory approvals, and the possibility of strategic discontinuation of development programs. These forward-looking statements are not guarantees of future performance and involve risks and uncertainties.
The information provided is based on a press release statement.
In other recent news, Gilead Sciences is making strides in its clinical development program, revealing encouraging results from lung cancer studies on Trodelvy. The data, set to be presented at the upcoming IASLC World Conference on Lung Cancer, shows promising efficacy for previously untreated advanced or metastatic non-small cell lung cancer patients. However, it's crucial to note that Trodelvy has not yet received approval for treating these forms of lung cancer.
In addition, Gilead has seen a series of significant developments. The company's HIV prevention drug, lenacapavir, demonstrated impressive efficacy in the PURPOSE-1 PrEP study, leading RBC Capital to increase its probability of success estimate for the drug to 95%. The FDA also granted accelerated approval for Livdelzi, a treatment for Primary Biliary Cholangitis (PBC), seen as a significant broadening of the PBC market by TD Cowen and BMO Capital Markets.
Gilead reported a 6% year-over-year rise in total product sales during its second quarter of 2024, reaching $6.7 billion. This increase was driven by an 8% rise in sales for its HIV treatment, Biktarvy, and a 23% increase for the oncology drug, Trodelvy. Following these results, Gilead revised its full-year non-GAAP operating income and EPS guidance upwards.
Analysts from TD Cowen, BMO Capital Markets, and Truist Securities maintained positive outlooks on Gilead's stock, with price targets ranging from $83 to $85. These assessments reflect the potential market expansion for PBC treatments and the anticipated success of Livdelzi. The recent FDA approval and promising clinical data provide a strong foundation for Gilead's next steps in addressing the needs of PBC patients.
InvestingPro Insights
As Gilead Sciences (NASDAQ: GILD) embarks on this innovative collaboration with Genesis Therapeutics, it's important to consider the company's financial health and market position. Gilead has exhibited a strong return over the last three months, with a 22.82% increase in price total return, reflecting investor confidence and a positive market reaction to its strategic moves. This is complemented by a high shareholder yield, which is an InvestingPro Tip indicating that the company is returning significant value to its shareholders.
Looking at the financial data from InvestingPro, Gilead boasts a solid market capitalization of $98.57 billion, asserting its prominence in the biotechnology industry. This is supported by a robust operating income margin of 38.5% for the last twelve months as of Q2 2024, showcasing efficient management and profitability in its operations. Moreover, Gilead's commitment to shareholder returns is evident in its dividend history, having raised its dividend for 9 consecutive years, with a current dividend yield of 3.89%.
Investors considering Gilead as a potential addition to their portfolio can find more insights and tips on InvestingPro. There are 9 additional InvestingPro Tips available for Gilead, offering a deeper dive into the company's financial metrics and market performance. These tips provide valuable information for making informed investment decisions, which can be accessed at: https://www.investing.com/pro/GILD.
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