Gilead Sciences (NASDAQ:GILD) maintained its Equalweight rating and a price target of $76.00 following AstraZeneca (NASDAQ:AZN)'s announcement of a failed study, which could have implications for Gilead's cancer drug Trodelvy. AstraZeneca reported that its TROPION-breast-01 study did not demonstrate a benefit in overall survival (OS) in patients with certain advanced breast cancers.
The study had previously shown a progression-free survival (PFS) benefit, leading to expectations that further data would confirm its superiority over Trodelvy, a similar drug by Gilead.
The latest outcomes from AstraZeneca's study are seen as a positive development for Gilead, potentially leaving it without direct competition in this treatment area. The lack of new safety concerns in AstraZeneca's trial, particularly regarding grade 3 or higher interstitial lung disease (ILD) events, was also noted. This news could alleviate some of the competitive pressure on Gilead's Trodelvy within the breast cancer drug class.
Despite the setback for AstraZeneca, the results may inject a sense of optimism for Gilead's broader lung cancer strategy. This comes especially after AstraZeneca's less than favorable updates in second-line non-small cell lung cancer (NSCLC) presented at the World Conference on Lung Cancer (WCLC) on September 9, 2024. Analysts had previously held low expectations for the drug class in lung cancer following these updates.
While the firm remains cautious about the overall prospects for this class of drugs in treating lung cancer, the current turn of events suggests reevaluating whether Dato-Dxd, AstraZeneca's drug, should be considered the benchmark for Trodelvy's potential. The firm acknowledges the significant optionality that still exists for Gilead leading up to its lung cancer readouts expected in the near to mid-term.
In summary, AstraZeneca's TROPION-breast-01 study did not meet the statistical significance on OS in a specific patient group with breast cancer, which could have been a direct competitor to Gilead's Trodelvy. This development is viewed as an unexpected boon for Gilead, possibly reinforcing its position in the market for the time being.
Gilead Sciences has made significant strides in HIV prevention with its drug, lenacapavir, showing a 96% reduction in HIV infections in a Phase 3 trial. The company plans to file for approval of lenacapavir by the end of 2024, with anticipated market introduction in 2025. Investment banking firms such as Mizuho, BMO Capital Markets, Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) have maintained their respective ratings on Gilead, highlighting the promising outcomes of the trial.
In parallel, Gilead Sciences has maintained its standing in the oncology market after a competitor's clinical setback. The company's drug, Trodelvy, is already approved and includes an overall survival benefit on its label, which positions it favorably in the market.
Gilead also reported a 6% year-over-year rise in total product sales, driven by an 8% rise in sales for its HIV treatment, Biktarvy, and a 23% increase for the oncology drug, Trodelvy. These recent developments have been met with approval from BMO Capital Markets and Piper Sandler, who maintained positive outlooks on Gilead's stock.
InvestingPro Insights
As Gilead Sciences (NASDAQ:GILD) navigates the competitive landscape following AstraZeneca's recent trial results, investors may find value in considering several key metrics and insights. Gilead's market capitalization stands at a robust $104.5 billion, reflecting its significance in the biotech industry. The company's commitment to rewarding shareholders is evident through its consistent dividend growth, having raised its dividend for 9 consecutive years, with a current yield of 3.67%. This dedication to shareholder returns is a testament to Gilead's financial health and management's confidence in its long-term strategy.
From a valuation perspective, Gilead is trading at an adjusted P/E ratio of 13.33 as of the last twelve months ending with Q2 2024, which may suggest the stock is valued reasonably relative to its earnings. Additionally, the company has demonstrated a strong return over the last three months, with a price total return of 19.89%, indicating positive investor sentiment and market momentum. These financial indicators, combined with Gilead's position as a prominent player in the biotechnology industry, underscore the potential for continued growth and stability.
For those interested in deeper analysis, there are 12 additional InvestingPro Tips available, providing further insights into Gilead's financial health and market performance. Investors seeking to make informed decisions may explore these tips by visiting https://www.investing.com/pro/GILD.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.