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Gilead Sciences, Inc.

Gilead Sciences, Inc. NASDAQ: GILD. Vivek Vinayak Patrick Leake. Company Background. Research-based pharmaceutical company Primary focus in HIV/AIDS, liver diseases, respiratory and cardiovascular, and cancer 16 products (6 HIV, 2 Liver, 3 Cardiovascular, 2 Respiratory, 3 Other).

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Gilead Sciences, Inc.

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  1. Gilead Sciences, Inc. NASDAQ: GILD Vivek Vinayak Patrick Leake

  2. Company Background • Research-based pharmaceutical company • Primary focus in HIV/AIDS, liver diseases, respiratory and cardiovascular, and cancer • 16 products (6 HIV, 2 Liver, 3 Cardiovascular, 2 Respiratory, 3 Other)

  3. Company Background • $9.7bn revenue, ⅔ from HIV products • $4.2bn EBITDA, 43% margin • 17% revenue growth over past year • Street estimates ~40% revenue growth 2014 due to release of products for HCV oral treatment

  4. Investment Thesis • Strong track record • Several recent acquisitions will come into fruition • Pharmasset acquired in 2011 for $11bn • Current leader in Hepatitis C drugs • Forefront of innovation • Strong product pipeline focusing on HCV, HIV, cardiovascular and respiratory disorders

  5. Catalysts • U.S. launch of Sovaldi drug was a success • Approved on December 6, 2013 • December sales totaled $136mi • Sales estimated to top $2.4bn • Filing for approval in Europe before the end of the quarter • Recently filed for approval of their once-daily fixed-dose drug for HCV treatment • Combination of ledipasvir (LDV) and sofosbuvir (SOF) • FDA has assigned LDV/SOF a “Breakthrough Therapy” designation • Sales expected to exceed $7bn/yr

  6. Intrinsic Valuation - DCF

  7. WACC

  8. Sensitivity

  9. Relative Valuation

  10. Relative Valuation - Implied Price/Share

  11. Investment Risks • Primary competition from AbbVie (NYSE: ABBV) • Also working on fixed dose combination drug • Approximately 45% of product sales occur outside the U.S. • Earnings can be negatively affected by currency fluctuations • Healthcare reform (340B Drug Pricing Program) • Rebate amount owed to Medicaid increased by 8% • Required to provide a 50% discount on products sold to patients enrolled in Medicare Part D

  12. Obligatory Bloomberg Plug For Thomas

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