Another weakness of Gilead stock is its competitive landscape, which is constantly evolving and challenging its market position. For example, Gilead’s hepatitis C drugs, which once generated more than $10 billion in annual sales, have been largely displaced by cheaper and more effective alternatives from AbbVie and Merck.
Similarly, Gilead’s Veklury, which was hailed as a breakthrough for COVID-19, has seen its demand and revenue decline as more vaccines and treatments become available. In the third quarter of 2023, Gilead’s Veklury sales dropped by 36% year-over-year, to $873 million.
Opportunities: A Growing Oncology Segment and a Strategic Partnership with Merck
One of the main opportunities for Gilead stock is its growing oncology segment, which is expected to become a major growth driver for the company in the coming years. Gilead has been aggressively expanding its presence in the oncology market, through acquisitions, collaborations, and internal development. In addition to Trodelvy and Magrolimab, Gilead also has several other oncology drugs in its portfolio, such as:
- Yescarta, a CAR-T therapy for treating certain types of lymphoma and leukemia. Yescarta was the first CAR-T therapy to be approved by the FDA, in 2017, and has generated $1.6 billion in cumulative sales since then.
- Tecartus, another CAR-T therapy for treating mantle cell lymphoma. Tecartus was approved by the FDA in 2020, and has shown strong uptake and patient outcomes.
- Jyseleca, a JAK inhibitor for treating rheumatoid arthritis and other inflammatory diseases. Jyseleca was approved in Europe and Japan in 2020, and is awaiting approval in the U.S., where it could face competition from AbbVie’s Rinvoq and Pfizer’s Xeljanz.
- Kite, a subsidiary of Gilead that specializes in cell therapy. Kite has a robust pipeline of CAR-T and TCR therapies for various hematologic and solid tumors, and is also developing next-generation platforms such as allogeneic and off-the-shelf products.
Another opportunity for Gilead stock is its strategic partnership with Merck, which was announced in February 2021. The two companies have agreed to co-develop and co-commercialize lenacapavir and islatravir, two long-acting injectables for treating HIV.
