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Comments (57)

MickeyD77 profile picture
Very well done article. GILD has always been a high quality company that cured hepatitis. They really understand viruses so they will always be in the forefront when viruses attack us, as they had been with HIV and now coronavirus. Now GILD has a very experienced CEO that knows how to buy quality small companies and hopefully make money in new areas.
Robbe Delaet profile picture
@MickeyD77 very well said, sir! Cheers to that!

Best, Robbe
calstang66 profile picture
Giliad (yes, going long)
1) virtuallly cured hepatitus
2) has the #1 med for HIV
3) the first (with 50 companies in the race) to come up with a "treatment" showing positive efficacy against the corona virus.
I like the article, it well thought out. Nobody has the crystal ball on Covid19. Mr Day is proving to be an excellent CEO. I hope he and his management team make the right strategic choices in terms of product portfolio and R&D resource allocation in order to make the top line more predictable in the future for investors
Robbe Delaet profile picture
@Francesco De Bartolo thanks for your comment. O'Day has done an amazing job at Roche and it looks like he will get Gilead back on the rails as well.
I'm pretty confident in it. The Galapagos and Forty Seven developments are a first positive sign.

Best, Robbe
Dear author,

Indeed, Gilead says they will produce few millions of the drug by end of the year. but there is so many uncertainty.

first, this drug is the only antiviral available. the world will cooperate with Gilead to increase the production to tens of millions.

second, pricing, Gilead said they will make the drug affordable worldwide. can you define "affordable"? Gilead didnt disclose the cost of making this drug, but cost always go down when production increase.

I see remdisivir will have high impact on Gilead revenues starting next years and years to come if vaccines are not effective.
Robbe Delaet profile picture
Hi @Alkaizer, thanks for sharing your thoughts!
Drug pricing is indeed the big question mark here and could have a significant impact on financial implications of this treatment. Let's wait out news about this topic.
Yes, it also depends significantly on the seasonality of this virus and vaccines.
If this virus will be seasonal for many years to come, Remdesivir could create significant sales for Gilead.
Take into account that Gilead is creating more than $20 bln in sales annually.
My point is that Gilead has big potential growth drivers which will likely outweigh growth from Remdesivir by a huge amount.
CaptainSolo profile picture
Gilead has 4 companies in the Cayman Islands. There names used to be on their US website.
"Foreign source income" from outside the USA can escape IRS federal and state income taxes under the Internal Revenue Code. Legally! www.linkedin.com/...
stay with it for a long time, it will be worth it
Notice how on Fri with FDA approval announc. pending downgrades pour in pre market stock tanks then late aft. formal FDA approval announc. made from WH. Classic street "analysts" separating retail from their shares rinse repeat. All legal too
I am long GILD and agree with the article but no word about the Yescarta patent issues with BMY?
Robbe Delaet profile picture
@degerliyatirimci to be honest, I'm not 100% updated on this news, which is why I didn't include it in my article. Also, patent lawsuits are unpredictable, so until we got more clear news about that, I really don't want to gamble on any outcomes. Take into account that these things happen all the time and can take multiple years before there is any outcome.
But definitely something to keep an eye on!

Best, Robbe
ShankaSwingTrades profile picture
100$ Is coming
long $gild
TAMIFLU.. VS... COVID-19.. Look up how much Roche made during the SARS Pandemic ...
Robbe Delaet profile picture
@GILDZILLA the 2003-2004 SARS epidemic? Around $700 mln with Tamiflu?
What is the point you want to make?
Nice analysis ... confirmed that GILD obtained approval to use Remdesivir for emergencies... and they are donating 1.5MM of their current stockpile as goodwill ... real money would come in Q3. With large number (hundreds of thousands?) of Covid patients clogging beds and resources in hospitals, shortening recovery is crucial not nice-to-have in the pandemic fight and reopening of businesses as usual. I would expect nations to fight for supplies.

The donation of current stockpile should not be viewed as write-off but investments to obtain more data for expansion of use.
Robbe Delaet profile picture
@koow thanks for the kind words. Yeah a bit sad that the news came out right before the article. However, it doesn't change much about my investment thesis.
You are totally right about the free-of-charge doses.
Ramon Serrano Bejar profile picture
I consider this well-documented article was written prior to FDA's approval of the remdesivir of the day of today and therefore should not have been published today, but rather asked the author to update all the corresponding necessary qualitative and quantitative changes.
I make these deductions based on the following paragraphs of this article:
“As a consequence, the treatment will only be beneficial for Gilead if the virus looks to become seasonal. This is also mentioned in a recent Morningstar analysis:

We assign remdesivir a 70% probability of approval in 2020 as a treatment for COVID-19, but we assume a 40% probability of bigger sales in 2021-23 as governments stockpile the treatment, if the disease looks like it might become seasonal. We assume peak sales of $1.4 billion in 2021, as we expect progress with a vaccine could limit long-term sales potential.”
Did you realize Tamiflu did $13B during SARS ??
Robbe Delaet profile picture
@Ramon Serrano Bejar thanks for your comment. I'm clearly explaining in the article that I don't expect Remdesivir to have a material impact on financials in a longer time frame. So this approval does not change much about my investment thesis either. Gilead stays a buy based on its long term growth opportunities and Remdesivir can just be seen as an icing on the cake.
I will certainly update the investment thesis if we would get a big second wave of virus cases, which could significantly impact the financials, but not everything is too premature.

Best, Robbe
I was trying to find information on what potential benefit an emergency use approval by the FDA would have in terms of a tax benefit by Gilead donating the 1.5M doses of remdesivir. Most of the articles I have read on remdesivir do not address any tax write off, just focusing on the cost of the increased production, $1B, which is seen only as a negative.
This will easily go to $140.00
Good luck with that when the ceo is giving out the drug for free. Even with fda approval the stock barely moves. Why should anyone invest in a company so hell bent on giving away their money for free. That’s insane
I agree w/ Robbe that CEO is a " short term pain for long term gain" CEO even on RDV strategy...
My interpretation of CEO RDV strategy is as ff:

1st give limited supply of IV form RDV free while accumulating critical data while
The world gov t is paying for clinical trials for Gilead to determine when a
patients can effectively use RDV to stop virus replication....
Fact #1 RDV does not “kill “ virus,
Fact #2 RDV also does not prevent “wet lung or microclotting strokes”, cytokine storms
associated with severe virus infection.
RDV also not effective if person is not yet infected with virus....
Issue #1 Critical Data still needed after patient gets infected....
Issue #2 when is best time to “inhale RDV??”
RDV only becomes effective when virus is multiplying fast in body...&
virus RNA inadvertently incorporates RDV molecule...virus replication stops.
++++++Stock Analysts trash GILD stock since Free RDV is "short term pain" to get data on issue #1 & 2.........Long Term Gain comes when,,,,,

Gilead Making $$$ on RDV is not with IV form of drug.....
$$$ comes when Inhaler or subcutaneous RDV developed later this year....
& mass production is on going....
CEO said already....forming partnerships for global manufacturing....
likely Indian & Chinese generic drug companies...like CIPLA, DR Reddy lab etc..

Currently, RDV is in drug promotion, info gathering phase...
.to get Japan & other countries FDA Approval.....
as there is no vaccine or anti viral CV competition in sight....no RUSH
Robbe Delaet profile picture
Well said @godfred ! Clearly, O'Day has a long term view on Remdesivir a treatment for seasonal pandemics. 150K treatments won't make the difference. It's the millions that will follow in 2021 which could have a materialising impact on sales, when hospitals start stockpiling the doses.
It is millions of global baby boomers stockpiling RDV inhalers in their homes.
calstang66 profile picture
I am all in to GILD, accordingly.....
— 6:07 PM ET 05/01/2020
The U.S. Food and Drug Administration on Friday granted emergency use authorization for the antiviral remdesivir to treat COVID-19.

Although clinical trials of the drug for treatment of the novel coronavirus, SARS-CoV-2, have produced mixed results, the largest study to date suggested that up to 50 percent of those given the drug for a five-day period showed improvement in symptoms.

Roughly the same percentage were well enough to be discharged from the hospital within two weeks of receiving their first dose of the drug, which is delivered intravenously.

The agency said the drug has not been approved as a general treatment for COVID-19. Rather, it is only intended for emergency use on severely ill patients who have been hospitalized.

"Today's action is an important step in our efforts to collaborate with innovators and researchers to provide sick patients timely access to new therapies where appropriate, while at the same time supporting research to further evaluate whether they are safe and effective," FDA Director Stephen Hahn said in a statement.

The larger study, conducted by the drug's manufacturer Gilead Sciences ( GILD
), found participants who received the drug within 10 days of symptom onset had improved outcomes compared to those treated after more than 10 days.

The time to clinical improvement for 50 percent of patients was 10days on a five-day regimen of the drug and 11 days for patients on a 10-day regimen.

By day 14 of treatment, 65 percent of the participants in the five-day treatment group and 54 percent in the 10-day treatment group achieved clinical recovery.

By day 14, 62 percent of patients treated early were also able to be discharged from the hospital, compared with 49 percent of patients who were treated late, Gilead said.

Another study published earlier this week by The Lancet found that COVID-19 patients treated with remdesivir were twice as likely to develop severe breathing problems, including acute respiratory distress syndrome, than those treated with placebo.

However, the study also said that those given the drug recovered up to five days faster than those who received standard care without it.
Before Doctors said it did not work, then changed their mind that it worked, now changed their mind again. Not sure we can trust the company as they done this charade before with other drugs.
Robbe Delaet profile picture
@Bonusplus Gilead has one of the most conservative, reliable, long-term oriented management teams out there (totally changed in 2019) in my opinion. O'Days' open letters to shareholders are clearly long-term oriented and he keeps to the facts.

Best, Robbe
Alexander Schiller profile picture
One of the most sensible articles on Gilead these days, thank you very much
Robbe Delaet profile picture
@Alexmf thanks for your kind comment. Have a good weekend!
very good what other company's are you looking at
Robbe Delaet profile picture
@jeromepl if you follow me, you will be updated on other stocks I look at.
Lately, I have been focused on insider trading activity as this coud yield strong returns. Each week, I provide my favourite pick.
Last weeks stocks like Mastercard, Amazon, Abbvie... have reached the favourite pick list.
Gilead is included as hedge against the Covid-19 crisis and improved my YTD return considerably.
CaptainSolo profile picture
What about the $24 billion in cash, with new cash of $1.8 billion a quarter for dividends, new acquisitions, and buybacks?
Robbe Delaet profile picture
@CaptainSolo that cash is a 100% offset by long term debt commitments. Anyway, I'm sure this management team will spend this cash wisely to create long term shareholder value, such as the Forty Seven acquisition.

Well written
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