Investors don’t fully appreciate Gilead Sciences‘ (GILD) leadership in HIV treatment, an analyst said Friday as he upgraded GILD stock.


Gilead is a key leader in treating HIV with big-name drugs like Biktarvy and Descovy. At the height of the Covid pandemic, sales of HIV treatments slipped 4%, says Bank of America analyst Geoff Meacham. But he expects sales to grow in the low- to mid-single digit range over the next five years, at least.

Despite this, GILD stock has underperformed its rivals.

“We think shares look oversold, especially given restoration of durable HIV franchise growth, an increasing contribution from hematology/oncology franchise (11% of revenues today, 17% in 2027) and optionality in both the HIV and hematology/oncology pipeline,” Meachem said in a note to clients.

On today’s stock market, GILD stock jumped 2.8%, closing at 76. That’s Gilead stock’s biggest single-day move in a month, according to

GILD Stock: Underperforming Rivals

Gilead stock has been under pressure this year, down 14% for 2023 as of Thursday’s close. Over the same period, shares of IBD’s Medical-Biomed/Biotech industry group have fallen about 5%.

Recent HIV growth is bolstered by strong prescription trends for Biktarvy and Descovy, Meacham said. In the second quarter, sales of the two drugs jumped a respective 17% and 12%, bringing in a combined $3.5 billion. Overall, revenue from HIV treatments climbed 9%.

The company is also working on a next-generation treatment for heavily pretreated HIV patients, and long-acting medications that would require less frequent doses. The former, a drug called lenacapavir, “remains an idea backbone for long-acting treatment” and could boost 2025 sales.

“Overall, we think the HIV franchise looks very strong long-term given low loss-of-exclusivity risks and lenacapavir development,” Meachem said. He upgraded GILD stock to a buy rating.

‘Impressive’ Growth For Cancer Drugs

Meanwhile, there are still uncertainties for Gilead’s cancer treatments.

This summer, Gilead scrapped testing a combination using its cancer drug, magrolimab, in patients with myelodysplastic syndrome. The Food and Drug Administration also put a magrolimab study on partial hold in patients with acute myeloid leukemia. Gilead stock fell 3.7% on the first announcement and was flat on the second.

Still, Meacham notes Gilead has reported strong growth for its cell therapies — Yescarta and Tecartus from subsidiary Kite Pharma — and another cancer drug called Trodelvy. Second-quarter sales of cancer treatments grew 38% overall.

He notes the compound annual growth rates for Kite’s drugs and Trodelvy “remain impressive” at 23% and 36% from 2022 to 2025. He now has a price target of 95 on GILD stock, up from 88 previously.

Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.


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