Biopharmaceutical company Gilead Sciences (NASDAQ: GILD) could be generating a higher profit margin from three new therapies to treat cancer and HIV.
The company has already seen growth in its medications that treat HIV and liver disease, which contributed to its profit of $2.18 billion during the fourth quarter, rising from $1.78 billion a year ago. Revenue climbed by 5% to $7.93 billion, beating Wall Street’s expectations of $7.69 billion.
Gilead’s HIV business increased by 6% year-over-year with its drug Biktarvy rising 7% and the HIV prevention portfolio up 47%, said CEO Daniel O’Day during an earnings call.
“Yeztugo, our twice-yearly HIV prevention injectable, has already exceeded our coverage goals and is rapidly gaining market share in addition to expanding the reach of HIV prevention to new users,” he added.
Strong pipeline of new drugs
Gilead announced it has 10 ongoing and potential new launches through 2027, resulting in the pharmaceutical company’s “strongest pipeline in our almost 40-year history,” O’Day said. “Gilead is entering 2026 in a position of strength.”
The pharmaceutical company has been expanding the types of treatments it offers, including medications for cancer.
The company’s milestones were accomplished partly due to the diversification strategy that has proven to be successful for the past six years, he said.
Gilead continues to be on the lookout for additional pharmaceutical companies and will “continue to add to our pipeline with appropriate M&A” in the future, O’Day said.
“We’re very ready. We’re very proactive and disciplined,” he said.
In 2020, the company invested $21 billion in the purchase of Immunomedics and its antibody-drug conjugate (ADC) Trodelvy, which treats metastatic triple-negative and HR+/HER2- breast cancer.
Product sales increased by 5% to $7.9 billion during the fourth quarter, due to more revenue from its liver disease and HIV segments, and were partially offset by a decline in sales of Veklury, a Covid-19 treatment.
The company’s HIV and hepatitis C virus or HCV drugs generate “stellar profit margins” because it does not need a large number of people working in the sales department, and manufacturing is relatively inexpensive, wrote Karen Andersen, a director for Morningstar.
“We think its portfolio and pipeline support a wide moat and with the HCV market stabilizing, Gilead needs strong continued innovation in HIV, solid oncology launches, and smart future acquisitions to return to growth,” she added.
But Gilead has been increasing its portfolio outside of its HIV and HCV treatments from its prior acquisitions.
For liver disease, hepatitis D therapy Hepcludex (from the Myr acquisition) is “differentiated” while its primary biliary cholangitis drug Livdelzi (from CymaBay) has “gained significant share,” said Andersen.
“The 2020 acquisition of Immunomedics (breast cancer drug Trodelvy) established Gilead’s solid tumor exposure, and the Kite acquisition (Yescarta) and Arcellx collaboration (anitocel) give Gilead exposure to the blood cancer market with CAR-T therapies,” she added.
Gilead estimates total product sales in 2026 to generate between $29.6 billion and $30 billion.
Both prevention and treatment drugs for HIV are estimated to increase by 6% in 2026. Yeztugo’s revenue is expected to produce $800 million in 2026 compared to $150 million in 2025 and is the “world’s first twice-yearly HIV prevention therapy,” the company said.
Gilead, which has a market capitalization of $172.9 billion, does face some competition from GSK (NYSE: GSK), which is slightly smaller at a $123.5 billion market cap.
GSK launched “two-drug regimens based on its integrase inhibitor Tivicay (Juluca in 2017 and Dovato in 2019),” Andersen said. “However, Gilead’s Genvoya (2015), Odefsey (2016), Descovy (2016), and Biktarvy (2018) launch push patent protection into the 2030s and are boosting the firm’s market share. Novel drug lenacapavir (approved as Sunlenca for treatment-resistant HIV patients and Yeztugo in HIV prevention) also has potential to further extend Gilead’s patent protection and serve more patients in prevention and treatment markets.”
Gilead’s increasing portfolio of treatments, potential new launches of drugs, and the continued success with its HIV treatments could lead to higher growth and profit margins.
Comments