On Thursday, Gilead Sciences, Inc. (NASDAQ:GILD) reported second-quarter revenue of $6.95 billion, beating the consensus of $6.72 billion.

Sales increased 5% year over year primarily due to higher product sales in HIV, Liver Disease, and Oncology. Product sales excluding Veklury increased 6% year-over-year to $6.7 billion.

Adjusted EPS was $2.01, up from $1.34 a year ago, beating the consensus of $1.60, primarily driven by lower operating expenses and higher revenues.

Also Read: Gilead's $42.5K Priced HIV Drug Could Be Made At Just $40 Annually, Campaigners Urge Company To Slash Price.

HIV product sales increased 3% to $4.7 billion in the second quarter of 2024, primarily driven by higher demand across treatment and prevention. Lower average realized price due to channel mix partially offset this.

Biktarvy sales increased 8% to $3.2 billion in the second quarter, driven by higher demand.

Descovy sales decreased 6% to $485 million in the second quarter due to lower average realized price due to channel mix, partially offset by higher demand. The Liver Disease portfolio sales increased 17% to $832 million.

Covid-19 treatment Veklury (remdesivir) sales decreased 16% to $214 million, primarily driven by lower hospitalization rates.

Cell Therapy product sales increased 11% to $521 million.

Guidance: Gilead Sciences raised its fiscal year 2024 adjusted EPS forecast from $3.45-$3.85 to $3.60-$3.90 compared to the consensus of $3.75.

The company reaffirmed its product sales outlook of $27.1 billion-$27.5 billion, including Veklury sales of around $1.3 billion.

Goldman Sachs analyst says that as the company's pipeline is skewed towards Phase 3 programs, Gilead is more focused on earlier-stage deals across therapeutic areas (virology, oncology, inflammation) and ordinary course partnerships.

The analyst noted that while management has highlighted their return to pre-Immunomedics acquisition leverage levels, Gilead indicated that large-scale deals like Immunomedics ($21 billion) are unlikely in the near future. However, smaller acquisitions similar to CymaBay Therapeutics ($4.3 billion) could be pursued every few years.

The analyst keeps a Neutral rating with a price target of $71.

RBC Capital Markets says the Core HIV and CAR-T franchises showed strong performance, enhanced operating leverage, and a more favorable risk profile for upcoming pipeline developments.

The confirmed oral GLP-1 obesity plan may also help limit downside risk.

While investor sentiment is improving, the stock trades at a discount compared to peers. However, at $75, much of the potential seems already priced in, and given the challenges from high revenue baselines and competitive pressures, significant near- to medium-term growth may be difficult.

"We would look for a better entry point," the analyst said, raising the price target to $72 from $71 and giving the stock a Sector Perform rating.

Price Action: GILD stock is down 2.95% at $73.36 at last check Friday.

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