Gilead’s (NASDAQ: GILD) HIV and hepatitis B franchises has fueled the company’s strong growth over the past two years. This was driven by the launch of Truvada in the U.S. and internationally, and Atripla in the U.S. For coming years, Ambrisentan (pulmonary arterial hypertension), which was launched in the U.S. in June 2007, should help bolster revenue growth in 2008-09. The upcoming launches of Atripla outside of the U.S., Aztreonam lysine for cystic fibrosis, and Viread for hepatitis B should drive further growth. In short, multiple product launches over the next few years should fuel consistent and visible revenue and earnings growth.Longer-term, Gilead is well positioned to remain a leader in new antivirals with an emerging pipeline of drugs to treat HIV, HBV and HCV. In 2006, the company expanded into pulmonary diseases with the acquisitions of Phase III companies Myogen and Corus. These two acquisitions will help drive continued growth and diversification of revenue and earnings. Gilead’s agreement with Parion demonstrates the company’s commitment to grow the pulmonary franchise. Although P-680 (improves lung function in cystic fibrosis) is still early in development (preclinical), it could add newsflow and help grow Gilead’s clinical stage pipeline.
Target price is $44.
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