Gilead Sciences (GILD): Navigating Stormy Waters to Seize Oncology Gold

Amid a turbulent first quarter marked by earnings volatility, Gilead Sciences (GILD) stands at a pivotal crossroads. While near-term challenges—such as declining sales of its flagship oncology drug Trodelvy and fading pandemic-era demand—have spooked investors, the company's robust pipeline of clinical milestones and transformative therapies offers a compelling case for long-term opportunity. Let's dissect the data to reveal why now could be the time to bet on Gilead's oncology renaissance.

Trodelvy's Clinical Milestones: A Foundation for Future Growth

Trodelvy, Gilead's Trop-2-directed antibody-drug conjugate (ADC), has emerged as a cornerstone of its oncology portfolio. Recent clinical data underscore its potential to redefine treatment paradigms for aggressive cancers:

1. ASCENT-04 Trial Breakthrough:
   In early 2025, Trodelvy combined with Keytruda (pembrolizumab) achieved a statistically significant progression-free survival (PFS) improvement in first-line PD-L1-positive metastatic triple-negative breast cancer (mTNBC). This marks the first ADC-checkpoint inhibitor combo to show superiority over standard chemotherapy in this indication. The trial's success positions Trodelvy for a potential first-line approval in mTNBC, expanding its addressable market from second-line use to earlier lines of treatment.

2. Dual-Target CAR T-Cell Synergy:
   Beyond ADCs, Gilead's subsidiary Kite is advancing anitocabtagene autoleucel (anito-cel), a BCMA-directed CAR T-cell therapy for multiple myeloma. Phase 2 data showed a 94% overall response rate, including a 66% stringent complete response rate—a stark contrast to existing therapies. With FDA Fast Track and RMAT designations, anito-cel could become a blockbuster, especially if approved before rival programs.

3. Trodelvy's Expanding Indications:
   Ongoing trials, such as ASCENT-07 in HR+/HER2- metastatic breast cancer and EVOKE-01 in NSCLC, aim to broaden its label. Even setbacks in urothelial cancer (ASCENT-03) pale against the drug's potential in high-growth markets like TNBC and SCLC, where Breakthrough Therapy Designation has been granted for extensive-stage small cell lung cancer.

Financial Volatility: A Temporary Headwind

GILD's Q1 2025 results revealed mixed signals, with flat total revenue of $6.7 billion amid headwinds:

• Trodelvy Sales Declined 5% to $293M, attributed to inventory adjustments and pricing pressures. However, this drop is temporary; first-line approvals could boost sales to $1.2–1.5B by 2027, according to analysts.
• Veklury (remdesivir) Collapsed 45% to $302M, as post-pandemic demand waned. This loss was partially offset by growth in HIV therapies like Biktarvy (+7%) and Descovy (+38%), which now account for 70% of sales.
• Cell Therapies Struggled: Yescarta and Tecartus sales fell 3% to $464M, reflecting competition and pricing pressures. Yet, the dual-target KITE-363 in B-cell lymphomas hints at future differentiation.

Market Sentiment: Pessimism vs. Pipeline Potential

Investors have punished GILD's stock—down 15% year-to-date—over near-term execution risks. But this pessimism overlooks three critical catalysts in 2025:

1. FDA Decisions to Watch:
2. June 19, 2025: Lenacapavir's PDUFA date for twice-yearly HIV prevention. Approval could add $500M+ in annual sales and solidify Gilead's HIV leadership.

3. Trodelvy Submissions: Gilead will file for first-line mTNBC approval by mid-2025, with potential FDA action by late 2025 or early 2026.

4. Pipeline Density:
   With 13 Phase 3 programs, including Trodelvy in lung cancer and anito-cel in myeloma, GILD's pipeline boasts 52 clinical-stage assets. This depth reduces reliance on any single drug, a stark contrast to its HIV-centric past.

5. Strategic Partnerships:
   Collaborations like the LEO Pharma deal ($5.5B) for inflammation therapies and Terray Therapeutics for targeted protein degraders diversify GILD's risk. These partnerships could yield next-gen therapies, reducing reliance on ADCs alone.

Why Buy Now? The Case for Immediate Action

The time to act is now for three reasons:

1. Undervalued Stock:
   GILD trades at 12.1x forward P/E, a 20% discount to the sector average. This undervaluation ignores Trodelvy's $5B+ peak sales potential and anito-cel's myeloma dominance.

2. Catalyst-Driven Upside:
   Positive FDA decisions in 2025 could spark a 25–30% stock rebound. Even a conservative Trodelvy first-line approval could add $0.50–$1.00 to 2026 EPS, per analysts.

3. Dividend Safety:
   With a 3.35% yield and $7.9B in cash, GILD can sustain payouts while reinvesting in R&D. The stock's beta of 1.2 offers leverage to a sector recovery.

Risks and Considerations

• Regulatory Delays: A Trodelvy approval delay beyond 2026 could pressure valuation.
• CAR T Competition: Anito-cel faces rivals like Bristol-Myers' idecabtagene vicleucel, which already holds myeloma approvals.
• Pricing Pressure: Managed care pushback on ADCs and CAR Ts could cap margins.

Conclusion: A Buy Rating with a 2025 Target of $75

Gilead Sciences is a buy at current levels. While near-term headwinds—including Trodelvy's sales slump and legacy product declines—are real, the oncology pipeline's clinical progress and 2025 catalysts position GILD to rebound strongly. With a $75 price target (20% upside), investors who buy now could capitalize on a stock primed to deliver transformative growth in 2025 and beyond.

Act now before the FDA's June 19 decision and Trodelvy submissions unlock this undervalued gem.

Disclosure: The author holds no positions in GILD. This article is for informational purposes only.