Gilding the Lily
The greater part of this century has been marred by visible global conflict, yet most of us forget about the war that we fight as a species -- one that cost us 2.1 million lives last year, according to the World Health Organization. That's right, I am talking about the war against HIV and AIDS, which has been fought for over two decades now and will continue for the foreseeable future. Leading the charge on the side of humankind is pharmaceutical trailblazer Gilead Sciences (GILD). Health-care stocks are on a roll right now, and Gilead is leading the way.
Gilead creates and markets medicines that fight life-threatening diseases, such as HIV/AIDS and hepatitis B. The California-based company traditionally focused on viral ailments, but in 2006 it expanded its portfolio to include respiratory disease and cardiovascular treatment with the acquisition of Corus Pharma and Myogen. The company's stellar board is made up of folks like Paul Berg, winner of the 1980 Nobel Prize in Chemistry and current CEO John Martin, who was previously the director of antiviral chemistry at Bristol-Meyers.
Within Gilead's broad portfolio, the impetus for growth in 2008 comes from the company's extraordinary HIV franchise. A touch more than 80% of the company's $2.5 billion in revenue came from HIV products in 2006 -- a whopping $1.2 billion courtesy of their star product, Truvada, which is increasingly forming the backbone of HIV therapy around the world.
The company's newest HIV drug, Atripla, is the first and only once-daily, single tablet regimen that received approval in the U.S. in 2006, and it has since become the most popular treatment in this market. In the first year alone, Atripla raked in 8% of total revenues, showing that it can pull its own weight in the future. In December last year, the drug received marketing authorization in the European Union, Norway and Iceland. Sales of Atripla in Europe and America, along with increased global sales of the tried-and-tested Truvada, should prop up growth quite nicely this year.
An estimated 250,000 HIV-positive Americans remain undiagnosed today, which is why the Centers for Disease Control and Prevention has wisely recommended that HIV testing become a part of routine medical care. As a result, Gilead's HIV sales should benefit, considering that 80% of new patients receive either Truvada or Atripla for treatment.
