Lenacapavir And Trodelvy Launches Will Serve A Growing Aging Market

Key Takeaways

• Multiple new product launches and innovation in oncology and HIV therapy strongly position Gilead to expand into larger, diversified markets and drive sustained revenue growth.
  
• Strength in core HIV and liver portfolios, robust R&D, and minimal competition risks support stable cash flows and enable long-term margin and earnings expansion.
  
• Intensifying pricing pressure, growing competition, and heavy reliance on new product launches threaten Gilead’s revenue growth, margins, and overall earnings stability.

Catalysts

A biopharmaceutical company, discovers, develops, and commercializes medicines in the areas of unmet medical need in the United States, Europe, and internationally.

• Gilead’s upcoming launches—including twice-yearly lenacapavir for PrEP, anito-cel cell therapy for multiple myeloma, and Trodelvy’s move into first-line triple-negative breast cancer—positively position the company to capture significantly larger addressable markets, directly supporting outsized future revenue growth and diversifying its top line far beyond current consensus expectations.
  
• Growing global demand for advanced therapies to treat chronic diseases, especially HIV and liver diseases, is driving robust underlying volume growth for Gilead’s core franchises. As the global population ages and access to healthcare expands, Gilead’s leading HIV and liver portfolios, along with its preventive solutions, can benefit from durable, multi-year expansion in both developed and emerging markets, boosting long-term revenue trajectories.
  
• Advances in precision medicine and improved adoption of next-generation therapeutics play to Gilead’s strengths in cell therapy and targeted oncology, which carry higher potential operating margins relative to legacy antivirals. Near-term launches and positive readouts from the oncology and cell therapy pipeline are likely to accelerate earnings growth and support margin expansion.
  
• The company’s heightened internal R&D productivity and focused investments in U.S.-based manufacturing and research infrastructure give it an innovation advantage. Coupled with a robust pipeline and new product launches—supported by recent strategic acquisitions (Immunomedics, Kite)—these trends set the stage for superior earnings growth and sustainable operating leverage.
  
• Gilead’s deep expertise and dominant share in HIV, alongside first-mover opportunities in long-acting therapies, enable continued pricing power and cash flow stability. The absence of major loss of exclusivity events until 2033 and a top-tier operating margin structure (recently at 43 percent) combine to underpin strong earnings per share and long-term cash flow growth, providing balance sheet strength for further investment or return to shareholders.

Gilead Sciences Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Gilead Sciences compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Gilead Sciences's revenue will grow by 5.7% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 20.8% today to 29.9% in 3 years time.
• The bullish analysts expect earnings to reach $10.2 billion (and earnings per share of $8.68) by about April 2028, up from $6.0 billion today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 20.9x on those 2028 earnings, down from 21.8x today. This future PE is greater than the current PE for the US Biotechs industry at 20.4x.
• Analysts expect the number of shares outstanding to decline by 0.07% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.73%, as per the Simply Wall St company report.

Gilead Sciences Future Earnings Per Share Growth

Risks

• Gilead continues to face significant pricing pressures in key markets, such as the impact of the Medicare Part D redesign, which has already materially lowered realized prices for its HIV products and could foreshadow further downward pressure on pricing power and top-line revenue in the coming years.
  
• There is ongoing and increasing competition from both branded and generic/biosimilar products, especially in the maturing HIV and cell therapy portfolios; this leads to eroding market share for legacy drugs and stagnation or decline in core revenue streams and net margins over the long term.
  
• While the company highlights a “diverse pipeline,” there is heavy strategic dependence on forthcoming product launches and the success of drugs like lenacapavir and Trodelvy; a failure to achieve regulatory approvals, commercial uptake, or positive reimbursement environments could result in R&D expenses outpacing future revenue gains, creating earnings risk.
  
• Competitive threats from new modalities such as biospecifics and in-class alternatives in oncology and cell therapy are already leading to lower realized prices and sales, as seen with Trodelvy and Tecartus, potentially reducing both current and future earnings and overall profit margins.
  
• The industry’s longer development timelines combined with persistent regulatory scrutiny and healthcare cost containment worldwide, including potential for increased drug price controls and reimbursement challenges, increase the risk that Gilead will face compressed margins and slower than anticipated revenue growth over the next decade.

Valuation

• The assumed bullish price target for Gilead Sciences is $140.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Gilead Sciences's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $140.0, and the most bearish reporting a price target of just $92.0.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $33.9 billion, earnings will come to $10.2 billion, and it would be trading on a PE ratio of 20.9x, assuming you use a discount rate of 6.7%.
  
• Given the current share price of $104.21, the bullish analyst price target of $140.0 is 25.6% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.