Even taking into account the company`s cash and cash equivalents, the debt becomes even more sustainable: with a net debt/EBITDA of 1.36x, the company is close to repaying the entire debt with an EBITDA of just one year. In 2020, the company completed 11 acquisitions and partnerships in oncology, demonstrating a strong focus on commercializing oncology drugs. Notably, “since 2020, the pipeline has increased by 50% and to date includes 10 drugs in phase 3 (clinical trials) in the oncology department.” Taking into account sales and market capitalization, the best period of this company was 2015, so the negative returns of the last 6 years are justified. However, over the past 3 years, it is the company`s desire to return to the level of this era and this can be deducted from the significant R&D expenses to expand the pipeline. Do you work at Gilead Sciences? Evaluate Gilead Sciences as an employer. Profitability metrics are crucial to evaluating a business, especially compared to competitors in the industry. The following table shows the current comparison between Gilead and its main competitors: Biogen (BIIB), Merck (MRK), Novo Nordisk (NVO), AbbVie (ABBV) and Bristol Myers Squibb (BMY). Personally, I believe that Gilead Sciences is currently the most undervalued pharmaceutical company, and in this article, I will explain how I came to this conclusion. Our employees include some of the most talented innovators in the biopharmaceutical industry. We are always looking for the next wave of passionate people interested in joining an intellectually stimulating and socially responsible company that tackles serious diseases and public health issues around the world. Each member of our team plays a vital and visible role in discovering, developing and delivering innovative treatments for people with life-threatening diseases. Because the impossible is not impossible.
That is the next step. However, to better understand whether the company is generating quality profits, it is necessary to analyze cash inflows: growing profits that do not lead to cash inflows are a red flag. Profits can be manipulated by the misuse of non-monetary revenues and costs, which is not the case with free cash flow. We are building a diverse workforce to drive innovation at Gilead. Being a leader in a stable and growing market is certainly good for Gilead`s cash registers. However, management is opting for greater revenue diversification from 2020 onwards so as not to be overly dependent on anti-HIV drugs. In my opinion, a strong company like Gilead deserves higher multipliers, so it is currently undervalued compared to its competitors. As you can see, Gilead currently has strong values and does not distort competitors who are close to their all-time highs. In addition, Gilead has the most leveraged FCF margin and once again demonstrates its effectiveness in generating cash through its operations. Looking at this data, it`s counterintuitive to think that Gilead (aside from BIIB) is the company furthest from its all-time highs, but it is. Have you ever been curious about what it means to produce innovative new medicines? In the latest episode of our “Inside the Innovation” series, learn about Gilead`s patient-centric approach to pharmaceutical manufacturing from Monica Tijerina, Vice President, External Manufacturing, Clinical Supply Chain and Logistics, and Ken Kent, Senior Vice President of Chemical Development and Manufacturing. Hear Monica and Ken talk about what motivates them, share career highlights, and reflect on the critical role inclusion and diversity play in their work.
As you can see, it`s easy to see that the business was profitable year after year until 2015, as all of these elements saw a significant increase at that time. However, it must be said that the strong improvement between 2013 and 2015 is mainly due to several acquisitions of the company such as YM BioSciences, EpiTherapeutics ApS and Phenex Pharmaceuticals AG. From 2015 to 2018, there was a sharp decline. Overall, I think Gilead can easily meet its commitments despite high debt/equity. Its cash inflows are able to support the company`s overall debt. According to the debt, the company is quite indebted, as it has a value of 126.70%; However, it is important to think further. We encourage all qualified individuals who are passionate about our mission and want to make a difference through our work to apply online. Candidates selected for further review will be contacted by a member of the Company`s internal recruitment team. The second risk is related to the huge $25.5 billion investment that Gilead has made over the past 3 years. While these investments are welcomed because they express the company`s willingness to innovate, it is not clear in advance whether these investments will bring tangible benefits to the pipeline. Gilead Sciences is #8 on the list of the best healthcare companies to work for in America. Zippie`s Best Workplaces lists provide unbiased, data-driven ratings from companies.
The rankings are based on government and proprietary data on salaries, the company`s financial health, and employee diversity. Since 2018, however, the trend in sales and profits has resumed, and as recent investments in research and development and demand for HIV-treated products are no longer slowed by the pandemic emergency, there are good signs that this trend may continue in the future. Gilead Sciences, Inc. is a biopharmaceutical company founded in 1987 that researches, develops and commercializes medicines for the treatment of serious and rare diseases worldwide. It is a company with a market capitalization of approximately $76 billion and an undisputed leader in the fight against HIV. The first risk of a potential investment concerns the sector in which Gilead operates. The pharmaceutical industry is very competitive and a company`s pipeline is the most important thing. Currently, despite recent investments in oncology drugs, Gilead`s pipeline is not very diversified, as a large portion of its sales are related to HIV drugs. The company is trying to diversify; However, it is not yet certain that this process will be successful. Buying Gilead means buying a company that has lost investor interest since 2015, and this is also reflected in the fact that the price per share in 2015 was around $117, almost double the current price. The potential upside potential of 100% is very interesting, but it can only happen if Gilead manages to redeem itself for good. The table above shows the main short-term solvency ratios from 2010 to the present.
As you can see, the current values are lower than those in the past; However, the current ratio and the quick ratio are still above 1, so there is no risk of short-term insolvency. In addition, as the company has significant cash inflows, it is able to almost fully cover its short-term debt with its cash flow from operations over 1 year (0.98x). As we can see in this chart in terms of the company`s cash flow, we can see that Gilead is able to generate large cash inflows, often even higher than the earnings themselves: the large divergence between free cash flow and earnings is due to the presence of high non-cash costs such as depreciation. According to the 2021 annual report, a large portion of the company`s revenue comes from the sale of drugs used in the fight against HIV: out of a total of $27.3 billion, up to $16.3 billion comes from these drugs, or 59.7%.