GILD: 3 Pharmaceutical Stocks With Blockbuster Drug Potential

The pharmaceutical industry with blockbuster drug potential represents a high-growth opportunity for investors seeking transformative returns. These companies invest heavily in research and development to create novel therapies that address significant unmet medical needs, ranging from advanced cancer treatments to groundbreaking gene therapies.

To capitalize on this opportunity, consider investing in fundamentally sound biotech stocks, Vertex Pharmaceuticals Incorporated (VRTX - Get Rating), BioMarin Pharmaceutical Inc. (BMRN - Get Rating), and Gilead Sciences, Inc. (GILD - Get Rating), that are poised to skyrocket.

A robust drug pipeline is essential for these companies as they focus on developing innovative treatments that target specific disease pathways, improving patient outcomes, and creating a competitive advantage.

That said, the regulatory environment also plays a critical role in the success of blockbuster drugs. Agencies have increasingly implemented expedited review processes for therapies that address high-priority health issues, reducing the time required for approval.

However, pharmaceutical companies are increasingly adopting new modalities and Mechanisms Of Action (MOAs) as firms focus on diverse and robust portfolios to redefine standards of care. Their cutting-edge research in areas like mRNA technology and targeted immunotherapies is transforming patient care and generating significant investor interest. Further, the global biotechnology market is anticipated to reach $3.88 trillion by 2030, growing at a CAGR of 13.9%.

With that in mind, let’s delve into the fundamentals of the three Biotech stock picks, beginning with the third choice.

Stock #3: Vertex Pharmaceuticals Incorporated (VRTX - Get Rating)

VRTX is a global biotechnology company that focuses on developing and commercializing therapies for treating cystic fibrosis (CF). It markets four approved medicines: TRIKAFTA/KAFTRIO, SYMDEKO/SYMKEVI, ORKAMBI, and KALYDECO.

3 STOCKS TO DOUBLE THIS YEAR

On January 31, VRTX announced a reimbursement agreement with NHS England for eligible sickle cell disease (SCD) patients to access the CRISPR/Cas9 gene-edited therapy, CASGEVY®. This CRISPR/Cas9 gene-edited therapy is the second of the medicines funded by NHS England’s Innovative Medicines Fund following the prior agreement for TDT patients.

In the same week, VRTX received approval from the U.S. Food and Drug Administration (FDA) for JOURNAVX™, an oral, non-opioid, highly selective NaV1.8 pain signal inhibitor for the treatment of adults with moderate-to-severe acute pain. This drug is a non-opioid treatment without any addictive potential approved in more than 20 years.

VRTX’s trailing-12-month EBIT margin and levered FCF of 1,471.7% and 817.1% are 41.7% and 24.7% higher than their respective industry averages of 2.65% and 2.70%. Likewise, its trailing-12-month asset turnover ratio of 0.49x is 17.1% above the industry average of 0.42x.

For the fourth quarter, which ended on December 31, 2024, VRTX’s product revenues increased 15.7% year-over-year, amounting to $2.91 billion. The company reported a non-GAAP operating income of $1.19 billion, indicating a 4.1% increase from the prior-year quarter. In addition, VRTX’s non-GAAP net income came in at $1.03 billion and $3.98 per share.

Looking ahead, VRTX anticipates revenue for the fiscal year 2025 to be in the range of $11.75 billion-$12.00 billion.

Analysts expect VRTX’s revenue to increase 8.6% for the fiscal year 2025 (ending December 2025) to $11.96 billion and its EPS to increase significantly to $18.11, respectively. For the fiscal year 2026, its revenue is expected to increase 9.3% year-over-year to $13.08 billion, while its EPS is forecasted to settle at $20.38, indicating a 12.6% improvement over the prior year.

VRTX’s stock has surged 15.4% over the past year and 13.2% over the past month to close the last trading session at $484.24.

VRTX’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

VRTX has a B grade for Value. It is ranked #40 out of 336 stocks in the Biotech industry. Click here to see the additional ratings for VRTX (Growth, Momentum, Stability, Sentiment, and Quality).

Stock #2: BioMarin Pharmaceutical Inc. (BMRN - Get Rating)

BMRN develops and commercializes therapies for people with serious and life-threatening rare diseases and medical conditions. The company is a biotechnology company addressing the root cause of genetic conditions.

The stock’s trailing-12-month EBIT margin of 19.98% is 653.5% higher than the industry average of 2.65%. Similarly, its 9.80% trailing-12-month ROCE is 263.3% above the industry average of 2.70%.

In the fiscal fourth quarter that ended on December 31, 2024, BMRN’s total revenue increased 15.6% year-over-year to $747.31 million. The company reported non-GAAP income from operations of $232 million, indicating 109% growth from the prior-year quarter. BMRN’s non-GAAP net income came in at $180 million, up 89.5% year-over-year, while its non-GAAP EPS grew 87.8% from the year-ago value to $0.92.

According to the full-year financial guidance for fiscal year 2025, the company’s revenue is projected to be between $3.1 billion and $3.2 billion, with non-GAAP operating margin anticipated to fall between 32% and 33%. Its non-GAAP EPS is expected to range from $4.20 to $4.40.

Street expects BMRN’s revenue for the fiscal first quarter (ending March 2025) to increase 14.1% year-over-year to $740.14 million. Its EPS for the same period is expected to register a 35.4% growth from the prior year, settling at $0.96. In addition, it surpassed the EPS estimates in each of the trailing four quarters, which is promising.

The stock has surged 9.2% over the past month and 7.6% over the past three months to close the last trading session at $68.25.

BMRN’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

It also has an A grade for Value and a B for Growth and Sentiment. Within the same industry, it is ranked #8 out of 336 stocks. Click here to see BMRN’s ratings for Momentum, Stability, and Quality.

Stock #1: Gilead Sciences, Inc. (GILD - Get Rating)

GILD is a biopharmaceutical company dedicated to advancing treatments for life-threatening diseases such as human immunodeficiency virus (HIV), viral hepatitis, COVID-19, and cancer. Its portfolio of marketed products includes Biktarvy, Genvoya, Odefsey, Truvada, Harvoni, Vemlidy, and Veklury, among others.

On February 20, GILD announced that the European Commission (EC) granted conditional marketing authorization for seladelpar for the treatment of primary biliary cholangitis (PBC) in combination with ursodeoxycholic acid (UDCA) in adults who have an inadequate response to UDCA alone. This is a significant new treatment option for people living with the rare liver disease in the European Economic Area (EEA).

On January 11, GILD and LEO Pharma announced a strategic partnership to accelerate the development and commercialization of LEO Pharma’s small molecule oral STAT6 programs for the potential treatment of patients with inflammatory diseases. In this partnership, GILD will acquire LEO Pharma’s comprehensive preclinical oral STAT6 small molecule inhibitors and targeted protein degraders, and it will also help GILD expand its inflammation portfolio.

In terms of the trailing-12-month EBIT margin, GILD’s 37.80% is 1,325.6% higher than the 2.65% industry average. Similarly, its 27.9% trailing-12-month levered FCF margin is 935.8% higher than the industry average of 2.70%. Also, its trailing-12-month asset turnover ratio of 0.47x compares to the industry average of 0.42x.

During the fiscal fourth quarter, which ended on December 31, 2024, GILD’s total revenues increased 6.4% year-over-year to $7.57 billion. The company reported a non-GAAP operating income of $3.11 billion, indicating a 13.7% growth from the prior-year quarter. Its non-GAAP net income attributable came in at $2.39 billion and $1.90 per share, reflecting an increase of 10.6% year-over-year.

As per the full-year 2025 guidance, GILD forecasts product sales to range from $228.20 billion to $28.60 billion. The company also expects non-GAAP EPS to be between $7.70 and $8.10.

The consensus revenue estimate of $6.76 billion for the fiscal first quarter (ending March 2025) represents a marginal increase year-over-year. The consensus EPS estimate of $1.75 for the same quarter remains flat year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.

Over the past nine months, the stock has gained 63.4%, closing the last trading session at $109.95.

GILD’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to a Buy in our proprietary rating system.

It has a B grade for Growth, Value, Sentiment, and Quality. The stock is ranked first in the same Biotech industry. Click here to access the additional GILD ratings for Momentum and Stability.

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GILD shares were trading at $110.78 per share on Monday afternoon, up $0.83 (+0.75%). Year-to-date, GILD has gained 19.93%, versus a 2.29% rise in the benchmark S&P 500 index during the same period.