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Gilead Sciences Raises Dividend 4% Ahead of ‘Pivotal Pipeline Year’

Gilead Sciences Inc. (GILD) is a biopharmaceutical company focused on developing treatments for HIV, viral hepatitis, and cancer with operations in 35 countries worldwide.

The company generated 69% of its revenue from HIV products, 8% of its revenue from Hepatitis C virus (HCV) related products, 11% of its revenue from Veklury, and 10% from other product sales during 2020. Higher Veklury and HIV product sales offset weakness in Truvada-based products following the loss of exclusivity and lower HCV sales due to fewer patient starts during the COVID-19 pandemic.

The company’s therapeutics are sold primarily in the United States (92% of product sales) with 68% of its total worldwide revenue coming from three large wholesalers, AmerisourceBergen Corporation, Cardinal Health Inc., and McKesson Corporation.

Strong Q4 Results Driven by Veklury

Veklury has been in demand as its antiviral properties have shown promise in treating emerging viral pathogens, including ebola, SARS, and SARS-CoV-2, the virus that causes COVID-19. It has been approved for temporary use as a COVID-19 treatment in nearly 50 countries.

Gilead Sciences reported fourth quarter revenue that rose 26% to $7.3 billion, beating consensus estimates by $130 million, and non-GAAP earnings of $2.19 per share, beating consensus estimates by four cents. Revenue growth was primarily driven by $1.9 billion in Veklury sales during the quarter while management continued to build out its pipeline.

Analysts, including Matthew Harrison from Morgan Stanley, remain optimistic about the prospects of Gilead’s product pipeline in 2021. One reason is the likely success of Trodelvy in Phase 3 trials.

The company raised its quarterly dividend by 4.4% to $0.71 per share, which represents a 4.4% forward yield. The dividend is payable on March 30, 2021 to shareholders on record as of March 15, 2021.

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