We are in the midst of the earnings season, my favorite time of the year. Some of the largest and most powerful publicly traded firms have already reported their second-quarter earnings with a few still left to report. Among those that have already announced their results are two biotechnology favorites, Gilead Sciences, Inc. (NASDAQ:GILD) and Celgene Corporation (NASDAQ:CELG).
In recent weeks, I recommended investors to buy both these names on broad market weakness. If you did, you would have done well with a 30% return on Gilead Sciences, Inc. (NASDAQ:GILD) alone. In this article, I would review the most recent quarterly fillings and see how these companies might perform in the future.
Approaching $100 billion
Gilead Sciences, Inc. (NASDAQ:GILD) is no longer the mid-sized biotechnology company it used to be just last year. After a sharp 5% move to the upside following the report, Gilead Sciences, Inc. (NASDAQ:GILD)’s market cap approached the $100 billion mark. The company reported net income of $772.6 million, or $0.46 per share, an 8.5% increase from $711.6 million reported in the second quarter of last year.
The strong results were fueled by a good showing from the company’s two best selling HIV medications, Atripla and Truvada. The two drugs performed well, with sales up 4% and 3%, respectively. Total product sales increased 14% to $2.66 billion for the period ended June 30. Moreover, Gilead Sciences, Inc. (NASDAQ:GILD) reported strong growth in its new, single tablet HIV combination of Complera and Eviplera where sales rose a whopping 159% to $188.7 million.
As of today, the company is dabbling in various areas such as HIV, AIDS, liver disease, cardiovascular, respiratory, oncology, and inflammation. In every one of these categories, Gilead Sciences, Inc. (NASDAQ:GILD) has at least one drug pending approval or in Phase 3 trials. The company has truly separated itself from the pack through diversification and sheer volume. Analysts are expecting 10% growth this year, followed by 47.2% growth next year. Even with a sharp move to the upside this year, the stock doesn’t look overpriced with a PEG ratio of only 1.20.
The diversified, fund favorite
Celgene Corporation (NASDAQ:CELG) reported yet another strong quarter. After all, the company has a long history of reporting better-than-anticipated results. The company reported $1.52 earnings per share for the quarter, beating the analyst estimate of $1.44. Net income for the quarter rose alongside revenue, due in large part to shareholder buybacks and a strong performance from its portfolio. Celgene Corporation (NASDAQ:CELG) actively pursues treatments across the disease spectrum. Everything from Myeloma, MDS, Acute Myeloid Luekemia, Lymphoma, Anemia, and Inflammation are in focus.
In terms on cancer-related progress, the company has 22 treatments awaiting FDA approval and an additional 12 treatments currently making way through Phase 3 trials. Revlimid, the company’s best seller, accounted for 67% of revenue while growing at 13% on a year over year basis. Despite patent expiration, the company’s Vidaza held up well with $211 million in revenue.