Gilead Sciences, Inc. (NASDAQ:GILD) and Danaher Corporation (NYSE:DHR) are both showing signs of stronger growth, but they are getting there in very different ways.
Gilead already has momentum, which is supported by its HIV business that is expanding at a double-digit rate, with newer products contributing more and resulting in management raising its sales outlook. Danaher, on the other hand, is earlier in its recovery, where spending across parts of the life-sciences market is improving. However, project timing and weaker respiratory testing are still muddying the picture for the company.
DON’T MISS: J&J and Contineum’s Depression Drug Missed Phase 2 Goal. What Comes Next?
That makes this less a comparison of two equally mature growth stories and more a question of how much investors are willing to wait for Danaher’s recovery to catch up with Gilead’s current momentum.
Bull Case
Gilead’s latest quarter gives investors plenty of evidence that growth is already here, which can be corroborated with product sales excluding Veklury increasing 10% to $7.6 billion, and HIV sales rising 12% to $5.7 billion. Biktarvy remained the workhorse, generating $3.8 billion and growing 7%. But some of the faster growth came elsewhere, like Descovy sales jumping 48% to $967 million. Meanwhile, Yeztugo, Gilead’s twice-yearly injectable HIV prevention medicine, generated $232 million compared with just $15 million a year earlier.
The encouraging part is that HIV wasn’t the only contributor for the company, as liver-disease sales increased 10% to $877 million. This was helped by Livdelzi, where revenue climbed from $78 million to $167 million, and Trodelvy also grew 26% to $457 million. That was enough for Gilead to raise its 2026 outlook, and the company now expects product sales of $30.1 billion-$30.4 billion and product sales excluding Veklury of $29.8 billion-$30.1 billion.
READ ALSO: GSK Adds Another Cancer Drug in a $750 Million Deal. Is its Oncology Bet Getting Bigger?
Danaher’s (NYSE:DHR) numbers aren’t growing nearly as quickly, but there were some important signs beneath the headline figures. The company reported that revenue increased 5.5% to $6.3 billion in fiscal Q2, while core revenue grew 3%. Excluding respiratory testing, core growth was stronger at 4.5%, and adjusted EPS increased 8% to $1.94. More interesting was what happened inside Life Sciences, and CEO Rainer Blair described it as the segment’s strongest quarter in several years.
Another significant point to note is bioprocessing revenue, which, although it was held back by customer project timing, orders grew at a mid-teens rate during the quarter. Weak revenue accompanied by weak orders would point to deteriorating demand, but Danaher instead reported strong orders even as some revenue was pushed out, suggesting the bioprocessing slowdown wasn’t simply a case of customers disappearing. Management expects the broader recovery to continue, saying it anticipates exiting 2026 at a mid-single-digit core revenue growth rate. Danaher also raised its full-year adjusted EPS guidance to $8.45-$8.60 from $8.35-$8.55.
Bear Case
The obvious weakness in Gilead’s (NASDAQ:GILD) story is how much of that growth still comes back to HIV. The franchise generated $5.69 billion of Gilead’s $7.63 billion in quarterly product sales, which translates to roughly three-quarters of product sales still coming from one therapeutic area. Gilead has been spending heavily to broaden that base and recorded $11.2 billion of acquired in-process R&D expenses in fiscal Q2, primarily related to Arcellx, Tubulis, and Ouro Medicines. Those transactions contributed to quarterly GAAP and non-GAAP losses per share of $8.45 and $6.75, respectively.
The businesses outside HIV aren’t all moving in the right direction either. The company reported that Trodelvy had a strong quarter, but Cell Therapy sales declined 14% to $417 million amid competitive headwinds, and Yescarta fell 12% while Tecartus dropped 24%.
Danaher’s problem that investors should keep in mind is the opposite: although there are signs of recovery, the numbers haven’t caught up with the narrative yet. The company lowered its full-year core revenue-growth outlook to 3%-4% from its previous 3%-6% range. Biotechnology revenue also came in below expectations, according to Reuters, despite the strength in bioprocessing orders.
Respiratory testing remains another drag, as companywide core growth was 3% in fiscal Q2 but improved to 4.5% when respiratory testing was excluded. For fiscal Q3, Danaher expects total core growth of only 2%-3%, compared with roughly 5% excluding respiratory testing. So while the Life Sciences improvement is encouraging, investors are still waiting for that recovery to translate into stronger companywide growth.
Conclusion
Gilead doesn’t require investors to wait for a recovery to arrive. Its non-Veklury business grew 10%, HIV sales increased 12%, and management raised its full-year sales outlook. The problem is that much of that success remains tied to HIV, while Gilead’s expensive push into other therapeutic areas has yet to produce equally consistent results.
Danaher requires more patience, as Life Sciences just delivered its strongest quarter in several years and bioprocessing orders grew at a mid-teens rate, but those positives sit alongside a reduced full-year core growth outlook and continued respiratory-testing weakness.
Right now, Gilead’s growth story is easier to see in the actual results, and Danaher’s is more about what today’s orders and improving end markets could mean for revenue over the next several quarters. While that gives Gilead the more convincing growth story today, Danaher has evidence that its recovery is taking shape. However, investors still need to see more of that improvement work its way through to reported growth.
READ NEXT: Can Eli Lilly Catch Novo Nordisk in the Oral GLP-1 Race? AND Abbott vs. Intuitive Surgical: Is Consistent Growth Better Than Premium Growth?
This article is originally published at Insider Monkey.
