Gilead's Got the Goods

Even with all the tumult in the stock market this year, shares of Gilead Sciences (Nasdaq: GILD  ) have performed strongly, up 16% since the beginning of the year. Following Gilead's presentation yesterday at the Goldman Sachs Healthcare conference, now seems like a good time to check in on one of the most exciting large-cap drugmakers.

Gilead has been a proverbial money-printing machine in recent quarters, with free cash flow up an outstanding 20% year over year in the first quarter. Gilead kept cranking out the cash despite experiencing all the same growth challenges common to the pharmaceutical and biotech industries.

Gilead's future is also bright. It has a few home-run long shots in its pipeline, like the resistant hypertension treatment darusentan. But those candidates are balanced out by less risky bets such as its HIV integrase inhibitor elvitegravir, and compounds that will be cheap to market, like a recently in-licensed pulmonary arterial hypertension treatment.

Even better, most of the candidates in Gilead's pipeline are late-stage products. Elvitegravir is set to start phase 3 testing next quarter, and darusentan has been in two phase 3 trials for some time now (though these are all long studies). Gilead also has a cystic fibrosis drug candidate, aztreonam lysine, awaiting both FDA and European Union approval decisions.

Whatever happens with these compounds, Gilead's bread and butter will always be its franchise of HIV drugs. Despite fierce competition from many big-pharma behemoths such as Merck (NYSE: MRK  ) , GlaxoSmithKline (NYSE: GSK  ) , and Johnson & Johnson (NYSE: JNJ  ) , Gilead managed to push its HIV product sales up 37% in the first quarter. Although Gilead revealed that some of this gain might have been a one-off from its buyers' stocking up on these drugs in the quarter, these sales numbers still show that there's a lot of growth left for Gilead's most important compounds, even with its commanding dominance in the HIV space.

It's not too much of a stretch to say that Gilead has been firing on all cylinders lately, with no significant signs of slowing down. There will surely be some lumpiness along the way -- it's a fact of life for all drugmakers -- but as long as Gilead makes good use of its cash, its long-run future looks bright.