Gilead Announces $5 Billion Buyback

Groan:

Gilead Sciences Inc. (GILD) announced a 3-year, $5 billion stock-buyback effort, with the board and management considering the move “an appropriate and strategic use of the company’s cash.”
A host of companies have been boosting or initiating repurchase plans in recent months as the need to hoard cash recedes. The drug maker, known more for its HIV treatments, announced Tuesday it has completed a $1 billion buyback effort authorized in January, buying 24.1 million shares for an average $41.43.
The stock was up 1.6% premarket at $39.00 and was down 11% this year through Monday. Gilead’s market value is about $35 billion.
The drug maker plans to fund the repurchase program with future profit as Gilead said on Tuesday that the company has made significant progress with its HIV pipeline programs to develop a new treatment regimen, which it expects to file for regulatory approval this year.
Gilead reported last month its first-quarter profit jumped 45% on strong sales of its HIV drugs as well as higher royalties from flu-treatment Tamiflu because of worldwide initiatives to plan for a possible influenza pandemic.

Just give us the money! The buyback works out to about $5.50 per share and Gilead doesn’t pay a dividend. At least, the stock is up today.

Posted by on May 11th, 2010 at 10:48 am


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