Moody's says Gilead announcement is negative

Moody's Investors Service said that the announcement by Gilead Sciences, Inc. regarding its pipeline compound GS-7977 is credit negative.

Gilead announced unfavorable results from a clinical trial of GS-7977, which is Gilead's top phase III pipeline drug, and the main motivation behind its $11.1 billion acquisition of Pharmasset, Inc. earlier this year.

However, Moody's said, there is no impact to Gilead's Baa1 rating or its stable outlook as Gilead's cash flow over the next several years will be driven primarily by its existing HIV products and is not impacted by the announcement.

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