Gilead Raises Its Product Sales Forecast, Beats on Earnings

(Bloomberg) -- Gilead Sciences Inc. raised its outlook for product sales in the second quarter, even as the biotechnology company fights off slipping sales of its blockbuster hepatitis C franchise.

• Gilead reported adjusted earnings per share of $1.82, beating analysts’ estimates of $1.72 but below the $1.91 recorded in the same period a year ago. Total revenue of $5.69 billion compared with expectations of $5.54 billion.

Key Insights

• HIV is stacking up to be a lucrative market for Gilead, with product sales of $4 billion, compared with $3.7 billion for the same period last year.
• A growing HIV portfolio may not be enough to offset slipping sales of the hepatitis C franchise, which turned the company into a pharmaceutical giant. The drugs brought in $842 million in the quarter, compared with $1 billion a year prior. The company’s next big bet, treating the liver disease NASH, has encountered significant setbacks this year as well.
• One of new Chief Executive Officer Daniel O’Day’s first big moves was to separate Kite Pharma, the cancer-focused cell therapy Gilead acquired for $11.9 billion in 2017, into its own business unit. Buying Kite to ward off slipping sales has yet to pay off. The company has said it was hopeful sales of Kite’s CAR-T therapy Yescarta would improve this year. The drug brought in $120 million versus estimates of $114.07 million.

Market Reaction

• Gilead shares rose about 1% to $67.75 in late trading. They are up 7.3% this year through Tuesday’s close.

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• The company has been busy deal-making as another strategy to diversify its pipeline. Earlier this month, Gilead made a $1.1 billion equity investment in Galapagos NV and made an upfront payment of $3.95 billion to access Galapagos’s current and future drug pipeline.
• To read more details on the results, click here

To contact the reporter on this story: Kristen V. Brown in San Francisco at kbrown340@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Mark Schoifet, Timothy Annett

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