Gilead Misses Mark on Earnings as Daniel O'Day Prepares to Take Helm
(Bloomberg) -- Gilead Sciences Inc. posted fourth-quarter earnings that missed expectations as the biotechnology giant fends off threats to its best-selling drugs and prepares for a new CEO to take the reins.
- Gilead reported adjusted earnings per share of $1.44, compared with analysts’ estimates of $1.70. Earnings were hurt by an impairment and noncash tax charge related to intangible assets acquired from Kite Pharma.
- Reinvigorating the company’s drug pipeline will be a crucial task for new Chief Executive Officer Daniel O’Day, the former Roche Holding AG veteran who takes the helm March 1. Diversifying is critical as sales wane in Gilead’s blockbuster hepatitis C franchise, which helped turn the drugmaker into a leader in the field.
- Gilead’s last attempt to stem a sales drop is still not paying off. In 2017 it paid $11.9 billion for Kite and its cancer immunotherapy drug, Yescarta. Disappointing sales of Yescarta have previously led analysts to speculate that the company could write down the value of the Kite deal. On an earnings call, the company said it’s hopeful Yescarta sales will improve markedly in 2019.
- A new HIV drug, Biktarvy, is yet another strategy to protect the endangered bottom line. Its sales totaled $578 million in the quarter, ahead of the average estimate of $527.8 million.
- Gilead shares fell 3.6 percent in late trading.
- Revenue in the fourth quarter was $5.8 billion, surpassing estimates of $5.52 billion. Total revenue in 2018 slipped from $26.1 billion the previous year.
- Gilead has indicated it could address some of its issues through dealmaking. “First and foremost, we’re focused on M&A,” Chief Financial Officer Robin Washington said last month at the J.P. Morgan Healthcare Conference in San Francisco.
- To read more details on the results, click here
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