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Gilead Sciences, Inc. (GILD - Free Report) topped earnings and sales in the third quarter as lower tax expenses boosted the bottom line. The company also raised its annual guidance.
GILD reported third-quarter adjusted earnings of $2.29 per share, which comfortably beat the Zacks Consensus Estimate of $1.91 and increased from $1.90 in the year-ago quarter. The year-over-year increase was driven by lower tax expenses.
Total revenues of $7.1 billion beat the Zacks Consensus Estimate of $6.8 billion on solid oncology sales. Revenues were flat year over year, driven by increased sales in oncology and HIV, which was partially offset by lower COVID-19 drug Veklury (remdesivir) and chronic hepatitis C virus (“HCV”) product sales.
Gilead’s stock has lost 1.9% year-to-date compared with the industry's decline of 22.1%.
Image Source: Zacks Investment Research
Quarter in Detail
Total product sales were flat at $7 billion in the quarter under review. Excluding Veklury, product sales increased 5% year over year to $6.4 billion due to increased sales from HIV and oncology franchises.
HIV product sales increased 4% year over year to $4.7 billion, reflecting higher demand. Sales missed the Zacks Consensus Estimate by 0.55% but beat our model estimate of $4.6 billion.
Biktarvy sales increased 12% year over year to $3.1 billion, reflecting higher demand as well as favorable channel inventory. Its sales were up 4% sequentially, beating the Zacks Consensus Estimate and our estimate of $3 billion.
Descovy (FTC 200 mg/TAF 25 mg) sales increased 2% year over year to $511 million, primarily driven by higher demand, partially offset by pricing dynamics in the United States. However, Descovy sales missed the Zacks Consensus Estimate of $522 million and our model estimate of $521.9 million.
The Liver Disease portfolio sales, which include chronic HCV, chronic hepatitis B virus and chronic hepatitis delta virus, decreased 10% year over year to $706 million, as higher HCV patient starts were more than offset by unfavorable pricing dynamics.
Cell Therapy product sales increased by 22% year over year to $486 million. However, it missed the Zacks Consensus Estimate of $498 million and our model estimate of $516.2 million.
Yescarta sales increased 23% year over year to $391 million on increased demand in the second- and third-line settings for relapsed or refractory large B-cell lymphoma outside the United States.
Tecartus sales increased 18% year over year to $96 million, driven by increased demand in adult R/R B- mantle cell lymphoma and R/R adult acute lymphoblastic leukemia.
Breast cancer drug Trodelvy’s sales surged 58% year over year to $283 million, primarily driven by higher demand in both the United States and Europe. Per the company, Trodelvy remains the leading regimen for second-line metastatic triple-negative breast cancer across both the U.S. and Europe. Sales missed the Zacks Consensus Estimate of $284 million but beat our model estimate of $278.2 million.
Veklury sales decreased 31% to $636 million, primarily driven by lower rates of COVID-19-related hospitalizations.
Adjusted product gross margin declined to 85.9% for the quarter, down from 86.8% in the year-ago quarter due to intangible asset amortization expenses related to the pretreated HR+/HER2- metastatic breast cancer indication for Trodelvy following its approval in February 2023 as well as product mix.
Research & development expenses were $1.5 billion, up 25% year over year due to increased clinical activity, as well as costs associated with the discontinuation of two phase III magrolimab studies.
SG&A expenses were $1.3 billion, up from $1.2 billion in the year-ago quarter, driven by increased commercial activities in oncology.
2023 Guidance Increased
Product sales are projected to be between $26.7 billion and $26.9 billion (previous guidance: $26.3-$26.7 billion).
Total product sales, excluding Veklury, are expected to be $24.8-$25 billion (previous guidance: $24.6-$25 billion).
Total Veklury sales are estimated at around $1.9 billion (previous guidance: $1.7 billion).
Adjusted earnings per share are anticipated in the range of $6.65-$6.85 (previous guidance: $6.45-$6.80).
Other Updates
The European Commission approved Trodelvy as a monotherapy for the treatment of adult patients with unresectable or metastatic HR+/HER2- mBC who have received endocrine-based therapy and at least two additional systemic therapies in the advanced setting.
The FDA and European Commission approved the label expansion of Veklury to treat COVID-19 in appropriate patients with mild to severe hepatic impairment.
Gilead earlier discontinued the late-stage ENHANCE-2 study of magrolimab in first-line acute myeloid leukemia (“AML”) with TP53 mutations based on an ad hoc analysis and following a review by an independent data monitoring committee. The FDA had previously placed a partial clinical hold on magrolimab studies in AML that paused enrollment, though previously enrolled patients may continue to receive the study medicine.
Gilead Sciences, Inc. Price, Consensus and EPS Surprise
Gilead’s third-quarter results were better than expected, as a strong surge in Trodelvy sales boosted its performance. Consequently, the company raised its annual guidance.
The oncology business also continues to perform well and the label expansion of Trodelvy will further boost the franchise. Early data from the mid-stage EVOKE-02 study evaluating the investigational use of Trodelvy in combination with Keytruda as a first-line treatment in patients with advanced or metastatic non-small cell lung cancer without actionable genomic alterations was promising.
Biktarvy remains the leading treatment choice for those seeking to switch to a new regimen in the United States, as well as for those switching therapies.
However, competition from the likes of GSK plc (GSK - Free Report) will be a headwind. Strong patient demand for the oral two-drug regimen (Oral 2DR- Dovato, Juluca) and long-acting medicines (Cabenuva and Apretude) drove GSK’s HIV franchise in the third quarter of 2023, which increased by 15%.
Dynavax’s loss per share estimates for 2023 have narrowed from 23 cents to 15 cents for 2023 in the past 30 days. During the same period, earnings estimates for 2024 rose from 3 cents to 12 cents. Year-to-date, shares of DVAX have gained 25.4%.
Earnings estimates for Ligand Pharmaceuticals’ 2023 earnings per share have increased from $5.09 to $5.10 in the past thirty days. During the same period, earnings estimates for 2024 rose from $4.56 to $4.59.
Ligand beat earnings estimates in three of the last four quarters and missed the mark on one occasion. The company has delivered an earnings surprise of 52.47%, on average.
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Gilead (GILD) Q3 Earnings Beat, Trodelvy Fuels Oncology Sales
Gilead Sciences, Inc. (GILD - Free Report) topped earnings and sales in the third quarter as lower tax expenses boosted the bottom line. The company also raised its annual guidance.
GILD reported third-quarter adjusted earnings of $2.29 per share, which comfortably beat the Zacks Consensus Estimate of $1.91 and increased from $1.90 in the year-ago quarter. The year-over-year increase was driven by lower tax expenses.
Total revenues of $7.1 billion beat the Zacks Consensus Estimate of $6.8 billion on solid oncology sales. Revenues were flat year over year, driven by increased sales in oncology and HIV, which was partially offset by lower COVID-19 drug Veklury (remdesivir) and chronic hepatitis C virus (“HCV”) product sales.
Gilead’s stock has lost 1.9% year-to-date compared with the industry's decline of 22.1%.
Image Source: Zacks Investment Research
Quarter in Detail
Total product sales were flat at $7 billion in the quarter under review. Excluding Veklury, product sales increased 5% year over year to $6.4 billion due to increased sales from HIV and oncology franchises.
HIV product sales increased 4% year over year to $4.7 billion, reflecting higher demand. Sales missed the Zacks Consensus Estimate by 0.55% but beat our model estimate of $4.6 billion.
Biktarvy sales increased 12% year over year to $3.1 billion, reflecting higher demand as well as favorable channel inventory. Its sales were up 4% sequentially, beating the Zacks Consensus Estimate and our estimate of $3 billion.
Descovy (FTC 200 mg/TAF 25 mg) sales increased 2% year over year to $511 million, primarily driven by higher demand, partially offset by pricing dynamics in the United States. However, Descovy sales missed the Zacks Consensus Estimate of $522 million and our model estimate of $521.9 million.
The Liver Disease portfolio sales, which include chronic HCV, chronic hepatitis B virus and chronic hepatitis delta virus, decreased 10% year over year to $706 million, as higher HCV patient starts were more than offset by unfavorable pricing dynamics.
Cell Therapy product sales increased by 22% year over year to $486 million. However, it missed the Zacks Consensus Estimate of $498 million and our model estimate of $516.2 million.
Yescarta sales increased 23% year over year to $391 million on increased demand in the second- and third-line settings for relapsed or refractory large B-cell lymphoma outside the United States.
Tecartus sales increased 18% year over year to $96 million, driven by increased demand in adult R/R B- mantle cell lymphoma and R/R adult acute lymphoblastic leukemia.
Breast cancer drug Trodelvy’s sales surged 58% year over year to $283 million, primarily driven by higher demand in both the United States and Europe. Per the company, Trodelvy remains the leading regimen for second-line metastatic triple-negative breast cancer across both the U.S. and Europe. Sales missed the Zacks Consensus Estimate of $284 million but beat our model estimate of $278.2 million.
Veklury sales decreased 31% to $636 million, primarily driven by lower rates of COVID-19-related hospitalizations.
Adjusted product gross margin declined to 85.9% for the quarter, down from 86.8% in the year-ago quarter due to intangible asset amortization expenses related to the pretreated HR+/HER2- metastatic breast cancer indication for Trodelvy following its approval in February 2023 as well as product mix.
Research & development expenses were $1.5 billion, up 25% year over year due to increased clinical activity, as well as costs associated with the discontinuation of two phase III magrolimab studies.
SG&A expenses were $1.3 billion, up from $1.2 billion in the year-ago quarter, driven by increased commercial activities in oncology.
2023 Guidance Increased
Product sales are projected to be between $26.7 billion and $26.9 billion (previous guidance: $26.3-$26.7 billion).
Total product sales, excluding Veklury, are expected to be $24.8-$25 billion (previous guidance: $24.6-$25 billion).
Total Veklury sales are estimated at around $1.9 billion (previous guidance: $1.7 billion).
Adjusted earnings per share are anticipated in the range of $6.65-$6.85 (previous guidance: $6.45-$6.80).
Other Updates
The European Commission approved Trodelvy as a monotherapy for the treatment of adult patients with unresectable or metastatic HR+/HER2- mBC who have received endocrine-based therapy and at least two additional systemic therapies in the advanced setting.
The FDA and European Commission approved the label expansion of Veklury to treat COVID-19 in appropriate patients with mild to severe hepatic impairment.
Gilead earlier discontinued the late-stage ENHANCE-2 study of magrolimab in first-line acute myeloid leukemia (“AML”) with TP53 mutations based on an ad hoc analysis and following a review by an independent data monitoring committee. The FDA had previously placed a partial clinical hold on magrolimab studies in AML that paused enrollment, though previously enrolled patients may continue to receive the study medicine.
Gilead Sciences, Inc. Price, Consensus and EPS Surprise
Gilead Sciences, Inc. price-consensus-eps-surprise-chart | Gilead Sciences, Inc. Quote
Our Take
Gilead’s third-quarter results were better than expected, as a strong surge in Trodelvy sales boosted its performance. Consequently, the company raised its annual guidance.
The oncology business also continues to perform well and the label expansion of Trodelvy will further boost the franchise. Early data from the mid-stage EVOKE-02 study evaluating the investigational use of Trodelvy in combination with Keytruda as a first-line treatment in patients with advanced or metastatic non-small cell lung cancer without actionable genomic alterations was promising.
Biktarvy remains the leading treatment choice for those seeking to switch to a new regimen in the United States, as well as for those switching therapies.
However, competition from the likes of GSK plc (GSK - Free Report) will be a headwind. Strong patient demand for the oral two-drug regimen (Oral 2DR- Dovato, Juluca) and long-acting medicines (Cabenuva and Apretude) drove GSK’s HIV franchise in the third quarter of 2023, which increased by 15%.
Zacks Rank & Stocks to Consider
Gilead currently carries a Zacks Rank #2 (Buy).
A couple of other top-ranked stocks in the overall healthcare sector are Dynavax Technologies (DVAX - Free Report) and Ligand Pharmaceuticals (LGND - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dynavax’s loss per share estimates for 2023 have narrowed from 23 cents to 15 cents for 2023 in the past 30 days. During the same period, earnings estimates for 2024 rose from 3 cents to 12 cents. Year-to-date, shares of DVAX have gained 25.4%.
Earnings estimates for Ligand Pharmaceuticals’ 2023 earnings per share have increased from $5.09 to $5.10 in the past thirty days. During the same period, earnings estimates for 2024 rose from $4.56 to $4.59.
Ligand beat earnings estimates in three of the last four quarters and missed the mark on one occasion. The company has delivered an earnings surprise of 52.47%, on average.