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Gilead (GILD) Q2 Earnings Beat Estimates, HIV Sales Decline

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Gilead Sciences, Inc.’s (GILD - Free Report) second-quarter results came in better than expected, driven by contribution from COVID-19 treatment, Veklury.

The company reported earnings of $1.87 per share in the quarter under review, which beat the Zacks Consensus Estimate of $1.76 and jumped from $1.11 in the year-ago quarter.

Total revenues of $6.2 billion beat the Zacks Consensus Estimate of $6.1 billion and increased 21% from the year-ago quarter, mainly owing to incremental sales of Veklury (remdesivir) for the treatment of COVID-19.

Gilead Sciences, Inc. Price, Consensus and EPS Surprise

Gilead Sciences, Inc. Price, Consensus and EPS Surprise

Gilead Sciences, Inc. price-consensus-eps-surprise-chart | Gilead Sciences, Inc. Quote

Quarter in Detail

Total product sales increased 21% to $6.1 billion for the quarter under review. Excluding Veklury, product sales increased 5% year over year to $5.3 billion as contributions from new product launches such as Tecartus and Trodelvy were offset by the expected decline from the loss of exclusivity of Truvada and Atripla in the United States. 

HIV product sales decreased 2% to $3.9 billion due to the loss of exclusivity of Truvada and Atripla.  Biktarvy sales increased 24% year over year to $1.9 billion. Descovy sales increased 4% year over year to $435 million in the reported quarter, driven by increased pre-exposure prophylaxis (“PrEP”) demand in the United States and the impact of the COVID-related channel inventory drawdown in the same period last year, offset by lower average net selling price. Truvada sales decreased 72% year over year to $108 million and Atripla sales fell 42% year over year to $60 million in the second quarter, following the loss of exclusivity in the United States in October 2020.

HCV product sales increased 23% to $549 million, driven primarily by improved market starts in the United States and Europe as well as an unfavorable change in the estimates of government rebates in the second quarter of 2020.
HBV and hepatitis delta virus (“HDV”) product sales increased 8% to $237 million. Vemlidy sales increased 32% to $200 million. Hepcludex (bulevirtide) contributed $7 million to the top line, representing the first full quarter of sales for Gilead.

Cell Therapy product sales increased 39% to $219 million. Yescarta sales increased to $178 million, driven by increased uptake in relapsed or refractory indolent follicular lymphoma (“FL”) in the United States, following its approval by the FDA in first-quarter 2021 and expansion in Europe. Tecartus sales totaled $41 million, driven by the launch in mantle cell lymphoma in the United States and Europe.

Breast cancer drug, Trodelvy, generated $89 million of sales.

Veklury sales were $829 million for the second quarter. 

Adjusted product gross margin was 86.4% compared with 84.3% in the year-ago period. Research & development (R&D) expenses came in at $1.1 billion, down 9% from the year-ago quarter.

2021 Guidance Updated

Product sales are projected at around $24.4-$25 billion (earlier estimated range: $23.7-$25.1 billion). Veklury sales are expected to be in the range of $2.7-$3.1 billion compared to $2.0-$3.0 billion estimated earlier, reflecting the ongoing role of the drug in the pandemic. Earnings per share are expected in the range of $6.90-$7.25, compared to the previously expected range of $6.75-$7.45.  The Zacks Consensus Estimate for sales and earnings per share is pegged at $24.8 billion and $7.10, respectively.

Other Updates

Gilead filed a new drug application to the FDA, seeking approval of lenacapavir for the treatment of HIV-1 infection in heavily treatment-experienced people with multi-drug resistant infection. Please note that it has collaborated with a subsidiary of Merck & Co., Inc., (MRK - Free Report) to develop and commercialize long-acting, investigational treatment combinations of Gilead’s lenacapavir and Merck’s islatravir in HIV.

Gilead’s Kite announced a partnership with Shoreline Biosciences, Inc. to develop allogeneic candidates for a range of hematologic malignancies. The collaboration will focus initially on CAR NK targets, with Kite having an option to expand the collaboration to include an induced pluripotent stem cell CAR Macrophage program.

Our Take

Gilead’s second-quarter results were better than expected as flagship HIV therapy, Biktarvy, registered continued growth and gains in market share despite the ongoing impact of the pandemic. Incremental contribution from Veklury also positively impacted sales.

Gilead’s stock has gained 19.8% this year against the industry's decline of 0.5%.


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While the ongoing pandemic has adversely impacted the HIV and HCV businesses, the contribution from Veklury maintains momentum for Gilead. Generic competition for the HIV business affected sales. Competition is stiff as well from the likes of GlaxoSmithKline (GSK - Free Report) .  While Europe is seeing signs of recovery, the pace of pandemic recovery was slower than management’s expectations in the United States.

Gilead currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same space is Repligen Corporation (RGEN - Free Report) , which currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings estimates for Repligen for 2021 are up 5 cents in the past 60 days.  The stock is up 25.8% in the year so far.