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Gilead (GILD) Gears Up to Report Q3 Earnings: What's in Store?
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Gilead Sciences Inc. (GILD - Free Report) is set to report third-quarter 2023 results on Nov 7, after market close.
The biotech major has a mixed record, with earnings beating estimates in two of the last four quarters and missing in the remaining two, the average beat being 2.77%. In the last reported quarter, the company missed expectations by 16.25%.
Gilead Sciences, Inc. Price, Consensus and EPS Surprise
Revenues in the third quarter have most likely been boosted by increased sales in oncology and HIV franchises, as in the first and second quarters. However, a decline in Veklury (remdesivir) sales is likely to have dented this growth slightly.
Sales in the HIV franchise are being driven by higher demand for the flagship HIV therapies, Biktarvy and Descovy. Biktarvy’s sales increased 17% year over year in the previous quarter due to higher demand and favorable pricing dynamics. The trend is likely to have continued in the to-be-reported quarter. Descovy’s revenues were boosted by higher demand and favorable pricing dynamics in the previous quarter and the momentum is likely to have continued in the third quarter.
The Zacks Consensus Estimate and our model estimate for sales of Biktarvy and Descovy are pegged at $3 billion and $521 million, respectively.
The Liver Disease portfolio sales, including chronic hepatitis C virus, chronic hepatitis B virus and chronic hepatitis delta virus, increased in the previous quarter, driven by higher demand. The trend has most likely continued in the third quarter.
Sales of Veklury are likely to have seen a decline due to lower rates of COVID-19-related hospitalizations in all regions.
A strong increase in Cell Therapy product sales is likely to have boosted the top line in the third quarter. Yescarta sales are primarily being driven by increased demand for relapsed or refractory (“R/R”) large B-cell lymphoma in the United States and Europe. Tecartus (brexucabtagene autoleucel) sales are being fueled by increased demand in adult R/R B-cell precursor acute lymphoblastic leukemia and mantle cell lymphoma in the United States and Europe. Sales are likely to have experienced a sequential increase, driven by the label expansions of Yescarta and Tecartus.
The Zacks Consensus Estimate for Cell Therapy product sales is $498 million and our estimate for the same is $516 million.
Increased sales of Trodelvy, reflecting continued uptake in metastatic triple-negative breast cancer, have also likely boosted sales in the third quarter. The drug was also approved in Europe, which should positively impact sales. The Zacks Consensus Estimate for Trodelvy sales is $282 million and our estimate for the same is $278 million.
Operating expenses are also likely to have increased in the third quarter on higher R&D expenses.
Pipeline & Regulatory Updates
Apart from the regular top- and bottom-line numbers, we expect investors to focus on key pipeline updates when the company reports its to-be-reported quarter.
The FDA approved a label expansion of its anti-viral drug, Veklury. The drug is now approved in the United States without any dose adjustments for the treatment of COVID-19 in patients with mild, moderate or severe hepatic impairment.
The FDA has placed a partial clinical hold on new patient starts in studies evaluating magrolimab to treat acute myeloid leukemia(AML) in the United States. As a result of the hold, screening and enrollment of new study participants under the U.S. investigational new drug application (IND 147229) and U.S. Expanded Access Program will be paused. Nevertheless, patients already enrolled in AML studies may continue to receive treatment and be monitored according to the current study protocol.
The candidate is a potential first-in-class anti-CD47 immunotherapy and is being evaluated for several potential indications, including ongoing trials in solid tumors. Management stated that studies of magrolimab in solid tumors can continue without any impact from this hold.
The late-stage ENHANCE study on magrolimab in higher-risk myelodysplastic syndromes was discontinued previously.
Share Price Performance
Gilead’s stock has lost 2.3% in the past year compared with the industry's decline of 24.8%.
Image Source: Zacks Investment Research
What Our Model Predicts
Our proven model does not conclusively predict an earnings beat for Gilead this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: Earnings ESP for GILD is -1.14% as the Zacks Consensus Estimate is pinned at $1.91 per share and the Most Accurate Estimate is pegged at $1.89 per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks to Consider
Here are some drug and biotech stocks you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this season.
LGND topped earnings estimates in three of the last four quarters and missed in the remaining one, with an earnings surprise of 52.47%, on average. Ligand is scheduled to release third-quarter 2023 results on Nov 6.
Acadia Pharmaceuticals (ACAD - Free Report) currently has an Earnings ESP of +6.76% and a Zacks Rank #2.
Acadia beat earnings estimates in two of the trailing four quarters and missed in the remaining two. ACAD delivered an earnings surprise of 20.33%, on average. Year-to-date, shares of Acadia have gained 37.7%.
uniQure (QURE - Free Report) has an Earnings ESP of +13.90% and a Zacks Rank #2 at present.
QURE beat earnings estimates in two of the trailing four quarters and missed in the remaining two. It delivered a negative earnings surprise of 17.83%.
Image: Shutterstock
Gilead (GILD) Gears Up to Report Q3 Earnings: What's in Store?
Gilead Sciences Inc. (GILD - Free Report) is set to report third-quarter 2023 results on Nov 7, after market close.
The biotech major has a mixed record, with earnings beating estimates in two of the last four quarters and missing in the remaining two, the average beat being 2.77%. In the last reported quarter, the company missed expectations by 16.25%.
Gilead Sciences, Inc. Price, Consensus and EPS Surprise
Gilead Sciences, Inc. price-consensus-eps-surprise-chart | Gilead Sciences, Inc. Quote
Factors to Note
Revenues in the third quarter have most likely been boosted by increased sales in oncology and HIV franchises, as in the first and second quarters. However, a decline in Veklury (remdesivir) sales is likely to have dented this growth slightly.
Sales in the HIV franchise are being driven by higher demand for the flagship HIV therapies, Biktarvy and Descovy. Biktarvy’s sales increased 17% year over year in the previous quarter due to higher demand and favorable pricing dynamics. The trend is likely to have continued in the to-be-reported quarter.
Descovy’s revenues were boosted by higher demand and favorable pricing dynamics in the previous quarter and the momentum is likely to have continued in the third quarter.
The Zacks Consensus Estimate and our model estimate for sales of Biktarvy and Descovy are pegged at $3 billion and $521 million, respectively.
The Liver Disease portfolio sales, including chronic hepatitis C virus, chronic hepatitis B virus and chronic hepatitis delta virus, increased in the previous quarter, driven by higher demand. The trend has most likely continued in the third quarter.
Sales of Veklury are likely to have seen a decline due to lower rates of COVID-19-related hospitalizations in all regions.
A strong increase in Cell Therapy product sales is likely to have boosted the top line in the third quarter. Yescarta sales are primarily being driven by increased demand for relapsed or refractory (“R/R”) large B-cell lymphoma in the United States and Europe. Tecartus (brexucabtagene autoleucel) sales are being fueled by increased demand in adult R/R B-cell precursor acute lymphoblastic leukemia and mantle cell lymphoma in the United States and Europe. Sales are likely to have experienced a sequential increase, driven by the label expansions of Yescarta and Tecartus.
The Zacks Consensus Estimate for Cell Therapy product sales is $498 million and our estimate for the same is $516 million.
Increased sales of Trodelvy, reflecting continued uptake in metastatic triple-negative breast cancer, have also likely boosted sales in the third quarter. The drug was also approved in Europe, which should positively impact sales. The Zacks Consensus Estimate for Trodelvy sales is $282 million and our estimate for the same is $278 million.
Operating expenses are also likely to have increased in the third quarter on higher R&D expenses.
Pipeline & Regulatory Updates
Apart from the regular top- and bottom-line numbers, we expect investors to focus on key pipeline updates when the company reports its to-be-reported quarter.
The FDA approved a label expansion of its anti-viral drug, Veklury. The drug is now approved in the United States without any dose adjustments for the treatment of COVID-19 in patients with mild, moderate or severe hepatic impairment.
The FDA has placed a partial clinical hold on new patient starts in studies evaluating magrolimab to treat acute myeloid leukemia(AML) in the United States. As a result of the hold, screening and enrollment of new study participants under the U.S. investigational new drug application (IND 147229) and U.S. Expanded Access Program will be paused. Nevertheless, patients already enrolled in AML studies may continue to receive treatment and be monitored according to the current study protocol.
The candidate is a potential first-in-class anti-CD47 immunotherapy and is being evaluated for several potential indications, including ongoing trials in solid tumors. Management stated that studies of magrolimab in solid tumors can continue without any impact from this hold.
The late-stage ENHANCE study on magrolimab in higher-risk myelodysplastic syndromes was discontinued previously.
Share Price Performance
Gilead’s stock has lost 2.3% in the past year compared with the industry's decline of 24.8%.
Image Source: Zacks Investment Research
What Our Model Predicts
Our proven model does not conclusively predict an earnings beat for Gilead this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: Earnings ESP for GILD is -1.14% as the Zacks Consensus Estimate is pinned at $1.91 per share and the Most Accurate Estimate is pegged at $1.89 per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks to Consider
Here are some drug and biotech stocks you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this season.
Ligand Pharmaceuticals (LGND - Free Report) has an Earnings ESP of +2.94% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
LGND topped earnings estimates in three of the last four quarters and missed in the remaining one, with an earnings surprise of 52.47%, on average. Ligand is scheduled to release third-quarter 2023 results on Nov 6.
Acadia Pharmaceuticals (ACAD - Free Report) currently has an Earnings ESP of +6.76% and a Zacks Rank #2.
Acadia beat earnings estimates in two of the trailing four quarters and missed in the remaining two. ACAD delivered an earnings surprise of 20.33%, on average. Year-to-date, shares of Acadia have gained 37.7%.
uniQure (QURE - Free Report) has an Earnings ESP of +13.90% and a Zacks Rank #2 at present.
QURE beat earnings estimates in two of the trailing four quarters and missed in the remaining two. It delivered a negative earnings surprise of 17.83%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.