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Gilead (GILD) Q4 Earnings Miss Estimates, Sales Top on Veklury
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Gilead Sciences, Inc. (GILD - Free Report) reported mixed results in the fourth quarter as earnings missed expectations while sales surpassed the same.
GILD’s fourth-quarter adjusted earnings of $1.72 per share missed the Zacks Consensus Estimate of $1.76 but increased from $1.67 in the year-ago quarter. The year-over-year increase was due to lower total costs and expenses.
Total revenues of $7.1 billion beat the Zacks Consensus Estimate of $7 billion on better-than-expected Veklury (remdesivir) sales, due to an uptick in hospitalizations at the end of 2023. Revenues decreased 4% due to lower Veklury and HIV sales than the year-ago quarter's level.
The stock is trading down in response to the results.
Gilead’s stock has lost 2.9% in the past six months compared with the industry's decline of 0.6%.
Image Source: Zacks Investment Research
Quarter in Detail
Total product sales decreased 4% to $7.1 billion in the quarter under review. Excluding Veklury, product sales were flat year over year to $6.3 billion, as higher oncology sales were partially offset by lower HIV sales.
HIV product sales decreased 2% to $4.7 billion, attributable to a lower average realized price due to channel mix. Sales missed the Zacks Consensus Estimate of $4.9 billion and our model estimate of $4.8 billion.
Biktarvy sales increased 7% year over year to $3.1 billion, due to higher demand. However, the reported number missed both the Zacks Consensus Estimate and our model estimate of $3.2 billion.
Descovy (FTC 200 mg/TAF 25 mg) sales decreased 5% year over year to $509 million, mainly due to unfavorable pricing dynamics in the United States. Descovy sales missed the Zacks Consensus Estimate of $545 million and our model estimate of $565 million.
The Liver Disease portfolio sales, which include chronic HCV, chronic hepatitis B virus and chronic hepatitis delta virus, remained flat year over year at $691 million. Sales were impacted by unfavorable pricing dynamics, offset by higher demand across chronic hepatitis C virus and chronic hepatitis delta virus products.
Cell Therapy product sales increased 11% year over year to $466 million. However, it missed the Zacks Consensus Estimate of $526 million and our model estimate of $552.3 million.
Yescarta sales increased 9% year over year to $368 million, primarily driven by solid demand in relapsed or refractory (“R/R”) large B-cell lymphoma outside the United States.
Tecartus sales increased 19% year over year to $98 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 53% year over year to $299 million, primarily driven by higher demand in both the United States and Europe. Per the company, with more than 30,000 patients treated to date, Trodelvy's solid demand trends continue to reinforce its robust clinical profile as the only TROP2-directed antibody-drug conjugate approved and available in multiple tumor types. Sales beat the Zacks Consensus Estimate of $297 million and our model estimate of $279.6 million.
Veklury sales decreased 28% to $720 million, primarily driven by lower rates of COVID-19-related hospitalizations. However, sales beat the Zacks Consensus Estimate of $474 million and our model estimate of $435 million.
Adjusted product gross margin declined to 86.1% for the quarter from 86.8% in the year-ago quarter due to product mix. Research & development expenses were $1.45 billion compared with $1.54 billion in the year-ago quarter.
SG&A expenses were $1.6 billion, down 20.9% year over year. The year-ago quarter recorded a charge related to the termination of the Trodelvy’s collaboration agreement with Everest Medicines in 2022.
2023 Results
Revenues decreased 1% to $27.1 billion due to a reduction of $1.7 billion in Veklury sales, partially offset by higher oncology sales. Revenues were in line with the Zacks Consensus Estimate. Adjusted earnings per share decreased to $6.72 in 2023 from $7.26 in 2022, primarily due to higher total costs and expenses, as well as lower Veklury sales. The reported number also missed the Zacks Consensus Estimate of $6.76.
2024 Guidance
Product sales are projected to be between $27.1 billion and $27.5 billion. Total product sales, excluding Veklury, are expected between $25.8 and $26.2 billion.
Total Veklury sales are estimated at around $1.3 billion. Adjusted earnings per share are anticipated in the range of $6.85-$7.25.
Gilead Sciences, Inc. Price, Consensus and EPS Surprise
The phase III EVOKE-01 study of Trodelvy versus docetaxel in previously treated metastatic non-small cell lung cancer did not meet its primary endpoint of overall survival. While not statistically powered, Gilead observed an encouraging trend in a subgroup of patients non-responsive to prior anti-PD-(L)1 immunotherapy. The company might potentially explore this trend further.
The FDA approved Yescarta’s label update to include overall survival (“OS”) data from the phase III ZUMA-7 study, which showed a statistically significant OS improvement for Yescarta in second-line R/R LBCL versus standard of care.
Our Take
Gilead's fourth-quarter results were a mixed bag. While Veklury sales declined year over year due to the evolution of the pandemic, sales were better than management’s expectations, reflecting the uptick in hospitalizations at the end of 2023.
The oncology business also continues to perform well and the label expansion of Trodelvy in metastatic bladder cancer will further boost the franchise. However, the failure of the lung cancer study was disappointing, given the market potential. This also dealt a blow to Gilead’s efforts to establish itself in the competitive oncology space in the wake of increasing competition in the HIV business.
Competition from the likes of GSK plc (GSK - Free Report) continues to 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 fourth quarter of 2023, which increased 10%.
In the past 30 days, the Zacks Consensus Estimate for Puma Biotech’s 2023 earnings per share (EPS) has remained constant at 73 cents. During the same time frame, the consensus estimate for Puma Biotech’s 2024 EPS has remained steady at 69 cents. Over the past year, shares of PBYI have gained 8.6%.
PBYI beat estimates in three of the last four quarters while missing on one occasion, delivering a four-quarter average earnings surprise of 76.55%.
In the past 30 days, Sarepta’s loss estimates for 2023 have improved from a loss of $6.80 per share to $6.57 per share. During the same period, earnings estimates per share for 2024 have risen from $1.71 to $2.14.
Sarepta’s earnings beat estimates in each of the last four quarters, delivering an average surprise of 48.67%. In the previous reported quarter, its earnings beat estimates by 72.29%.
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Gilead (GILD) Q4 Earnings Miss Estimates, Sales Top on Veklury
Gilead Sciences, Inc. (GILD - Free Report) reported mixed results in the fourth quarter as earnings missed expectations while sales surpassed the same.
GILD’s fourth-quarter adjusted earnings of $1.72 per share missed the Zacks Consensus Estimate of $1.76 but increased from $1.67 in the year-ago quarter. The year-over-year increase was due to lower total costs and expenses.
Total revenues of $7.1 billion beat the Zacks Consensus Estimate of $7 billion on better-than-expected Veklury (remdesivir) sales, due to an uptick in hospitalizations at the end of 2023. Revenues decreased 4% due to lower Veklury and HIV sales than the year-ago quarter's level.
The stock is trading down in response to the results.
Gilead’s stock has lost 2.9% in the past six months compared with the industry's decline of 0.6%.
Image Source: Zacks Investment Research
Quarter in Detail
Total product sales decreased 4% to $7.1 billion in the quarter under review. Excluding Veklury, product sales were flat year over year to $6.3 billion, as higher oncology sales were partially offset by lower HIV sales.
HIV product sales decreased 2% to $4.7 billion, attributable to a lower average realized price due to channel mix. Sales missed the Zacks Consensus Estimate of $4.9 billion and our model estimate of $4.8 billion.
Biktarvy sales increased 7% year over year to $3.1 billion, due to higher demand. However, the reported number missed both the Zacks Consensus Estimate and our model estimate of $3.2 billion.
Descovy (FTC 200 mg/TAF 25 mg) sales decreased 5% year over year to $509 million, mainly due to unfavorable pricing dynamics in the United States. Descovy sales missed the Zacks Consensus Estimate of $545 million and our model estimate of $565 million.
The Liver Disease portfolio sales, which include chronic HCV, chronic hepatitis B virus and chronic hepatitis delta virus, remained flat year over year at $691 million. Sales were impacted by unfavorable pricing dynamics, offset by higher demand across chronic hepatitis C virus and chronic hepatitis delta virus products.
Cell Therapy product sales increased 11% year over year to $466 million. However, it missed the Zacks Consensus Estimate of $526 million and our model estimate of $552.3 million.
Yescarta sales increased 9% year over year to $368 million, primarily driven by solid demand in relapsed or refractory (“R/R”) large B-cell lymphoma outside the United States.
Tecartus sales increased 19% year over year to $98 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 53% year over year to $299 million, primarily driven by higher demand in both the United States and Europe. Per the company, with more than 30,000 patients treated to date, Trodelvy's solid demand trends continue to reinforce its robust clinical profile as the only TROP2-directed antibody-drug conjugate approved and available in multiple tumor types. Sales beat the Zacks Consensus Estimate of $297 million and our model estimate of $279.6 million.
Veklury sales decreased 28% to $720 million, primarily driven by lower rates of COVID-19-related hospitalizations. However, sales beat the Zacks Consensus Estimate of $474 million and our model estimate of $435 million.
Adjusted product gross margin declined to 86.1% for the quarter from 86.8% in the year-ago quarter due to product mix. Research & development expenses were $1.45 billion compared with $1.54 billion in the year-ago quarter.
SG&A expenses were $1.6 billion, down 20.9% year over year. The year-ago quarter recorded a charge related to the termination of the Trodelvy’s collaboration agreement with Everest Medicines in 2022.
2023 Results
Revenues decreased 1% to $27.1 billion due to a reduction of $1.7 billion in Veklury sales, partially offset by higher oncology sales. Revenues were in line with the Zacks Consensus Estimate. Adjusted earnings per share decreased to $6.72 in 2023 from $7.26 in 2022, primarily due to higher total costs and expenses, as well as lower Veklury sales. The reported number also missed the Zacks Consensus Estimate of $6.76.
2024 Guidance
Product sales are projected to be between $27.1 billion and $27.5 billion. Total product sales, excluding Veklury, are expected between $25.8 and $26.2 billion.
Total Veklury sales are estimated at around $1.3 billion. Adjusted earnings per share are anticipated in the range of $6.85-$7.25.
Gilead Sciences, Inc. Price, Consensus and EPS Surprise
Gilead Sciences, Inc. price-consensus-eps-surprise-chart | Gilead Sciences, Inc. Quote
Other Updates
The phase III EVOKE-01 study of Trodelvy versus docetaxel in previously treated metastatic non-small cell lung cancer did not meet its primary endpoint of overall survival. While not statistically powered, Gilead observed an encouraging trend in a subgroup of patients non-responsive to prior anti-PD-(L)1 immunotherapy. The company might potentially explore this trend further.
The FDA approved Yescarta’s label update to include overall survival (“OS”) data from the phase III ZUMA-7 study, which showed a statistically significant OS improvement for Yescarta in second-line R/R LBCL versus standard of care.
Our Take
Gilead's fourth-quarter results were a mixed bag. While Veklury sales declined year over year due to the evolution of the pandemic, sales were better than management’s expectations, reflecting the uptick in hospitalizations at the end of 2023.
The oncology business also continues to perform well and the label expansion of Trodelvy in metastatic bladder cancer will further boost the franchise. However, the failure of the lung cancer study was disappointing, given the market potential. This also dealt a blow to Gilead’s efforts to establish itself in the competitive oncology space in the wake of increasing competition in the HIV business.
Competition from the likes of GSK plc (GSK - Free Report) continues to 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 fourth quarter of 2023, which increased 10%.
Zacks Rank & Stocks to Consider
Gilead currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the healthcare industry are Puma Biotechnology, Inc. (PBYI - Free Report) and Sarepta Therapeutics (SRPT - Free Report) . PBYI currently sports a Zacks Rank #1 (Strong Buy) and SRPT carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, the Zacks Consensus Estimate for Puma Biotech’s 2023 earnings per share (EPS) has remained constant at 73 cents. During the same time frame, the consensus estimate for Puma Biotech’s 2024 EPS has remained steady at 69 cents. Over the past year, shares of PBYI have gained 8.6%.
PBYI beat estimates in three of the last four quarters while missing on one occasion, delivering a four-quarter average earnings surprise of 76.55%.
In the past 30 days, Sarepta’s loss estimates for 2023 have improved from a loss of $6.80 per share to $6.57 per share. During the same period, earnings estimates per share for 2024 have risen from $1.71 to $2.14.
Sarepta’s earnings beat estimates in each of the last four quarters, delivering an average surprise of 48.67%. In the previous reported quarter, its earnings beat estimates by 72.29%.