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Gilead Sciences, Inc. (GILD - Free Report) reported better-than-expected results in the second quarter and raised its annual earnings guidance.
Adjusted earnings per share (EPS) of $2.01 comfortably beat the Zacks Consensus Estimate of $1.61. In the year-ago quarter, the company reported adjusted earnings of $1.34 per share.
The year-over-year increase was driven by higher revenues and lower operating expenses.
Total revenues of $6.9 billion beat the Zacks Consensus Estimate of $6.6, primarily due to high HIV, oncology and liver disease drug sales. Revenues increased 5% from the year-ago quarter.
The stock is trading up in pre-market on better-than-expected quarterly results and raised guidance.
Gilead’s shares have lost 6.6% year to date compared with the industry's decline of 5.9%.
Image Source: Zacks Investment Research
Quarter in Detail
Total product sales rose 5% year over year to $6.9 billion. Excluding Veklury, product sales increased 6% to $6.7 billion.
HIV product sales grew 3% year over year to $4.75 billion, driven by higher demand. The figure beat the Zacks Consensus Estimate of $4.71 billion but missed our model estimate of $4.78 billion.
Flagship HIV therapy Biktarvy’s sales increased 8% year over year to $3.23 billion, due to higher demand. The reported number beat the Zacks Consensus Estimate of $3.2 billion but missed our model estimate of $3.3 billion.
Per GILD, Biktarvy accounts for more than 49% share of the treatment market in the United States.
However, Descovy (FTC 200 mg/TAF 25 mg) sales decreased 6% year over year to $485 million, due to lower average realized price owing to channel mix. The reported number missed the Zacks Consensus Estimate of $498 million and our model estimate of $502 million.
The Liver Disease portfolio sales, which include chronic HCV, chronic hepatitis B virus and chronic hepatitis delta virus, increased 17% to $832 million. The increase was attributable to higher average realized price due to channel mix in the United States, as well as higher demand in products for chronic HCV, chronic hepatitis B virus and chronic hepatitis D virus in Europe.
Veklury sales decreased 16% to $214 million due to lower rates of COVID-19-related hospitalizations. However, sales beat the Zacks Consensus Estimate of $194 million and our model estimate of $133.5 million.
Cell Therapy product (comprising Yescarta and Tecartus) sales increased 11% year over year to $521 million. The figure beat the Zacks Consensus Estimate of $519 million but missed our model estimate of $531.
Yescarta sales increased 9% year over year to $414 million, primarily driven by strong demand in relapsed or refractory (R/R) large B-cell lymphoma outside the United States.
Tecartus sales increased 21% year over year to $107 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 23% year over year to $320 million, primarily driven by higher demand in second-line metastatic triple negative breast cancer and pre-treated HR+/HER2- metastatic breast cancer in the United States and Europe.
Per the company, with more than 40,000 patients treated to date, Gilead plans to extend Trodelvy's reach to many more patients in new and existing markets, as well as new indications. However, Trodelvy's sales missed the Zacks Consensus Estimate of $344 million.
Cost Analysis
Adjusted product gross margin declined to 86% from 86.9% in the year-ago quarter due to product mix.
Research & development expenses totaled $1.3 billion, down 7.1% from the year-ago quarter’s level. This was due to the timing of clinical activities, including wind-down of studies on certain magrolimab, obeldesivir, and Trodelvy studies following recent data and regulatory updates.
SG&A expenses amounted to $1.4 billion, down from $1.8 billion in the year-ago quarter. GILD recorded a legal settlement expense in the year-ago quarter that was not repeated in the reported quarter.
Acquired IPR&D expenses totaled $38 million.
2024 Guidance Updated
Product sales are projected to be between $27.1 billion and $27.5 billion (unchanged). Total product sales, excluding Veklury, are expected to be between $25.8 billion and $26.2 billion (unchanged).
Total Veklury sales are estimated to be $1.3 billion (unchanged).
However, adjusted earnings per share are now anticipated to be in the range of $3.60-$3.90, up from the previous guidance of $3.45-$3.85.
Pipeline Updates
Gilead announced positive data from the late-stage PURPOSE 1 study evaluating twice-yearly subcutaneous lenacapavir for HIV prevention in cisgender women. At the interim analysis, lenacapavir demonstrated 100% efficacy with zero HIV infections and superiority to both background HIV incidence and once-daily oral Truvada.
The FDA approved an updated label for Biktarvy to include additional data for the treatment of pregnant adults with HIV-1 with suppressed viral loads.
However, GILD suffered a setback when Trodelvy did not meet the primary endpoint of improvement in overall survival (OS) in the intention-to-treat population of the confirmatory late-stage TROPiCS-04 study in locally advanced or metastatic urothelial cancer. Earlier, EVOKE-01, evaluating Trodelvy in patients with metastatic or advanced non-small cell lung cancer, did not meet its primary endpoint of OS.
Our Take
Gilead’s second-quarter results were encouraging as Biktarvy maintained its dominant position for HIV treatment across major markets.
Gilead Sciences, Inc. Price, Consensus and EPS Surprise
The positive data on lenacapavir bodes well. Per GILD, lenacapavir, with its twice-yearly dosing, could set a new bar for HIV prevention and allow PrEP to reach a much broader population of people who could benefit from a prevention regimen. Gilead expects to launch lenacapavir by late next year as the first and only twice-yearly subcutaneous prevention option.
Approval of better HIV treatments should strengthen the HIV franchise in the wake of the increasing competition.
GSK plc (GSK - Free Report) posted 13% growth in HIV sales, driven by strong patient demand for two drug regimens — Dovato and Juluca — and long-acting drugs (Cabenuva and Apretude).
The oncology business continued to perform well, but pipeline setbacks for Trodelvy were a disappointment.
Gilead had earlier acquired a clinical-stage biopharmaceutical company, CymaBay Therapeutics Inc., for $4.3 billion. The acquisition added CymaBay’s investigational lead product candidate, seladelpar, to Gilead’s pipeline.
The FDA has accepted the new drug application seeking approval of the candidate for the treatment of primary biliary cholangitis and granted priority review to the same with a target action date of Aug 14, 2024.
Zacks Rank & Stocks to Consider
Gilead currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the biotech sector are Entrada Therapeutics (TRDA - Free Report) and Anixa Biosciences (ANIX - Free Report) . While TRDA sports a Zacks Rank #1 (Strong Buy), ANIX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Entrada Therapeutics’ 2024 loss per share have narrowed from 14 cents to 13 cents, and the same for 2025 loss per share have narrowed from $3.44 to $3.21.
In the past 60 days, the Zacks Consensus Estimate for Anixa Biosciences’ 2024 loss per share has narrowed from 44 cents to 43 cents, and the same for 2025 loss per share has remained constant at 45 cents.
ANIX’s earnings beat estimates in three of the trailing four quarters and missed the mark once, delivering an average surprise of 2.27%.
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Gilead (GILD) Q2 Earnings Beat, Annual Profit Guidance Raised
Gilead Sciences, Inc. (GILD - Free Report) reported better-than-expected results in the second quarter and raised its annual earnings guidance.
Adjusted earnings per share (EPS) of $2.01 comfortably beat the Zacks Consensus Estimate of $1.61. In the year-ago quarter, the company reported adjusted earnings of $1.34 per share.
The year-over-year increase was driven by higher revenues and lower operating expenses.
Total revenues of $6.9 billion beat the Zacks Consensus Estimate of $6.6, primarily due to high HIV, oncology and liver disease drug sales. Revenues increased 5% from the year-ago quarter.
The stock is trading up in pre-market on better-than-expected quarterly results and raised guidance.
Gilead’s shares have lost 6.6% year to date compared with the industry's decline of 5.9%.
Image Source: Zacks Investment Research
Quarter in Detail
Total product sales rose 5% year over year to $6.9 billion. Excluding Veklury, product sales increased 6% to $6.7 billion.
HIV product sales grew 3% year over year to $4.75 billion, driven by higher demand. The figure beat the Zacks Consensus Estimate of $4.71 billion but missed our model estimate of $4.78 billion.
Flagship HIV therapy Biktarvy’s sales increased 8% year over year to $3.23 billion, due to higher demand. The reported number beat the Zacks Consensus Estimate of $3.2 billion but missed our model estimate of $3.3 billion.
Per GILD, Biktarvy accounts for more than 49% share of the treatment market in the United States.
However, Descovy (FTC 200 mg/TAF 25 mg) sales decreased 6% year over year to $485 million, due to lower average realized price owing to channel mix. The reported number missed the Zacks Consensus Estimate of $498 million and our model estimate of $502 million.
The Liver Disease portfolio sales, which include chronic HCV, chronic hepatitis B virus and chronic hepatitis delta virus, increased 17% to $832 million. The increase was attributable to higher average realized price due to channel mix in the United States, as well as higher demand in products for chronic HCV, chronic hepatitis B virus and chronic hepatitis D virus in Europe.
Veklury sales decreased 16% to $214 million due to lower rates of COVID-19-related hospitalizations. However, sales beat the Zacks Consensus Estimate of $194 million and our model estimate of $133.5 million.
Cell Therapy product (comprising Yescarta and Tecartus) sales increased 11% year over year to $521 million. The figure beat the Zacks Consensus Estimate of $519 million but missed our model estimate of $531.
Yescarta sales increased 9% year over year to $414 million, primarily driven by strong demand in relapsed or refractory (R/R) large B-cell lymphoma outside the United States.
Tecartus sales increased 21% year over year to $107 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 23% year over year to $320 million, primarily driven by higher demand in second-line metastatic triple negative breast cancer and pre-treated HR+/HER2- metastatic breast cancer in the United States and Europe.
Per the company, with more than 40,000 patients treated to date, Gilead plans to extend Trodelvy's reach to many more patients in new and existing markets, as well as new indications. However, Trodelvy's sales missed the Zacks Consensus Estimate of $344 million.
Cost Analysis
Adjusted product gross margin declined to 86% from 86.9% in the year-ago quarter due to product mix.
Research & development expenses totaled $1.3 billion, down 7.1% from the year-ago quarter’s level. This was due to the timing of clinical activities, including wind-down of studies on certain magrolimab, obeldesivir, and Trodelvy studies following recent data and regulatory updates.
SG&A expenses amounted to $1.4 billion, down from $1.8 billion in the year-ago quarter. GILD recorded a legal settlement expense in the year-ago quarter that was not repeated in the reported quarter.
Acquired IPR&D expenses totaled $38 million.
2024 Guidance Updated
Product sales are projected to be between $27.1 billion and $27.5 billion (unchanged). Total product sales, excluding Veklury, are expected to be between $25.8 billion and $26.2 billion (unchanged).
Total Veklury sales are estimated to be $1.3 billion (unchanged).
However, adjusted earnings per share are now anticipated to be in the range of $3.60-$3.90, up from the previous guidance of $3.45-$3.85.
Pipeline Updates
Gilead announced positive data from the late-stage PURPOSE 1 study evaluating twice-yearly subcutaneous lenacapavir for HIV prevention in cisgender women. At the interim analysis, lenacapavir demonstrated 100% efficacy with zero HIV infections and superiority to both background HIV incidence and once-daily oral Truvada.
The FDA approved an updated label for Biktarvy to include additional data for the treatment of pregnant adults with HIV-1 with suppressed viral loads.
However, GILD suffered a setback when Trodelvy did not meet the primary endpoint of improvement in overall survival (OS) in the intention-to-treat population of the confirmatory late-stage TROPiCS-04 study in locally advanced or metastatic urothelial cancer. Earlier, EVOKE-01, evaluating Trodelvy in patients with metastatic or advanced non-small cell lung cancer, did not meet its primary endpoint of OS.
Our Take
Gilead’s second-quarter results were encouraging as Biktarvy maintained its dominant position for HIV treatment across major markets.
Gilead Sciences, Inc. Price, Consensus and EPS Surprise
Gilead Sciences, Inc. price-consensus-eps-surprise-chart | Gilead Sciences, Inc. Quote
The positive data on lenacapavir bodes well. Per GILD, lenacapavir, with its twice-yearly dosing, could set a new bar for HIV prevention and allow PrEP to reach a much broader population of people who could benefit from a prevention regimen. Gilead expects to launch lenacapavir by late next year as the first and only twice-yearly subcutaneous prevention option.
Approval of better HIV treatments should strengthen the HIV franchise in the wake of the increasing competition.
GSK plc (GSK - Free Report) posted 13% growth in HIV sales, driven by strong patient demand for two drug regimens — Dovato and Juluca — and long-acting drugs (Cabenuva and Apretude).
The oncology business continued to perform well, but pipeline setbacks for Trodelvy were a disappointment.
Gilead had earlier acquired a clinical-stage biopharmaceutical company, CymaBay Therapeutics Inc., for $4.3 billion. The acquisition added CymaBay’s investigational lead product candidate, seladelpar, to Gilead’s pipeline.
The FDA has accepted the new drug application seeking approval of the candidate for the treatment of primary biliary cholangitis and granted priority review to the same with a target action date of Aug 14, 2024.
Zacks Rank & Stocks to Consider
Gilead currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the biotech sector are Entrada Therapeutics (TRDA - Free Report) and Anixa Biosciences (ANIX - Free Report) . While TRDA sports a Zacks Rank #1 (Strong Buy), ANIX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Entrada Therapeutics’ 2024 loss per share have narrowed from 14 cents to 13 cents, and the same for 2025 loss per share have narrowed from $3.44 to $3.21.
In the past 60 days, the Zacks Consensus Estimate for Anixa Biosciences’ 2024 loss per share has narrowed from 44 cents to 43 cents, and the same for 2025 loss per share has remained constant at 45 cents.
ANIX’s earnings beat estimates in three of the trailing four quarters and missed the mark once, delivering an average surprise of 2.27%.