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Gilead (GILD) Q1 Earnings Top, Coronavirus Candidate in Focus
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Gilead Sciences, Inc. (GILD - Free Report) beat on both earnings and sales in the first quarter. However, shares were down 2.6% in after-market trading, most likely on the uncertain outlook for the year as fewer patients will be accessing HIV and HCV drugs, given the global scenario. Moreover, costs have gone up due to R&D spend on experimental coronavirus treatment, remdesivir.
Nevertheless, Gilead’s stock has gained 29.3% in the year so far compared with the industry's growth of 1.9%.
The company delivered earnings of $1.68 per share in the first quarter, increasing a cent from the year-ago quarter’s reported figure and beating the Zacks Consensus Estimate of $1.58.
Total revenues of $5.55 billion beat the Zacks Consensus Estimate of $5.41 billion and grew 5.1% year over year.
HIV Franchise Maintains Momentum
Product sales came in at $5.5 billion, up from $5.2 billion. Sales in the reported quarter benefited from an estimated $200 million in revenues related to increased customer buying patterns and patient prescription trends, primarily in the United States, due to the coronavirus (COVID-19) pandemic.
HIV product sales increased 14.3% year over year to $4.6 billion, driven by higher sales volume from the continued uptake of Biktarvy, and increased customer buying patterns and patient prescription trends due to the pandemic. Sales of Biktarvy were $1.7 billion, up from $793 million in the year-ago quarter. Genvoya generated sales of $824 million, down from $1.0 billion in the year-ago quarter. Descovy recorded sales of $458 million, up from $342 million in the year-earlier period, while Odefsey sales were $409 million, up from $397 million a year ago.
HCV product sales declined 7.7% to $729 million, due to lower average net selling price.
CAR-T therapy, Yescarta (axicabtageneciloleucel), generated $140 million in sales, up from $96 million a year ago, driven by its continued expansion in Europe. Sales also grew from $122 million in the previous quarter.
Sales from other products — chronic hepatitis B (HBV) drugs, cardiovascular, oncology and other categories (Vemlidy, Viread, Letairis, Ranexa, Zydelig and AmBisome) — were $464 million, which decreased from $696 million in the year-ago quarter due to declines in Ranexa and Letairis sales after generic entries in 2019.
Adjusted product gross margin was 87.1%, relatively flat with 87% in the year-ago period. Research & development (R&D) expenses came in at $1.10 billion, up from $1.06 billion in the year-ago quarter. Selling, general and administrative (SG&A) expenses increased to $1.08 billion from $1.03 million in the year-ago quarter.
2020 Guidance
Even though the first-quarter results weren’t affected, Gilead anticipates COVID-19 impacts on its business in the short term as fewer patients are accessing treatments for conditions like HIV and HCV. However, the magnitude of the anticipated impact is uncertain. Moreover, Gilead began advancing remdesivir and rapidly expanding its manufacturing production. The company expects to update its outlook on the second-quarter 2020 earnings call.
COVID-19 Update
Gilead initiated two open-label phase III studies in February (SIMPLE studies) on experimental candidate, remdesivir, for COVID-19. Additional global studies are ongoing, including a global, placebo-controlled trial being led by the U.S. National Institute of Allergy and Infectious Diseases (NIAID) as well as more recently initiated studies through the World Health Organization and INSERM in France.
NIAID recently announced that the preliminary results from their trial met the primary endpoint and remdesivir was found to shorten the time to recovery for hospitalized patients with COVID-19 when compared with a placebo. Gilead also announced top-line results from the first SIMPLE study evaluating 5-day and 10-day dosing durations of remdesivir in patients with severe COVID-19 disease. The study demonstrated similar clinical improvements in patients with severe symptoms of COVID-19, regardless of whether they received five or ten days of treatment.
Other Updates
Gilead acquired Forty Seven for approximately $4.9 billion, adding magrolimab, which is currently in phase Ib/II studies for several hematological cancers, to its pipeline.
Kite achieved two key regulatory milestones for KTE-X19, an investigational cell therapy for the treatment of relapsed or refractory mantle cell lymphoma. In Europe, the marketing authorization application for KTE-X19 was fully validated and is now under review by the European Medicines Agency. In the United States, the FDA accepted the Biologics License Application for the same and granted Priority Review designation.
In March, the FDA approved Epclusa for children 6 years and older (or weighing at least 17 kg) with HCV.
Gilead is looking to expand remdesivir’s manufacturing production. The company expects more than 140,000 treatment courses of remdesivir to be manufactured by the end of May 2020.
Our Take
Gilead’s first-quarter earnings and sales beat expectations. The HIV franchise maintains momentum, driven by the strong performance of Biktarvy amid stiff competition from the likes of GlaxoSmithKline (GSK - Free Report) . Biktarvy remains the number one prescribed HIV regimen in the U.S. during the quarter. Moreover, $200 million of revenues were pulled forward in the first quarter, primarily for the HIV franchise, due to the COVID-19 pandemic across the United States and Europe. This was mainly attributable to payers and pharmacies providing greater access to medicines by allowing 90-day refills and, in some cases, early refills among other operators.
Gilead is uncertain about future business conditions for the time being and expects the situation to stabilize by year-end. Nevertheless, a positive outcome from studies on remdesivir will be a significant boost for the company.
Currently, there are no FDA-approved treatments for the severe illness caused by SARS-CoV-2. Given the alarming levels of spread and severity, quite a few biotechs are evaluating their approved drugs or pipeline candidates to determine if they are effective in treating the infected patients.
Another biotech, Amgen (AMGN - Free Report) , reported better-than-expected first-quarter results and announced that it will begin clinical studies to evaluate inflammatory medicine Otezla to treat respiratory distress in late-stage COVID-19 patients.
Incyte (INCY - Free Report) has also initiated a study on its lead drug, Jakafi, for COVID-19 infection.
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Gilead (GILD) Q1 Earnings Top, Coronavirus Candidate in Focus
Gilead Sciences, Inc. (GILD - Free Report) beat on both earnings and sales in the first quarter. However, shares were down 2.6% in after-market trading, most likely on the uncertain outlook for the year as fewer patients will be accessing HIV and HCV drugs, given the global scenario. Moreover, costs have gone up due to R&D spend on experimental coronavirus treatment, remdesivir.
Nevertheless, Gilead’s stock has gained 29.3% in the year so far compared with the industry's growth of 1.9%.
The company delivered earnings of $1.68 per share in the first quarter, increasing a cent from the year-ago quarter’s reported figure and beating the Zacks Consensus Estimate of $1.58.
Total revenues of $5.55 billion beat the Zacks Consensus Estimate of $5.41 billion and grew 5.1% year over year.
HIV Franchise Maintains Momentum
Product sales came in at $5.5 billion, up from $5.2 billion. Sales in the reported quarter benefited from an estimated $200 million in revenues related to increased customer buying patterns and patient prescription trends, primarily in the United States, due to the coronavirus (COVID-19) pandemic.
HIV product sales increased 14.3% year over year to $4.6 billion, driven by higher sales volume from the continued uptake of Biktarvy, and increased customer buying patterns and patient prescription trends due to the pandemic. Sales of Biktarvy were $1.7 billion, up from $793 million in the year-ago quarter.
Genvoya generated sales of $824 million, down from $1.0 billion in the year-ago quarter. Descovy recorded sales of $458 million, up from $342 million in the year-earlier period, while Odefsey sales were $409 million, up from $397 million a year ago.
HCV product sales declined 7.7% to $729 million, due to lower average net selling price.
CAR-T therapy, Yescarta (axicabtageneciloleucel), generated $140 million in sales, up from $96 million a year ago, driven by its continued expansion in Europe. Sales also grew from $122 million in the previous quarter.
Sales from other products — chronic hepatitis B (HBV) drugs, cardiovascular, oncology and other categories (Vemlidy, Viread, Letairis, Ranexa, Zydelig and AmBisome) — were $464 million, which decreased from $696 million in the year-ago quarter due to declines in Ranexa and Letairis sales after generic entries in 2019.
Adjusted product gross margin was 87.1%, relatively flat with 87% in the year-ago period. Research & development (R&D) expenses came in at $1.10 billion, up from $1.06 billion in the year-ago quarter. Selling, general and administrative (SG&A) expenses increased to $1.08 billion from $1.03 million in the year-ago quarter.
2020 Guidance
Even though the first-quarter results weren’t affected, Gilead anticipates COVID-19 impacts on its business in the short term as fewer patients are accessing treatments for conditions like HIV and HCV. However, the magnitude of the anticipated impact is uncertain. Moreover, Gilead began advancing remdesivir and rapidly expanding its manufacturing production. The company expects to update its outlook on the second-quarter 2020 earnings call.
COVID-19 Update
Gilead initiated two open-label phase III studies in February (SIMPLE studies) on experimental candidate, remdesivir, for COVID-19. Additional global studies are ongoing, including a global, placebo-controlled trial being led by the U.S. National Institute of Allergy and Infectious Diseases (NIAID) as well as more recently initiated studies through the World Health Organization and INSERM in France.
NIAID recently announced that the preliminary results from their trial met the primary endpoint and remdesivir was found to shorten the time to recovery for hospitalized patients with COVID-19 when compared with a placebo. Gilead also announced top-line results from the first SIMPLE study evaluating 5-day and 10-day dosing durations of remdesivir in patients with severe COVID-19 disease. The study demonstrated similar clinical improvements in patients with severe symptoms of COVID-19, regardless of whether they received five or ten days of treatment.
Other Updates
Gilead acquired Forty Seven for approximately $4.9 billion, adding magrolimab, which is currently in phase Ib/II studies for several hematological cancers, to its pipeline.
Kite achieved two key regulatory milestones for KTE-X19, an investigational cell therapy for the treatment of relapsed or refractory mantle cell lymphoma. In Europe, the marketing authorization application for KTE-X19 was fully validated and is now under review by the European Medicines Agency. In the United States, the FDA accepted the Biologics License Application for the same and granted Priority Review designation.
In March, the FDA approved Epclusa for children 6 years and older (or weighing at least 17 kg) with HCV.
Gilead is looking to expand remdesivir’s manufacturing production. The company expects more than 140,000 treatment courses of remdesivir to be manufactured by the end of May 2020.
Our Take
Gilead’s first-quarter earnings and sales beat expectations. The HIV franchise maintains momentum, driven by the strong performance of Biktarvy amid stiff competition from the likes of GlaxoSmithKline (GSK - Free Report) . Biktarvy remains the number one prescribed HIV regimen in the U.S. during the quarter. Moreover, $200 million of revenues were pulled forward in the first quarter, primarily for the HIV franchise, due to the COVID-19 pandemic across the United States and Europe. This was mainly attributable to payers and pharmacies providing greater access to medicines by allowing 90-day refills and, in some cases, early refills among other operators.
Gilead is uncertain about future business conditions for the time being and expects the situation to stabilize by year-end. Nevertheless, a positive outcome from studies on remdesivir will be a significant boost for the company.
Currently, there are no FDA-approved treatments for the severe illness caused by SARS-CoV-2. Given the alarming levels of spread and severity, quite a few biotechs are evaluating their approved drugs or pipeline candidates to determine if they are effective in treating the infected patients.
Another biotech, Amgen (AMGN - Free Report) , reported better-than-expected first-quarter results and announced that it will begin clinical studies to evaluate inflammatory medicine Otezla to treat respiratory distress in late-stage COVID-19 patients.
Incyte (INCY - Free Report) has also initiated a study on its lead drug, Jakafi, for COVID-19 infection.
Gilead currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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