Gilead raises sales outlook as quarterly product revenue grows
Gilead increased third-quarter product sales by 13 per cent and raised its annual sales outlook. HIV medicines supported the growth, while coronavirus treatment and cell therapies recorded lower sales. Adjusted earnings per share rose, although the reported measure fell. Acquisition-related research charges weigh on the company’s annual earnings forecast as operating cash generation remains strong.
Economics & Markets··Midday
Sales and earnings
Gilead Sciences increased third-quarter product sales by 13 per cent to 8.3 billion dollars and raised its annual sales guidance. The US drugmaker released the results on October 29. Adjusted diluted earnings reached 2.55 dollars per share, compared with 2.47 dollars a year earlier, a result also reported by Zacks. Reported diluted earnings moved in the other direction, declining from 2.43 dollars to 1.94 dollars per share. The company attributed that decline to equity investment losses, higher operating and tax expenses and lower other revenue, partly offset by stronger product sales and lower acquired research expenses.[1], [2]
HIV medicines support growth
HIV medicines generated 6.2 billion dollars of sales, up 18 per cent. Management linked growth to higher average realised prices, prevention demand and inventory movements. Biktarvy sales rose 10 per cent to 4.1 billion dollars, while Descovy grew 49 per cent to 1 billion dollars. Veklury sales fell 69 per cent to 86 million dollars as coronavirus-related hospitalisations declined. Cell therapy sales decreased 18 per cent to 355 million dollars amid competition. Product gross margin rose from 78.6 per cent to 81.0 per cent, mainly because a royalty-related obligation expired.[1]
Annual outlook and cash
Management lifted annual product sales guidance to 31–31.3 billion dollars from 30.1–30.4 billion dollars. It nevertheless forecast a reported annual loss of 4.05–4.40 dollars per share and an adjusted loss of 0.85–1.20 dollars. The outlook includes 12.4 billion dollars of acquired research charges associated with four transactions, before the Lakefront collaboration and tax effects. Quarterly operations generated 5 billion dollars in cash. Gilead paid 1 billion dollars in dividends and repurchased 370 million dollars of shares. Cash, cash equivalents and marketable debt securities stood at 6.4 billion dollars at September’s end.[1]
Research and development spending increased from 1.3 billion dollars to 1.6 billion dollars. Selling, general and administrative expenses rose from 1.4 billion dollars to 1.6 billion dollars. Gilead cited higher employee and clinical materials spending in research, and promotional activity and integration costs among administrative expense pressures.[1]
