Gilead beats estimates but cautions that COVID-19 clouds outlook

Gilead Sciences Inc. posted stronger-than-forecast results, but the drugmaker said there is significant uncertainty about how COVID-19 will affect its business even though its experimental treatment for the disease appears headed toward a swift U.S. authorization.

The biotechnology company reported adjusted earnings per share of $1.68, topping analysts’ estimates of $1.57. Total revenue of $5.55 billion was higher than the $5.46 billion that Wall Street expected.

Key Insights

There is ample enthusiasm for remdesivir, Gilead Sciences’ experimental medicine for Covid-19 that the Food and Drug Administration is rushing toward allowing on to the U.S. market after early clinical trials. But more broadly, Covid-19 could cause fewer patients to access treatments for conditions such as HIV, the company said.

There is pressure on Gilead to reinvigorate its drug pipeline to offset slipping sales of its hepatitis C franchise, which turned the company into a pharmaceutical giant. The drugs brought in $729 million in the quarter, better than analyst estimates of $610 million. Gilead announced a $4.9 billion deal for the company Forty Seven in March, a pact that could help bolster the company’s pipeline.

HIV sales continue to be a bright spot. Biktarvy, perhaps Gilead’s next big hit medicine, brought in $1.7 billion. Analyst estimates for the drug were $1.55 billion. The company’s HIV portfolio brought in $4.1 billion overall.

Market Reaction

Shares of Foster City, California-based Gilead declined 1.4% in late trading. The stock had gained 29% through Thursday’s close on hopes that remdesivir will prove to be an effective treatment for Covid-19.