By Anne Steele and Jonathan D. Rockoff 

Gilead Sciences Inc.'s sales of hepatitis C drugs Harvoni and Sovaldi plunged in the latest quarter compared with a year ago, while the company's warning that the drugs' sales would keep falling prompted a 2017 forecast that disappointed analysts.

Shares in the biopharmaceutical company dropped 4.3% to $70 in after-hours trading Tuesday.

Gilead, of Foster City, Calif., has dominated the market for hepatitis C drugs, but competition has squeezed prices. The treatment of many advanced cases has also trimmed the numbers of patients who require immediate care, the company said.

During the quarter, sales of Harvoni more than halved to $1.64 billion from the year-earlier quarter, while Sovaldi sales plunged to $541 million from $1.55 billion. Analysts had expected Harvoni sales of $1.61 billion and Sovaldi sales of $587 million, according to FactSet.

Gilead CEO John Milligan said the company was taking steps to secure insurance reimbursement for patients at earlier stages of the disease -- something that has not been automatic in some cases. "Patients seeking care today have a different profile," he said on a conference call.

The company is also hoping to bringing to market a new HIV/AIDS drug, and executives indicated the company was looking for potential acquisitions.

In all, Gilead posted a profit of $3.12 billion, or $2.34 a share, down from $4.68 billion, or $3.18 a share, a year earlier. Excluding acquisition-related impacts, stock-based compensation and other items, adjusted per-share earnings declined to $2.70 from $3.32. Revenue fell 14% to $7.32 billion.

Analysts polled by Thomson Reuters expected per-share profit of $2.61 and revenue of $7.15 billion.

For 2017, the company anticipates product sales between $22.5 billion and $24.5 billion. "Guidance appears to assume a worst-case scenario," Barclays analysts said in a research note. Gilead's forecast for $7.5 billion to $9 billion in hepatitis C drug sales, in particular, fell well below analyst estimates.

The declines in Harvoni and Sovaldi sales were partly offset by sales of a combination hepatitis C drug, Epclusa, which is priced lower than Harvoni and Sovaldi. It generated sales of $1.05 billion in the latest quarter, compared with $640 million during the third quarter. Analysts expected Epclusa sales to reach $901 million, according to FactSet.

Gilead's net sales of HIV/AIDS and other antiviral drugs rose 12% to $2.99 billion in the quarter.

Write to Anne Steele at Anne.Steele@wsj.com and Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com

(END) Dow Jones Newswires

February 07, 2017 18:46 ET (23:46 GMT)

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