Gilead Quarterly Revenue Rises on Remdesivir Sales -- Update
October 28 2020 - 7:33PM
Dow Jones News
By Maria Armental and Joseph Walker
Gilead Sciences Inc.'s revenue rose 17% in the third quarter,
helped by sales of its antiviral drug remdesivir that has become a
standard treatment for hospitalized Covid-19 patients.
Yet sales of the company's other drugs were hurt by
pandemic-related shutdowns. And the company dialed back its
forecast for overall revenue this year because of
lower-than-expected hospitalization rates of Covid-19 patients.
Remdesivir, which sells under the brand name Veklury, brought in
$873 million in sales in the latest quarter, beating analysts'
estimates of $771.7 million, according to FactSet. The drug has
been approved in the U.S. to treat patients 12 years and older who
require hospitalization for the disease caused by the new
coronavirus.
A study paid for by the National Institute of Allergy and
Infectious Diseases found the drug helped speed recovery times in
hospitalized Covid-19 patients. Remdesivir was administered to
President Trump as part of his Covid-19 treatment regimen.
California-based Gilead lowered the high end of its expectations
for Veklury sales this year because of fewer hospitalizations
related to Covid-19. The company didn't disclose revenue guidance
for the drug, but said that a $1.5 billion reduction in the
high-end of its 2020 revenue outlook was primarily due to its
revised view of Veklury.
Hospitalization rates in the second quarter were around 12% to
15%, and dropped closer to 5% around the start of the third
quarter, said Johanna Mercier, Gilead's chief commercial officer,
on a conference call with analysts to discuss the quarter.
Gilead on Wednesday said it now projects $23 billion to $23.5
billion in product sales for the year, down from its earlier view
of $23 billion to $25 billion, which the company said reflected the
progression of the pandemic. Gilead said that AmerisourceBergen
Corp. would remain the sole U.S. distributor of remdesivir through
the end of 2020 and that it would sell the drug directly to
hospitals.
Gilead shares fell 1.5% in after-hours trading.
Chief Executive Daniel O'Day said he expected that Veklury will
continue to play a role in treating Covid-19 patients even as more
new treatments and vaccines are approved.
"We do feel very strongly that Veklury will contribute to our
overall sales, be an important source of cash for our business and
allow us to pay down debt," Mr. O'Day said on the analyst call.
Gilead said the pandemic and associated shutdowns weighed on
sales of its hepatitis C and HIV-prevention medicines in the
quarter. Gilead expects its portfolio of HIV treatments for
infected patients to remain largely unaffected by the pandemic.
Widespread vaccinations for Covid-19 may not be available until
late 2021, and the pandemic may continue to affect Gilead's
business into next year and possibly afterward, said Gilead Chief
Financial Officer Andrew Dickinson on the analyst call.
The company said it expects its core business to gradually
recover in the fourth quarter and into the first half of 2021 and
that acquisition of Immunomedics Inc. should immediately add to
revenue growth. Immunomedics's Trodelvy is among the brightest
cancer-drug prospects, showing signs of success in treating lung
and other cancers.
The Immunomedics acquisition has "effectively transformed our
near- and long-term growth story," Mr. O'Day said.
The biopharmaceutical company said it now expects $10.7 billion
to $11.2 billion in operating profit for the year, compared with
its earlier view of $10.7 billion to $13 billion.
Gilead swung to a third-quarter profit of $360 million, or 29
cents a share, from a $1.17 billion loss a year earlier. Last
year's quarterly result included upfront collaboration and
licensing expenses of $3.92 billion, or $2.40 a share, related to
Gilead's global research and development collaboration agreement
with Galapagos NV. On an adjusted basis, profit for the September
quarter was $2.11 a share.
Revenue rose to $6.58 billion from $5.6 billion a year
earlier.
Analysts surveyed by FactSet expected a profit of $1.33 a share,
or $1.90 a share as adjusted, on $6.3 billion in revenue.
Company officials had said that pandemic-related disruptions to
routine health care had lowered sales and the number of new
patients starting taking some of its drugs, including its antiviral
drug Biktarvy and its prophylactic treatment Descovy, which can
prevent new HIV infections.
Sales of Biktarvy rose 50% to $1.89 billion in the third
quarter, while Descovy sales climbed 40% to $508 million.
Write to Maria Armental at maria.armental@wsj.com and Joseph
Walker at joseph.walker@wsj.com
(END) Dow Jones Newswires
October 28, 2020 19:18 ET (23:18 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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