Gilead announces lower than expected 2017 sales guidance

Gilead Sciences on Tuesday said that it anticipates full-year revenue for 2017 to be in the range of $22.5 billion to $24.5 billion, falling short of analysts' expectations of $27.9 billion. At the mid-point, the guidance represents a 22-percent decline versus 2016 sales of $30 billion. 

The company said it expects 2017 hepatitis C sales to be in the range of $7.5 billion to $9 billion, down from $14.8 billion last year and below analyst forecasts of $11.6 billion. Gilead explained that competition from other therapies and shorter treatment duration for patients will reduce sales this year by $1.9 billion to $2.5 billion, while fewer new patients starting on the drugs will result in $2.9 billion to $3.8 billion less in 2017 sales.

"This is a challenging situation," remarked CEO John Milligan, adding that the hepatitis C market is "declining faster this year than we would have predicted last year." Milligan acknowledged that it would be "challenging to grow without some sort of acquisition" outside of its HIV franchise. Meanwhile, non-hepatitis C revenue is projected to be between $15 billion and $15.5 billion this year. 

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For the fourth quarter of 2016, Gilead recorded sales of $7.3 billion, down from $8.5 billion in the year-ago period, but besting analyst projections of $7.2 billion. Meanwhile, net income in the three-month period reached $3.1 billion, versus $4.7 billion in the prior year. 

In the quarter, Gilead reported that sales of the hepatitis C therapy Harvoni fell by more than 50 percent year-over-year to $1.6 billion, while revenue from Sovaldi reached $541 million, down from $1.5 billion in the same quarter of 2015. Analysts were anticipating sales of $1.6 billion for Harvoni and $587 million for Sovaldi. 

Regarding other products, Epclusa, which was authorised last year in the US and EU for the treatment of all six genotypes of hepatitis C, amassed $1.1 billion in sales in the fourth quarter, up from $640 million during the preceding quarter. Analysts had anticipated revenue of $901 million for the drug in the last quarter.

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