Gilead posts higher profit, revenue in Q2 as sales surge for triple combination HIV drug Biktarvy

Headline results for the second quarter:

Product sales

$5.6 billion

Versus $5.5 billion

Revenue

$5.7 billion (forecasts of $5.5 billion)

Versus $5.6 billion

Profit

$1.9 billion

Versus $1.8 billion

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

CEO Daniel O'Day said "we saw strong revenue growth quarter-over-quarter, primarily driven by our HIV medicines and the rapid adoption of Biktarvy. Based on this momentum…we are raising our full-year product sales guidance for 2019." He added "I am also very excited about the progress we are making to strengthen our pipeline, including the recently announced Galapagos collaboration, to bring forward our next generation of products."

Gilead Sciences noted that product sales in Europe in the second quarter benefited from about $160 million of adjustments for statutory rebates related primarily to hepatitis C and HIV drug sales made in prior years.

Meanwhile, in recent senior leadership changes, Gilead announced that chief scientific officer John McHutchison is leaving the company in August, and that it has appointed Lilly Bio-Medicines president Christi Shaw to lead its Kite unit.

Other results:

  • US product sales: $4.1 billion, unchanged year-on-year
  • European product sales: $1 billion, unchanged versus the year-ago period
  • Total HIV sales: $4 billion, up from $3.7 billion in the prior year, fuelled mainly by higher sales volume from continued uptake of Biktarvy
    • Biktarvy: $1.1 billion, up from $185 million in the prior year
    • Genvoya: $980 million, down from $1.2 billion in the prior year
    • Truvada: $718 million, down from $765 million in the prior year
    • Odefsey: $387 million, up from $385 million in the prior year
    • Descovy: $358 million, down from $403 million in the prior year
  • Total hepatitis C sales: $842 million, down from $1 billion in the prior year, primarily attributable to competitive dynamics, including a decline in US Medicare prices, and lower patient starts
    • Epclusa and the authorised generic version: $493 million, down from $500 million in the prior year
    • Harvoni and the authorised generic version: $193 million, down from $331 million in the prior year
  • Yescarta: $120 million, up from $68 million in the prior year, driven by increases in the number of therapies provided to patients

Looking ahead:

Gilead said it now forecasts full-year revenue of $21.6 billion to $22.1 billon, versus a prior projection of $21.3 billion to $21.8 billion. The company indicated that the guidance was raised because of "favourable demand trends observed in the first half of 2019 across [our] product portfolio," in addition to other factors.

What analysts said:

"Overall, total revenue is in-line once you back out the $160 million adjustment in Europe," said Mizuho Securities analyst Salim Syed, adding that "2019 revenue guidance raised by $300 million more than makes up the adjustment, so that's a modest positive."

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