Gilead delivers mixed results as Q4 sales top estimates, but full-year outlook falls short

Headline results for the fourth quarter:

Product sales

$5.8 billion

Versus $5.7 billion

Revenue

$5.9 billion (forecasts of $5.7 billion)

$5.8 billion

Profit

$2.7 billion

$3 million

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

What the company said:

Gilead stated that its profit for the quarter rose primarily due to "net favourable tax effects of intra-entity intangible asset transfers to different tax jurisdictions and an increase in net gains from equity securities." The company noted that it also booked a pre-tax impairment charge of $800 million during the quarter related to in-process R&D intangible assets acquired in connection with its 2017 acquisition of Kite Pharma.

Other results:

  • Total HIV product sales: $4.6 billion, up from $4.1 billion, driven by higher sales volume as a result of the continued Biktarvy uptake
    • Biktarvy: $1.6 billion, up from $578 million, beating analyst estimates of $1.4 billion
    • Genvoya: $958 million, down from $1.2 billion
    • Truvada: $768 million, down from $823 million
    • Descovy: $437 million, up from $411 million
    • Odefsey: $435 million, down from $448 million
  • Total hepatitis C product sales: $630 million, down from $738 million, with declines stemming mainly from lower average net selling price
    • Epclusa and authorised generic version: $465 million, up from $453 million
    • Harvoni and authorised generic version: $101 million, down from $232 million
  • Yescarta: $122 million, up from $81 million, while analysts forecasted $131.6 million, Gilead said total sales for 2019 being $456 million versus $264 million the year before, driven by a higher number of therapies provided to patients and continued expansion in Europe
  • US product sales: $4.52 billion, versus $4.47 billion
  • European product sales: $840 million, up from $813 million
  • Full-year revenue: $22.4 billion, up from $22.1 billion in 2018
  • Full-year profit: $5.4 billion, down from $5.5 billion in 2018

Looking ahead:

For the year, Gilead expects to earn from $6.05 to $6.45 per share on product sales ranging from $21.8 billion to $22.2 billion in 2020, with the upper end being $100 million more than its previous forecast. Meanwhile, analysts anticipated earnings of up to $7.02 per share on $22.5 billion in revenues.

For related analysis, see ViewPoints: Gilead back in the waiting game on M&A.

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