Headline results for the first quarter:
|Product sales||$5.47 billion||Versus $5.2 billion|
|Overall revenue||$5.55 billion (forecasts of $5.46 billion)||Versus $5.3 billion|
|Profit||$1.6 billion||Versus $2 billion|
Note: All changes are versus the prior-year period unless otherwise stated
What the company said:
CEO Daniel O'Day said Gilead Sciences' first-quarter performance "demonstrates our continued progress and highlights the strength of our underlying business," adding that while the company is "prepared to navigate the uncertainty and short-term impact from the COVID-19 pandemic, we are confident in our ability to deliver on our long-term goals." The company said product sales included an estimated $200 million in revenue related to "increased customer buying patterns and patient prescription trends due to the pandemic," mainly in the US, but this is "expected to reverse itself over subsequent quarters."
O'Day indicated that Gilead's "focus at this time is on…our work with remdesivir." The company's earnings call comes a day after preliminary data from the Phase III ACTT trial, led by the US National Institute of Allergy and Infectious Diseases, showed the antiviral drug was associated with a 31% faster recovery time than placebo in hospitalised patients with advanced COVID-19.
Gilead noted that R&D expenses during the quarter were up compared to the same time last year, primarily due to its ramp up of remdesivir, including approximately $50 million tied to manufacturing scale-up and clinical trial costs. The company added that this was partially offset by lower clinical trial expenses as a result of its decision to pause or postpone other studies because of the pandemic.
Gilead warned that COVID-19 could impact its business in the short-term due to factors such as fewer patients accessing treatment for conditions such as HIV and hepatitis C, but that these effects are "uncertain" for the time being. In addition, during the first quarter Gilead also began advancing remdesivir and expanding its manufacturing, and now says it expects more than 140,000 treatment courses of the antiviral will be produced by the end of May. It also anticipates more than 1 million treatment courses will be manufactured by December, with plans to be able to produce several million courses in 2021.
The total investments in remdesivir this year "could be material," but Gilead said the amount, as well as the potential for the drugmaker to recoup its "at-risk investments at some point in the future are dependent on clinical trial and regulatory outcomes." However, the company noted it would focus on making remdesivir "both accessible and affordable to governments and patients around the world."
During its last financial results presentation in early February, Gilead projected it would earn from $6.05 to $6.45 per share on product sales ranging from $21.8 billion to $22.2 billion in 2020. On Thursday, the company said it expects to provide "additional insights and outlook" on its second-quarter earnings call, when there will likely be more "clarity on the duration and magnitude of the impact of the COVID-19 pandemic and the development of remdesivir."
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