Boxes of Remdisivir anti-viral drug
Sima Diab/Bloomberg
Last month, Gilead Sciences alerted investors that its December 2020 quarter had been good. On Thursday, the drug maker (ticker: GILD) reported the results, and they were good—primarily thanks to the need for Gilead’s Covid-19 treatment remdesivir, which it sells under the brand name Veklury.
“We’re grateful that Veklury is able to play such an important role in getting patients out of the hospital faster,” said chief executive Dan O’Day, on the late afternoon conference call.
In after hours trading, Gilead stock rose 2.6%, to $67.54, after a 2% gain during Thursday’s trading day. The Nasdaq Composite had gained 1% on the day.
The quarter’s revenue grew 26%, to $7.3 billion, with the help of $1.9 billion in Veklury sales. Apart from the Covid drug, the sales of Gilead’s other products fell 7% as the company hustles to move patients from its off-patent drugs for HIV, to newer products. Its new HIV treatment Biktarvy had $2 billion in sales, but the sliding sales of drugs facing generic competition left Gilead’s HIV product group down 7% for the quarter, at $4.3 billion.
Products that Gilead is counting on for growth include Trodelvy, the cancer treatment it acquired with its September 2020 purchase of Immunomedics. The newly-approved product had sales of about $50 million in the quarter. Revenue from Gilead’s cell-therapy treatments grew 34%, to $160 million.
Under standard accounting treatment, earnings fell 42% in the December quarter, to $1.23 a share. Ignoring acquisition and non-cash costs, as Wall Street analysts now do, Gilead’s adjusted earnings jumped 99%, to $2.19.
For the 2020 year, product sales grew 10%, to $24.4 billion. The Covid drug Veklury provided a $2.8 billion boost. Earnings fell 98% for the year, to 10 cents a share. But after backing out acquisition costs and non-cash charges like the writedown of the company’s disappointing investment in an arthritis product from Galapagos (GLPG), Gilead says its 2020 earnings rose 16%, to $7.09 a share.
Guiding investors on its 2021 year expectations, Gilead foresees sales of between $21.7 and $22.1 billion, with $2 billion to $3 billion coming from continued need for Veklury as the world slowly gets vaccinated against Covid. Thanks to expense control, it expects adjusted earnings of between $6.75 and $7.45 a share.
That forecast pleased RBC Capital analyst Brian Abrahams, who points out the the consensus average forecast for 2021 year earnings falls toward the bottom of Gilead’s guidance range, at $6.88 a share. He rates the stock an Outperform, and has an $80 price target.
Write to Bill Alpert at [email protected]
