How Gilead’s Covid Drug Carried Its Third-Quarter Beat — And Why Shares Fell

 How Gilead’s Covid Drug Carried Its Third-Quarter Beat — And Why Shares Fell

A big beat from Gilead Sciences‘ (GILD) Covid treatment, Veklury, offset mixed sales for its other products, an analyst said Thursday as GILD stock toppled.




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During the third quarter, Veklury generated $1.9 billion, helping total revenue climb 13%. But without Veklury, Gilead said, its product sales actually declined 3%. That followed the loss of exclusivity in the U.S. for HIV treatments Truvada and Atripla.

Further, the company pushed out major data releases from studies of its high-profile cancer medicines, Trodelvy and magrolimab, until the first quarter of 2022, RBC Capital Markets analyst Brian Abrahams said in a report to clients. But he kept an outperform rating.

“Slight slippage in Trodelvy and magrolimab timelines pushes key oncology catalysts to next year, but should not change outlook,” he said. “We continue to see potential for stock upside.”

But in after-hours trading on today’s stock market, GILD stock tumbled 2.1% near 66. GILD stock hit a ceiling at its 200-day moving average during the regular session, according to MarketSmith.com.

GILD Stock: Veklury Hides Mixed Sales

During the third quarter, adjusted Gilead earnings climbed 26% to $2.65 per share and crushed views for $1.76 a share. Sales were $7.42 billion, well above GILD stock analysts’ call for $6.29 billion. Excluding Veklury, product sales were $5.4 billion.

Chief Executive Daniel O’Day noted the “significant impact’ Veklury is making on the Covid pandemic. The company is also facing tricky dynamics in the HIV market where two key products lost exclusivity, but a newer drug called Biktarvy brought in record sales.

Overall, sales of HIV treatments declined 8% year over year, bringing in $4.2 billion. Hepatitis C drugs generated $429 million, also tumbling 8%. Meanwhile, its hepatitis B/D drugs and cell therapy sales surged a respective 17% and 51%.

Trodelvy, one of the drugs Gilead has highlighted as a growth driver, brought in $101 million.

Guidance Strong With Veklury Help

For the year, Gilead guided adjusted earnings of $7.90-$8.10 per share and $26 billion to $26.3 billion in product sales. Both measures were well above GILD stock analysts’ call for adjusted profit of $7.23 a share and $25.24 billion in sales.

Gilead expects Veklury to bring in $4.5 billion to $4.8 billion of those product sales. In 2022, RBC’s Abrahams expects Veklury to make predicting earnings more difficult.

But “we believe with the base business likely to bounce back and oncology franchise layering on, there should be good earnings growth beyond that,” he said. He has an 86 price target on GILD stock.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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