Biotech giants Gilead Sciences and Amgen posted mixed quarters — leading GILD stock and Amgen stock to topple Friday.
For Gilead, total revenue inched down roughly 4% to $6.35 billion, a hair above forecasts for $6.33 billion, according to FactSet. Adjusted earnings came in at $1.37 a share, down 35%, and missing projections for $1.54 a share. The earnings decline was driven by a tax impairment and higher operating expenses.
Meanwhile, Amgen's adjusted profit came in well ahead of forecasts at $3.98 per share, but sales missed views and fell 2% to $6.105 billion. Like its biotech peer, Amgen's profit fell due to a tax impairment. Amgen also noted decreased revenue and higher operating expenses, leading to a 6% earnings decline. Analysts expected lower earnings of $3.81 a share, but slightly higher sales at $6.113 billion.
In morning trading on today's stock market, GILD stock toppled 3.2% to 80.85. Amgen stock fell 2% to 235.49.
GILD Stock: Covid Sales Dive
The lion's share of Gilead's revenue decline was driven by light sales of Covid treatment Veklury.
Gilead is far from the first drugmaker to see a revenue slope due to Covid-related products. This week, Merck, Roche and GSK all reported lower — or nonexistent — sales of their Covid products. Covid cases reported to the Centers for Disease Control and Prevention peaked in mid-January and have since trended down.
During the first quarter, Veklury sales plummeted 63% to $573 million. Excluding the impact of Veklury, Gilead's sales actually increased 15%. Veklury sales missed expectations, which ranged from $700 million to $713 million, according to analysts' reports.
"While Gilead is not updating their $2 billion (full-year) guidance for the drug, we believe waning Covid revenue is likely to continue weighing on medium-term (earnings per share)," RBC Capital Markets analyst Brian Abrahams said in a report.
Still, Abrahams kept his sector perform rating on GILD stock and raised his price target by 1 to 88. He noted Gilead is spending more — dragging on its earnings — to invest in research and development. This can have long-term benefits "but are unlikely to yield clinical or commercial visibility for some time."
Further, "Veklury's downtick highlights the degree to which Covid may pressure the (near-term profit and loss statement)," he said in a report.
Cancer, HIV Treatments Offer Upside
The silver lining came from Gilead's cancer and HIV treatments. Revenue from HIV treatments jumped 13% to $4.19 billion. Sales of Gilead's biggest HIV medicine, Biktarvy, popped 24% to $2.68 billion, ahead of estimates for $2.52 billion.
Overall, oncology sales rocketed 59% to $670 million. Trodelvy, which treats breast and bladder cancer, generated $222 million, growing 52% to beat GILD stock analysts' forecast for $217 million. Revenue from cell therapies Yescarta and Tecartus also beat the Street's expectations at a respective $359 million and $89 million. Yescarta sales climbed 70% as Tecartus sales surged 40%.
For the year, Gilead expects $26 billion to $26.5 billion in product sales. GILD stock analysts predicted $26.3 billion in product sales — which excludes other sources of revenue like licensing and royalty deals.
The guidance includes expectations for $2 billion from Veklury sales, a decline of 49% and in line with analyst forecasts for $2.03 billion.
Analysts see adjusted earnings at $6.60-$7 per share. Also, analysts called for $6.85 earnings per share.
Amgen Stock: Amjevita Takes Stage
The strongest growth among Amgen's products came from its new Humira biosimilar, Amjevita. Amjevita launched in the U.S. in February, though it has been on the market for several years in Europe. Sales surged 52% to $164 million.
Behind Amjevita, Amgen reported strong sales increases for osteoporosis treatment Evenity, cancer drug Blincyto and low platelet treatment Nplate. Sales surged a respective 49%, 41% and 36%. The company's biggest moneymaker, osteoporosis treatment Prolia, brought in $927 million in sales, up 9%.
But revenue from migraine treatment Aimovig slumped 32% to $69 million due to unfavorable changes in sales deductions and lower net selling price. Amgen expects the trend of lower sales prices to continue in an effort to remain competitive.
For the year, Amgen guided to $26.2 billion to $27.3 billion in sales and adjusted profit of $17.60-$18.70 per share. Amgen stock analysts predicted a respective $27.65 billion and $17.91.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
