Gilead Sciences' had a "mildly disappointing" fourth quarter that featured two high-profile misses from HIV drugs, an analyst said Wednesday as GILD stock hit a four-month low.
The unexpected high point came from Veklury, a treatment for Covid. But Veklury sales are seasonal and more difficult to predict. Meanwhile, revenue from HIV treatments Biktarvy and Descovy came in light, Edward Jones analyst John Boylan said in a report. The faster-growing cancer treatments saw mixed results.
"However, one quarter does not make a trend, and we did not see any meaningful changes in the trajectory for Gilead's HIV business," he said. "Additionally, we believe Gilead has a good HIV product pipeline, which should help long-term growth, assuming clinical success."
But on the stock market today, GILD stock skidded 4.3% to 74.42. Shares hit their lowest point since early October.
GILD Stock: Mixed Fourth-Quarter Report
Overall, the fourth quarter proved a mixed bag for Gilead. Adjusted earnings of $1.72 per share lagged forecasts by 4 cents per share, though EPS rose 3% year over year. Sales dipped almost 4% to $7.12 billion, but were narrowly above expectations for $7.1 billion, according to FactSet.
The lion's share of Gilead's sales beat came on the back of Veklury, its treatment for patients hospitalized with Covid. Veklury sales tumbled 28% to $720 million, but beat forecasts by more than $200 million. Johanna Mercier, Gilead's chief commercial officer, expects Veklury to offer a long tailwind though on a seasonal basis.
"What we saw in Q4 was obviously an uptick in hospitalizations for Covid-19, quite dramatic actually in December and even in early January," Mercier told Investor's Business Daily in an interview. "Obviously, Covid-19 is here to stay. I think we believe there is a long tail to this one, unfortunately for patients."
Excluding Veklury, however, the remainder of Gilead's product sales were flat in the fourth quarter. For the full year, the numbers flipped. Veklury dragged total sales down 1% in 2023. Removing Veklury from the equation, full-year sales actually climbed 7%.
Biktarvy, Trodelvy Miss
There were puts and takes across Gilead's earnings numbers.
Sales of its biggest HIV treatment, Biktarvy, climbed 6.5% to $3.11 billion. But that missed expectations for $3.21 billion.
All three of Gilead's cancer medicines showed growth, with Trodelvy leading the way. Trodelvy revenue skyrocketed more than 53% to $299 million. However, GILD stock analysts projected a slightly higher $305 million. Tecartus sales also jumped 19.5%, to $98 million.
GILD stock analysts are now watching for what's next from the big-name biotech company. GILD stock is the fourth biggest biotech in Investor's Business Daily's 758-company Medical-Biomed/Biotech industry group. The company is a leader in hepatitis C and HIV treatments, and has a burgeoning franchise of cancer drugs.
Chief Executive Daniel O'Day notes there are currently 30 studies underway testing Trodelvy and combinations using it to treat various cancers. Of those, seven are Phase 3 tests. The company just had a big setback for Trodelvy, however. The drug failed to pass muster against chemotherapy in lung cancer. GILD stock tumbled more than 10% on the news on Jan. 22.
"Our (view) for Trodelvy's long-term potential hasn't changed based on (the study called) Evoke-01," Chief Medical Officer Merdad Parsey told IBD. He added Gilead believes Trodelvy still has a future as a lung cancer treatment, noting a subset of patients showed a three-month benefit on overall survival. "We have to understand that patient population better but we believe there's an opportunity there."
Notably, Gilead is also running a confirmatory study of Trodelvy in bladder cancer treatment. It's also testing Trodelvy as a first treatment for patients with metastatic triple-negative breast cancer.
Guidance Comes Out Mixed
For the full year, Gilead guided to adjusted earnings of $6.85 to $7.25 a share. The midpoint of Gilead's guidance, $7.05, missed projections for $7.23. But Andrew Dickinson, chief financial officer, says that still shows strong growth vs. 2023 when Gilead earned $6.72 a share, minus some items.
The company also expects full-year product sales of $27.1 billion to $27.5 billion. That excludes licensing and royalty revenue. GILD stock analysts forecast $27.68 billion in sales.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
