Two of Gilead Sciences' most important drugs, Biktarvy and Trodelvy, missed Wall Street's sales expectations, and Gilead stock slumped Friday.
Biktarvy, an HIV treatment, is Gilead's biggest moneymaker. During the first quarter, Biktarvy generated $3.15 billion in sales, growing almost 7% year over year. But that lagged more bullish projections for $3.24 billion, according to FactSet. Sales were closer to other projections for $3.16 billion to $3.17 billion, RBC Capital Markets analyst Brian Abrahams said in a report.
Revenue from breast cancer drug Trodelvy slipped 5% to $293 million and came in well below forecasts for $353 million.
But analysts remained upbeat on Gilead stock, even as it slipped 4% to 101.88. The company is well entrenched in the HIV space with Biktarvy as a treatment and Descovy as a pre-exposure prophylaxis agent, or PrEP. Gilead is also looking to launch a new PrEP drug called lenacapavir this summer.
"Despite seasonal HIV weakness and Part D redesign impact, product demand and class share remained robust for both Biktarvy (treatment) and Descovy (PrEP), while Gilead's liver disease and COVID franchises added consistent, meaningful cash flow to the business, with continued strong early growth trends for Livdelzy in primary biliary cholangitis," Leerink Partners analyst Daina Graybosch said in a client note.
She rates Gilead stock an outperform.
Shares are consolidating with a buy point at 119.96, according to MarketSurge, but remain below their 50-day moving average. Shares closed down 2.8% at 103.17.
Gilead Stock: Mixed Sales Report
There were puts and takes across the report.
Total sales were flat at $6.67 billion and lagged projections for $6.81 billion. Gilead said lower sales of Covid treatment Veklury and cancer drugs were offset by stronger sales in its HIV and liver disease segments. Excluding Veklury, total sales rose 4%.
Revenue from HIV treatments climbed 6%, helped by 38% growth from Descovy, which brought in $586 million in sales. Gilead noted Descovy benefited from higher average realized price and higher demand. Analysts expected a lower $515 million from Descovy.
Strong demand for Descovy will be "well-received as a potential indicator of the health/growth of the HIV PrEP market ahead of the anticipated 2H25 lena launch," RBC's Abrahams said. If approved, lenacapavir would be an every-six-months injection to prevent HIV in people at risk of contracting it.
Sales of liver disease treatments also 3% to $758 million. Cell therapy sales dropped 3% to $464 million, but that lagged the Street's view for $485 million.
Leerink's Graybosch says breast cancer drug Trodelvy is likely nearing its peak penetration in its currently approved space, while cell therapies Yescarta and Tecartus are facing additional competition from within and outside the cell therapy class. But all three could see momentum from ongoing clinical studies.
On a more promising note, adjusted earnings came in at $1.81 per share, reversing from a year-earlier loss and beating calls by three pennies.
Biotech Retains 2025 Outlook
Gilead retained its top- and bottom-line outlooks for 2025. The company projects $28.2 billion to $28.6 billion in full-year product sales — which strips out revenue from licensing agreements and royalties. Analysts expect $28.57 billion in product sales this year.
The company also kept its guidance for earnings of $7.70 to $8.10 per share, minus some items. The midpoint of Gilead's outlook, however, is short of Wall Street's call for $7.89.
Gilead is looking more and more like a "safe haven" stock, RBC's Abrahams said. Needham analyst Joseph Stringer noted more than 80% of Gilead's profits are recognized in the U.S. and all of its research and development capital infrastructure is in the U.S., which is where the company's supply chain and intellectual property are strongest.
Abrahams reiterated his sector perform rating on Gilead stock, but hiked his price target to 92 from 89. Stringer rates Gilead shares a hold.
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