BMO Capital Markets analyst Evan Seigerman in a note to investors called Gilead’s third-quarter performance “consistent” and “steady,” while noting the company continues to demonstrate “reliable strength” in its human immunodeficiency virus business.
Gilead Sciences on Wednesday reported 7% year-over-year revenue growth in the third quarter, with earnings easily surpassing the analyst consensus.
The HIV leader brought in $7.5 billion in Q3, significantly ahead of the forecasted $7 billion. Non-GAAP diluted earnings-per-share (EPS) was $2.02, whereas analysts had expected Gilead to report $1.51 per share. Still, EPS dipped 12% from the same period in 2023, driven mainly by a $1.75 million impairment attributable to in-process research and development costs, according to Gilead.
Reflecting its strong Q3 results, Gilead on Wednesday raised its full-year product sales guidance to between $27.8 billion to $28.1 billion, up from its previous range of $27.1 billion to $27.5 billion. Adjusted profit is now forecasted to be $4.25 to $4.45 per share, compared to the previous outlook of $3.60 to $3.90 per share.
Gilead’s HIV sales jumped 9% in Q3 to $5.1 billion driven by demand for once-daily antiretroviral pill Biktarvy which surged 13% year-over-year generating $3.5 billion in sales, beating analysts’ estimate by more than $140 million. The pre-exposure prophylaxis (PrEP) pill Descovy brought in $586 million, representing 15% growth from the same period in 2023 and a $72 million beat versus the consensus.
“Gilead maintains its best-in-class position in HIV as it sets the stage for a potential revitalization of growth in the PrEP market,” Seigerman wrote in a note to investors.
Looking ahead, Gilead CEO Daniel O’Day announced during an investor call Wednesday that the company is “on track” to file an application before the end of 2024 seeking FDA approval for twice-yearly subcutaneous PrEP lenacapavir.
If approved, lenacapavir “could make a major impact on global public health and significantly catalyze the prevention market,” O’Day said. In terms of expanding lenacapavir’s reach, Chief Commercial Officer Johanna Mercier pointed to the “real opportunity” of targeting individuals beyond the current market and cater to Black and Latino individuals, as well as younger adults, cisgender women and transgender people.
Jefferies analyst Michael Yee in an investor note said management’s continued focus on HIV bodes well for Gilead’s business, arguing that the sentiment on the company’s stock “continues to shift more positive towards HIV with greater focus on long-acting programs” which the pharma is gearing up to launch next year.
Aside from HIV, Gilead’s COVID-19 antiviral Veklury also contributed to Gilead’s top line beat, growing 9% in Q3 to bring in $692 million—more than twice as much as its projected sales of $272 million.
In oncology, the antibody-drug conjugate Trodelvy missed the consensus estimate by a slim, $8-million margin, despite delivering 17% year-on-year growth with $332 million in Q3 sales. According to Seigerman, Gilead’s cancer business has suffered “recent fits and starts” and the pharma needs to demonstrate that it can sustain “consistent clinical execution” in oncology.
To that end, the recent readout from the Phase II iMMagine-1 trial is a “step in the right direction” for Gilead, Seigerman said. The company on Wednesday revealed that its investigational CAR-T therapy anito-cel elicited a 95% overall response rate in patients with relapsed or refractory multiple myeloma—including a 62% complete response rate or better. The safety profile was clean, with no delayed neurotoxicities.
In response to these data, Seigerman in a separate note said that anito-cel could be “competitive” to Legend Biotech and Johnson & Johnson’s Carvykti—though stronger data is needed to better differentiate Gilead’s therapy and overcome the “competitive foothold.”
