EATG » Gilead topples as its hepatitis C drug franchise continues to crumble

Gilead topples as its hepatitis C drug franchise continues to crumble

Gilead Sciences’ hepatitis C downfall accelerated in the first quarter as sales declined by their widest margin in eight periods — prodding shares to topple in after-hours trading Tuesday.

The biotech leader also reported total sales and adjusted profit that lagged Street forecasts. Further, it reiterated 2018 sales guidance that missed. In after-hours trading on the stock market today (May 1), Gilead plunged 4.9% after ending the regular session up a fraction, at 72.56.

Sales of hepatitis C drugs Harvoni, Sovaldi and Epclusa raked in $1.05 billion, declining 59%. That was the single biggest year-over-year decline in the eight quarters since Gilead started reporting sales of hepatitis C drugs separately from its other antiviral products.

But hepatitis C drug sales narrowly topped the consensus model for $1.02 billion, according to a report from Mizuho analyst Salim Syed last week. Still, investors are wondering when sales of hepatitis C drugs will stabilize, he said.

“Recall that during the fourth-quarter call, management commented that they anticipate patient market share and pricing to stabilize toward ‘mid-2018,’ with more predictable albeit declining patient starts,” he wrote.

Hepatitis C, HIV Drugs Challenged

During the quarter, sales of Harvoni and Sovaldi declined across all major markets as U.S. sales of Epclusa also fell, Gilead said in a news release. Gilead cited increasing competition for its challenge in hepatitis C drugs. Harvoni lagged sales views by $140 million.

Sales of HIV and hepatitis B drugs climbed 2% to $3.33 billion. But new HIV drug Biktarvy brought in just $35 million in U.S. sales. That missed the consensus for $47 million, according to Syed’s week-ago report.

RBC analyst Brian Abrahams says consensus numbers between $41 million and $51 million for Biktarvy were overly bullish. He also noted uptake of cancer treatment Yescarta — acquired with Kite Pharma last year — was strong at $40 million in sales vs. the consensus view for $17 million.

“Strong Yescarta can’t offset soft HIV/hepatitis C (drug sales),” he said. “But the rest of 2018 looks better.”

Total revenue of $5.09 billion declined nearly 22%. Sales missed the consensus of analysts polled by Zacks Investment Research for $5.42 billion. Adjusted profit of $1.48 per share lagged by 18 cents and fell nearly 34% year over year.

For the year, Gilead reiterated guidance for $20 billion to $21 billion in product sales. The consensus modeled adjusted profit of $6.43 a share on $21.22 billion in revenue.

By Allison Gatlin