Gilead Sciences Reports Strong Second Quarter Results
Gilead Sciences, Inc. (GILD) reported strong second-quarter results on Thursday, exceeding analyst expectations. The company's revenue reached $6.95 billion, surpassing the consensus estimate of $6.72 billion. This growth was primarily driven by higher product sales across HIV, Liver Disease, and Oncology segments. Excluding Veklury, product sales increased by 6% year-over-year to $6.7 billion.
Adjusted earnings per share (EPS) came in at $2.01, significantly higher than the $1.34 reported in the same quarter last year and exceeding the consensus estimate of $1.60. This improvement was primarily attributed to lower operating expenses and higher revenues.
HIV Product Sales Remain Strong
Gilead's HIV product sales continued their upward trajectory, increasing by 3% to $4.7 billion in the second quarter. This growth was driven by higher demand for both treatment and prevention options. However, lower average realized prices due to channel mix partially offset this increase.
Biktarvy, a key HIV treatment drug, saw its sales rise by 8% to $3.2 billion, fueled by increased demand. Descovy, another HIV treatment, experienced a 6% decline in sales to $485 million due to lower average realized prices. However, this decline was partially offset by higher demand.
Liver Disease Portfolio Shows Strong Growth
The Liver Disease portfolio delivered impressive results, with sales increasing by 17% to $832 million. This growth was driven by strong performance across the portfolio, including Epclusa and Vemlidy.
Gilead Raises Fiscal Year 2024 Adjusted EPS Forecast
Based on the strong second-quarter performance, Gilead raised its fiscal year 2024 adjusted EPS forecast from $3.45-$3.85 to $3.60-$3.90. This revised forecast surpasses the consensus estimate of $3.75.
The company also reaffirmed its product sales outlook of $27.1 billion-$27.5 billion, including Veklury sales of around $1.3 billion.
Analysts Remain Cautious Despite Strong Results
Despite the strong second-quarter results, analysts remain cautious about Gilead's future prospects. Goldman Sachs maintains a Neutral rating with a price target of $71, citing the company's focus on earlier-stage deals and the challenges of maintaining growth with a high revenue baseline.
RBC Capital Markets also expresses caution, raising its price target to $72 from $71 but maintaining a Sector Perform rating. The analysts acknowledge the strong performance of Gilead's core HIV and CAR-T franchises but highlight the challenges of competitive pressures and a high revenue baseline.
Gilead Stock Price Declines
Following the earnings report, Gilead's stock price declined by 2.95% to $73.36 at last check on Friday. This decline suggests that investors may be concerned about the company's future growth prospects despite the strong second-quarter results.