Gilead Raises 2020 Profit Outlook on Remdesivir Demand

Henrietta Strickland
August 2, 2020

A Gilead Sciences, Inc. logo is seen outside the company headquarters in Foster City, California, U.S. May 1, 2018.

Gilead's second-quarter sales fell almost 10% from a year earlier to $5.1 billion, short of the average analyst estimate of $5.3 billion, according to Refinitiv.

The company said that it expects to produce over two million courses of the drug by the end of the year, and has priced remdesivir at $50 per vial in the USA for patients with private insurance, while it will cost $390 per vial for federal insurance programmes.

The results reflected weak sales of Gilead's hepatitis C drugs and flagship HIV treatments during coronavirus pandemic lockdowns.

The company is sticking by full-year guidance announced in February of product sales in a range of $21.8 - $22.2 billion and earnings per share of between $5.15 and $5.55.

Overall, Gilead reported a loss of $3.34 billion, or $2.66 a share, compared with a year-earlier profit of $1.88 billion, or $1.47 a share. The company said it expects its HIV drugs and hepatitis C sales to begin regaining momentum in the current third quarter.

Analysts surveyed by FactSet expected a loss of 69 cents a share, or adjusted profit of $1.44, on $5.29 billion in revenue.

Second-quarter sales of Gilead's HIV drugs fell 1% from a year earlier to $4 billion, while sales of drugs to cure hepatitis C fell 47% to $448 million due to fewer new patients and competition from rival drugs.

In the U.S., product sales also decreased 7% to $3.8bn, which Gilead again attributed to COVID-19 disruption to its hepatitis C product sales, as well as lower sales of its pulmonary hypertension drug Letairis (ambrisentan) and chest pain med Ranexa (ranolazine) after generic entries hit the market in the first half of 2019. The drug received an emergency use authorization from USA regulators in May, after a big trial found it sped recovery by about four days in hospitalized patients.

Demand for remdesivir continues to outstrip supply in many parts of the world.

The $4.9 billion acquisition in April of Forty Seven, deepening Gilead's pipeline of cancer drugs, was the first major outright acquisition under Chief Executive Daniel O'Day, who took over the helm previous year with a mandate to jump-start sales growth and turn around the company's sagging stock price.

Gilead expects to have manufactured more than two million remdesivir treatment courses by the end of 2020, and several million more treatment courses in 2021.

It also plans to test remdesivir in combination with Eli Lilly's Olumiant (baricitinib), a JAK inhibitor already used in inflammatory diseases, and Roche's IL-6 drug Actemra (tocilizumab).

Remdesivir may be effective in reducing recovery time in patients with severe Covid-19, though more trials are needed to confirm this, the experts said.

Other reports by Click Lancashire

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