Gilead Sciences (GILD) anticipates cancer medicines to account for one-third of revenue by 2030, and the company’s shares rose on Friday despite a mixed earnings report.
Trodelvy, Yescarta, and Tecartus, Gilead’s cancer medications, had a 38% increase in sales to $728 million. According to FactSet, this surpassed analyst forecasts of $709 million. According to RBC Capital Markets analyst Brian Abrahams, Gilead’s HIV and cancer treatments continue to experience high acceptance.
“This should continue to provide valuation support and limit downside risk while the company’s broader pivot into cancer (drugs) continues in the coming years, though meaningful near-term upside may also be capped by limited pipeline catalysts and upcoming competitor datasets,” he said in a client note.
GILD shares closed at 78.68 today, up 4.2% on the day.
Veklury Weighs On Growth In GILD Stock
Total second-quarter revenues increased 5% to $6.6 billion, above analyst expectations of $6.45 billion. Total revenues increased 11% when Gilead’s Covid therapy, Veklury, was excluded. Sales of Veklury fell 43% to $256 million. This fell well short of the projected $354 million.
Furthermore, adjusted profits fell 15% to $1.34 per share, falling short of analysts’ expectations of $1.64 per share. According to Third Bridge analyst Lee Brown, the profits shortfall is mostly attributable to a 32-cent penalty connected to an antitrust dispute involving HIV treatment.
Nonetheless, “there were several standout performances in the quarter, including Biktarvy, Descovy, and Trodelvy,” Brown said in a client note. “On the other hand, Yescarta and Tecartus generated strong growth but fell short of (analyst) expectations.”
Biktarvy, an HIV medicine, earned $2.98 billion in sales, above expectations of $2.88 billion. Sales increased by 17%. Descovy revenue increased 12% to $516 million, above analysts’ expectations of $493 million.
“As HIV drug Biktarvy goes, so goes Gilead,” Brown added, noting that the drug earned 45% of Gilead’s overall sales in the second quarter. “Fortunately for Gilead, Biktarvy appears to be firing on all cylinders.” Cancer Treatments Are ‘On Track’
Trodelvy, a breast cancer therapy, had a 63% increase in sales to $260 million. Gilead saw greater adoption among individuals suffering from a particular kind of metastatic breast cancer. Trodelvy sales were expected to be $243 million, according to analysts.
Yescarta and Tecartus, two cell treatments, produced $380 million and $88 million in sales, respectively. According to FactSet, Yescarta revenues increased 29% and above projections of $375 million. However, Third Bridge’s Brown said that other estimates showed Yescarta sales may be greater.
Meanwhile, Tecartus sales increased 21% but fell well short of analyst expectations of $91 million.
According to Mizuho Securities analyst Salim Syed, Gilead management thinks the business is “on track” to generate a third of its revenue from cancer medicines by 2030. Gilead might seek partnerships, licenses, or buyouts to accomplish this aim.