Gilead Sciences (GILD) increased its growth forecast for the year on strong third quarter results, marking a shift away from its COVID revenues and spurring investor anticipation for new products in the near future.
In third quarter earnings Wednesday, the company increased its 2024 guidance — bucking the opposite trend by large pharma peers this quarter — and beat on both top- and bottom-line results.
CEO Daniel O’Day told Yahoo Finance the company’s third quarter was the its best this year.
“This has been the strongest quarter of the year for us. It really shows the strength of our business model … and that’s true for both … our legacy business, our HIV business, our virology business, but also for the new business areas of oncology and also inflammation,” he said.
On the post-earnings call with investors, CFO Andrew Dickinson said the company’s beat was due to surprise increased sales of the COVID-19 antibody drug Veklury, as well as the legacy HIV portfolio sales.
“We … expect full‐year 2024 total product sales in the range of $27.8 to $28.1 billion, an increase of $650 million at the midpoint compared to the prior range,” Dickinson said.
The company reported revenue of $7.5 billion, up 7% year over year, beating Wall Street estimates by about 7%. In addition, Gilead reported adjusted earnings per share of $2.02, beating Wall Street expectations by nearly 30%.
The stock is up nearly 6% Thursday, trading at more than $96 per share, compared to a market close price of $91.69 per share. Jefferies analyst Michael Lee said in a note to clients late Wednesday that the stock is up 40% since the summer, when it bottomed out at $63 per share.
The company’s HIV portfolio sales were up 9%, an area it has continued to rely on for strength as it diversified into oncology and inflammatory diseases in the past five years. That includes the $12 billion acquisition of Kite Pharma, which boosted Gilead’s oncology pipeline.
“What the investment community is realizing is the durability of that base business goes well into late 2030s and early 2040s. And that’s very different than the outlook that we had five years ago,” O’Day said.
He said this is why the company isn’t facing the same pressures as larger pharma companies, such as pricing and patent policies from the federal government. However, Gilead has faced its own set of inquiries and legal settlements related to patent gaming — most recently a $40 million settlement for slowing the release of a life-saving HIV treatment in order to boost profits.
