GILD Stock Dives As Profit Lags Forecasts Despite Strong Cancer Drug Sales

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GILD Stock Dives As Profit Lags Forecasts Despite Strong Cancer Drug Sales

April 27, 2023

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Biotech giants Gilead Sciences (GILD) and Amgen (AMGN) posted mixed quarters on Thursday — leading GILD stock and Amgen stock to topple.

For Gilead, total revenue inched down roughly 4% to $6.35 billion, a hair above forecasts for $6.33 billion, according to FactSet. Adjusted earnings came in at $1.37 per share, down 35%. The earnings decline was driven by a tax impairment, but missed projections for $1.54 a share.

Meanwhile, Amgen's adjusted profit came in well ahead of forecasts at $3.98 per share, but sales missed views and fell 2% to $6.105 billion. Like its biotech peer, Amgen's profit fell due to a tax impairment. Amgen also noted decreased revenue and higher operating expenses, leading to a 6% earnings decline. Analysts expected lower earnings of $3.81 a share, but slightly higher sales at $6.113 billion.

In after-hours trading on today's stock market, GILD stock toppled 2.5% near 81.50. Amgen stock fell 2.3% near 234.80.

GILD Stock: Covid Sales Dive

The lion's share of Gilead's sales decline was driven by light sales of Covid treatment, Veklury.

Gilead is far from the first drugmaker to see a revenue slope due to Covid-related products. This week, Merck (MRK), Roche (RHHBY) and GSK (GSK) all reported short — or nonexistent — sales of their Covid products. Covid cases reported to the Centers for Disease Control and Prevention peaked in mid-January and have since trended down.

During the first quarter, Veklury sales plummeted 63% to $573 million. Excluding the impact of Veklury, Gilead's sales actually increased 15%.

"Biktarvy (and HIV treatment) outperformed once again, and oncology revenue increased 59% year over year, driven by Trodelvy and cell therapy," Gilead Chief Executive Daniel O'Day said in a written statement.

Sales of Trodelvy, which treats breast and bladder cancer, surged 52% to $222 million and topped GILD stock analysts' forecast for $217 million. Revenue from cell therapies Yescarta and Tecartus also beat the Street's expectations at a respective $359 million and $89 million. Yescarta sales climbed 70% as Tecartus sales surged 40%.

Revenue from Biktarvy also popped 24% to $2.68 billion, ahead of estimates for $2.52 billion.

For the year, Gilead expects $26 billion to $26.5 billion in product sales. GILD stock analysts predicted $26.3 billion in product sales — which excludes other sources of revenue like licensing and royalty deals.

The guidance includes expectations for $2 billion from Veklury sales, a decline of 49% and in line with analyst forecasts for $2.03 billion.

Analysts see adjusted earnings at $6.60-$7 per share. Also, analysts called for $6.85 earnings per share.

Amgen Stock: Amjevita Takes Stage

The strongest growth among Amgen's products came from its new Humira biosimilar, Amjevita. Amjevita launched in the U.S. in February, though it has been on the market for several years in Europe. Sales surged 52% to $164 million.

Behind Amjevita, Amgen reported strong sales increases for osteoporosis treatment Evenity, cancer drug Blincyto and low platelet treatment Nplate. Sales surged a respective 49%, 41% and 36%. The company's biggest moneymaker, osteoporosis treatment Prolia, brought in $927 million in sales, up 9%.

But revenue from migraine treatment Aimovig slumped 32% to $69 million due to unfavorable changes in sales deductions and lower net selling price. Amgen expects the trend of lower sales prices to continue in an effort to remain competitive.

For the year, Amgen guided to $26.2 billion to $27.3 billion in sales and adjusted profit of $17.60-$18.70 per share. Amgen stock analysts predicted a respective $27.65 billion and $17.91.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

GILD Stock Dives As Profit Lags Forecasts Despite Strong Cancer Drug Sales

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