Gilead Sciences (NASDAQ:GILD) reported Q4 2018 revenue of $5.8 billion, beating on revenue by $280 million. It missed on GAAP EPS and non-GAAP EPS. GILD is down by nearly 5% since the earnings report was released. The issues are likely hurting the stock.

Stagnant Revenue Growth

Gilead’s revenue has been in decline for a few years now. Its HCV regimen was a modern-day miracle, but the HCV runway has been in decline. Now, GILD bulls must pivot to the company’s HIV franchise. In Q4 2018, Gilead’s product sales of $5.7 billion grew 4% sequentially.

HCV fell by 18%, while total HIV sales were up 9%. Over 70% of total product sales now comes from HIV. As HIV goes, so goes Gilead. Sequentially, Truvada and Genvoya were up by single digits. Truvada for PrEP (pre-exposure prophylaxis), a prescription medication to help reduce the risk of getting HIV through sex, has raised Truvada’s profile. The company estimates approximately 202,000 people were taking Truvada for PrEP at the end of Q4 2018. According to Gilead, the CDC estimates 1.1 million people in the U.S. could benefit from PrEP. That implies more upside for Truvada.

Biktarvy was the superstar again with $578 million in sales, up nearly 50% Q/Q. The lion’s share of Biktarvy’s revenue came from switches, partially at the expense of Genvoya. Switches also came at the expense of regimens containing dolutegravir, which has hurt GlaxoSmithKline’s (GSK) HIV sales. Read more:

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