Did Gilead Throw Away $12 Billion On Yescarta?

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Gilead CEO Daniel O'Day. Source: Bloomberg

Gilead (NASDAQ:GILD) reports quarterly earnings April 30th. Analysts expect revenue of $5.45 billion and EPS of $1.57. The revenue estimate implies a 7% decline sequentially.

Gilead’s HIV franchise has been a stalwart for the company. Revenue from Yescarta has been steady, but HCV and other products have been hit or miss. In Q4 2019, the company generated revenue of $5.8 billion, up 5% sequentially and 2% Y/Y. I questioned whether Gilead could maintain its previous momentum. We may find out more Thursday.

Revenue from HIV rose in the high-single-digit percentage range Q/Q. Biktarvy was the stalwart again, generating $1.6 billion in revenue at a 25% clip. The drug has cannibalized sales of some of Gilead’s other HIV drugs, but it has also taken share from GlaxoSmithKline (GSK). It remains the number one prescribed HIV regimen in the U.S. About half of every naive and switch patient is initiated on Biktarvy.

Traction from Descovy for PrEP, which launched during the quarter, helped drive revenue for Descovy up 20% Q/Q. Over 25% of individuals on PrEP are taking Descovy, and it could give the drug renewed life. Management estimates that, of the 230,000 people taking the company’s HIV prevention medicine, there are several hundred thousand more who could potentially benefit from it. Biktarvy and Descovy represented over 40% of total HIV sales and should remain catalysts for the rest of the year. Read more:

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