Gilead's third-quarter earnings of $1.79 per share surpassed the
Zacks Consensus Estimate of $1.64. Moreover, reported earnings were
way above the year-ago figure of $0.49 per share. Total revenues of
$6.04 billion was no comparison to the year-ago figure of $2.78
billion. However, we are concerned about the slowdown in company s
blockbuster HCV drug, Sovaldi sales (down 19.7% sequentially), due
to physicians delaying the initiation of treatments in the U.S. in
anticipation of Harvoni's approval. Harvoni is priced at $94,500
for a 12-week treatment, a price comparable to Sovaldi regimen. We
prefer to be on the sidelines until we get more visibility on
Harvoni uptake. Thus we maintain a Neutral recommendation on the
Gilead Sciences, Inc., a biopharmaceutical company, focuses on
the discovery, development and commercialization of drugs for
treating HIV/AIDS, liver diseases such as hepatitis B virus (HBV)
and hepatitis C virus (HCV), respiratory, oncology /inflammation
and cardiovascular related diseases. Lead products at Gilead
include HCV therapy, Sovaldi, apart from Truvada, Viread, Atripla,
Complera, Stribild and Emtriva for the treatment of HIV in adults.
Besides the HIV franchise, Gilead's other products include AmBisome
(treatment of fungal infection) and Letairis (treatment of
pulmonary arterial hypertension). Gilead's portfolio also includes
Cayston (improvement of respiratory symptoms in patients suffering
from cystic fibrosis with pseudomonas aeruginosa) and Ranexa
(chronic angina). The FDA approval of Zydelig (idelalisib 150 mg)
for treating three cancer forms has further boosted Gilead's
The U.S. approval of HCV therapy, Sovaldi, in Dec 2013 is a big
positive for Gilead as the drug offers significant commercial
potential. The European approval of the drug came in Jan 2014.
Sovaldi is also available in Canada. The drug is off to a strong
start recording sales of approximately $5.8 billion in the first
six months of 2014. The U.S. approval of Harvoni (Sovaldi plus
ledipasvir) will further boost Gilead's top line.
Gilead operates in North America, South America, Europe and
Asia-Pacific. Total revenues at Gilead came in at $11.20 billion in
2013, up 15%. Strong sales of the company's antiviral products
contributed to the increase. In 2013, total antiviral products
accounted for 86.5% of product sales. Total product sales climbed
15% to $10.80 billion in 2013. The company, founded in 1987, is
headquartered in Foster City, CA.
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