Will HIV and Oncology Propel Gilead's (GILD) Q1 Earnings?

Biotech major Gilead Sciences Inc. GILD is set to report first-quarter 2023 results on Apr 27, after market close.

The company has an excellent record, with earnings beating estimates in all of the last four quarters, the average being 16.92%. In the last reported quarter, the company beat expectations by 11.33%.

Gilead Sciences, Inc. Price, Consensus and EPS Surprise


Gilead Sciences, Inc. Price, Consensus and EPS Surprise

Gilead Sciences, Inc. price-consensus-eps-surprise-chart | Gilead Sciences, Inc. Quote

Factors to Note

Revenues increased 2% in the fourth quarter primarily due to increased sales in oncology, HIV and hepatitis C virus (“HCV”), partially offset by lower Veklury (remdesivir) sales. The trend has most likely continued in the first quarter.

HIV franchise sales increased 5% in the last reported quarter, driven by higher demand for the flagship HIV therapies Biktarvy and Descovy. Biktarvy’s sales increased 15% year over year in the fourth quarter due to higher demand. The trend is likely to have continued in the to-be-reported quarter. Descovy’s revenues increased on favorable pricing dynamics as well as higher demand. The momentum is likely to have continued in the first quarter.

The Zacks Consensus Estimate for sales of Biktarvy and Descovy is pegged at $2.6 billion and $453 million, respectively. Our model estimates for the same are $2.6 billion and $481 million, respectively.

Hepatitis C virus product sales also grew in the previous quarter, driven by increased patient starts and favorable pricing dynamics in the United States, partially offset by fewer starts in Europe. However, new patient starts have most likely declined in the first quarter.

Sales of Veklury (remdesivir), an antiviral treatment for COVID-19, plunged 26% in the fourth quarter, driven by lower rates of COVID-related hospitalizations. The first quarter is likely to have seen a decline as well. Gilead expects total Veklury sales of $2 billion for 2023.

Cell Therapy product sales, which include Yescarta (axicabtagene ciloleucel) and Tecartus (brexucabtagene autoleucel), soared 75% in the previous quarter. Yescarta sales are primarily driven by increased demand for relapsed or refractory (“R/R”) large B-cell lymphoma (“LBCL”) in the United States and Europe. Tecartus (brexucabtagene autoleucel) sales grew, driven by increased demand in adult R/R B-cell precursor acute lymphoblastic leukemia (“ALL”) and mantle cell lymphoma (“MCL”) in the United States and Europe.

Sales are likely to have experienced a sequential increase, driven by the label expansions of Yescarta and Tecartus. The Zacks Consensus Estimate for Cell Therapy product sales is $419 million and our estimate for the same is $431.4 million.

Sales of Trodelvy (for breast cancer) soared 65% in the fourth quarter, reflecting continued uptake in metastatic triple-negative breast cancer. Sales are likely to have registered a sequential increase on increased demand.

Hepatitis B virus and hepatitis delta virus product sales decreased in the fourth quarter. The first quarter is likely to have seen a similar trend.

Operating expenses are likely to have increased in the first quarter.

Pipeline & Regulatory Updates

Apart from the regular top and bottom-line numbers, we expect investors to focus on the key pipeline updates when the company reports.

The FDA approved Trodelvy for the treatment of adult patients with unresectable locally advanced or metastatic hormone receptor (HR)-positive, human epidermal growth factor receptor 2 (HER2)-negative (IHC 0, IHC 1+ or IHC 2+/ISH–) breast cancer who have received endocrine-based therapy and at least two additional systemic therapies in the metastatic setting.

Share Price Performance

Gilead’s stock has gained 36.1% in the past year against the industry's decline of 8.9%.


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What Our Model Predicts

Our proven model predicts an earnings beat for Gilead this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for GILD is +2.12% as the Zacks Consensus Estimate is pinned at $1.61 per share and the Most Accurate Estimate is pegged at $1.64.

Zacks Rank: The company currently carries a Zacks Rank #3.

Other Stocks to Consider

Here are some other drug and biotech stocks that you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat this season.

Novo Nordisk NVO has an Earnings ESP of +10.71% and currently flaunts a Zacks Rank #1.

NVO topped earnings estimates in three of the last four quarters. It has a four-quarter earnings surprise of 3%, on average.

Sanofi SNY has an Earnings ESP of +2.30% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sanofi beat earnings estimates in three of the trailing four quarters and missed in one. It delivered an earnings surprise of 7.68%, on average.

Amgen AMGN presently has an Earnings ESP of +1.82% and a Zacks Rank #3.

AMGN beat earnings estimates in all of the last four quarters, the average being 3.43%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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