Gilead Sciences Inc. (NASDAQ: GILD) reported its first quarter financial results after market close on Tuesday and missed analysts estimates. Shares fell by 7 percent after the opening bell on Wednesday.
For the first quarter, Gilead reported revenue of $5.1 billion, decreasing 21.5 percent year over year and missing analysts’ $5.4 billion. The company reported an non-GAAP income of $2 billion or $1.48 per share, also missing analysts’ estimates of $1.67.
Antiviral product sales, which include sales of HIV, chronic hepatitis B (HBV) and chronic hepatitis C (HCV) products, were $4.4 billion for the first quarter of 2018 compared to $5.8 billion for the same period in 2017.
Gilead’s HCV (hepatitis C) sales decline drastically from $2.58 billion the previous year to $1.05 billion for the quarter. Analysts forecasted sales of $1.19 billion. Revenue for HIV and HBV sales were $3.32 billion, slightly increasing from $3.26 billion the previous year.
Gilead Chief Financial Officer Robin Washington said the U.S. competition intensified for hepatitis C related treatments, making it into a much more intense environment.
“We do believe that overall hep C is a long and durable market. We'll continue to compete very aggressively with our competitor. But in summary, our expectations for 2018 are intact, and we believe our revenue reflects the guidance that we provided at the beginning of the year.” said Washington.
Gilead’s hepatitis C treatment was outshined by AbbVie’s treatment, which surpassed expectations by more than 45 percent last week. At the time last year, Gilead sold its treatment for $31,500, while AbbVie sold it for $13,200.
Gilead forecasts revenue for its hepatitis C treatment to be in between $3.5 billion to $4 billion this year, significantly lower than last year’s sales of $9.1 billion.
Gilead acquired Kite Pharma last year and received Yescarta as part of the agreement. For the first quarter, Yescarta drove in revenue of $40 million, beating analysts’ estimates of $23 million.
“I think we're off to a great start. We've reiterated guidance, and the year is progressing in line with our expectations. We do believe that 2018 is a trough year for us on which we can grow. We'll have seasonality fluctuations from quarter to quarter, but we're very confident, hence, reiterated our overall guidance for the year and expect to be able to grow off of our 2018 base going forward.” said Washington.
For the full year, Gilead forecasts revenue to be between $20 billion to $21 billion on an effective tax rate of 21 percent to 23 percent. The company projects a diluted EPS of $1.41 to $1.51.