Gilead Looks Away From Hepatitis C Treatments for Growth
Gilead Sciences Inc.'s earnings fell less than expected in the most recent quarter as declining drug sales were partially offset by cost cuts.
Shares dropped 3.8% to $74.90 in after-hours trading on Thursday as executives warned on a conference call that the worst is yet to come for the pharmaceutical company's hepatitis C treatments, which saw a 33% sales decline during the quarter. Sales were hurt by more competition from generic drugs as the company's patents expired.
James Meyers, Gilead's executive vice president of worldwide commercial operations, said on a call with analysts that the impact of competition and price erosion was only partially reflected in the third-quarter results and the full impact will come in the fourth quarter.
Antiviral sales fell $1 billion to $5.8 billion as declines in treatments for hepatitis C offset growth in sales of HIV and hepatitis B treatments.
On the expected sales growth of non-hepatitis C treatments, Gilead on Thursday raised the low end of its full-year revenue forecast. It also raised its adjusted per-share earnings outlook to a range of $1.02 to $1.17, from 86 cents to 93 cents.
Earlier this month, Gilead closed its $11 billion acquisition of Kite Pharma Inc. Gilead announced plans to buy the company in late August in a bid to diversify its portfolio and add new streams of revenue to quell investor concerns about flagging sales for certain drugs.
California-based Kite is a leader among several companies that aim to use genetic engineering to weaponize a patient's T-cells and then deploy them to attack lymphoma and other blood cancers.
In all, for the third quarter the Foster City, Calif.-based Gilead reported earnings of $2.72 billion, or $2.06 a share, down from earnings of $3.33 billion, or $2.49 a share, a year earlier. On an adjusted per-share basis, earnings fell to $2.27 from $2.75.
Revenue dropped 13% from a year ago to $6.51 billion. Operating expenses also decreased 14%.
Analysts polled by Thomson Reuters had forecast earnings of $2.13 a share on $6.39 billion in sales.
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
October 26, 2017 19:02 ET (23:02 GMT)