What to Look For in Gilead Earnings

Gilead Sciences Inc. (NASDAQ: GILD) is set to report its third-quarter financial results after the markets close on Thursday. Thomson Reuters has consensus estimates that call for $2.89 in earnings per share (EPS) on $7.82 billion in revenue. The same period from the previous year had $1.84 in EPS on $6.04 billion in revenue.

This company discovers, develops and commercializes medicines in areas of unmet medical need in North America, South America, Europe and the Asia-Pacific. Its products include Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, Tybost and Vitekta for the treatment of human immunodeficiency virus (HIV) infection in adults, and Harvoni, Sovaldi, Viread and Hepsera products for the treatment of liver disease.

It recently announced that the FDA has approved Letairis in combination with Eli Lilly’s Adcirca for reducing the risk of disease progression and hospitalization and improving exercise ability in patients suffering from pulmonary arterial hypertension. Both Letairis and Adcirca are approved in the United States, European Union and elsewhere as once-daily treatments for patients with pulmonary arterial hypertension.

Recently, the U.S. Food and Drug Administration (FDA) issued a warning that hepatitis C treatments Viekira Pak and Technivie can cause serious liver injury, mostly in patients with underlying advanced liver disease. The markets reacted very negatively to AbbVie Inc. (NYSE: ABBV) on this news, but Gilead came out on top because it produces a competing hepatitis C vaccine.

As a result, the FDA is requiring the manufacturer to include information about serious liver injury adverse events to the Contraindications, Warnings and Precautions, Postmarketing Experience and Hepatic Impairment sections of the Viekira Pak and Technivie drug labels.

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Ahead of its earnings report, a few analysts weighed in on Gilead’s position:

• JPMorgan reiterated a Buy rating with a $133 price target.
• Oppenheimer reiterated an Outperform rating but raised its price target to $124 from $120.
• RBC Capital reiterated a Buy rating with a $130 price target.
• Jefferies has a Hold rating but lowered its price target to $107 from $115.

So far in 2015, Gilead has outperformed the market, with the stock up 16% year to date, while over the past 52 weeks the stock is down 1%.

Shares of Gilead were last seen Tuesday trading up 1.1% at $109.80, with a consensus analyst price target of $124.25 and a 52-week trading range of $85.95 to $123.37.

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