Gilead Earnings Bring Mixed Results

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Gilead Corporation (NASDAQ: GILD) has joined other biotech giants in releasing its earnings for the third quarter of 2017. The company’s market cap was last seen at $101 billion before earnings, and that was after sector and peer-related post-earnings weakness took down shares of Celgene, Amgen and Biogen.

One issue that needs to be considered is that Gilead only recently closed upon its Kite Pharma acquisition of more than $11 billion. It turns out that Wall Street analysts are not very good, sometimes for more than just one or two quarters, in forecasting a company’s earnings and revenues once they start integrating the new numbers into the old forecast models.

Gilead reported earnings per share (EPS) of $2.27 and revenue of $6.51 billion. Thomson Reuters had consensus estimates of $2.13 EPS and $6.39 billion in revenues. The results from the same period from a year earlier were $2.75 EPS and $7.5 billion in revenues.

As of September 30, 2017, Gilead reported that it had $41.4 billion of cash, cash equivalents and marketable securities but that was ahead of closing the Kite Pharma deal.

Gilead said that Harvoni sales were $973 million, and total product sales were listed as roughly $6.4 billion. HIV and HBV product sales were $3.6 billion compared to $3.5 billion for the same period in 2016. HCV product sales were $2.2 billion compared to $3.3 billion for the same period in 2016. Other product sales were $559 million for the third quarter of 2017 compared to $564 million for the same period in 2016.

Gilead has now offered guidance for full year 2017. For the year, the net product sales of $24 billion to $25.5 billion offered in July was moved to a new range of $24.5 billion to $25.5 billion. The company sees 2017 gross margin now coming in at 86% to 87%.

Gilead and other biotechs have been rather unexciting, but many analysts on Wall Street had recently been raising their price targets after the Kite Pharma deal was announced. Kite also received an FDA approval in recent weeks for its lead candidate as a CAR-T cancer treatment.

Gilead shares closed down 2.5% at $77.88, versus $79.89 just a day earlier. Its shares were indicated around $78.00 in the after-hours trading session on Thursday. Its 52-week range is $63.76 to $86.27 and its Thomson Reuters consensus analyst target price was $85.29 coming into earnings.

Other key related news is below.

Short sellers have been chasing up their bets against biotech.

In earnings related news, Celgene shares hit a new low and drug the major biotechs lower despite the actual reporting initially looking good until looking at forward guidance.

Jefferies just announced its top health care picks that it expects to do well out in 2018.