Gilead Sciences, Inc. GILD revised its annual guidance for 2020 as the worsening of the coronavirus pandemic drove sales for Veklury (remdesivir).
Total product sales are now projected to come around $24.3-$24.35 billion for 2020, up from the previous guidance of $23-$23.5 billion. The increase in guidance is primarily accountable to increased Veklury sales, as hospitalization and treatment rates were higher than expected, given the most recent COVID-19 surge.
Veklury sales are estimated at $2.8-$2.825 billion.
Total product sales, excluding Veklury, are projected around $21.5-$21.525 billion, indicating the underlying strong Biktarvy uptake, partially offset by the loss of exclusivity of Truvada in the United States and the impact of COVID-19 primarily on Gilead’s pre-exposure prophylaxis (“PrEP”) franchise and chronic hepatitis C virus (“HCV”) franchise.
R&D expenses are now expected to grow 20% (previous guidance: mid-teens percentage growth) to reflect the increase in expenses for obligations under the new commercialization and development agreement for Jyseleca (filgotinib) with Galapagos NV GLPG. The guidance also reflects higher clinical trial and manufacturing ramp-up expenses related to Gilead’s COVID-19 treatment, remdesivir.
Non-GAAP EPS is now projected at $6.98-$7.08, up from the earlier estimated range of $6.25-$6.60.
Gilead’s shares have lost 2.8% in the past year against the industry’s growth of 9.7%.
The company was in the spotlight in 2020 primarily due to Veklury, which is approved for the treatment of COVID-19 in the United States and the European Union.
The massive decline in sales of its HCV franchise has prompted it to focus on the HIV franchise, Yescarta and other newer avenues. Competition is stiffening in the HIV space from the likes of Glaxo GSK.
Hence, Gilead is diversifying into the oncology space. To that end, it acquired Immunomedics for approximately $21 billion and entered into strategic collaborations to foray into the lucrative oncology space.
It has also collaborated with Novo Nordisk NVO for developing treatments for non-alcoholic steatohepatitis (NASH).
Gilead currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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