Gilead Sciences profit falls, but beats Wall Street estimates
(Adds company comments, updates share price)
By Deena Beasley
July 26 (Reuters) - Gilead Sciences Inc on Wednesday reported lower second-quarter profits as use of its flagship hepatitis C drugs continued to decline, but the results still beat Wall Street estimates and the company raised its full-year sales outlook.
After one-time items, Gilead earned $2.56 a share. Wall Street analysts, on average, had forecast adjusted earnings of $2.15 a share, according to Thomson Reuters I/B/E/S.
"People had a sense they were going to beat on the HCV (hepatitis C) side and that's where most of it came from," said Leerink analyst Geoffrey Porges. But with a rival drug from AbbVie Inc likely to be approved by regulators next month, the stronger sales trend is unlikely to continue, he said.
Gilead's quarterly sales of hepatitis C drugs Sovaldi, Harvoni and Epclusa totaled $2.9 billion, down from $4 billion a year earlier, but above the $2.23 billion forecast by analysts.
Chief Executive John Milligan, on a conference call with investors and analysts, said the competitive threat hinges on "unknowns" including AbbVie's pricing, how it promotes its drug and contracts with health insurers and other payers.
Gilead warned earlier this year that sales of its high-priced hepatitis C drugs were declining as fewer patients were deemed eligible for treatment and competition grew.
Second-quarter sales of other antiviral products, including Gilead's other main franchise of HIV drugs, rose to $3.6 billion from $3.1 billion for the same period in 2016.
Gilead raised its full-year 2017 product sales estimate to between $24 billion and $25.5 billion, up from a previous range of $22.5 billion to $24.5 billion.
Milligan said Gilead was confident in its prospects for both the HIV and HCV markets but has been "very, very active" in assessing other potential business opportunities. "When the things are right for us, we will announce them," he said.
"It is very clear that they are preparing themselves to be much more acquisitive," Porges said, citing actions including scaled back share buybacks and cuts in research spending.
Net income fell to $3.1 billion from $3.5 billion in the year-ago quarter. Overall revenue fell to $7.14 billion from $7.78 billion.
Shares of Gilead, which closed at $74.19 on Nasdaq, were flat in after-hours trading. (Reporting by Deena Beasley; Editing by Richard Chang)
