Gilead Looks Away From Hepatitis C Treatments for Growth
October 26 2017 - 7:17PM
Dow Jones News
By Imani Moise
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)
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