By Maria Armental

Gilead Sciences Inc. swung to a loss in the June quarter following the acquisition of biotech company Forty Seven Inc. and reflecting higher costs as it ramps up production of Covid-19 drug remdesivir.

The $4.9 billion acquisition in April of Forty Seven, deepening Gilead's pipeline of cancer drugs, was the first major outright acquisition under Chief Executive Daniel O'Day, who took over the helm last year with a mandate to jump-start sales growth and turn around the company's sagging stock price.

Remdesivir was authorized for emergency use in the U.S. in May and Gilead began charging for the drug in July.

On Thursday, Gilead said expenses more than doubled in the quarter to $8.13 billion, outpacing revenue gains, largely due to higher costs related to clinical trials and manufacturing ramp-up expenses related to remdesivir.

Overall, Gilead reported a loss of $3.34 billion, or $2.66 a share, compared with a year-earlier profit of $1.88 billion, or $1.47 a share. On an adjusted basis, profit fell to $1.11 a share.

Revenue fell 10% to $5.14 billion.

Analysts surveyed by FactSet expected a loss of 69 cents a share, or adjusted profit of $1.44, on $5.29 billion in revenue.

The drugmaker had warned that about $200 million in sales had moved into the March quarter, primarily in the U.S., as customers stocked up on prescription medicines during the coronavirus pandemic.

Sales of HIV drug Biktarvy, which more than doubled in the March quarter, rose 44% to $1.6 billion in the second quarter.

"Gilead's first half performance demonstrates the strength and durability of our core HIV business, even as we navigated the expected impact of the COVID-19 pandemic," Mr. O'Day said in a statement, adding that Gilead was seeing early signs of recovery.

Joseph Walker contributed to this article.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

July 30, 2020 17:18 ET (21:18 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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