It's been a while since investors were really happy with Gilead Sciences' (NASDAQ:GILD) quarterly results. The big biotech's revenue and earnings fell compared to prior-year numbers throughout the first three quarters of 2016. 

Gilead didn't break that streak when it announced its fourth-quarter and 2016 full-year results after the market closed on Tuesday. Sales were down, yet again. So were earnings. And the biotech shared even worse news for investors about the future. Here are the highlights from Gilead's update.

Female scientist with pipette in laboratory

Image source: Getty Images.

By the numbers

Metric 

Q4 2016 

Q4 2015 

Year-Over-Year Change

Sales

$7.3 billion

$8.5 billion

(14.1%)

Net income from continuing operations

$3.1 billion

$4.7 billion

(34%)

Adjusted EPS

$2.70

$3.32

(18.7%)

Data Source: Gilead Sciences.

None of Gilead's fourth-quarter numbers looked good in comparison to the prior-year period's results. However, the company's net income fell the most on a percentage basis. That's primarily because Gilead's research and development costs soared in the fourth quarter, up almost 60% year over year, to $1.2 billion.

Gilead is spending a lot on advancing its pipeline. The biotech has 28 clinical studies in progress. Ten of those are late-stage trials, which are larger in scope, and therefore tend to be more expensive than earlier-stage clinical studies.

The company reported 2016 full-year revenue of $30.4 billion, down 6.9% from the prior year. Full-year earnings came in at $13.5 billion, a 25.4% year-over-year decrease. Gilead announced adjusted earnings per share for 2016 of $11.57, down 8.2% from 2015.

Gilead's cash position at the end of 2016 stood at $32.4 billion, including cash, cash equivalents, and marketable securities. That's a relatively small increase from the $31.6 billion on hand at the end of the third quarter of 2016.

Perhaps the most impressive number for Gilead Sciences is that the biotech generated $16.7 billion in operating cash flow in 2016. The company used $11 billion of that cash flow to buy back stock and used $2.5 billion to pay dividends.

Beyond the numbers

Anyone who follows Gilead Sciences was probably most interested in the company's hepatitis C virus (HCV) franchise performance in the fourth quarter. As expected, sales for Harvoni and Sovaldi continued to decline. However, there seemed to be at least a glimmer of good news: The downward trajectory for overall HCV sales appeared to level off somewhat.

Gilead Sciences HCV sales trend

Data source: Gilead Sciences. Chart by author.

Epclusa's growth is making a big difference in Gilead's HCV franchise sales. Sales for the company's newest HCV drug totaled $1.05 billion in 2016, and that number reflects only two full quarters on the market.

Gilead is also seeing a shift in its HIV franchise from older drugs to newer ones. While sales for Truvada, Atripla, Stribild, Viread, and Complera/Eviplera fell in the fourth quarter, sales growth for Genvoya, Descovey, and Odefsey more than made up for their declines. Sales for Gilead's combined HIV franchise increased 12% in the fourth quarter compared to the prior-year period.

The biotech is also getting solid growth from its other products. Fourth-quarter sales for pulmonary arterial hypertension drug Letairis increased 15% year over year, to $226 million. Sales for angina treatment Ranexa jumped 24%, to $210 million. 

Looking ahead

Gilead's outlook for 2017 was the most disturbing thing in its update. The company projects net product sales between $22.5 billion and $24.5 billion. That's a drop of nearly 22% from Gilead's 2016 result.

The company expects its HCV drugs to generate sales of $7.5 billion to $9 billion. By comparison, Gilead's HCV franchise made $14.8 billion last year. To make matters worse, Gilead also projected 2017 non-HCV product sales will be between $15 billion and $15.5 billion. That range reflects minimal growth over 2016 at best.

One of the few positive updates from Gilead was that the company's board voted to increase its dividend by 10% for 2017. That increase will bring the company's dividend yield to just under 3%.

Gilead's best shot at shaking off the dark cloud hovering over the stock appears to be making a smart acquisition. So far, at least, there's no new news on that front.

Keith Speights owns shares of Gilead Sciences. The Motley Fool owns shares of and recommends Gilead Sciences. The Motley Fool has a disclosure policy.