Surprisingly strong hepatitis C virus (HCV) sales helped Gilead Sciences (NASDAQ:GILD) enjoy better-than-expected results when the big biotech provided its second-quarter update in July. But that didn't mean that the company had turned the corner with its struggling HCV franchise.

Gilead demonstrated that its HCV woes haven't gone away when the company announced its third-quarter results after the market closed on Thursday. The song remained pretty much the same as previous quarters this year. Here are the highlights. 

Two scientists looking at a computer monitor

Image source: Getty Images.

Gilead Sciences results: The raw numbers


Q3 2017 

Q3 2016 

Year-Over-Year Change


 $6.5 billion  $7.5 billion


Net income from continuing operations

 $2.7 billion  $3.3 billion


Adjusted EPS

 $2.27  $2.75


Data source: Gilead Sciences.

What happened with Gilead Sciences this quarter?

Just like the first and second quarters, Gilead's worst news in the third quarter came from its HCV franchise. Sales for Harvoni fell to $973 million, nearly halved from the prior-year period. Gilead's first big HCV drug, Sovaldi, experienced an even greater decline: Sales plunged 73% year over year to $219 million.

There were a couple of bright spots in Gilead's HCV lineup, though. The company reported third-quarter sales for Epclusa of $882 million, up 38% from the same period in 2016. Also, newly approved HCV drug Vosevi generated revenue of $123 million.

Gilead's best news came from its TAF-based HIV drugs. Sales for Genvoya more than doubled year over year to $988 million. Descovey contributed $316 in revenue during the third quarter, a 259% increase from the prior-year period. Sales for Odefsey came in at $296 million, nearly triple the level a year ago.

However, Gilead's older HIV drugs didn't fare so well. Revenue from Truvada slipped 5% year over year to $811 million. The company reported sales for Atripla of $439 million, roughly one-third below the amount from the third quarter of 2016. Viread's revenue slipped nearly 10% to $274 million. Sales for Complera/Eviplera were $237 million, just over half the level from the prior-year period. Stribild took the biggest hit, with sales sinking 63% year over year to $229 million.

Most of Gilead's other drugs didn't see big changes one way or the other in the third quarter. The most significant of these, pulmonary arterial hypertension drug Letairis, generated revenue of $213 million in the third quarter, slightly lower than the $215 million recorded in the prior-year period.

Of course, Gilead's biggest news during the third quarter stemmed from its August announcement that it was acquiring Kite Pharma for $11.2 billion. The deal closed earlier this month.

Looking forward

Don't expect any of the third-quarter trends to change much in the fourth quarter. Gilead announced revised guidance for full-year 2017. The company expects net product sales between $24.5 billion and $25.5 billion for the full year. That translates to fourth-quarter sales of around $5 billion -- another hefty decline. The good news, though, is that Gilead anticipates non-HCV sales of $16 billion to $16.5 billion for the year, up from its previous guidance of $15.5 billion to $16 billion.

The HCV franchise will continue to generate nice cash flow for Gilead, but its future lies in other areas. While newer HIV drugs are performing very well, the key thing to watch for the company in the indication is its bictegravir combo. The Food and Drug Administration is scheduled to make an approval decision on the combo by Feb. 12, 2018. Bictegravir is the most important asset that helped Gilead's pipeline rank No. 4 in the biopharmaceutical industry in EvaluatePharma's analysis earlier this year.

Gilead's launch of Yescarta, which won FDA approval just over a week ago, will also be enormously important. The CAR-T therapy was the main reason Gilead bought Kite and represents a great opportunity for the big biotech.  

One other thing to watch is what Gilead does with its growing cash stockpile. At the end of the third quarter, the company had $41.4 billion of cash, cash equivalents, and marketable securities. Remember, that's after using some cash to buy Kite. There could be more acquisitions in Gilead's near future.