Gilead Sciences' (GILD 0.10%) last quarterly earnings update in February sounded kind of like a broken record. The news in the fourth quarter of 2017 was very similar to Gilead's results for earlier quarters in the year.

The big biotech will provide an update on its first-quarter performance on Tuesday, May 1, 2018. Will there be more of the same old story or some new twists? Here's what you can expect with Gilead's Q1 earnings results.

Scientist wearing safety glasses and mask with hand holding beaker in front of him overlaid on images of chemical structures and periodic table

Image source: Getty Images.

1. A nice jump in HIV sales

The primary bright spot for Gilead in 2017 was its HIV franchise. Gilead claimed seven blockbuster HIV drugs, with one not far away from the $1 billion sales level. While first-quarter sales for the company's older HIV drugs like Truvada and Atripla will probably continue to drop, Gilead's newer TAF-based drugs should more than offset those declines.

Expect Genvoya to remain the No. 1 seller in Gilead's lineup. However, Genvoya's reign probably won't last very much longer. The Food and Drug Administration (FDA) approved Biktarvy in February. Market research firm EvaluatePharma projects that Biktarvy will be the biggest new drug launched in 2018. Although Gilead won't have a full quarter's worth of sales for the new drug in its Q1 update, Biktarvy likely got off to a great start.

Meanwhile, the growth for Genvoya, Descovy, and Odefsey should keep going for a while. Overall, my view is that Gilead's HIV franchise will enjoy a meaningful jump in year-over-year sales on the continued strength of these three TAF-based drugs plus the introduction of Biktarvy.  

2. A slowing rate of decline in HCV sales

Gilead's hepatitis C virus (HCV) franchise has been like a dark cloud looming over the biotech. The company's CEO, John Milligan, said in the Q4 earnings conference call in February that as Gilead enters 2018, "the market dynamics of HCV are stabilizing." Will we see that stabilization in the first quarter? Probably not. But there could be a hint that it's on the way.

There are two components to Gilead's HCV sales: the number of new patient starts and Gilead's market share. The bad news is that the number of new patient starts almost certainly will continue to fall in the first quarter. More bad news is that Gilead is likely to continue losing some market share to AbbVie's Mavyret in Q1.

However, the good news is that the rate of the decline in the number of new patient starts is slowing. I suspect that could make a bigger impact on Gilead in the first quarter than lost market share to AbbVie.

Even better news could be on the way. Milligan thinks that Gilead's HCV franchise, led by Epclusa, should stabilize its market share by the middle of 2018. If that happens, it could position the company to return to revenue and earnings growth by the end of the year.

3. A little help from Uncle Sam

Gilead Sciences actually posted a net loss in the fourth quarter of 2017. It wasn't a cause for alarm, though. The loss stemmed from a $5.5 billion one-time charge related to the U.S. tax reform legislation passed late last year. With that tax hit out of the way, Gilead will now receive a little help from Uncle Sam.

In 2017, Gilead's effective tax rate stood at 24.5%. Beginning in the first quarter of this year, the company expects its effective tax rate to be reduced to between 21% and 23%. The midpoint of that guidance reflects a tax reduction of 2.5%. That might not seem like much at first glance, but considering that Gilead should report earnings before taxes of well over $2 billion, 2.5% can add up to a nice extra amount of money added to the company's bottom line.

Perhaps more important, though, is that Gilead plans to move around $28 billion that has been parked overseas to the U.S. this year. We'll soon know how much of that amount was repatriated in Q1. Ready access to this cash could prime the pump for Gilead to make more acquisitions in 2018.

What not to expect

What shouldn't you expect from Gilead in its Q1 update? I wouldn't count on any new information about potential deals. Although executives have stated they're interested in more acquisitions and partnerships, there have been no indications that any deals are on the table.

Don't expect a significant contribution from one prize from an already-completed acquisition, either. Gilead picked up Yescarta with the Kite buyout last year. The CAR-T therapy won FDA approval soon afterward. However, the launch of Yescarta was expected to be quite slow due to the complexities associated with CAR-T treatment. I doubt the drug will even merit a line item in Gilead's Q1 earnings release.

There also probably won't be much, if any, new information on Gilead's pipeline beyond what has already been shared. However, you can bet that Gilead will focus a lot on its promising immunology candidate filgotinib and its non-alcoholic steatohepatitis (NASH) program, especially selonsertib. These drugs won't have any impact on Gilead's first-quarter results, but they could be critical to the biotech's future.