Gilead Sciences' (GILD 1.51%) executives had predicted in recent quarters that the big biotech would return to growth in 2019 after a "trough year" in 2018. But the company's guidance for full-year 2019 provided in February raised concerns that growth was really in store this year.
Those concerns can be laid to rest, at least for now. Gilead announced its 2019 first-quarter results after the market closed on Thursday. And just as predicted, the company returned to growth on both the top and bottom lines for the first time in quite a while. Here are the highlights from Gilead's first-quarter update.
Gilead Sciences results: The raw numbers
|$5.28 billion||$5.09 billion||
Net income from continuing operations
|$1.97 billion||$1.54 billion||
Adjusted earnings per share (EPS)
What happened with Gilead Sciences this quarter?
Gilead's first-quarter revenue growth came in the same way the company delivered growth for much of its history -- soaring HIV sales. The biotech reported that HIV franchise sales jumped 14% year over year, to $3.6 billion. As expected, Biktarvy led the way with sales of $793 million in the first quarter, up from $35 million from the prior-year period.
But Biktarvy pretty much had to carry the rest of Gilead's HIV franchise on its shoulders. Sales for the company's older HIV drugs Atripla, Complera/Eplivera, Stribild, and Truvada declined year over year. Gilead's relatively newer HIV drugs Descovey and Genvoya also saw sales slip a bit from the prior-year period. Odefsey and Symtuza (for which Gilead receives revenue from its partner Johnson & Johnson) were the only HIV drugs in the biotech's lineup to join Biktarvy in achieving year-over-year sales growth.
Cancer drug Yescarta picked up solid momentum in the first quarter. Sales for the cell therapy increased 19% from the prior-year period, to $96 million.
Perhaps the most welcome news in the quarter came from Gilead's long-suffering hepatitis C virus (HCV) franchise. While the company's HCV revenue fell more than 24% year over year, to $790 million, the total was higher than the $738 million reported in the fourth quarter of 2018.
However, the HCV bounce could be only a temporary one. Gilead attributed the sequential bump to four things:
- The timing of a Department of Corrections order
- Wholesaler inventory stocking of its new authorized generic drugs
- Higher patient starts in Asia
- An unfavorable accounting adjustment in Europe for the fourth quarter of 2018
Gilead's revenue growth was one key factor in the company's solid bottom-line performance in the first quarter. The company also benefited from lower cost of goods sold and reduced income taxes in the quarter, as compared to the prior-year period. Gilead's GAAP earnings gains looked better than its adjusted non-GAAP numbers, though, primarily because the company recorded a larger hit from unrealized gains from equity securities in the first quarter than it did in the year-ago period.
With Gilead posting solid revenue and earnings numbers, you might have expected the company to boost its full-year 2019 guidance. That didn't happen, though. Gilead reaffirmed its previous full-year outlook of product sales between $21.3 billion and $21.8 billion.
Investors can look forward to several upcoming developments for the biotech. Gilead expects to launch Biktarvy in Italy and the United Kingdom around mid-2019. The company hopes to win U.S. Food and Drug Administration (FDA) approval for Descovey as a PrEP (pre-exposure prophylaxis) treatment for HIV in the fourth quarter of 2019. And Gilead anticipates filing for European approval of filgotinib in treating rheumatoid arthritis in the third quarter of this year.
It's still too soon to know if Gilead can truly return to sustained growth in 2019. The good news, though, is that the company has definitely gotten off to a good start to achieving its goal.