Gilead Sciences (NASDAQ:GILD) made headlines in recent days after the company announced that it was working with Chinese authorities to test its Ebola drug remdesivir in treating the deadly coronavirus strain that has become an epidemic. But that wasn't the biggest news for Gilead this week.

The big biotech reported its 2019 fourth-quarter and full-year results after the market closed on Tuesday. Here are three important things to know about Gilead's Q4 update.

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Image source: Getty Images.

1. Better-than-expected revenue

Gilead endured a long stretch where its revenue declined quarter after quarter. That wasn't the case in Q4, though. The company reported Q4 revenue of $5.9 billion, up from $5.8 billion in the prior-year period. This result even topped the consensus Wall Street revenue estimate of $5.71 billion.

Sure, Gilead's hepatitis C virus (HCV) franchise continued to weigh on the company's total revenue. HCV sales fell nearly 19% year over year in the fourth quarter to $630 million. But the quarter-over-quarter decline of only 6.5% wasn't too bad considering what Gilead has experienced in the past.

The biggest bright spot for Gilead yet again was its HIV franchise. HIV sales jumped 12% year over year in Q4 to $4.6 billion, with Biktarvy leading the way with sales of $1.57 billion. Although Descovy was the only other HIV drug in Gilead's lineup to deliver sales growth, the combination of it and Biktarvy were more than enough to offset declining sales for Truvada, Genvoya, and other HIV drugs.

Yescarta didn't pick up much momentum in Q4, though. Sales rose nearly 51% year over year in the fourth quarter to $122 million, but that was only slightly above the $118 million recorded in the third quarter.

2. A big earnings miss

While Gilead topped Wall Street's Q4 revenue estimate, it was a different story on the bottom line. The biotech posted adjusted earnings of $1.7 billion, or $1.30 per diluted share. This result was lower than the $1.9 billion, or $1.44 per diluted share, generated in the prior-year period. It was also well below the average analysts' Q4 earnings estimate of $1.67 per share.

Gilead's earnings based on generally accepted accounting principles (GAAP) looked much better, though. The company reported GAAP earnings of $2.7 billion, or $2.12 per share, up significantly from GAAP earnings of only $3 million in the prior-year period. However, this big improvement stemmed mainly from some positive tax effects from accounting moves related to asset transfers and net gains from equity securities.

Analysts probably weren't too bothered by Gilead's big adjusted earnings miss. It's possible that they didn't factor in some of the company's acquisition-related expenses.

3. Lackluster 2020 guidance

Gilead provided what could be described as lackluster full-year 2020 guidance. The company projects product sales to be between $21.8 billion and $22 billion. The midpoint of that range is lower than the $22.1 billion in product sales generated in the full year 2019.

Non-GAAP adjusted earnings per share (EPS) for full-year 2020 are expected to be between $6.05 and $6.45. The midpoint of this range is well below the consensus Wall Street adjusted EPS estimate for 2020 of $7.01.

At first glance, it might also appear that Gilead's adjusted EPS will decline from its full-year 2019 level. However, beginning this year, the company isn't excluding stock-based compensation expense from its non-GAAP figures. On an apples-to-apples basis, Gilead's adjusted EPS outlook for 2020 reflects a year-over-year increase of 2% at the midpoint of the guidance range.

The bigger picture

If I had to sum up Gilead's fourth-quarter results in one word, it would probably be "blah." There simply was nothing in the company's update to excite investors.

However, pipelines are more important to the prospects for biotech stocks than past quarterly results. Gilead could generate more excitement later this year if it wins FDA approval for immunology drug filgotinib in treating rheumatoid arthritis (RA). Some analysts think filgotinib could achieve peak annual sales in the ballpark of $6 billion if approved for RA and other targeted immunology indications.

Gilead also ended 2019 with cash, cash equivalents, and marketable debt securities totaling $25.8 billion. That's a big cash stockpile the company could use to bolster its pipeline. The company is also putting its ample cash flow to use in another way that should delight investors -- its dividend. Gilead announced an 8% dividend increase beginning in the first quarter of 2020.