Inside Gilead's Lackluster $7.2 Billion Q4 Earnings

In this clip from "The Pharma & Biotech Show" on Motley Fool Live, recorded on Feb. 2, Motley Fool contributor Brian Orelli analyzes Gilead's (GILD -0.47%) earnings report and discusses why the biotech giant could see fairly low revenue growth or even see earnings drop substantially.

Brian Orelli: Let's move into Gilead's earnings. They reported, fourth quarter 2021, revenue of $7.2 billion. That was down 2% year-over-year but that decrease was mainly due to Veklury, which is a COVID-19 treatment that still goes by the drug name of Remdesivir. Excluding Veklury, sales were up 8% year-over-year. It's not too bad. Biktarvy, which is a HIV drug, was up 22% year-over-year. Truvada was down 58% and Atripla was down 29%. Both of those were due to now having generic competition. The cell therapies, which are Yescarta and Tecartus, which they got from, what was the name of that company? I was going to go Juno (JUNO) but then Juno went to Celgene (CELG) that then went to Bristol-Myers Squibb (BMY 0.48%). Yescarta and Tecartus together, most of this is Yescarta sales, were up 47% year-over-year combined, but they are only doing $239 million combined. They're not quite even combined, they are not quite even a blockbuster yet, but they are certainly growing in the right direction. The GAAP earnings were down year-over-year. They had $1.25 billion charge related to a settlement with ViiV which is the HIV conglomerate that's owned mostly by GlaxoSmithKline (GSK -0.39%), but Pfizer (PFE 0.19%) has a stake in it and so does a Japanese drug maker as well. They all basically contributed their HIV drugs together to try to be able to compete with Gilead because Gilead has so many HIV drugs that they could make huge combinations. The GAAP earnings were also hurt by a $625 million charge for a payment to its collaborator, maybe it was last quarter and they paid it this quarter, Arcus Biosciences (RCUS -1.75%). Adjusted earnings, which they don't adjust for those two things, but they were still down year-over-year at $1.87 versus $2.19 a year ago. But, the company is still generating quite a bit of cash flow. Its operating cash flow was $3.2 billion. They gave 2020 guidance. Sales were $23.8 billion to $24.3 billion, and that compares to $27 billion, but that's, again, Veklury is going to go down they are expecting. Without Veklury, they're looking for growth of 1.8% to 4.2%. I know that's not really anything to get excited about, I don't think. Adjusted earnings-per-share for the year are expected to come in at $6.20 to $6.70. That's down from the $7.28 that they had this year. They're going to have fairly low revenue growth and that's going to result in not so great earnings or earnings dropping substantially.