Gilead 2021 Forecast Buoyed by Remdesivir Covid-19 Therapy

(Bloomberg) -- Gilead Sciences Inc. reported a full-year forecast buoyed by a still-growing market for remdesivir, the Covid-19 antiviral treatment that it expects to generate as much as $3 billion in 2021.

Covid-related hospitalizations increased dramatically toward the end of 2020, boosting uptake of its drug, Chief Commercial Officer Johanna Mercier said in a Thursday call with investors. Half of hospitalized patients in the U.S. are getting the therapy, she said.

Gilead reported $1.94 million in fourth-quarter sales of remdesivir, marketed under the name Veklury. That easily outpaced the $1.45 billion average analyst estimate. Despite an influx of vaccines reaching the U.S. and beyond, Gilead continues to see long-term, sustained demand for the company's antiviral therapy.

The Foster City, California-based biotech expects 2021 earnings per share of $6.75 to $7.45, compared with the average analyst estimate of $6.77. Sales may top $23.70 billion to $25.10 billion, the company said; $2 billion to $3 billion of which it anticipates will come from remdesivir. Gilead also boosted its first-quarter dividend by 4.4%.

“We expect Veklury will remain a critical tool for patients and physicians well into the future,” Mercier said.

Gilead's shares rose as much as 2.5% in trading after the market closed. The stock has risen more than 12% this year through Wednesday's close.

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The intravenously-administered antiviral became the first Covid-19 medicine to get full U.S. approval late last year, based on a study showing hospitalized patients who got it recovered about five days faster. Gilead donated its first 1.5 million doses. Now, it charges $3,120 for the typical course of treatment.

Remdesivir utilization has doubled since last summer, according to CarePort Health, which collects hospital drug utilization from electronic health record companies across the country.

Still, investors have been skeptical that the antiviral will remain a source of sustained revenue. “As vaccinations increase, we believe Veklury sales will begin to decline, and we do not believe the drug will be a meaningful contributor to long-term growth,” said Ashtyn Evans, an analyst at Edward Jones, in a note to investors on Thursday.

Sales of the antiviral offset losses across the rest of the company's portfolio. Excluding remdesivir, Gilead's product sales decreased 7% in the fourth quarter and 3% for all of 2020 compared to the same periods in 2019.

The decline occurred largely because of the continued effects on the pandemic on its HIV and hepatitis C franchises, which generated $4.26 billion and $423 million in the fourth quarter, respectively.

The biotech's top executives repeatedly sought to pacify concerns about the underlying business during the Thursday call, suggesting they expect a rebound in the second quarter as vaccinations accelerate. New acquisitions could also help bolster the biotech, they said.

Gilead was an active deal maker in 2020, with a $21 billion dollar play for Immunomedics Inc., the maker of a promising breast-cancer therapy, and reaching bolt-on deals for Forty Seven Inc. and Germany's MYR GmbH. Still, investors are eager for more M&A.

“Despite the acquisitions, sales growth in the next several years will be difficult due to competition and pricing pressure in the hepatitis C and HIV markets,” Evans said.

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