(Bloomberg) -- Gilead Sciences Inc. shares slipped after the biotechnology giant issued a disappointing sales outlook for drugs that once helped drive its profits.
Product sales for 2018 will be $20 billion to $21 billion, the company said in a statement on Tuesday. That's below the $21.3 billion analysts were expecting, according to Barclays Plc.
Shares fell 1.6 percent to $79.06 at 5:31 p.m. in late trading in New York.
Gilead has been working to diversify its pipeline as sales of its blockbuster hepatitis C drugs begin to fade. The treatments brought in $9.1 billion in 2017, but demand has steadily declined as the easiest-to-find patients have received treatment. Gilead expects 2018 hepatitis C sales to be $3.5 billion to $4 billion, according to a slide presentation for investors -- well short of the $5.45 billion average of analyst expectations compiled by Bloomberg.
The Foster City, California-based drugmaker is looking for growth from new disease areas such as cancer and NASH, a liver condition. In October, it acquired Kite Pharma Inc., venturing into the highly competitive cancer field with a technology that is both innovative and extremely complex.
Kite's first approved treatment, Yescarta, had $7 million in sales in the fourth quarter. Gilead now has 28 centers certified to treat patients with the therapy, known as CAR-T, and sees a “slowly growing momentum” in patient enrollment at those locations, Chief Executive Officer John Milligan said in a conference call on Tuesday.
Gilead will continue to seek out technologies that can expand its presence in CAR-T, said Milligan, including ways to go after solid tumors and methods to lessen the side effects of the treatment.
While Gilead won't reap as much of a benefit from the tax overhaul as some of its biotechnology peers, it does expect a lower tax rate of 21 percent to 23 percent in 2018, according to the statement.
Fourth-quarter earnings were $1.78 per share, topping analysts' expectations of $1.67 per share. Revenue also beat expectations, with top hepatitis C treatment Harvoni bringing in $644 million.
To contact the reporter on this story: Caroline Chen in San Francisco at cchen509@bloomberg.net.
To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy Annett, Mark Schoifet
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