(Bloomberg) -- Gilead Sciences Inc. had a mixed bag of news in its earnings release, with better-than-expected sales of its Covid treatment Veklury and a $2.7 billion impairment charge tied to its 2020 acquisition of Immunomedics.
- The company said it brought in $6.6 billion in first-quarter revenue, which topped the average analyst estimate of $6.2 billion. Earnings per share excluding some items were $2.12, above Wall Street expectations of $1.82.
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Key Insights
- Gilead raised eyebrows in 2020 when it agreed to buy Immunomedics for about $21 billion, a substantial premium for a company that was developing a promising breast-cancer therapy. That drug, Trodelvy, has since had mixed study results and some analysts have questioned whether it will have a clinically meaningful benefit for patients with a common type of breast cancer.
- Chief Financial Officer Andy Dickinson said in an interview that the impairment charge was related to uncertainty about the timing of expanded regulatory approval for Trodelvy. The drug is currently cleared for a less-common type of breast cancer and advanced bladder cancer.
- Revenue from Veklury clocked in at $1.5 billion for the first quarter, exceeding fourth-quarter sales and topping the average analyst estimate of $1.1 billion.
- Veklury sales have fallen in the U.S. in the last eight weeks as Covid-19 hospitalizations have fallen, Dickinson said. Gilead doesn't expect to see another surge of the virus so it isn't updating its full-year forecast for the drug, Dickinson said. The company also left unchanged its guidance for 2022 product sales of $23.8 billion to $24.3 billion.
Market Performance
- Shares of the Foster City, California-based company fell 0.9% in extended trading at 4:23 p.m. in New York. Through Wednesday's close, the stock had fallen 15% to start the year compared with a 10% drop in the S&P 500 Index.
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