Gilead Sciences Q2 Profit Down; Lifts FY Adj. Profit, Total Product Sales Outlook

Gilead Sciences Inc. (GILD) reported that its second quarter net income attributable to the company declined to $1.14 billion or $0.91 per share from $1.52 billion or $1.21 per share last year. The decrease was primarily due to higher acquired in-process research & development expenses from an upfront payment of $300 million, or $0.18 on a post-tax per share basis, related to the Dragonfly Therapeutics Inc. collaboration and higher net unrealized losses from strategic equity investments.

Quarterly non-GAAP earnings per share decreased 13% to $1.58 from $1.81 last year, primarily reflecting the Dragonfly upfront payment and Biktarvy-related royalty expense that began in the first quarter of 2022, offset partially by higher revenues. Analysts polled by Thomson Reuters expected the company to report earnings of $1.53 per share for the second quarter. Analysts' estimates typically exclude special items.

Total revenue for the second quarter 2022 increased 1% to $6.3 billion from the prior year, primarily due to increased sales in HIV and oncology products, offset partially by decreased sales of Veklury (remdesivir) and hepatitis C virus or "HCV" products. Analysts expected revenue of $5.85 billion for the second quarter.

HCV product sales decreased 18% to $448 million in the second quarter of 2022 compared to the same period in 2021, primarily driven by channel mix leading to lower average realized price and fewer patient starts.

For the full-year, the company now expects earnings per share to be in the range of $2.90 - $3.30, compared to the prior outlook of $3.00 - $3.50.

The company now expects annual non-GAAP earnings per share to be between $6.35 and $6.75, compared to the prior estimation of $6.20 and $6.70. Analysts expect annual earnings of $6.57 per share.

The company now anticipates annual total product sales to be between $24.5 billion and $25.0 billion, compared to the previous outlook of $23.8 billion - $24.3 billion. Analysts expect revenue of $24.57 billion for the year.

Annual total product sales, excluding Veklury, is expected to be between $22.0 billion to $22.5 billion, compared to the prior outlook of $21.8 billion and $22.3 billion.

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