Earnings Results: Gilead stock rallies as it reports $1.9 billion in sales for its COVID-19 drug in Q4

It made up 25% of Gilead’s GILD, +2.03% total revenue in the final three months of the year. In total, Veklury brought in a total of $2.8 billion since it received emergency use authorization as a COVID-19 treatment in May.

Last spring, the authorization was cheered by a medical community that had few options to treat severely ill COVID-19 patients. In the days leading up to and after the emergency authorization was announced, Gilead’s stock hovered around $80. It has since dropped to the mid-60s, closing at $65.83 on Thursday, as excitement around the drug has waned.

The World Health Organization said Nov. 20 that it recommended against treating hospitalized COVID-19 patients with the drug, saying research, including its own, did not indicate that it “improves survival and other outcomes in these patients.”

However, Gilead CEO Daniel O’Day said Thursday in a news release that Veklury is being used to treat one of out every two hospitalized COVID-19 patients in the U.S.

Gilead had earnings of $1.5 billion, or $1.23 per share, in the fourth quarter of 2020, compared with $2.7 billion, or $2.12 per share, in the same quarter a year ago. It had adjusted earnings per share of $2.19, against a FactSet consensus of $2.04.

Gilead said revenues were $7.4 billion for the quarter, up from $5.9 billion in the fourth quarter of 2019. The FactSet consensus was $7.1 billion.

The company’s bellwether HIV portfolio continues to be driven by sales of newer therapies like Biktarvy, which saw sales increase to $2.1 billion in the fourth quarter of 2020, up from $1.5 billion in the same period a year ago. But its overall HIV business saw a 7% decline in sales in the fourth quarter, to $4.2 billion in Q4 of 2020, compared with $4.5 billion in Q4 of 2019.

Analysts said they were less focused on the company’s fourth-quarter results, given that executives had already shared some details about fourth-quarter sales at the virtual J.P. Morgan Health Care Conference in January. At that time, Gilead updated its guidance for 2020 based on unexpectedly higher product sales during the final quarter of the year.

What they were looking for, however, are hints at Veklury utilization in 2021 and sales expectations for Trodelvy, the company’s breast-cancer drug that received approval from the Food and Drug Administration last April. It gained the rights to Trodelvy through its $21 billion acquisition of Immunomedics Inc. in September.

Trodelvy generated $64.0 million in sales in the fourth quarter of 2020 and $137 million over 12 months. (About $49 million of that is counted on Gilead’s balance sheet since the Immunomedics deal closed during the fourth quarter of the year.)

“One thing we are keenly interested in is how Gilead plans to convey its longer-term growth outlook to investors,” Mizuho Securities analyst Salim Syed wrote in a Feb. 2 note to investors.

Gilead provided “strong” guidance for 2021, according to RBC Capital Markets’ Brian Abrahams. The company said it expects total product sales of $23.7 billion to $25.1 billion, including Veklury sales of $2.0 billion to $3.0 billion, and adjusted EPS of $6.75 to $7.45. The drug maker also noted that it expects to see a gradual recovery from the dynamics of the pandemic in the second quarter of 2021.

“Veklury should provide another year of cash flow and earnings boost to enable the oncology franchise to further mature as a [long-term] growth engine,” Abrahams told investors on Thursday. “We continue to believe their HIV durability and oncology optionality are undervalued in shares.”

Gilead’s stock is down 2.6% over the past 12 months, while the S&P 500 SPX, +1.09% has gained 17.9%.