Healthcare stock under pressure: Gilead Sciences, Inc. (NASDAQ: GILD)

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Gilead Sciences, Inc. (NASDAQ: GILD) stock lost over 4.6% on 25th October, 2019 (as of 12:31 pm GMT-4; Source: Google finance) after the company posted mixed results for the third quarter of FY 19

The sales of cancer cell therapy Yescarta fell slightly from the previous quarter. GILD reported the net loss for the third quarter of 2019 of $1.2 billion, compared to net income of $2.1 billion for the same period in 2018. This is due to the inclusion of up-front collaboration and licensing expenses of $3.92 billion that is occurred due to GILD’s global research and development collaboration agreement with Galapagos NV.

Moreover, at the end of September, 2019, Gilead had generated $25.1 billion of cash, cash equivalents and marketable debt securities, versus $31.5 billion at the end of December, 2018. During the third quarter of 2019, GILD has generated $2.6 billion in operating cash flow, paid $5.05 billion as per the global research and development collaboration agreement and stock purchase agreement with Galapagos (cash flows from investing activities), had repaid debt of $1.5 billion, paid cash dividends of $804 million and used $223 million on stock repurchases. The company has  also paid $1.5 billion of debt required to finance the acquisition of Kite.

GILD in the third quarter of FY 19 has reported the adjusted earnings per share of $1.75, beating the analysts’ estimates for the adjusted earnings per share of  $1.74, according to IBES data from Refinitiv. The company had reported flat adjusted revenue of $5.6 billion in the third quarter of FY 19, which is as per the analysts’ estimates for revenue of $5.6 billion. During the quarter the HIV drugs sales rose to $4.2 billion from $3.7 billion a year earlier. Sales of Yescarta, which is a part of a new class of therapies that require altering immune system cells to fight cancer, had totaled $118 million, fallen short of analyst expectations, and down 2% from the second quarter.

Additionally, for the third quarter, product sales for the third quarter rose 1% to $5.5 billion. In the US it is up 2% to $4.2 billion and in Europe it has fallen by 8% to $804 million.

The company has narrowed its full-year 2019 sales outlook to be now in the range of $21.8 billion and $22.1 billion from a previous $21.6 billion to $22.1 billion.

Meanwhile, the company intends to increase the cell therapy manufacturing capabilities with a new 67,000-square-foot viral vector facility in Oceanside, California.

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