Gilead Sciences, Inc. (NASDAQ: GILD) stock fell 1.8% on July 26th, 2018 (as of 10:35 AM GMT-4; Source: Google finance) after the company announced that Chief Executive Officer John Milligan will step down at the end of the year, which is an abrupt departure from a drug company struggling with falling sales and profit as competition has taken a toll on sales of its hepatitis C drugs. The company has frequently faced criticism for the high prices of its HIV and hepatitis C drugs. GILD for the second quarter of 2018 has reported the net income of $1.8 billion compared to $3.1 billion in 2017. The company has delivered a very strong quarter driven by the performance of the HIV franchise with further stabilization in HCV and continued progress of the Yescarta launch.
Gilead Sciences in the second quarter of FY 18 has reported the adjusted earnings per share of $1.91, beating the analysts’ estimates for the adjusted earnings per share of $1.55. The company had reported 20.9 percent fall in the adjusted revenue to $5.65 billion in the second quarter of FY 18, beating the analysts’ estimates for revenue of $5.18 billion.
Moreover, HIV product sales for the second quarter were $3.7 billion, which is a growth of 13% year-over-year and 16% sequentially. The year-over-year increase was primarily due to the uptake of the Descovy-based regimen with a very strong contribution from Biktarvy in the U.S. The U.S. HIV business continues to be a major growth driver for the company, delivering 18% year-over-year revenue growth and 11% year-over-year prescription growth, which reflects the strong underlying demand for Descovy-based regimens. 70% of GILD’s total HIV treatment prescription volume was comprised of Descovy-based regimens. Further, GILD expects that Biktarvy will become the number one single tablet regimen for treatment-naïve patients and will overtake Genvoya as the most successful launch in HIV history.
Meanwhile, Genvoya remained the number one regimen for naïve and switch patients across the EU5 collectively for the fifth executive quarter. Biktarvy was approved in the EU toward the end of June and was immediately launched in Germany and a few other countries. The company believe Biktarvy will make significant contributions to the European revenues once pricing and reimbursement are achieved broadly, which can take up to 12 months.
As of June 30, 2018, Gilead Sciences had $31.7 billion of cash, cash equivalents and marketable securities compared to $32.1 billion as of March 31, 2018. During the second quarter of 2018, GILD has generated $1.6 billion in operating cash flow, including tax-related payments of $1.5 billion, and also paid cash dividends of $740 million and utilized $450 million on stock repurchases.