By Maria Armental and Joseph Walker
Gilead Sciences Inc.'s revenue rose 17% in the third quarter, helped by sales of its antiviral drug remdesivir that has become a standard treatment for hospitalized Covid-19 patients.
Yet sales of the company's other drugs were hurt by pandemic-related shutdowns. And the company dialed back its forecast for overall revenue this year because of lower-than-expected hospitalization rates of Covid-19 patients.
Remdesivir, which sells under the brand name Veklury, brought in $873 million in sales in the latest quarter, beating analysts' estimates of $771.7 million, according to FactSet. The drug has been approved in the U.S. to treat patients 12 years and older who require hospitalization for the disease caused by the new coronavirus.
A study paid for by the National Institute of Allergy and Infectious Diseases found the drug helped speed recovery times in hospitalized Covid-19 patients. Remdesivir was administered to President Trump as part of his Covid-19 treatment regimen.
California-based Gilead lowered the high end of its expectations for Veklury sales this year because of fewer hospitalizations related to Covid-19. The company didn't disclose revenue guidance for the drug, but said that a $1.5 billion reduction in the high-end of its 2020 revenue outlook was primarily due to its revised view of Veklury.
Hospitalization rates in the second quarter were around 12% to 15%, and dropped closer to 5% around the start of the third quarter, said Johanna Mercier, Gilead's chief commercial officer, on a conference call with analysts to discuss the quarter.
Gilead on Wednesday said it now projects $23 billion to $23.5 billion in product sales for the year, down from its earlier view of $23 billion to $25 billion, which the company said reflected the progression of the pandemic. Gilead said that AmerisourceBergen Corp. would remain the sole U.S. distributor of remdesivir through the end of 2020 and that it would sell the drug directly to hospitals.
Gilead shares fell 1.5% in after-hours trading.
Chief Executive Daniel O'Day said he expected that Veklury will continue to play a role in treating Covid-19 patients even as more new treatments and vaccines are approved.
"We do feel very strongly that Veklury will contribute to our overall sales, be an important source of cash for our business and allow us to pay down debt," Mr. O'Day said on the analyst call.
Gilead said the pandemic and associated shutdowns weighed on sales of its hepatitis C and HIV-prevention medicines in the quarter. Gilead expects its portfolio of HIV treatments for infected patients to remain largely unaffected by the pandemic.
Widespread vaccinations for Covid-19 may not be available until late 2021, and the pandemic may continue to affect Gilead's business into next year and possibly afterward, said Gilead Chief Financial Officer Andrew Dickinson on the analyst call.
The company said it expects its core business to gradually recover in the fourth quarter and into the first half of 2021 and that acquisition of Immunomedics Inc. should immediately add to revenue growth. Immunomedics's Trodelvy is among the brightest cancer-drug prospects, showing signs of success in treating lung and other cancers.
The Immunomedics acquisition has "effectively transformed our near- and long-term growth story," Mr. O'Day said.
The biopharmaceutical company said it now expects $10.7 billion to $11.2 billion in operating profit for the year, compared with its earlier view of $10.7 billion to $13 billion.
Gilead swung to a third-quarter profit of $360 million, or 29 cents a share, from a $1.17 billion loss a year earlier. Last year's quarterly result included upfront collaboration and licensing expenses of $3.92 billion, or $2.40 a share, related to Gilead's global research and development collaboration agreement with Galapagos NV. On an adjusted basis, profit for the September quarter was $2.11 a share.
Revenue rose to $6.58 billion from $5.6 billion a year earlier.
Analysts surveyed by FactSet expected a profit of $1.33 a share, or $1.90 a share as adjusted, on $6.3 billion in revenue.
Company officials had said that pandemic-related disruptions to routine health care had lowered sales and the number of new patients starting taking some of its drugs, including its antiviral drug Biktarvy and its prophylactic treatment Descovy, which can prevent new HIV infections.
Sales of Biktarvy rose 50% to $1.89 billion in the third quarter, while Descovy sales climbed 40% to $508 million.
Write to Maria Armental at firstname.lastname@example.org and Joseph Walker at email@example.com
(END) Dow Jones Newswires