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Gilead (GILD) to Report Q3 Earnings: Is a Beat in the Cards?

·4-min read

Biotech major Gilead Sciences Inc. GILD is slated to report third-quarter 2021 results on Oct 28, after market close.

The company has an excellent track record, with earnings beating estimates in all of the last four quarters, the average beat being 6.10%. In the last reported quarter, the company beat expectations by 6.25%.

Gilead Sciences, Inc. Price and Consensus

Gilead Sciences, Inc. Price and Consensus
Gilead Sciences, Inc. Price and Consensus

Gilead Sciences, Inc. price-consensus-chart | Gilead Sciences, Inc. Quote

What Our Model Predicts

Our proven model predicts an earnings beat for Gilead this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for Gilead is +3.69%, as the Zacks Consensus Estimate is pegged at $1.72 and the Most Accurate Estimate is pegged at $1.78.

Zacks Rank: The company currently carries a Zacks Rank #3.

Factors at Play

A decline in HIV franchise sales due to the loss of exclusivity of Truvada and Atripla adversely impacted Gilead's top line in the second quarter. Sales from this franchise came in at $3.9 billion in the second quarter. The trend is likely to have continued in the third quarter as well. Flagship HIV therapy, Biktarvy, saw continued growth and gains in market share, despite the ongoing impact of the pandemic in the second quarter, and the trend is expected to have continued in the third quarter. Strong growth in Biktarvy sales might have somewhat offset the overall decline in sales in the quarter. Descovy sales increased in the previous quarter and a similar trend has most likely prevailed in the to-be-reported quarter. The Zacks Consensus Estimate for sales of Biktarvy and Descovy is pegged at $2.2 billion and $516 million, respectively.

Like the second quarter, HCV sales are likely to have increased in the third quarter driven primarily by improved market starts in the United States and Europe. Sales in the previous quarter increased 23% to $549 million.

Veklury sales contributed $829 million to the top line in the second quarter. Given the increasing vaccination rates and surge in sales of antibody treatments, sales of Veklury are likely to have declined or remained stable sequentially in the third quarter. The Zacks Consensus Estimate for Veklury sales is pegged at $502 million.

Cell Therapy product sales, which include Yescarta (axicabtagene ciloleucel) and Tecartus (brexucabtagene autoleucel), came in at $219 million in the previous quarter. Sales might have experienced a sequential increase, driven by label expansions. The Zacks Consensus Estimate for Yescarta sales stands at $192 million.

Trodelvy (for breast cancer) sales came in $89 million in the second quarter. The drug was added following the acquisition of Immunomedics by Gilead in 2020. Launch activities continued following the full FDA approval for second-line metastatic triple-negative breast cancer (mTNBC) and accelerated approval for metastatic urothelial cancer. Consequently, sales might have registered a sequential increase as demand is normalizing.

Operating expenses might have increased due to higher investments in the oncology program.

Other Pipeline & Regulatory Updates

Apart from the regular top and bottom-line numbers, we expect investors to focus on key pipeline updates.

In September 2021, Gilead submitted a supplemental biologics license application (sBLA) to the FDA for Yescarta (axicabtagene ciloleucel) to expand its current indication to include the treatment of adults with relapsed or refractory large B-cell lymphoma (LBCL) in the second-line setting.

Share Price Performance

Gilead’s stock has gained 19.1% in the year so far against the industry's decline of 10.3%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Other Stocks to Consider

Here are some other drug/biotech stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Regeneron Pharmaceuticals REGN has an Earnings ESP of +8.78% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkermes ALKS has an Earnings ESP of +56.52% and a Zacks Rank #1.

Eli Lilly and Company LLY has an Earnings ESP of +0.76% and a Zacks Rank #3.

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Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report

Eli Lilly and Company (LLY) : Free Stock Analysis Report

Alkermes plc (ALKS) : Free Stock Analysis Report

Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report

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