Gilead Sciences Inc. shares erased a decline as a strong quarterly performance more than offset a lower profit outlook amid litigation costs. The stock rose as much as 1.2%.
In June, a California jury found that Gilead and Teva Pharmaceutical Industries Ltd. didn’t engage in an anticompetitive conspiracy to delay generic versions of the HIV drugs. However, before the case went to trial, the companies reached a last-minute deal with major pharmacy chains and direct purchases. Gilead paid $525 million in settlements, according to a second-quarter earnings release, which shaved 32 cents off of per-share earnings.
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For the full year, Gilead now expects adjusted earnings will be $6.45 to $6.80 a share, down from earlier guidance of $6.60 to $7. Adjusted earnings for the second quarter were $1.34 a share, the Foster City, California-based drug company said in a statement, below analysts’ average estimate of $1.64.
Chief Executive Officer Daniel O’Day said the earnings cut was almost completely due to the litigation.
“The business is performing well on a consistent basis,” he said in an interview. “There’s a lot to look forward to in the second half of the year.”
Revenue was $6.6 billion in the quarter, above the average Wall Street estimate of $6.44 billion. The Foster City, California-based drug company raised its revenue forecast for the year as sales of its HIV therapies and cell therapy products rose more than expected.
Analysts are particularly interested in the progress of Gilead’s cancer drugs, including CAR-T therapies and other medicines, that are anticipated to see significant sales growth over the next few years. Trodelvy, a drug approved in the US for some breast and bladder cancers, brought in $260 million, beating analysts’ average estimate of $242 million.
The company also sells the Covid-19 treatment Veklury, or remdesivir, which has been used less in recent months as hospitalizations have fallen. Total sales in the quarter were $256 million, well below the average estimate of $359 million. The company is also recruiting patients for two late-stage trials of an oral Covid antiviral.
--With assistance from Ike Swetlitz.
(Updates with share move in first paragraph.)