By Sarah Roden
Gilead Sciences (GILD, Financial) released first quarter 2015 earnings on April 30. High revenues pointed to the success of Gilead’s blockbuster hepatitis C therapies; Sovaldi and Harvoni.
Analysts had estimated that Gilead would post diluted earnings per share of $2.32 for the quarter on a non-GAAP basis, but Gilead beat expectations by posting $2.94 per share. This figure nearly doubled from $1.48 in the same quarter of last year. Gilead substantially beat the analyst revenue estimate of $6.89 billion and posted nearly $7.6 billion in quarterly revenue, marking over a 50% year-over-year increase. Sales derived from Harvoni and Sovaldi totalled more than half of total quarterly revenue at $4.55 billion. Gilead noted that 90,000 patients in the U.S. and E.U. initiated treatment on Sovaldi or Harvoni. This comes after controversy over the high price tag of the regimes as people protested the $1,000 per pill price tag of Sovaldi.
Looking forward, Gilead provided revised guidance for full-year 2015 net product sales between $28 million and $29 million, marking a $2 billion increase from prior guidance. Gilead also declared its first quarterly cash dividend of $0.43 per share of common stock.
Analysts were overwhelmingly bullish on Gilead following the quarterly report.
According to Smarter Analyst, Alan Carr of Needham reiterated a Buy rating on Gilead following the quarterly report and maintained a price target of $120. Carr noted Harvoni’s strong performance, which he expects to continue in the EU and Japan. Carr also commented on GS-5816 testing, a hepatitis C drug in Gilead’s pipeline, noting that top-line results for the drug are expected in 3Q15 and a New Drug Application should be submitted in 4Q15.
Alan Carr has rated Gilead 15 times since February 2012, earning an 87% success rate recommending the stock with a +51.3% average return per GILD recommendation. Overall, Carr has a 72% success rate recommending stocks with a +39.1% average return per rating.
Separately, Geoff Meacham of Barclays maintained an Overweight rating on Gilead following the earnings report with a $125 price target. Meacham noted Harvoni’s strong performance and added that Gilead’s “strong 1Q performance was differentiated versus large cap biotech peers.” Though many analysts are worried about the decreasing market for hepatitis C and pricing competition from other drugs, Meacham acknowledged that while “hep C discounts may increase over 2015, we view the 46% gross-to-net guidance as a worst case scenario and expect the conversation to increasingly focus on broader patient access – which is just beginning to play out.” The analyst assured that Gilead will maintain leadership in hepatitis C therapies, despite competition. Furthermore, Meacham expects “Gilead to continue to innovate and raise the bar in hep C with a pangenotypic regimen and a shorter duration of therapy.”
Geoff Meacham has rated Gilead 6 times since September 2012, earning an 83% success rate recommending the stock with a +40.3% average return per GILD recommendation. Overall, Meacham has a 78% success rate recommending stocks with a +29.7% average return per rating.
On average, the top analyst consensus for Gilead on TipRanks is Moderate Buy.
