Gilead Sciences (NASDAQ:GILD)
Shares of GILD have been under pressure over the past month after the stock tested and closed back below its 200 day moving average. Since then, shares have slipped roughly 17% and hovering just above a 2 year low. Can GILD get back on track into the second half of the year or will it be even further off into 2017?
GILD Analyst Expectations
Analysts at Leerink Partners had the following comments on the outlook for GILD.
Gilead’s US HCV Price Erosion Seems Likely to Continue Through 2016; Near-Term Strong Competitive Position, Volume Only Partially Offsets Discounting, Mix, Market Effects. Given that Gilead has one of the most dominant franchises in recent industry history, GILDs investors and analysts experienced a rude awakening (as apparently did Gilead’s management) when the company disclosed softening HCV sales in Q1 2016 based on growing rebates, more government purchases, and shorter treatment duration. Reported total HCV revenue declined by 12% compared to Q4 and by 6% compared to Q1 2015. These results were largely driven by the US (-13% QoQ and -40% YoY), where a 13% sequential increase in patient starts could not offset eroding revenue yield per patient. This was consistent with our cautious views on this franchise, but occurred sooner and to a greater degree than we had anticipated.
In todays note, we use Gileads disclosure and commentary and updated IMS data to reestimate HCV product sales for the company for the remaining quarters of 2016. Our longer-term forecast of steadily eroding HCV revenue is unchanged. We now forecast Gilead 2016 US HCV revenue of $8.7bn, 5% less than our prior $9.2bn estimate. Our revised forecast reflects a 1.3% sequential compounded decline each quarter in realized revenue per start, and a 12% compounded decrease in revenue per Rx (the other approach we use to estimate quarterly sales). These declines are significantly less than the 23% QoQ decrease in realized revenue per start experienced in Q1, assuming that while some of the rebating and contract headwinds in Q1 don’t persist in Q2, many others certainly will. Our adjusted total HCV revenue forecast for the company is now 2% above consensus for 2016 and 5% above consensus for 2017
About Gilead Sciences, Inc.
Gilead Sciences, Inc., incorporated on June 22, 1987, is a research-based biopharmaceutical company. The Company focuses on the discovery, development and commercialization of medicines in areas of unmet medical need. The Company’s principal areas of focus include human immunodeficiency virus (HIV), liver diseases, such as chronic hepatitis C virus (HCV) infection and chronic hepatitis B virus (HBV) infection, cardiovascular, hematology/oncology and inflammation/respiratory.
Its Nimbus Apollo program includes the candidate NDI-010976, a hepatotropic allosteric Acetyl-CoA Carboxylase (ACC) inhibitor, and other preclinical ACC inhibitors for the treatment of non-alcoholic steatohepatitis (NASH), and for the treatment of hepatocellular carcinoma (HCC) and other diseases. Its Nimbus Apollo program is a Phase II ready clinical program for NDI-010976 and related metabolic and liver diseases.