What to Look For in Gilead Sciences Earnings Report

Health and Healthcare

Published: October 28, 2014 11:55 am

Last Updated: October 28, 2014 11:56 am

Gilead Sciences Inc. (NASDAQ: GILD) is set to report its third-quarter earnings after the U.S. markets close on Tuesday. Thomson Reuters has consensus estimates of $1.92 in earnings per shares and $5.99 billion in revenue. In the third quarter of the previous year, Gilead posted earnings of $0.52 per share on revenue of$2.78 billion.

In the second quarter of 2014 Gilead posted a strong beat on earnings due to the production and sales of its hepatitis C treatment, Sovaldi. The sales from this drug in the second quarter were $3.48 billion, and for the six months ending in June sales totaled over $5.7 billion.

In the last earnings report, Gilead CEO John Martin mentioned that more than 80,000 patients in the United States and Europe had been prescribed Sovaldi. Treatment of this drug generally goes for $1,000 a pill.

However, Gilead has developed a second-generation hepatitis C drug called Harvoni, which combines Sovaldi with ledipasvir, another drug produced by Gilead. The FDA earlier in October approved Harvoni.

Treatment with Harvoni is slightly more expensive than Sovaldi, but there is a distinct advantage in that it does not require supplemental treatment to deal with the effects of Sovaldi, making it more attractive. Harvoni treatment costs in the area of $94,000 for a 12-week period, compared to the costs Sovaldi treatment of roughly $84,000.

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On October 15, Nomura reiterated a Buy rating for Gilead with a $141 price target. Bank of America initiated coverage of the stock with a Buy rating and a price target of $130 on October 1.

Gilead has crossed over the 50-day moving average twice with ease in the weeks before it reports earnings. The 50-day moving average reads at $105.45 and has acted as support for Gilead throughout this quarter without having been tested. The 200-day moving average is $87.29.

Shares of Gilead were up around 0.5% at 113.10 in the first two hours of trading Tuesday. The consensus analyst price target is $118.08 and a 52-week trading range is $63.50 to $114.11. The company has a market cap of $170 billion.

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Gilead Sciences, Inc – Quarterly EPS (BNRI) | FindTheBest

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