Gilead Sciences, Inc. (NASDAQ:GILD) shareholders eagerly await February 7, 2017 to arrive as it is the day the leading biotech firm reports its fourth-quarter report. Will company be able to stop its nine-month drop in stock price? So, what are the factors that investors should look for when the firm releases its fourth-quarter update.
It’s a foregone assumption that Gilead will post yet another decline in sales for Sovaldi and Harvoni. What’s more vital to focus on than these figures, although, is the pace of change in the sales of the combined hepatitis C virus franchise. First thing to notice is the rate of change, not just the YoY change itself. Next it is vital to consider the HCV franchise, not merely the sales decline for Gilead’s top-selling HCV medications.
The release of Epclusa has resulted in a considerable amount of revenue for company. Still, the combined sales of HCV franchise are still on a descending trend. If the decrease rate comes lower in the fourth quarter, it would be promising news for company even if the YoY numbers aren’t so impressive. A slowing rate of drop in HCV sales would indicate the bleak sales deterioration is possibly near stabilizing.
Gilead has introduced numerous powerful TAF-based HIV medications in the preceding 13 months. Genvoya released in late 2015, with Odefsey and Descovey following in early 2016. Revenue of all three medications are growing, particularly for Genvoya. Although, shareholders should note how major of an influence these TAF-based teams are having on revenue of Gilead’s older HIV medications. In specific, Genvoya has potential to cannibalize Stribild’s market share.
Sales for Viiv’s leading HIV drugs, Triumeq and Tivicay, increased 70% in 3Q2016 against the prior-year period. Gilead faces tough competition from generic HIV medications, and this is one of the factors that should be contemplated on while making future investment decision on this stock.