Gilead Sciences’s performance in 3Q16
During 3Q16, Gilead Sciences’s (GILD) total revenues fell 10% to $7.5 billion. Gilead Sciences primarily earns revenue from the sale of HIV (human immunodeficiency virus) and HCV (hepatitis C virus) drugs.
Of this, the revenue from product sales stood at $7.4 billion during the period. The product sales were down 3% on a sequential basis. The falling HCV franchise is responsible for GILD’s underperformance.
Antiviral product sales
Gilead Sciences’s (GILD) product sales comprise Antiviral Product sales and Other Products sales. The Antiviral portfolio consists of the HCV franchise and HIV and Other Antivirals. The Antiviral business garnered $6.8 billion during 3Q16.
The 31% fall in the HCV franchise was partially offset by the HIV franchise, which grew 21% during 3Q16. The contribution from HCV slipped to $3.3 billion.
Meanwhile, the HIV portfolio grew to $3.5 billion. We’ll discuss the factors behind the HIV portfolio’s strong growth in the next article. You can also read Behind Gilead Sciences’ Dominance in HIV to understand GILD’s dominance in the HIV space.
Other Products segment’s sales
Gilead Sciences’s Other Products portfolio includes Letairis (ambrisentan), Ranexa (ranolazine), and AmBisome (amphotericin B liposome injection). The Other Products segment’s net sales rose 11% to $564 million during 3Q16.
If the HIV franchise growth more than offsets the HCV franchise’s fall, Gilead Sciences’s share price could rise. However, if the freefall for HCV continues, GILD could fall further.
If you want diversified exposure to Gilead Sciences, you can consider the iShares Nasdaq Biotechnology ETF (IBB). IBB holds ~7.6% of its assets in GILD Along with Gilead Sciences, the fund holds ~8.9% of its assets in Celgene (CELG), 7.9% in Biogen (BIIB), and ~7.1% in Regeneron (REGN).