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GILD or ABBV: Which Is Expected to Report Faster Revenue Growth?

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Revenue projections for 2019

In its fourth-quarter earnings presentation, Gilead Sciences (GILD) guided for product sales in the range of $21.3 billion–$21.8 billion for 2019. According to the company’s fourth-quarter earnings conference call, this guidance is susceptible to uncertainties such as the lower-than-anticipated growth of its HIV drug sales in 2019 due to increasing competition from generic TDF-based drugs, increasing pricing pressures, unfavorable foreign currency fluctuations, and unfavorable shifts in its payer mix.

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According to the company’s fourth-quarter earnings presentation, Gilead Sciences expects an unplanned revenue benefit of $0.3 billion associated with the lower impact of the introduction of generic TDF-based HIV drugs and a benefit of $0.4 billion associated with a delay in the loss of patent exclusivity for Letairis. The company has also forecast YoY (year-over-year) incremental revenue worth $1.6 billion–$1.8 billion from the sale of its HIV drugs in the United States and Japan in 2019. Additionally, the company expects a favorable YoY revenue impact of $0.2 billion in 2019 related to the increasing penetration of the company’s cell therapy franchise in the United States and commercial launches in the European Union.

According to the company’s fourth-quarter earnings presentation, Gilead Sciences’ 2019 product sales guidance also assumes an unfavorable YoY impact of $0.8 billion–$1.0 billion associated with declining HCV sales and $1.1 billion–$1.2 billion related to the patent expiry of the company’s key drugs, Letairis and Ranexa.

On its fourth-quarter earnings call, AbbVie (ABBV) guided for a nearly flat revenue performance in 2019 based on a projection of 1% YoY operational revenue growth, which will be mostly offset by a 1% unfavorable impact of foreign exchange on reported sales.

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Wall Street’s projections

Wall Street analysts expect Gilead Sciences’ revenues to be $21.97 billion, $22.51 billion, and $22.79 billion, respectively, in 2019, 2020, and 2021, implying YoY changes of -0.69%, 2.45%, and 1.21%, respectively.

On the other hand, Wall Street analysts expect AbbVie’s revenues to be $32.88 billion, $34.68 billion, and $36.89 billion, respectively, in 2019, 2020, and 2021, implying YoY revenue growth of 0.45%, 5.46%, and 6.40%, respectively.

AbbVie is expected to report higher YoY revenue growth than Gilead Sciences from 2019 to 2021.

Next, we’ll discuss EPS projections for Gilead Sciences and AbbVie in 2019.

 

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