What Are the Key Growth Catalysts for Gilead Sciences in 2019?

Revenue and EPS growth trajectory

Gilead Sciences (GILD) reported revenue of $22.13 billion in 2018, a YoY (year-over-year) fall of 15.24%. The company also reported non-GAAP (generally accepted accounting principles) diluted EPS of $6.67 in 2018, a YoY fall of 24.54%.

What Are the Key Growth Catalysts for Gilead Sciences in 2019?

Growth catalysts

In 2018, Gilead Sciences reported revenue of $3.7 billion from the sale of HCV (hepatitis C) products, a YoY fall of 59.34%. In the fourth quarter, the company reported HCV product sales worth $738 million, a YoY fall of 51% and a sequential fall of 18%.

In its fourth-quarter earnings presentation, Gilead Sciences guided for HCV franchise revenue of $2.7 billion–$2.9 billion in 2019, which assumes a negative YoY revenue impact of $0.4 billion–$0.5 billion associated with fewer new patient starts and another $0.4 billion–$0.5 billion associated with increasing competitive pressures.

According to Gilead Sciences’ fourth-quarter earnings conference call, the company launched the authorized generic version of its leading HCV drugs, Epclusa and Harvoni, in the United States in the fourth quarter through its subsidiary Asegua Therapeutics. Despite the anticipated fall in the prices of the HCV products it sold to the Medicare program starting in the first quarter, Gilead Sciences expects the launch of authorized HCV products to enable it to have a sustainable presence in the HCV market. The company expects to see increasing penetration in the Medicaid market due to the launch of authorized generics of Epclusa and Harvoni in 2019.

In 2018, Gilead Sciences reported revenue of $14.6 billion from the sale of HIV products, a YoY rise of 12.31%. In the fourth quarter, the company reported HCV product sales worth $4.1 billion, a YoY rise of 20.59%.

Recently launched Descovy-based HIV drug Biktarvy and HIV prophylaxis drug Truvada were key growth drivers for Gilead Sciences in 2018. According to Gilead Sciences’ fourth quarter earnings conference call, Biktarvy has emerged as the best HIV drug launched in the US market based on total prescriptions written in the first 11 months postlaunch. The drug is also considered a leading HIV drug prescribed for both newly diagnosed patients and those switching from other therapies.

According to Gilead Sciences’ fourth-quarter earnings conference call, it’s also focused on expanding the label of Yescarta across earlier lines of therapy in approved indications as well as in new hematology and oncology indications in 2019.

Next, we’ll discuss AbbVie’s recent and upcoming new product launches and market expansion strategy.