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Apr 30, 2020

Gilead beats estimates but cautions that COVID-19 clouds outlook

Gilead says Remdesivir hit primary target in COVID-19 study

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Gilead Sciences Inc. cautioned investors that there is “significant uncertainty” about how the coronavirus pandemic will affect its business, even as its drug to treat COVID-19 appears headed toward a swift U.S. authorization.

There is ample enthusiasm for remdesivir, an antiviral medication that the National Institute of Allergy and Infectious Diseases said on Wednesday appears to have a positive impact on patients after early clinical trials. Anthony Fauci, the head of the NIAID, said the clinical trial offered “quite good news.”

The company said that it has taken significant steps to expand manufacturing of the drug, with more than 140,000 doses of remdesivir expected be manufactured by the end of next month, and more than a million expected by the end of the year.

Shares of Gilead, which had gained 29 per cent this year through Thursday’s close on hopes that remdesivir will help ease the strain of the pandemic, were down 1.6 per cent in after-hours trading.

Chief Executive Officer Daniel O’Day said on a conference call with analysts on Thursday that Gilead may spend US$1 billion on remdesivir this year. Already, the company has laid out about US$50 million to increase its manufacturing capacity and run clinical trials. Gilead is speaking with other companies about helping to produce remdesivir as well, Chief Financial Officer Andrew Dickinson said on the analyst call.

Gilead has pledged to make the drug affordable for government and patients, but it hasn’t said how much it will charge for medication that isn’t donated.

At the same time, the company said fewer patients accessing treatments for conditions such as HIV and HCV, and that could have a short-term impact on the business. Already, the company said on its earnings call, there have been fewer people starting new treatment courses for both conditions.

The biotechnology company reported adjusted earnings per share of US$1.68, topping analysts’ estimates of US$1.57. Total revenue of US$5.55 billion was higher than the US$5.46 billion that Wall Street expected.

Excitement over remdesivir is unlikely to fully relieve pressure to find new hit drugs. Gilead is looking to reinvigorate its drug pipeline to offset slipping sales of its hepatitis C franchise, which turned the company into a pharmaceutical giant. The drugs brought in US$729 million in the quarter, better than analyst estimates of US$610 million. Gilead announced a US$4.9-billion deal for the company Forty Seven in March, a pact that could help bolster the company’s pipeline.