Gilead Sciences Inc. swung to a loss in the June quarter following the acquisition of biotech company Forty Seven Inc. and reflecting higher costs as it ramps up production of Covid-19 drug remdesivir.
Gilead Sciences Inc.'s remdesivir is worth prescribing for patients with severe Covid-19 though evidence of its benefits remains inconclusive, according to a panel of global experts convened by the British Medical Journal.
The company is sticking by full-year guidance announced in February of product sales in a range of $21.8 - $22.2 billion and earnings per share of between $5.15 and $5.55.
Product sales in Q2 were down almost 10% compared with previous year to just over $5 billion, and the company recorded a net loss of $3.3 billion.
"We think this implies up to $1 billion to $3 billion of remdesivir, . a positive that was not expected at the start of the year", said Jefferies analyst Michael Yee.
Gilead is pinning the blame on the disruption caused by the ongoing COVID-19 pandemic, as demand for its core hepatitis C and HIV franchises declined.
Sales of HIV drug Biktarvy, which more than doubled in the March quarter, rose 44% to $1.6 billion in the second quarter.
Analysts surveyed by FactSet expected a loss of 69 cents a share, or adjusted profit of $1.44, on $5.29 billion in revenue.
Overall, Gilead reported a loss of $3.34 billion, or $2.66 a share, compared with a year-earlier profit of $1.88 billion, or $1.47 a share.
Gilead this month began commercial sales of remdesivir, which is given to hospitalized patients by infusion. It was approved in Japan.
"In addition to the critical work of advancing remdesivir, we have continued to strengthen our presence in immuno-oncology", Daniel O'Day, the company's chairman and chief executive office, said in a statement.
R&D expenses have also increased because of Gilead's focus on developing remdesivir as an antiviral against COVID-19, and donations to the USA healthcare system in June.
Investment in remdesivir research will continue, the company plans to test the drug early in the disease and has already launched a phase 1a study testing an inhaled solution.
The U.S. National Institute of Allergy and Infectious Diseases is now conducting a trial of remdesivir in combination with Olumiant, an arthritis drug from Eli Lilly & Co, and those results are expected next month.
So far, only remdesivir and the generic steroid dexamethasone have been shown in rigorous clinical trials to help patients with COVID-19.