Biotech giant Gilead Sciences’ (GILD) earnings have cheered the equity markets yet again. Soaring sales of the company’s blockbuster drug Sovaldi have catapulted the company’s top and bottom line far beyond expectations.
Sovaldi was in the news recently as U.S. lawmakers raised concerns over the pricing of this new hepatitis C drug. This long-awaited drug, approved in December 2013, costs $1,000 per pill or $84,000 for a 12-week course to treat a hepatitis C patient.
Though the company’s shares have plunged roughly 15% from the high hit in late February following the pricing concern, its share prices have recovered 8% in the past 5 days.
This drug has enabled Gilead to report outstanding earnings results. While revenues have doubled, profits have tripled from the year-ago quarter.
Gilead Earnings in Focus
The company reported earnings per share of $1.33 for the first quarter of 2014, easily outpacing the Zacks Consensus Estimate of 75 cents and way above the year-ago earnings of 43 cents per share.
Moreover, total revenues for the reported quarter came in at $4.9 billion, beating our estimates by around 36%. Revenues from the company’s antiviral product sales jumped 119% to $4.5 billion, mainly led by solid Sovaldi sales.
The company generated nearly half of its revenues, or $2.7 billion, from the sale of Sovaldi during the reported quarter, beating an average of analyst estimates by more than $1 billion. Revenues from Sovaldi were almost triple the sales from the company’s next biggest drug, Atripla, which reported an 11% year-over-year fall.
Gilead has reiterated its full-year 2014 guidance and expects product sales to be between $11.3 billion and $11.5 billion, excluding the sales of Sovaldi and other hepatitis C drugs.
Amgen Earnings in Focus
While GILD cheered the markets, another biotech major, Amgen (AMGN), came out with disappointing results. The company reported revenues of $4.5 billion, missing our estimates by more than 4%.
Though adjusted earnings per share came in at $1.87, slightly above our estimates of $1.81, it dropped 5% year over year. Moreover, the company reported a 25% fall in net income due to a jump in production and research costs.