Key Takeaways
- Q1 revenue reached $6.96 billion, surpassing analyst estimates of $6.91 billion.
- The company delivered adjusted EPS of $2.03, exceeding the anticipated $1.91.
- Annual EPS forecast was reduced to a loss of $0.65–$1.05 from previously projected earnings of $8.45–$8.85.
- The dramatic forecast revision stems from $11.5 billion in IPR&D expenses related to multiple acquisitions.
- Shares of GILD declined approximately 2% during after-hours trading and were trading 1% lower at $132.60 in Friday’s premarket session.
Despite surpassing Wall Street’s first-quarter projections, Gilead Sciences experienced a stock decline. The reason? A substantial adjustment to annual earnings forecasts that surprised market participants.
Shares declined nearly 2% in Wednesday’s after-hours session, and continued trading 1% lower at $132.60 during Friday’s premarket activity.
The biopharmaceutical company reported first-quarter revenue of $6.96 billion, slightly exceeding the consensus estimate of $6.91 billion. Adjusted earnings per share reached $2.03, outperforming the $1.91 projection from FactSet analysts.
Following these quarterly results, Gilead increased its annual revenue projection to $30 billion–$30.4 billion, an improvement from the previous range of $29.6 billion–$30 billion.
However, the earnings outlook painted a starkly different picture.
The pharmaceutical giant now anticipates a full-year adjusted loss ranging from $0.65 to $1.05 per share. This represents a significant departure from its previous guidance of $8.45 to $8.85 in positive earnings. Wall Street analysts had projected $8.65.
The company attributed this forecast adjustment to $11.5 billion in charges related to in-process research and development (IPR&D), combined with additional borrowing expenses stemming from several recent acquisitions.
HIV Medications Lead Revenue Performance
Biktarvy, Gilead’s leading HIV treatment, continued its strong performance. Revenue from this medication increased 8% to reach $3.4 billion, representing almost half of the company’s total quarterly revenue. The complete HIV product line demonstrated 10% growth compared to the previous year.
The company also elevated its sales projection for Yeztugo, its twice-daily HIV prevention injection, to $1 billion — a substantial increase from the previous $200 million estimate.
However, not all products showed positive trends. Veklury, the company’s COVID-19 treatment, experienced a 52% revenue decline to $144 million, which Gilead linked to reduced COVID-19 hospitalizations.
Epclusa, used for hepatitis C treatment, generated $283 million compared to $346 million during the corresponding period last year. The cell therapy segment also weakened, decreasing approximately 12% to $407 million from $464 million.
When excluding Veklury, product revenue increased 8% to $6.8 billion.
Recent Acquisitions Drive Forecast Adjustment
Gilead has pursued an aggressive acquisition strategy throughout 2026. In February, the company announced plans to acquire Arcellx for $7.8 billion. Gilead previously maintained a partnership with the Maryland-based biotechnology company to jointly develop anitocabtagene autoleucel.
Toward the end of March, Gilead revealed plans to purchase privately held Ouro Medicine to enhance its autoimmune disease pipeline. Last month, the company announced an agreement to acquire Tubulis GmbH, broadening its antibody-drug conjugate platform.
The $11.5 billion IPR&D expense associated with these acquisitions is responsible for the earnings guidance reversal.
Gilead’s current market capitalization stands at approximately $164.57 billion. The stock trades at a P/E ratio of 19.8x. Company insiders have sold $10.6 million worth of shares during the past three months, with no insider purchases recorded during this timeframe.
