Will This BioTech Company Produce Another Positive Earnings Surprise?

Gilead Sciences, a leading biotechnology company that develops, researches, and commercializes antiviral drugs and therapeutics, is set to report 3Q2015 earnings today after the market closes. The Estimize consensus is expecting impressive results, with EPS of $3.01 and revenue of $8.13 billion. Wall Street Analysts are not as optimistic, forecasting EPS of $2.90 and revenue of $8.08 billion. Gilead has surpassed analyst expectations for the past three quarters and looks to continue this trend.

 

Hepatitis C Drug Domination and HIV

Gilead is the industry leader in the HIV and Hepatitis C (HCV) drug sector. A large chunk of company revenue comes from the HCV segment. Gilead’s two leading therapies, Sovaldi and Harvoni, have become a standard amongst prescribed medication for patients, mainly attributed to their effectiveness. Because of increased Medicare spending on Hepatitis C drugs, and due to the huge market lead Gilead has over its competitors, revenues are projected to increase substantially as Sovaldi and Harvoni are used by a significant portion of the 300,000 treated HCV patients.

Furthermore, Gilead rival AbbVie was flagged by United States Health Regulation officials over concerns of serious liver damage caused by AbbVie HCV treatments.

Though the firm is still the leader in the HIV drug space, HCV therapeutic sales have governed. In December of 2014, Gilead controlled about 95% of the HIV drug space. In August of 2015, Gilead now controls 85% of the HIV sector.  Noting this trend, the company has come out and declared a reenergized focus on the HIV market, working on highly advanced new products to provide. It will be interesting to see whether or not Gilead can create a market changing solution to the HIV virus.

 

Trends in Stock Price

Over the past five years, the California based biotech company’s stock has increased over 450%. In October of 2010, shares were trading at approximately $19. In 2015, shares have been as high as $122, but are currently hovering around $109. This colossal increase can be attributed to the rise in status of Sovaldi as one of the world’s most popular HCV treatments.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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