While Gilead saw high demand for several of its top products in the first quarter, a $2.7 billion write-down on its cancer efforts put a big dent in earnings.
Gilead's HIV combo med Biktarvy and COVID-19 antiviral Veklury—plus cancer drug Trodelvy—all grew sales and helped the company post a 3% revenue increase during the period to $6.6 billion. But a $2.7 billion charge related to its 2020 Immunomedics buyout dragged earnings to just $0.02 per share.
In a note to clients Thursday, Mizuho analyst Salim Syed said the write-down stemmed from a "conservative" decision by Gilead's management after Trodelvy's closely watched TROPiCS-02 trial. The study didn't produce enough data to support an immediate FDA filing in HR-positive, HER2-negative metastatic breast cancer, so management opted to take the write-down, Syed wrote.
The decision could "change in the coming months," but the company opted to go with the charge for the time being, the analyst added.
Trodelvy delivered a “statistically significant” improvement in progression-free survival for the trial's heavily pretreated patients. But the company wasn't clear on whether the benefit was "clinically meaningful."
Now, "absent a regulatory discussion," Gilead figures it won't be able to file right away based on its current progression-free survival data, Syed wrote, resulting in the write-down.
Gilead plans to present the TROPiCS-02 data during the American Society of Clinical Oncology meeting in June.
In Trodelvy's current approved use—third-line metastatic triple-negative breast cancer—the drug posted a big sales increase of 103% to $146 million.
Under CEO Dan O'Day, Gilead has been pushing to expand in oncology, including through the $21 billion Immunomedics buyout that brought it Trodelvy. But it has hit setbacks along the way, including an FDA clinical hold earlier this year for CD47 prospect magrolimab. Those studies have now mostly resumed.
Elsewhere in Gilead's portfolio, COVID-19 antiviral Veklury sales grew 5% to $1.5 billion in the first quarter. The company expects $2 billion total for the medicine this year, so management figures demand for the treatment will ebb in the remaining months of 2022.
Gilead's current mainstay HIV franchise delivered modest growth as well. Biktarvy sales jumped 18% from 2021's first quarter to $2.15 billion, while Descovy revenues increased 4% to $374 million.
On the flip side, Truvada sales took an expected hit, plummeting 72% after its 2020 loss of exclusivity.
In all, Gilead's HIV product sales increased 2% to $3.7 billion.
Despite screening levels still below pre-pandemic levels, the U.S. HIV market grew a little over 3% from last year, Gilead's chief commercial officer Johanna Mercier said on a Thursday conference call. The pre-exposure prophyylaxis market—aka PrEP—grew 33% year-over-year and 3% quarter-over-quarter, she noted.
Gilead’s cell therapy franchise also continued on its growth path, posting a 43% sales increase to $274 million. Tecartus sales jumped 103% to $63 million, while Yescarta, which recently won FDA approval in second-line large B-cell lymphoma treatment, grew 32% to $211 million. Orders for Yescarta's new use started coming in “the day after FDA approval, and have been steady ever since,” said Mercier.
Gilead recently won FDA approval for a new cell therapy manufacturing facility in Fredrick, Maryland, to support cell therapy growth for several years, execs said. The company also recently purchased about 27 acres of land in Oceanside, California, to support additional manufacturing needs.