Reports of Veklury’s demise were greatly exaggerated. That was the takeaway from Gilead’s third quarter earnings report as the antiviral medication for hospitalized COVID-19 patients garnered $1.9 billion in sales.
It was a remarkable reversal for Veklury, which saw sales drop from $1.9 billion in the final quarter of 2020 to $1.5 billion in the first quarter of this year, followed by $829 million in the second quarter.
In July, the downward trend prompted Gilead to project Veklury’s annual sales to fall between $2.7 billion and $3.1 billion. Instead, the treatment has generated more than $4.2 billion this year with a quarter left to go.
Wall Street analysts were surprised as well. This week, in a preview of Gilead's earnings, Zacks consensus pegged Veklury’s sales to come in at $502 million for the third quarter.
“We’ve all been a little bit shy about predicting how the pandemic will continue to evolve,” Gilead CEO Daniel O’Day, said during a conference call. “We’ve proven to be not always right.”
With the delta variant wreaking havoc this summer and hospitals in the United States filling back up with COVID patients, Veklury had a resurrection. The treatment was used by more than 60% of the patients hospitalized in the U.S., according to Gilead CCO Johanna Mercier. The company also credited the performance to the medicine’s effectiveness against the delta variant.
Since it was approved by the FDA in May of last year, there has been considerable debate on the merits of Veklury. In the DisCoVeRy study of more than 800 patients in Europe, the results of which were published in The Lancet last month, Veklury was shown to have no benefit over standard of care. But other studies demonstrated Veklury’s value, and doctors, evidently, remain on board.
Veklury’s sales carried Gilead to a revenue figure of $7.4 billion, up from $6.2 billion in the previous period, and led the company to revise its annual sales projection of $24.4 to $25 billion to a forecast of $26 to $26.3 billion.
Excluding Veklury, Gilead’s product sales fell 3% compared to the third quarter of last year as the company’s bread-and-butter drugs—for HIV and HCV—continued their slow recovery from the pandemic.
Overall HIV sales came in at $4.2 billion, down 8% from last year’s third quarter, attributed largely to the loss of exclusivity for Truvada and Atripla in the U.S. Biktarvy sales helped offset the losses, scoring a record $2.3 billion, an increase of 20% from the third quarter of last year and 14% from the previous period.
Descovy's $433 million was down 15% from last year, reflecting "pricing pressure in the PrEP market despite the U.S. PrEP market growing 12%," wrote SVB Leerink analyst Geoffrey Porges in a note to investors.
Gilead’s HIV products took a major hit during the pandemic, as sales declined for three straight quarters. The recovery began in the second quarter with a 2% increase followed by a 3% increase in the third quarter.
“What we’re assuming is we’re gonna get, from a market standpoint, back to where we were prior to COVID. We’re just starting from a much lower base, so it’s gonna take a little bit of time,” Mercier said. “As we get to 2022, you’ll see that play out, assuming no other (COVID) surges come through.”
Mercier also said that the HIV sales rebound has been slowed because screenings are down 10% and diagnoses are down 20% from pre-pandemic levels.
HCV sales, which came in at $429 million, also were down by 8% from last year’s third quarter, as the pandemic is still stifling patient visits and new prescriptions, the company said.
A positive was the sales of Gilead’s two lymphoma cell therapies, which increased 51% to $222 million, Yescarta accounting for $175 million and Tecartus $47 million.
So what can Gilead expect from Veklury in the fourth quarter, considering COVID-19 hospitalizations in the U.S. are in decline?
"Our revised 2021 revenue estimate of $26.4 billion is now 5% above consensus and includes $4.9 billion of Veklury sales," Porges wrote. "We expect Veklury to decline quickly in 2022, and by 2025 expect it to contribute only $86 million in sales."