Gilead Sciences reported on Thursday that sales of HIV medications increased 4% to $5.3 billion in the third quarter, including $39 million for Yeztugo, the company’s new preventive medicines, which helped increase its profit.
However, lower sales of COVID-19 and cancer cell therapy caused overall product sales to drop 2% to $7.3 billion.
After-hours trading saw a little decline in Gilead shares, which dropped 1% to $117.
According to LSEG, Wall Street anticipated Yeztugo sales of $37.5 million, with an annual U.S. list price of roughly $28,000. The medication is a twice-yearly injectable that U.S. regulators approved in June to prevent HIV infection in adults and adolescents who are at high risk of getting the fatal virus.
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Yeztugo Launch Shows Steady Progress but Faces Cost Challenges
In a research note, RBC Capital Markets analyst Brian Abrahams stated that while sales of the new HIV prophylaxis medication were in line with projections, they did not meet “growing expectations.”
In an interview, Gilead CEO Daniel O’Day stated, “We are really pleased with the progress of the Yeztugo launch,” noting that 75% of US payers have agreed to cover the medication, and the company anticipates that number will rise to 90% by mid-2026.
Yeztugo’s exorbitant cost is one of the reasons why CVS Health, the biggest pharmacy benefit manager in the United States, has yet to add the medication to its commercial plans.
Foster City, California-based Gilead recorded a quarterly profit of $2.43 per share, up from $1.00 the previous year, due to a significant impairment charge. A one-time sale of intellectual property brought in $400 million, contributing to a 3% increase in total revenue to $7.77 billion.
Strong Earnings Beat Despite Mixed Product Performance
The average Wall Street expectation of $2.13 per share on $7.45 billion in revenue was exceeded by the results.
Profits per share were “salvaged” by higher-than-anticipated contract revenue and lower-than-expected operating expenses, according to Abrahams, despite lower-than-expected product sales. “Still, we believe this would be considered a lower quality beat.”
Sales of Gilead’s liver disease portfolio increased 12% to $819 million, but sales of the COVID-19 medication Veklury decreased 60% to $277 million as a result of fewer COVID-related hospital admissions.
Due to increased competition, sales of cell therapy products fell 11% to $432 million, while sales of the cancer medication Trodelvy increased 7% to $357 million.
Gilead Raises 2025 Outlook Amid Shifting Market Dynamics
Gilead increased the lower end of its adjusted earnings expectation by 10 cents to $8.05 per share for the entire year, while keeping the top end at $8.25.
Additionally, while the upper end of the range remained at $28.7 billion, the company increased the low end of its 2025 product sales projections from $28.3 billion to $28.4 billion.
