With biotech stocks experiencing a mini renaissance of sorts in recent weeks, many traders were eagerly looking forward to profitable industry bellwether Gilead to set the tone for the next few days and weeks of trading. And while moments ago the company reported Q2 EPS of $3.08, down from $3.15 a year ago, it beat expectations of $3.02 as revenue of $7.77 billion came in line with expectations (down from $8.24 billion a year ago), the reason why the stock is currently sliding after hours is because while the biotech giant did beat, it cut its full year guidance by $500 million on the top line while boosting its R&D expense forecast by $300-$400 million.
It was not clear what exactly precipitated the guidance cut, however another aspect of the Q2 results that caught traders’ attention is that Gilead’s blockbuster drug, Harvoni, reported Q2 revenues of $2.56 billion, missing the consensus estimate of $2.87 billion by approximately 10%, even as sales of Sovaldi, its other key drug, beat estiamtes of $1.19 billion, and generating $1.36 billion in Q2 revenue.
The breakdown of all drug sales:
- 2Q Truvada rev. $942m, est. $911.1m
- 2Q Atripla rev. $673m, est. $685.5m
- 2Q Letairis rev. $203m, est. $189.6m
- 2Q Ranexa rev. $153m, est. $156.5m
- 2Q Zydelig rev. $41m, est. $50.4m
As a result of these two updates, the company stock slide in after hours, dropping by 4% and souring the mood for a whole army of momo biotech daytraders who were hoping that recent gains would accelerate following the GILD earnings release.
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