This week Gilead Sciences slashed its 2020 revenue forecast, citing lower than expected demand for the COVID-19 drug Remdesivir.
The company also said it was finding it difficult to predict sales of the drug, which is the only treatment in the U.S. that has been approved for patients who are hospitalized with COVID-19.
The drug is also authorized or approved for use in more than 50 other countries around the world.
For the third quarter, Gilead reported $837 million, coming in below the estimates of $960 million per Refinitiv IBES data.
Looking forward, the company lowered the top end of its full-year sales outlook to $23.5 billion, which is below Wall Street estimates of $24.1 billion. Previously Gilead had forecast
2020 sales as high as $25 billion.
According to the company’s Chief Commercial Officer Johanna Mercier, the United States saw a surge in COVID-19 cases over the summer but many were younger people and hospitalization rates actually dropped. “Our assumption is in light of the surge this fall both in Europe and the U.S., those numbers will pop back up,” said Mercier.
“The revision in guidance is tied, not entirely, but almost entirely to expectations around Veklury,” Gilead Chief Financial Officer Andrew Dickinson remarked. Veklury is the brand name for Remdesivir. “There was less demand in the third quarter than expected.”
The company noted that some sales recorded in the third quarter are being held in inventory for use in the fourth quarter. Additionally the volume of remdesivir purchased for government stockpiling purposes fell short of what the company had projected.
Even though the drug is the standard of care for patients who are hospitalized with severe COVID-19 cases, many doctors in the U.S. are weary of giving it to patients who aren’t as severely ill.
“There is still uncertainty about the pandemic and still lingering questions about the visibility of remdesivir with antibodies coming,” Jefferies analyst Michael Yee remarked, referring to experimental antibody drugs designed to treat COVID-19.
Company Chairman and CEO Dan O’Day remarked on the earnings call of the company’s acquisition of Immunomedics, “This has really been a pivotal quarter for Gilead. With last week’s closing of the Immunomedics acquisition, we’ve effectively transformed our near- and long-term growth story. Trodelvy, an improved medicine for third line metastatic triple-negative breast cancer, has tremendous potential for patients today and significant pan-tumor potential for the future.”
“We are all excited to deliver on that potential, along with the teams from Immunomedics who became a part of the Gilead family last week. I want to take this opportunity to thank everyone at Immunomedics for the extraordinary work that you’ve done on Trodelvy to date. It’s an honor to work with all of you now to build on those efforts for the benefit of patients with cancer around the world. The acquisition is undoubtedly an inflection point in terms of our growth and adds to the growing pipeline of transformational medicines that we’ve been strengthening over the course of the year. All of this is building on the strong foundation of our core business.”
The acquisition of Immunomedics is the largest transaction in Gilead’s history. Gilead agreed to pay $21 billion for the company.
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