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Gilead Lifts Adjusted-Earnings Forecast Amid Remdesivir Demand

Gilead lifted its 2020 product-sales estimate to a range of $24.3 billion to $24.35 billion from its October view of $23 billion to $23.5 billion.
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Gilead Sciences  (GILD) - Get Gilead Sciences Inc. Report shares rose on Monday after the biotechnology titan increased its earnings estimate for 2020 amid demand for its remdesivir covid treatment.

The Foster City, Calif., company sharpened its GAAP earnings-per-share estimate to a range of a loss of 8 cents a share to a profit of 2 cents. The previous estimate was a range of a loss of 25 cents to a profit of 10 cents. 

It boosted its estimate of adjusted earnings to $6.98 to $7.08 a share from $6.25 to $6.60.

The company lifted its 2020 product-sales estimate to a range of $24.3 billion to $24.35 billion from in its October estimate $23 billion to $23.5 billion.

Gilead also raised its operating-profit estimate to a range of $11.65 billion to $11.75 billion from $10.7 billion to $11.2 billion in October. 

A survey of analysts by FactSet produced consensus estimates for 2020 of GAAP earnings of 7 cents a share, or an adjusted $6.61, on revenue of $23.71 billion.

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The sales gain reflects “increased Veklury [remdesivir] sales, as hospitalization and treatment rates were higher than expected given the most recent covid-19 surge,” the company said in a statement. 

The overall strong numbers show “Gilead delivered solid performance, despite the global impacts of covid-19,” it said.

Gilead traded at $63.65, up 0.97%, in premarket trading Monday. It had slid 19% in the 12 months through Friday. 

Morningstar analyst Karen Anderson puts fair value at $77.

“Gilead has a leading treatment for SARS-CoV-2 with remdesivir, which we model at $2.9 billion in 2020 sales and $2.1 billion in 2021 sales,” she wrote earlier this month.

“Gilead generates stellar profit margins with its HIV and HCV portfolio, which requires only a small sales force and inexpensive manufacturing. 

"[Its] portfolio and pipeline support a wide moat, but Gilead needs HCV market stabilization, strong continued innovation in HIV, solid pipeline data, and smart future acquisitions to return to growth.”