Gilead Remdesivir Output Outlook Draws Analyst’s Skepticism

The “remdesivir guidance is hard to believe,” a Raymond James analyst wrote about Gilead Sciences' covid treatment.
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Shares of Gilead Sciences  (GILD) - Get Report shares fell Friday after Raymond James analyst Steven Seedhouse expressed skepticism about the biopharma giant’s forecast to produce more than 2 million doses of its remdesivir coronavirus treatment by year-end.

The “remdesivir guidance is hard to believe,” he wrote in a commentary cited by Bloomberg. Seedhouse has a market-perform rating on the stock.

Gilead shares “still trade on covid,” Seedhouse said. The 2-million-dose projection “for such a seemingly weak drug implies a disappointment could be in the cards in the fourth quarter.”

He sees the drug as important because Gilead raised its 2020 outlook in its earnings report Thursday, citing remdesivir strength as a reason.

The company now forecasts earnings per share of $6.25 to $7.65 for the year, up from its earlier estimate of $6.05 to $6.45 a share.

Gilead’s “aggressive forecast” translates to more than $3 billion of revenue from remdesivir this year and ignores better treatments or vaccines that may be available late in the year, Seedhouse said.

Meanwhile the company’s core products - HIV and hepatitis C drugs - are “under considerable pressure and interruption from Covid,” which led second-quarter earnings to trail expectations, he said.

Gilead posted a net a loss of $3.33 billion, or $2.66 a share, for the second quarter, swinging from profit of $1.88 billion, or $1.47 a share, in the year-earlier quarter.

Adjusted earnings totaled $1.11 a share, trailing analysts’ estimates.

Gilead shares recently traded at $69.85, down 3.4%. The stock has climbed 8% so far this year.