Gilead Sciences' (GILD) - Get Report earnings topped the analysts' consensus estimate in the second quarter but sales of its hepatitis C drugs continue to retrench due to increased competition and pricing pressures. The company lowered its 2016 forecast for net product sales.

Second-quarter sales of Gilead's HIV drugs were stronger than expected, boosted by the recent launch of single-tablet treatment regimens containing a new drug known as TAF.

The mixed financial results reported by Gilead on Monday are not likely to change the prevailing investment narrative which has weighed on the company's stock price. On a forward price-to-earnings basis, Gilead's stock trades at a discount to other big-cap biotech peers because its drug research pipeline lacks the blockbusters needed to make up for slowing sales from its hepatitis C franchise.

Gilead management has talked up a desire to jump start a new era of growth through acquisitions, but so far, only smaller deals have materialized. The $11 billion purchase of Pharmasset in 2011 transformed Gilead into the hepatitis C powerhouse, but at its current size, finding a similar takeover target today large enough to move the earnings needle in a big way is almost impossible.

Adjusted earnings per share totaled $3.08 in the second quarter, exceeding the consensus estimate of $3.02 per share. Total revenue fell 5% year over year to $7.78 billion in the quarter.

Gilead revised downward its guidance for total product sales in 2016 to a range of $29.5-30.5 billion from $30-31 billion. The company said lower, projected hepatitis C sales for the rest of the year compelled the company to guide down.  

The company's hepatitis C pills Sovaldi, Harvoni and Epclusa (approved just at the end of June), delivered $4 billion in sales during the second quarter, down 7% sequentially from the first quarter.

Gilead's quarterly hepatitis C sales peaked at $4.89 billion during the second quarter of last year. Insurance companies have more recently loosened restrictions to allow greater numbers of hepatitis C patients access to treatment, but competition from Merck and Abbvie and discounts offered to insurers has put downward pressure on net pricing.

The company's HIV business continues to outperform with second-quarter sales totaling $3.1 billion, up 15% compared to the same period last year. Gilead is doing a good job switching HIV patients on its older medicines to to its newer and better-tolerated TAF-containing regimens. Genvoya, the first of these new HIV pills to be approved, posted sales of $302 million in the quarter.

Ahead of the earnings announcement, Gilead shares closed Monday up 2% to $88.55. The stock was down 3.6% in after-hours trading.

Gilead has lost 12% of its value this year and is down 26% from an all-time high reached last June.

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