NEW YORK (TheStreet) -- Shares of Gilead Sciences (GILD) - Get Report were lower in early afternoon trading on Wednesday as Leerink analysts believe the research-based biopharmaceutical company's recent slump in sales could be coming from price erosion and weak patient volume outside the U.S.
Sales of Gilead's hepatitis C drugs have recently fallen due to increased competition and pricing pressures, despite the company seeing success from its recently released single-tablet regimen TAF.
Additionally, the market has lost 20% of its value and now has an annualized revenue rate of less than $20 billion, compared to $24 billion in the year prior, Leerink said in an analyst note, according to Barron's.
"The principal drivers of value erosion in this category had previously been price erosion, which increasing "gross to net" adjustments in the US effectively signaling lower and lower realized revenue per patient start," the firm added. "Several manufacturers, including Gilead, have also indicated that patient volume is also peaking in the US, and declining in certain markets outside the U.S."
These two catalysts are likely to drive revenue down and could continue to do so in future periods, Leerink noted, according to Barron's.
Gilead lost seven percentage points per share in international and U.S. markets combined, while its peers, such as AbbVie (ABBV), Merck (MRK) and Johnson & Johnson (JNJ) had shares that were relatively flat, the firm noted.
Leerink said the biopharmaceutical company could rebound with the release of its once-daily Epclusa, which was approved in June, Barron's reports.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate GILEAD SCIENCES INC as a Buy with a ratings score of B. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: GILD