Gilead Expected to Post Sky-High Hep C Sales in June Quarter

Ahead of Gilead Sciences' (GILD) second-quarter earnings report tomorrow night, CNBC reporter Meg Tirrell asks:


To which I replied:

The buyside "whisper number" for Sovaldi sales in the June quarter stands at $3.5 billion. But everyone who follows Gilead knows this, which means the "whispered" whisper number for sales of the blockbuster hepatitis C drug is probably more like $4 billion or more.

Gilead shares have been trading very strongly into Wednesday night's earnings report -- another indication investors expect a big Sovaldi sales number already. [Gilead has also been buying a lot of its own stock back recently, helping performance.] 
 

GILD Chart
GILD data by YCharts

As long as Gilead doesn't crap the bed entirely, the second quarter's performance seems largely irrelevant ahead of the FDA approval decision in October (or sooner) for the single-pill, fixed-dose combination of Sovaldi and ledipasvir. This is the hepatitis C therapy (no interferon or ribavirin required) everyone has been waiting for. Wall Street will be watching the launch of this product VERY closely. 

There will be a lot of volatility and trading around Gilead earnings, but buying on weakness has been a profitable investment strategy this year because the long-term bull thesis remains intact. On Wednesday's call, I'd like to hear management talk about what's next beyond hepatitis C and oncology. 

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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