New disappointing quarter from Gilead, CEO announces resignation

Another disappointing quarter from biotech Gilead – its shares have lost 2.4% in after-market trading as investors have lost patience and interest in the company’s shares. In addition to announcing the results, CEO John Milligan has announced he will leave the group at the end of the year. Milligan, biochemist, is a veteran in the California- based company, since he has been working for the group for as many as 28 years and has been CEO for two years and a half. However, throughout his office, he has not managed to win back trust from investors. Indeed, over the last two years, Gilead has reported an impressive series of negative quarter results, due to a steady drop in hepatitis C product sales, which were its top products 4 years ago. Milligan reacted late also when the time came to acquire other firms: the only significant purchased asset has been Kite, paid $11bn, which however will not yield significant profit in the near future.

Sales in Q2 2018 were down 21% to $5.65bn, and net profit decreased from $3.07bn (Q2 2017) to $1.82bn. The hepatitis C therapy Epclusa delivered sales of $500m, that is a $700m decline as compared to Q2 2017. The cancer CAR-T treatment Yescarta, obtained by acquiring Kite, generated as little as $68m. The new HIV drug, Biktarvy, approved by FDA in Q1 2018 and EMA in June, generated already $185 million, compared with the average analyst expectations of $136.5 million.

Positively, the market of hepatitis C treatments has stabilized and no further decline is expected in 2018, analysts say. The group holds high expectation about the new NASH therapy and Kite’s CAR-T technology. Gilead’s cash reserve is still impressive – over 31 billion dollars in cash now.

(Sources: FT, WSJ)