October 25, 2018 / 10:16 PM / 10 months ago

UPDATE 2-Gilead hepatitis C drug sales fall, but profit beats estimates

(Adds company comments, updates share price)

By Deena Beasley

Oct 25 (Reuters) - A steep decline in third quarter sales of Gilead Sciences Inc’s flagship hepatitis C drugs was partially offset by higher sales of its HIV treatments, and the U.S. biotechnology company slightly raised its full-year sales outlook on Thursday.

The company, which announced in July that Chief Executive Officer John Milligan and Chairman John Martin would step down as soon as the end of the year, also reported higher-than-expected quarterly earnings.

Gilead reported adjusted earnings of $1.84 per share, topping analysts’ average expectations by 21 cents, according to Refinitiv data.

On a conference call with analysts and investors, Milligan became audibly emotional while thanking colleagues “and everyone who supported us in our mission” during his nearly 30 years at Gilead.

He said the company, based in Foster City, California, has no specific criteria for choosing his successor, but hopes to have a new CEO named before the end of this year.

For the full year, Gilead said it now expects product sales of $20.8 billion to $21.3 billion, up from a previous range of $20 billion to $21 billion.

Gilead’s latest results “are consistent with a trajectory towards growing again and first quarter 2018 was probably the trough,” Jefferies analyst Michael Yee said in a research note, referring to the drop-off in hepatitis C sales over the past couple of years.

The decline in sales has been largely expected as many patients with the liver disease have been cured by the new drugs and rival products entered the market, with AbbVie’s treatments grabbing some market share once owned by Gilead.

Gilead’s quarterly sales of hepatitis C drugs totaled $902 million, down from $2.2 billion a year earlier. Sales of antiviral and HIV drugs rose to $3.7 billion from $3.3 billion.

Third quarter net income fell to $2.1 billion, or $1.60 per share, from $2.7 billion, or $2.06 per share, a year earlier.

Gilead’s shares, which rose 1 percent to close at $68.62 in regular trading, were little changed at $68.65 after hours. (Reporting By Deena Beasley Editing by Bill Berkrot)

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