Gilead Sciences Inc (GILD.O) on Thursday forecast its 2021 results above Wall Street estimates after posting a 26% rise in fourth-quarter 2020 revenue, driven by sales of its antiviral drug, remdesivir, which is used to treat COVID-19 patients.
Shares of Gilead were up 2.5% in extended trading.
Gilead said the COVID-19 pandemic continues to affect its sales, including its treatments for hepatitis C and HIV, due to fewer people going to their doctors. It expects a gradual recovery in underlying market dynamics starting the second quarter of this year.
Remdesivir, which is sold under the brand name Veklury, brought in $1.9 billion in the fourth quarter ended Dec. 31, above analysts' estimates of $1.34 billion. Excluding Veklury, Gilead said its quarterly sales fell 7%.
The company said remdesivir continues to be a critical tool during the COVID-19 pandemic, forecasting 2021 sales of up to $3 billion for the drug.
Gilead Chief Medical Officer Merdad Parsey said that unlike current COVID-19 vaccines and some other drugs, remdesivir does not target the spike proteins of the coronavirus, which are altered in some recently-identified, more transmissible variants of the virus.
"We have not so far seen mutations that would impact the efficacy of remdesivir," he said during a conference call.
Gilead said it continues to work on an inhaled version of the COVID-19 drug - which is given intravenously to hospitalized patients - but more clinical study is required.
For 2021, the California-based company projected an adjusted earnings range with a midpoint of $7.10 per share, on product sales with a midpoint of $24.4 billion, ahead of respective Wall Street estimates of $6.85 per share and $24.27 billion, according to IBES data from Refinitiv.
"We think the $7 number is higher than where investors were looking for and provides a good base to continue to grow," Jefferies analyst Michael Yee said in an email.
He said Gilead projected 2021 operating expenses at less than analysts have estimated.
The company's fourth-quarter revenue totaled $7.42 billion, beating the average analyst estimate of $7.33 billion. Adjusted quarterly earnings of $2.19 were ahead of Wall Street expectations of $2.15 per share.
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