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Gilead earnings hurt by legal settlement, other charges

Gilead Sciences Inc (GILD.O) on Tuesday posted lower-than-expected fourth-quarter earnings, citing a $1.25 billion legal settlement involving HIV drug patents and a charge related to its collaboration with Arcus Biosciences Inc , sending the company’s shares down nearly 4%.

Gilead reported adjusted quarterly earnings of 69 cents per share, down from $2.19 a year earlier. Wall Street analysts had forecast $1.60 per share, as compiled by Refinitiv.

For full-year 2022, Gilead said it expects adjusted earnings of $6.20 to $6.70 per share on product sales of $23.8 billion to $24.3 billion, or $21.8 billion to $22.3 billion excluding sales of its COVID-19 drug Veklury.

The targets are short of Wall Street estimates, “which puts a near-term damper on core business sentiment,” said Jefferies analyst Michael Yee.

Shares of Gilead were down 3.7% at $65.80 in after hours trading.

The company said it will make a one-time $1.25 billion payment to ViiV Healthcare – an HIV company majority-owned by GlaxoSmithKline (GSK.L), with Pfizer Inc (PFE.N) and Shionogi & Co Ltd (4507.T) as shareholders. It will also pay a 3% royalty until 2027 on sales of HIV drug Biktarvy and on future U.S. sales of any product containing its main component.

Quarterly revenue fell slightly to $7.24 billion from $7.42 a year earlier, but came in ahead of the average analyst estimate of $6.67 billion.

Product sales for the quarter fell 2% to $7.2 billion.

Sales of COVID-19 drug Veklury, known chemically as remdesivir, decreased 30% to $1.4 billon, but still easily surpassed the $864 million expected by analysts.

Fourth-quarter sales of Gilead’s HIV medicines rose 7% to $4.5 billion. The company had said in October that sales of non-COVID treatments, particularly of its flagship HIV drugs, were hurt during the pandemic as many people avoided healthcare settings, but had started to recover.

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Quarterly sales of breast cancer drug Trodelvy came in at $118 million, in line with analyst estimates of $116 million.

Yee said investor focus remains on upcoming results from a key trial of Trodelvy in patients with a specific type of breast cancer. The medication was the main driver of Gilead’s $21 billion purchase of Immunomedics in 2020.

Reporting By Deena Beasley; Editing by Bill Berkrot

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