Categories Earnings, Other Industries

Upbeat Q2 results no help to Gilead Sciences as CEO resignation sends shares down

Lower product sales and prescription trends continued to batter Gilead Sciences (GILD), as earnings slipped more than 40% in the second quarter of FY2018. However, the results beat expectations. The earnings announcement was preceded by the company updating that John F. Milligan will step down as CEO and President. The upbeat results were marred by the resignation, as shares slipped 1.6% in extended trading after market close on Wednesday.

Milligan, who was with Gilead for 28 years, plans to remain in his current position till the year-end as the Board of Directors searches for a successor.

With revenue tumbling 21% to $5.6 billion, the biopharma giant saw a 41% slide in second-quarter earnings to $1.82 billion or $1.39 per share. Non-GAAP EPS plunged 25% to $1.91.

The previous quarter, lower sales of Harvoni and Sovaldi across all major markets and lower sales of Epclusa in the US due to increased competition hurt product sales. This quarter, however, Genvoya sales lifted sales a bit, offset by Truvada.

 

CEO Milligan stepping down sparks a slide in share price even after upbeat results

 

Gilead also saw research and development expenses (R&D) skyrocket to $1.2 billion this quarter from $864 million a year ago.

Gilead also tweaked its full-year 2018 guidance, as effective tax rate is now expected to be 19-21%, while the combined impact of acquisition-related, up-front collaboration, stock-based compensation, and other expenses on diluted EPS is touted to be $1.50-1.60 now.

Earlier, the biopharma company said it expects full-year 2018 net product sales of $20 billion to $21 billion and EPS of $1.41-1.51. Gilead continues to expect product gross margin of 85-87%, with R&D expenses in the range of $3.40 billion to $3.60 billion.

With not so impressive results, one can say the CEO stepping down was a long way coming. “Today, Gilead has the right strategy in place to successfully execute on its mission of improving the lives of people with some of the world’s most serious diseases, led by a robust HIV franchise, an industry-leading cell therapy platform and a late-stage pipeline in NASH and inflammation,” said John C. Martin, Chairman of the Board of Directors.

However, CEO John F. Milligan hinted that it was high time for a vacation, who said, “I’m looking forward to a well-deserved break and will then move on to new and different opportunities.” Dr. Milligan will also resign from the Gilead Board by year-end. Chairman John C. Martin also said he would step down from the board when a new CEO joins the company.

Gilead Sciences post upbeat Q2 results, CEO resigns

Most Popular

United Parcel Service (UPS) seems on track to regain lost strength

Cargo giant United Parcel Service, Inc. (NYSE: UPS) ended fiscal 2023 on a weak note, reporting lower revenues and profit for the fourth quarter. The company experienced a slowdown post-pandemic

IPO Alert: What to look for when Boundless Bio goes public

Boundless Bio is preparing to debut on the Nasdaq stock market this week, and become the latest addition to the list of biotech firms that have launched IPOs this year.

Nike (NKE) bets on innovation and partnerships to return to high growth

Sneaker giant Nike, Inc. (NYSE: NKE) has been going through a rough patch for some time, with sales coming under pressure from weak demand and rising competition. Post-pandemic, the company

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top