- Consensus sell-side estimates call for $3.86B total revenue in the quarter, just over $1B from Sovaldi.
- Buy-side expects Sovaldi sales of $1.6B-1.8B for 1Q14.
- Sell-side consensus “beat” seems likely. Question is: what happens to the stock given investor expectations?
Gilead Sciences (GILD) will report earnings results after the bell on Tuesday, important because the large biotech company has served as a bellwether (and catalyst) for the recent biotech correction. Gilead has not offered 2014 guidance that includes sales of Sovaldi, the company’s recently launched Hepatitis C drug, which is not only on track to break Incivek’s record for the largest drug launch ever, but has also received significant negative press for its $1000/pill cost. Investors will be focused almost exclusively on Sovaldi sales figures for this first quarter, and on commentary from the company regarding payor interactions or pushback.
Consensus sell-side estimates call for Sovaldi’s first full quarter of sales to approach $1.05B, with total revenue of $3.86b. But Sovaldi prescription trends suggest much higher sales figures. ISI analyst Mark Schoenebaum, who has been a vocal Gilead bull, believes the whisper Sovaldi numbers are closer to $1.6B-$1.8B, in line with RBS’ estimate for $1.7B. Worth noting, only one sell-side analyst has increased 1Q14EPS/revenue guidance in the past 4 weeks.
In February, Gilead guided for 2014 revenues of $11.3B – $11.5B ($2.85B per quarter at the midpoint) ex-Sovaldi. If whisper numbers play out, revenues could surpass $4.4B, blowing consensus estimates of $3.9B out of the water.
So what constitutes a beat given the buy-side and sell-side consensus disparity, and does it even matter given a focus on latter-year revenues? That’s still a toss up.
It’s worth listening in to Gilead’s conference call after the close today, which can be found here. Biotech giant Amgen (AMGN) also reports after the close.
