Gilead Sciences (GILD), the best-performing healthcare stock in the S&P 500 over the past year, released its first-quarter earnings on Thursday after the bell.
Despite posting better-than-expected profits and reaffirming its full-year guidance, shares fell sharply in premarket and after-hours trading, highlighting investor caution amid policy uncertainty and flat revenue growth.
Mixed Financials: Strong Profit, Weak Sales
For the quarter ending March, Gilead reported revenue of $6.67 billion, narrowly missing Wall Street expectations of $6.8 billion and essentially flat year over year. However, the company posted non-GAAP earnings per share of $1.81, beating consensus estimates by three cents.
On a GAAP basis, net income was $1.32 billion, or $1.04 per share. Adjusted results excluded merger-related costs and other one-time expenses. Gilead reaffirmed its full-year non-GAAP EPS guidance of $7.70 to $8.10 on product sales of $28.2 billion to $28.6 billion.
Despite the earnings beat and consistent forecast, GILD shares fell around 4% in Friday’s premarket session, trading near $101.76.
HIV Business Anchors Performance
Gilead’s core HIV franchise continued to deliver. Sales of Biktarvy, its flagship HIV therapy, climbed 7% to $3.15 billion, making up nearly half the company’s quarterly revenue. Liver disease treatments also showed modest growth, rising 3% to $758 million. These gains, alongside tighter expense management, helped offset weaker performance in other therapeutic areas.
Cancer drug Trodelvy posted a 5% drop in sales to $293 million, falling short of analyst expectations due to pricing and inventory challenges. Cell therapy revenue declined 3% to $464 million, as the company faced intensified competition in the U.S. oncology space.
Positive results from a recent Phase 3 trial combining Trodelvy with Merck’s Keytruda in breast cancer treatment have the potential to revive momentum in Gilead’s oncology pipeline, according to analysts at Leerink Partners.
Policy Uncertainty and Market Jitters
While Gilead's fundamentals remain solid, investor sentiment appears rattled by broader concerns. Regulatory uncertainties loom over its HIV prevention portfolio. A U.S. Supreme Court case could potentially overturn mandates requiring insurers to cover preventive services, including PrEP, though executives said they don’t expect a significant impact on business regardless of the outcome.
A more pressing catalyst may be the upcoming FDA decision on lenacapavir, a long-acting injectable HIV prevention drug. Approval is expected by June 19, and analysts estimate peak annual sales could reach $4 billion by 2030. Jefferies analyst Michael Yee called lenacapavir’s approval “key” for Gilead’s growth narrative, noting that no red flags have emerged to date.
Meanwhile, political noise surrounding potential pharmaceutical tariffs and federal HIV program funding cuts has also added a layer of caution. CEO Daniel O’Day emphasized Gilead’s U.S.-centric operations and IP footprint, which may limit exposure to international tariffs. CFO Andrew Dickinson assured investors that tariff-related costs have been factored into the company’s 2025 guidance.
Investor Outlook: Solid Fundamentals, Priced for Perfection
Despite the quarterly revenue miss, Gilead remains a standout in a volatile biotech sector, with shares up roughly 60% over the past 12 months. The stock’s pullback may reflect high investor expectations rather than any fundamental weakness.
With lenacapavir’s approval decision on the horizon, potential policy headwinds, and signs of renewed strength in oncology, Gilead faces a pivotal few months. For now, its strong HIV business and stable guidance continue to anchor its position as a leader in healthcare — even as Wall Street weighs short-term risks.
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