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Biotech major Gilead Sciences Inc. (GILD - Free Report) is slated to report fourth-quarter 2021 results on Feb 1, after market close.

The company has an excellent track record, with earnings beating estimates in all of the last four quarters, the average beat being 15.7%. In the last reported quarter, the company beat expectations by 54.07%.

Gilead Sciences, Inc. Price and EPS Surprise

Gilead Sciences, Inc. price-eps-surprise | Gilead Sciences, Inc. Quote

What Our Model Predicts

Our proven model predicts an earnings beat for Gilead this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for Gilead is +2.03%, as the Zacks Consensus Estimate is pegged at $1.50 and the Most Accurate Estimate is pegged at $1.53.

Zacks Rank: The company currently carries a Zacks Rank #3.

Factors at Play

Gilead did not provide any guidance for the fourth quarter. It upped its product sales outlook for 2021 concurrent with the third-quarter results suggesting an increase in sales in the fourth quarter.

A decline in HIV franchise sales due to the loss of exclusivity of Truvada and Atripla adversely impacted the top line in the third quarter. Sales from this franchise came in at $4.2 billion in the third quarter. The trend is likely to have continued in the fourth quarter as well. Flagship HIV therapy, Biktarvy, saw continued growth and gains in market share, despite the ongoing impact of the pandemic in all three quarters. The trend is expected to have continued in the final quarter. Strong growth in Biktarvy sales might have offset the overall decline in sales in the quarter. 

Descovy sales decreased in the previous quarter due to lower net price. A similar trend has most likely prevailed in the to-be-reported quarter.The Zacks Consensus Estimate for sales of Biktarvy and Descovy is pegged at $2.4 billion and $435 million, respectively.

Like the third quarter, HCV sales are likely to have decreased due to fewer patient starts outside the United States. A surge in COVID-19 cases due to the Omicron variant both in the United States and Europe has most likely resulted in lower patient starts this quarter as well.

Veklury (remdesivir) sales, an antiviral treatment for COVID-19, contributed $1.9 billion to the top line in the third quarter. Given the surge in sales of antibody treatments, sales of Veklury are likely to have declined or remained stable sequentially in the fourth quarter. The Zacks Consensus Estimate for Veklury sales is pegged at $755 million.

Cell Therapy product sales, which include Yescarta (axicabtagene ciloleucel) and Tecartus (brexucabtagene autoleucel), came in at $222 million in the previous quarter. Sales might have experienced a sequential increase, driven by label expansions. The Zacks Consensus Estimate for Yescarta sales stands at $194 million.

Trodelvy (for breast cancer) sales came in $101 million in the third quarter, reflecting increased use for the second-line treatment of metastatic triple-negative breast cancer (TNBC) and metastatic urothelial cancer in the United States. The drug was added following the acquisition of Immunomedics by Gilead in 2020. Sales might have registered a sequential increase as demand is normalizing. 

Operating expenses might have increased due to higher investments in the oncology program.