Gilead Sciences, Inc. (NASDAQ: GILD)
If you follow my writing, you know that one of my favorite seasons is upon us once again. It’s earnings report season and GILD will be releasing theirs very soon! When it comes to biotech, there are few stocks that are more interesting to me than Gilead Sciences; and I’m expecting a blow out in earnings. Here’s why…
What Analysts Are Expecting Gilead Sciences Earnings To Be
Analysts overall are expecting a 37% increase in revenue compared to the same quarter year over year. That figure in the opinion of analysts should come in around $6.84 billion for the first quarter of 2015. While that would be massive growth, and incredibly impressive to say the least, I’m expecting them to do even better.
Why Gilead Sciences Will Top Projected Revenue In Q1 2015
There are quite a few reasons that I think GILD will top earnings expectations when they release their report on the 28th.
- They Have A History Of Doing So – Just look at the earnings reports over the last 2 years. 7 out of 8 of the quarterly reports topped analyst expectations.
- GILD Has A Strong Hold On The Hepatitis C Market – When it comes to Gilead Sciences, a massive portion of their revenue comes from the hepatitis C drugs Harvoni and Sovaldi. That’s because these drugs are part of the cocktail that has a strong hold on the hepatitis C market. Though companies like AbbVie (ABBV) have tried to take their piece of the pie, GILD continues to reign supreme!
- The Hepatitis C Market Is Huge – According to the World Health Organization, there are approximately 3.2 million people in the United States that are affected by hepatitis C. According to prescription data Gilead controls around 79% of that market.
- GILD Pricing – The treatment for hepatitis C has a massive price tag; coming in at $94,500 over the course of 12 months.
Now, let’s put all of this data together. For each patient using Gilead Sciences’ hepatitis C treatment, the company will earn $23,625 in the quarter. Considering that GILD controls around 79% of the market here in the US, their treatment will be given to around 2,528,000 patients! Multiply patients by the price and you get $59.724 billion (Obviously GILD won’t see a massive number like this, but it is what the math adds up to). Now, taking into consideration that the company also has a strong hold on the HIV market, it just doesn’t make sense that GILD revenue would only come in at $6.84 billion. I’m expecting to see a much higher number.
What Do You Think?
Do you think GILD is likely to beat earnings expectations? Why or why not? Let us know in the comments below!