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Gilead Sciences Q2 Revenues Grow 21 Percent as CAR T-Cell Business Jumps 39 Percent

NEW YORK – Gilead Sciences announced after the close of the market on Thursday a 39 percent increase in second quarter sales of its oncology CAR T-cell therapy products versus the prior year's quarter.

"2021 is a catalyst-heavy year for Gilead, as we've delivered all of our key first-half pipeline commitments," Gilead CEO Daniel O'Day said in a call to discuss the financial results. "The business is diversifying across indications and therapies, and in particular, we're seeing cell therapy and Trodelvy contribute to growth. We expect they will be key growth drivers for Gilead."

For the three-month period ending June 30, the Foster City, California-based company reported $6.22 billion in total revenue, up 21 percent compared to $5.14 billion in the prior-year quarter and beating analysts' consensus estimates of $6.07 billion. Gilead's overall revenue climb in the pharmaceutical product segment was primarily driven by the use of its antiviral medication remdesivir (Veklury) to treat hospitalized patients with COVID

Excluding the remdesivir sales, the firm's product sales were $5.3 billion, up 5 percent versus Q2 2020. Beyond remdesivir, Gilead's targeted cancer treatment sacituzumab govitecan‐hziy (Trodelvy), and growth across its cell therapies, including axicabtagene ciloleucel (Yescarta) and brexucabtagene autoleucel (Tecartus) also played into the revenue increase. Cell therapy product sales totaled $219 million, versus $157 million in the prior year's quarter.

Sacituzumab govitecan-hziy, to which the US Food and Drug Administration granted accelerated approval for metastatic triple-negative breast cancer in April last year, brought in $89 million. The agent was not yet a part of Gilead's pipeline during the second quarter last year, so year-over-year comparisons were not available, though sales of the drug grew sequentially by 24 percent.

Axicabtagene ciloleucel sales increased to $178 million, up 14 percent from $156 million in Q2 last year. Factors playing into this growth included expansion into refractory, indolent follicular lymphoma in the US as well as its continued expansion in Europe.

Gilead subsidiary Kite Pharma, which develops the firm's CAR T-cell programs, expects to present full data soon for the ZUMA-7 trial of axi-cel in second-line relapsed or refractory large B-cell lymphoma, and has already begun discussion with global regulatory authorities for this expanded indication. The firm has already reported top-line data showing a 60 percent improvement in event-free survival versus standard-of-care. "This is truly a landmark trial," O'Day said. "It's the first and largest reported Phase III trial readout that demonstrates the efficacy and safety of cell therapy, and we are excited by the opportunity to bring the potential benefits of cell therapy to patients in the earlier line."

Brexucabtagene autoleucel, which recently launched as a mantle cell lymphoma treatment in the US and EU, contributed $41 million to revenues during the second quarter. Looking ahead, however, the company is optimistic about the therapy's continued expansion, particularly in the wake of the ZUMA-3 clinical trial results, which showed 71 percent response rates with the autologous therapy in relapsed or refractory B-cell precursor acute lymphoblastic leukemia. Based on these findings, the FDA has granted the indication priority review and is expected to issue a decision around early October.

The company's non-GAAP net income for the second quarter was $2.25 billion, or $1.21 per share, compared to a loss of $2.99 billion, or $2.66 per share, in the prior-year quarter. The company reported non-GAAP diluted EPS of $1.87, exceeding analysts' consensus estimates of $1.73.

Gilead's R&D spending amounted to $1.13 billion in the quarter, versus $1.3 billion during the same quarter in 2020, marking a 13 percent reduction. Gilead chalked up the slightly lower spending on R&D to its pumping the brakes on remdesivir development amidst lower COVID-19 hospitalization rates and vaccine uptake, though the higher spending on sacituzumab govitecan-hziy offset much of this spending decrease.

Meanwhile, selling, general, and administrative spending during Q2 2021 was $1.35 billion compared to $1.24 billion in Q2 2020, which Gilead attributed to lower legal expenses due to a settled Department of Justice investigation, but offset in part by increased spending in the firm's global commercialization.

As of June 30, Gilead had $7.4 billion in cash, cash equivalents, and marketable debt securities.

The company also narrowed its full-year guidance. It now expects product sales in 2021 to be between $24.4 billion and $25.0 billion. Previously, it had estimated pharmaceutical products to net between $23.7 billion and $25.1 billion in revenues. The company is also estimating non-GAAP earnings per share in the range of $6.90 and $7.25, whereas previously it had guided to a range between $6.75 and $7.45.