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Gilead Sciences Inc. (GILD) stock rose Friday after the biopharmaceutical company reported better-than-expected third-quarter earnings and revenue and raised its full-year sales forecast, driven by strong demand for its HIV treatments.
The company also warned of a $1.5 billion revenue headwind in 2028 from Medicare pricing changes affecting its blockbuster HIV drug Biktarvy.
Gilead on Thursday reported third-quarter adjusted earnings of $2.55 per share, beating analysts' consensus estimate of $2.19.
Revenue rose 6.8% year over year to $8.30 billion, topping Wall Street's estimate of $7.809 billion.
Base business sales increased 16%, marking Gilead's strongest growth since 2015. Growth was driven by Biktarvy, Descovy and Yes2go in HIV, Trodelvy in metastatic breast cancer and Livdelzi in primary biliary cholangitis.
HIV sales climbed 18% year over year, supported by strong demand for Biktarvy and a modest initial contribution from Bixlenvo, which launched in August.
Biktarvy sales rose 10% to $4.1 billion, while its U.S. HIV treatment market share reached a record 53%.
Higher demand, improved average realized pricing and favorable inventory trends supported growth.
CEO Daniel O'Day said the HIV treatment market showed signs of stabilization despite growth remaining below its historical 2% to 3% range.
O'Day also highlighted the company's expanding prevention business, noting that Yes2go and Descovy for PrEP together hold 50% market share and generate approximately $4 billion in annualized revenue.
He said Gilead has its most comprehensive and diverse HIV pipeline to date.
Gilead expects a significant revenue hit in 2028 after Biktarvy was selected for Medicare's drug price negotiation program.
The CEO sharply criticized Medicare's drug pricing approach, arguing that the Inflation Reduction Act's so-called "pill penalty" discourages investment in innovative medicines such as Biktarvy.
He warned that imposing price reductions on highly differentiated drugs midway through their commercial life cycles could jeopardize future drug development, adding that the government's $2,600 price for Biktarvy fails to reflect the treatment's value.
The Centers for Medicare & Medicaid Services set Biktarvy's price at $2,600 per 30-day supply, approximately 38% below its list price.
Gilead expects the pricing changes and related effects across U.S. channels to reduce Biktarvy revenue by approximately $1.5 billion in 2028.
The company expects Biktarvy sales to decline in 2028 from 2027 levels but continues to forecast overall HIV revenue growth as newer treatments gain traction.
Chief Financial Officer Andrew Dickinson said Gilead has previously managed a $1.1 billion Medicare Part D headwind in 2025 and more than $500 million in government policy-related pressure in 2026.
Gilead raised its 2026 revenue forecast to $31 billion-$31.3 billion from $30.1 billion-$30.4 billion, exceeding Wall Street's estimate of $30.767 billion.
However, the company widened its adjusted loss forecast to 85 cents-$1.20 per share from 30 cents-65 cents, compared with analysts' consensus loss estimate of 47 cents.
The revised outlook includes approximately $9.88 per share in acquired research and development charges tied to $12.4 billion in transactions involving Arcellx, Tubulis, Ouro Medicines and PepStar, net of the Lakefront collaboration and related tax effects.
GILD Price Action: Gilead Sciences shares were up 4.76% at $173.49 during premarket trading on Friday. The stock is trading at a new 52-week high, according to market data.
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