Gilead's (GILD) product sales fell 10% year over year in the second quarter due to generic pressure on Letairis and Ranexa, a pandemic-related decline in patients seeking hepatitis C treatment and HIV pre-exposure prophylaxis, and the reversal of patient stockpiling that benefited first-quarter results. Management raised its product sales guidance for 2020 by a range of $1.2-$2.8 billion after incorporating coronavirus headwinds (less than $500 million impact in the first half) and highly uncertain sales assumptions for remdesivir. This guidance fits with our assumption of $2 billion in remdesivir sales in 2020, and we're maintaining our $85 per share fair value estimate for the firm. Gilead continues to build its oncology pipeline with small deals to supplement the larger Forty-Seven acquisition (which closed in the second quarter), and we think this investment will eventually offer support to the firm's wide moat, which currently rests on its dominant position in infectious diseases including HIV, hepatitis C, and now COVID-19.
We continue to model $2 billion in 2020 sales for Veklury (remdesivir), with sales of roughly $2-$3 billion annually through 2023. Veklury received emergency use authorization in the U.S. in May and is now approved in Japan (May 2020) and Europe (July 2020), and the firm is transitioning to commercial supply (at $2,340 per treatment course in developed markets) after exhausting its initial supply of donated drug in June. Remdesivir is now in development as part of combination therapy with other potential COVID-19 therapies (like Lilly's Olumiant), as an outpatient infusion in settings like nursing homes, and in phase 1 as an inhaled solution; and these studies could improve on remdesivir's efficacy alone or could allow access to remdesivir for patients outside the hospital.
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