Gilead Sciences (GILD) Stock Drops Despite Q1 Beat on Massive Acquisition Charges

Key Takeaways

• First-quarter revenue reached $6.96 billion, surpassing analyst estimates of $6.91 billion.
• Adjusted earnings per share of $2.03 exceeded the $1.91 consensus forecast.
• Annual EPS outlook revised to a loss between $0.65 and $1.05, a dramatic shift from previous guidance of $8.45–$8.85.
• The revision stems from $11.5 billion in IPR&D charges related to multiple acquisitions.
• Shares of GILD declined approximately 2% after hours and traded down 1% at $132.60 in Friday’s premarket session.

Gilead Sciences delivered first-quarter results that exceeded analyst expectations, yet investors sent shares lower. The reason? A shocking downward revision to full-year earnings projections that overshadowed the quarterly beat.

Gilead Sciences, Inc., GILD

Shares declined nearly 2% during after-hours trading Wednesday, and continued their descent with a 1% drop to $132.60 in Friday’s premarket session.

The biopharmaceutical company reported first-quarter revenue of $6.96 billion, narrowly beating the Street’s $6.91 billion estimate. On the bottom line, adjusted earnings per share reached $2.03, comfortably ahead of the $1.91 analyst consensus compiled by FactSet.

Building on these quarterly results, Gilead increased its full-year revenue outlook to a range of $30 billion to $30.4 billion, representing an upward adjustment from the previous $29.6 billion to $30 billion guidance.

However, the earnings outlook painted a starkly different picture.

Management now projects a full-year adjusted loss ranging from $0.65 to $1.05 per share. This represents a dramatic departure from the company’s earlier guidance of $8.45 to $8.85 in positive earnings. The Street had anticipated $8.65 per share.

The company attributed this guidance reversal to $11.5 billion in in-process research and development (IPR&D) expenses, combined with elevated financing costs stemming from several recent acquisitions.

HIV Franchise Delivers Robust Performance

Biktarvy, Gilead’s leading HIV treatment, continued its strong momentum. The drug generated $3.4 billion in sales, reflecting 8% growth and representing approximately half of the company’s total quarterly revenue. The overall HIV segment demonstrated solid 10% year-over-year expansion.

The company also significantly increased its revenue projection for Yeztugo, its twice-daily HIV prevention injection, to $1 billion—a substantial jump from the prior $200 million estimate.

However, some products underperformed. Veklury, the company’s COVID-19 treatment, experienced a 52% revenue decline to $144 million, which management linked to reduced COVID-19 hospitalization rates nationwide.

Epclusa, a hepatitis C therapy, generated $283 million compared to $346 million in the year-ago quarter. The cell therapy division also weakened, declining roughly 12% to $407 million from $464 million previously.

Excluding Veklury from the equation, product sales increased 8% to reach $6.8 billion.

Aggressive M&A Strategy Behind Guidance Adjustment

Gilead has pursued an active acquisition strategy throughout 2026. In February, the company announced plans to acquire Arcellx for $7.8 billion. Gilead previously maintained a collaboration agreement with the Maryland-based biotechnology company to jointly develop anitocabtagene autoleucel.

As March concluded, Gilead reached an agreement to purchase privately held Ouro Medicine to bolster its autoimmune disease pipeline. Most recently, the company announced plans to acquire Tubulis GmbH, enhancing its antibody-drug conjugate platform.

The $11.5 billion IPR&D charge associated with these transactions is the primary driver behind the earnings guidance reversal.

Gilead’s market capitalization currently stands at approximately $164.57 billion. The stock trades at a P/E ratio of 19.8x. Corporate insiders have sold $10.6 million worth of shares over the past three months, with zero reported insider purchases during the same timeframe.

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