WS Investor
08 May 2026, 06:34
# Gilead Edges Lower After Hours as Acquisition Charges Swamp Strong Operating Quarter
Foster City, May 7, 2026 — Shares in Gilead Sciences slipped roughly 1% in after-hours trading yesterday after the biopharmaceutical company reported a solid first quarter operationally but issued full-year EPS guidance that alarmed investors at first glance — a dramatic reduction driven almost entirely by the accounting cost of three major acquisitions rather than any deterioration in the underlying business.
The operating results were genuinely strong. Total revenues grew 4% to $7.0 billion, with base business product sales excluding Veklury up 8% to $6.8 billion. HIV remains the engine, with HIV product sales growing 10% to $5.0 billion. Biktarvy, the company's flagship HIV treatment, rose 7% to $3.4 billion, and Descovy surged 38% to $807 million. Trodelvy, the oncology antibody-drug conjugate, grew 37% to $402 million, reflecting strengthening demand. Non-GAAP diluted EPS improved to $2.03 from $1.81 a year ago, and product gross margin expanded to 87.5% on a non-GAAP basis. Full-year product sales guidance was raised to $30.0 to $30.4 billion from the prior range.
The jolt came from the updated EPS guidance. Full-year non-GAAP diluted EPS was cut to a loss of $0.65 to $1.05, compared to prior guidance of $8.45 to $8.85 — a swing of roughly $9.50 per share. The reason is entirely attributable to $11.5 billion in anticipated acquired in-process R&D charges from the company's acquisition spree: the completed $7.8 billion purchase of Arcellx, the pending acquisition of Ouro Medicines for autoimmune treatments, and the pending Tubulis deal for next-generation antibody-drug conjugates. These are non-cash accounting charges that hit the income statement at closing but represent strategic investments in future pipeline assets rather than operational losses.
Investors familiar with biotech acquisition accounting will recognize the pattern, but the headline EPS reversal is jarring enough to explain the modest after-hours dip as others digest what is actually a strong underlying quarter.
Foster City, May 7, 2026 — Shares in Gilead Sciences slipped roughly 1% in after-hours trading yesterday after the biopharmaceutical company reported a solid first quarter operationally but issued full-year EPS guidance that alarmed investors at first glance — a dramatic reduction driven almost entirely by the accounting cost of three major acquisitions rather than any deterioration in the underlying business.
The operating results were genuinely strong. Total revenues grew 4% to $7.0 billion, with base business product sales excluding Veklury up 8% to $6.8 billion. HIV remains the engine, with HIV product sales growing 10% to $5.0 billion. Biktarvy, the company's flagship HIV treatment, rose 7% to $3.4 billion, and Descovy surged 38% to $807 million. Trodelvy, the oncology antibody-drug conjugate, grew 37% to $402 million, reflecting strengthening demand. Non-GAAP diluted EPS improved to $2.03 from $1.81 a year ago, and product gross margin expanded to 87.5% on a non-GAAP basis. Full-year product sales guidance was raised to $30.0 to $30.4 billion from the prior range.
The jolt came from the updated EPS guidance. Full-year non-GAAP diluted EPS was cut to a loss of $0.65 to $1.05, compared to prior guidance of $8.45 to $8.85 — a swing of roughly $9.50 per share. The reason is entirely attributable to $11.5 billion in anticipated acquired in-process R&D charges from the company's acquisition spree: the completed $7.8 billion purchase of Arcellx, the pending acquisition of Ouro Medicines for autoimmune treatments, and the pending Tubulis deal for next-generation antibody-drug conjugates. These are non-cash accounting charges that hit the income statement at closing but represent strategic investments in future pipeline assets rather than operational losses.
Investors familiar with biotech acquisition accounting will recognize the pattern, but the headline EPS reversal is jarring enough to explain the modest after-hours dip as others digest what is actually a strong underlying quarter.