Gilead Sciences on Monday lowered its full-year sales outlook, citing slower-than-expected demand for its key hepatitis C drugs, and said second-quarter profits fell 22 percent.
The biotechnology company's shares, which had closed 2.3 percent higher, fell 4 percent to $85 after hours.
Product sales fell to $7.65 billion from $8.13 billion in the year-ago quarter, Gilead said in a statement. Sales of hepatitis C drugs Sovaldi and Harvoni dropped to $4 billion from $4.9 billion. Wall Street analysts, on average, had forecast hepatitis C sales of $4.09 billion, according to a poll by ISI Evercore.
Gilead lowered its 2016 product sales outlook to between $29.5 billion and $30.5 billion, from a previous range of $30 billion to $31 billion. The company said non-government U.S. health insurance plans were still limiting the number of patients who get the treatments, which many critics have said are far too expensive.
Other factors behind the lower sales forecast include weaker hepatitis C drug pricing in some European markets, a trend toward shorter treatments and the loss of market share to competition, Chief Financial Officer Robin Washington told analysts on conference call after the results were released.
Gilead drew fire more than two years ago when it charged $84,000 per course of treatment for Sovaldi, the first in a new class of hepatitis C drugs considered to be a cure for the liver-destroying disease.
While the list price has not changed, Gilead has offered discounts to certain insurers. Competing therapies have been launched by AbbVie and Merck over the past year.
The number of U.S. patients who started undergoing treatment with hepatitis C drugs was little changed from the first quarter, suggesting that the market has stabilized, ISI Group analyst Mark Schoenebaum said in a research note on Monday.
Gilead's quarterly net profit fell to $3.5 billion from $4.5 billion a year earlier. Adjusting for one-time items, Gilead earned $3.08 per share, which beat analysts' average estimate of $3.02, according to Thomson Reuters I/B/E/S.
An estimated 3.2 million Americans are infected with hepatitis C and insurers have responded by closely monitoring which patients should be treated with the new drugs.
The virus is spread by contact with contaminated blood of an infected person, by sharing needles or other equipment to inject drugs. Most patients have no symptoms, but some have fatigue, nausea, loss of appetite, and yellowing of the eyes and skin.