Gilead Sciences reported a lower quarterly profit on Tuesday as sales of its flagship hepatitis C drugs fell by a greater-than-expected 59 percent, sending shares of the biotechnology company down 5 percent.
The company left its full-year sales outlook unchanged.
Gilead said it earned $1.48 a share in the first quarter excluding onetime items. Analysts, on average, expected an adjusted profit of $1.67 a share, according to Thomson Reuters I/B/E/S.
Quarterly sales of Gilead's hepatitis C drugs dropped to $1.05 billion from $2.58 billion a year earlier, falling short of the $1.19 billion average analyst forecast. Sales of other antiviral and HIV drugs rose slightly to $3.33 billion from $3.27 billion.
The results are "quite a bit below expectations, however, it is very clear that a lot of the shortfall is due to inventory drawdown, consistent with first-quarter patterns," said Jefferies analyst Michael Yee. "The stock is probably going to bounce back."
Sales of Gilead's drugs to cure hepatitis C have been on a downward trend for some time due to increased competition from other companies, including AbbVie.
"Hepatitis C is definitely weaker, but that should not be a complete shock," Yee said.
Sales of Yescarta, the cancer cell therapy acquired with Gilead's $12 billion purchase last year of Kite Pharma, totaled $40 million for the quarter, beating analysts' expectations of $23 million.
For full-year 2018, the biotechnology company said it still expects net product sales of $20 billion to $21 billion and a 2018 tax rate of 21 percent to 23 percent.
Shares of Gilead, which rose half a percent to close at $72.56 in regular trading on the Nasdaq, were down 5.3 percent at $68.70 after hours.