Dive Brief:

• Gilead's hepatitis C franchise continues to see declining sales, but its HIV line led by Biktarvy helped drive revenue past Wall Street consensus estimates in the third quarter, in results released Thursday. 
• Quarterly sales of Gilead's hepatitis C drugs totaled $902 million, down from $2.2 billion a year ago. But the company saw growth in HIV product revenue, which rose to $3.7 billion on the back of Biktarvy sales, which came in nearly 20% above consensus forecasts. 
• For a moment, outgoing CEO John Milligan seemed emotional on his last earning call for Gilead after 29 years at the biotech. He noted the search for his replacement is "moving on quickly, and we certainly hope to have somebody announced before the end of the year."

Dive Insight:

Whoever becomes Gilead's next CEO will have a full agenda to steer a company in the midst of transformation. Hepatitis C revenues have largely collapsed, leaving HIV drugs and an uncertain bet of cancer cell therapy as Gilead's path forward. 

While one analyst called third quarter results "solid," Gilead's rapid revenue declines remain "sobering," Leerink analyst Geoffrey Porges wrote in a note to investors. 

In addition to guarding Biktarvy (bictegravir/emtricitabine/tenofovir alafenamide)'s growth and boosting uptake of Yescarta (axicabtagene ciloleucel), the next leader will be tasked with turning pipeline promise into commercial returns.

Over the next nine months, Gilead expects five Phase 3 study readouts. 

Those results, Gilead execs hope, will lead to two new drugs in filgotinib, a JAK inhibitor targeting arthritis, and selonsertib, an ASK-1 inhibitor for non-alcoholic steatohepatitis, or NASH.

Multiple analysts viewed this upcoming data as helping position Gilead for the near future. 

"A new CEO plus biotech markets stabilizing in 4Q18 could make for a great stock setup into five Phase 3 data readouts over the next 9 months," Raymond James equity analyst Steven Seedhouse wrote in an Oct. 26 note. 

Milligan also talked up the company's new subsidiary, Asegua Therapeutics, on Thursday's earnings call.

Asegua will launch generic versions in January for two of Gilead's hepatitis C drugs. Milligan predicted the generics will help not only stabilize its declining hepatitis C market share, but help to boost Gilead revenues. 

"It will take away some of the pain of the co-pays that are provided, especially into the Medicare population," he told investors. "But most importantly, it'll open up access for us into the Medicaid population, which is the largest growing segment of patients for the future."

Outside of the HIV and hepatitis area, Yescarta, Gilead's cancer cell therapy, notched $75 million in third quarter sales, a modest improvement from $68 million last quarter that spurred multiple investor questions. 

"Worryingly, Gilead's oncology cornerstone Yescarta is facing growth challenges as the complicated dosing slows hospital uptake," Leerink's Porges wrote.

Robin Washington, the company's chief financial officer, framed it as a "slow and steady" build on the call, noting 64 centers are now certified to use Yescarta with the goal of getting 20 centers certified in Europe by the end of 2018.

"As we continue to see patients inflows at certified centers, we have also observed variability in volume as some centers enthusiastically embraced this novel therapy and others adopt treatment more slowly," Washington said.

"Going forward, we anticipate a steady and measured launch as reimbursement, referrals and center logistics improve to accommodate more patients," she concluded.

The Foster City, California-based biotech opened down roughly 2.7% upon market open Friday, before moving higher later in the morning.