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(Reuters) - Gilead Sciences Inc (GILD.O) on Tuesday reported a 25 percent drop in first-quarter profit as fewer patients were treated with its flagship drugs for hepatitis C, sending shares of the biotechnology company down 2.5 percent.
After one-time items, Gilead earned $2.23 a share, falling short of the $2.28 forecast by Wall Street analysts, according to Thomson Reuters I/B/E/S.
The miss "was driven by lighter revenues, higher R&D (research and development), and higher tax," offset by a litigation gain, according to Mizuho analyst Salim Syed.
Quarterly sales of hepatitis C drugs Sovaldi, Harvoni and Epclusa totaled $2.6 billion, down from $4.3 billion a year earlier. Analysts had forecast hepatitis C sales of $2.65 billion.
Gilead warned earlier this year that sales of the high-priced drugs were declining due to a combination of fewer patients being deemed eligible for treatment and growing competition from other drugmakers.
Sales of other antiviral products, including Gilead's other main franchise of HIV drugs, rose to $3.3 billion from $2.9 billion for the same period in 2016.
The company's first-quarter net income fell to $2.7 billion from $3.6 billion a year earlier.
Gilead Chief Executive Officer John Milligan told analysts on a conference call that 2017 "is progressing as we expected," with the number of patients started on hepatitis C treatments dropping off following an initial "rapid increase in the number of patients treated and cured."
He said Gilead, with $34 billion in cash at the end of March, continues to explore "making partnerships and potential acquisitions."
U.S. President Donald Trump has called for bringing corporate profits being held offshore by multinationals into the country at a tax rate well below the 35 percent now owed on "repatriated" earnings, but Milligan downplayed the influence of such efforts on Gilead's strategy.
"There may be tax reform," Milligan said. "There may be repatriation - but we can't count on it or wait for it."
Overall revenue for the quarter fell to $6.5 billion from $7.8 billion.
It is "shocking to see continued and even accelerating (sales) decline," said Leerink analyst Geoffrey Porges.
The company repeated its previous forecast for 2017 product sales of $22.5 billion to $24.5 billion.
Shares of Gilead were down 2.5 percent at $66.85 in after-hours trading.
Reporting by Deena Beasley in Los Angeles; Editing by Matthew Lewis