Why did Gilead cut its 2020 revenue forecast?

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Gilead Sciences Inc. Revised 2020 Revenue Forecast Due to Lower-Than-Expected Demand for Remdesivir

Gilead Sciences Inc. adjusted its 2020 revenue forecast downwards primarily because of lower-than-anticipated demand and sales performance for its COVID-19 treatment, remdesivir. This revision reflects a more cautious outlook on the drug's sales trajectory in the latter part of the year.
Remdesivir Sales Missed Analyst Expectations

Remdesivir, marketed as Veklury, generated US$873 million in revenue during the quarter. This figure fell short of the US$960 million estimated by industry analysts, indicating a gap between market expectations and actual sales performance for the antiviral medication.
Declining Hospitalisation Rates Impacted Demand

The Chief Commercial Officer of Gilead, Johanna Mercier, explained that while the United States experienced a surge in COVID-19 cases over the summer, a concurrent drop in hospitalisation rates affected the demand for remdesivir. The company anticipates that a fall surge in both Europe and the US may lead to an increase in hospitalisations, potentially boosting demand.
Full-Year Sales Outlook Reduced

Consequently, Gilead lowered the upper limit of its full-year sales forecast to US$23.5 billion, a decrease from the previously projected high of US$25 billion. This revised guidance is almost entirely attributed to the adjusted expectations for Veklury (remdesivir) sales, with third-quarter demand proving less robust than anticipated.
Inventory Holding and Stockpiling Shortfalls

Further contributing to the forecast adjustment, Gilead noted that some third-quarter remdesivir sales were placed into inventory for fourth-quarter use. Additionally, government stockpiling purchases did not meet the company's projected volumes, impacting overall sales figures.

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Why did Gilead cut its 2020 revenue forecast?

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