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Gilead quarterly profit up 76 pct on HIV drug sales
 
 
  Tue Jul 19, 2005
 
By Deena Beasley
 
LOS ANGELES, (Reuters) - Gilead Sciences Inc. on Tuesday said its second-quarter profit rose 76 percent, driven by strong demand for its two-drug combination pill for HIV -- the virus that causes AIDS.
 
The Foster City, California-based biotechnology company posted a net profit of $196 million, or 41 cents per share, compared with $111.5 million, or 25 cents a share, a year ago.
 
Analysts on average expected 36 cents per share, according to Reuters Estimates.
 
Second-quarter revenue rose 55 percent to $495.3 million, compared with analyst estimates of $458.6 million.
 
"Gilead is really a story of royalty revenue kicking in ... it's a very positive result, but not a blowout quarter," said Geoff Porges, analyst at Bernstein & Co.
 
The company's shares, which closed at $46.60 on Nasdaq, were slightly lower at $46.30 in after hours trading.
 
Overall HIV drug sales rose 61 percent during the quarter, including $123.1 million in sales of Truvada, a two-drug combination HIV pill launched about a year ago. Sales of Viread and Emtriva, the two older HIV drugs used in the combination pill, rose 6 percent to $209.1 million and fell 26 percent to $12.1 million, respectively.
 
About half of the patients taking the older drugs have switched to the combination pill, the company said.
 
Chief Financial Officer John Milligan said Gilead now expects 2005 sales of HIV drugs of as much as $1.325 billion, up from a previous target of $1.275 billion.
 
Second-quarter sales of antifungal drug Ambisome rose 2 percent to $56.2 million and sales of hepatitis B drug Hepsera rose 64 percent to $45.8 million.
 
Milligan also raised the company's outlook for 2005 sales of Ambisome to $205 million to $215 million from a previous target of $200 million to $210 million and said sales of Hepsera are still expected to total $160 million to $180 million.
 
The CFO said the company's decision this week to buy back 65 percent of the royalty stream it now pays Emory University on sales of Emtriva will not have an impact on 2005 earnings, but will slightly add to earnings next year and incrementally increase future results depending on sales of the drug.
 
Milligan said the $341 million price of the royalty buyback will be amortized over the life of Emtriva's patent, which expires in 2018.
 
Gilead has developed a triple fixed-dose combination HIV pill with Bristol-Myers Squibb which it hopes to file with regulators by year-end, said Chief Executive John Martin.
 
The companies have not yet proven whether the biological effect of the three-drug combination pill is equivalent to that of the separate drugs, and Gilead said it is still not sure when this data will be available.
 
In the event that the triple-dose drug is not shown to be "bioequivalent," back-up plans include layering the pills, said Kevin Young, executive vice president, commercial operations. "There is always a trade-off between stability and the size of the pill," he said.
 
 
 
 
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