UPDATE: Gilead 4Q Profit Up 43%, 2010 Sales Outlook Bright
January 26 2010 - 7:10PM
Dow Jones News
Gilead Sciences Inc.'s (GILD) fourth-quarter profit rose 43% on
strong sales of its HIV drugs, as it offered a bright revenue
outlook for 2010.
The Foster City, Calif., company benefited from a spike in
royalties related to Tamiflu amid the swine flu pandemic, as well
as the continued rollout of Atripla, a combination HIV therapy that
is now the company's biggest seller. Furthermore, the company said
it will begin two late-stage clinical trials for its "Quad"
combination HIV treatment by mid-2010.
Investors applauded the outlook and pipeline news, as shares
rose 6.4% to $47.73 in after-hours trading, from Tuesday's close of
$44.87.
Gilead reported net income of $802.2 million, or 87 cents a
share, for the three months ended Dec. 31, up from $560 million, or
59 cents a share, a year earlier. Excluding items, earnings rose to
93 cents, exceeding analysts' expectations of 85 cents a share,
according to a survey from Thomson Reuters.
Revenue climbed 42% to $2.03 billion, also beating a Wall Street
projection of $1.93 billion.
Gilead projects 2010 net product sales of $7.6 billion to $7.7
billion, translating to growth of 17% to 19% for the year.
Wall Street currently projects total revenue for the year of
$7.9 billion, which includes revenue from royalties, contracts and
other sources, according to Thomson Reuters. In 2009, the company
reported product sales of $6.47 billion and revenue of $7.01
billion.
On a conference call, Chief Executive and Chairman John Martin
said he expects the HIV-related business to be "very healthy" for
the year, citing new HIV treatment guidelines that advise
physicians to start patients earlier on the therapies and new
testing initiatives.
Notably, Gilead said it would soon review recent clinical trial
results for its Quad HIV treatment pill with the Food and Drug
Administration, and plans to begin two Phase III studies before the
middle of 2010.
In December, Gilead reported that a mid-stage study had shown
its Quad combination was effective when compared to Atripla. It
will report the full results in mid-February.
The Quad combination includes Gilead's GS 9350, an experimental
boosting agent, along with its popular HIV combination drug therapy
Truvada and an experimental compound called elvitegravir. The
company also plans to launch a late-stage trial of the booster by
mid-2010.
Wall Street looks forward to the success of the Quad, partly
because all revenue from its sales will go to Gilead.
Atripla, a triple treatment that consists of Truvada along with
Bristol-Myers Squibb Co.'s (BMY) Sustiva, saw sales rise 50% to
$697.8 million, exceeding Truvada sales for the first time and
beating Wall Street views of $648 million, according to MDRx
Financial, a health-care market research firm.
Fourth-quarter sales of Truvada, which includes two Gilead
drugs, rose 19% to $670.7 million, well ahead of a Wall Street
consensus estimate of $642 million.
The company said that sales of both drugs were driven by
sales-volume growth in the U.S. and Europe.
Gilead noted strong market-share growth in central Europe for
Atripla. It launched Atripla in Belgium during the quarter and in
Australia at the beginning of the year.
Truvada and Atripla also maintained a strong presence in the
U.S., with the 85% of new patients with HIV using one of the
treatments.
As earlier projected, royalties from Tamiflu soared to $194.1
million from $16 million a year earlier, as countries stocked up on
the drug in response to the swine flu pandemic.
Gilead discovered Tamiflu but licensed it to Roche Holding AG
(RHHBY) for royalty payments that it receives with a one-quarter
lag.
Gilead confirmed that it is has discontinued the development of
darusentan for treatment-resistant high blood pressure after it
failed a late-stage study in December.
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com
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