Gilead HIV drugs drive profit after year-ago loss
Thu Oct 18, 2007 7:54pm EDT
LOS ANGELES, Oct 18 (Reuters) - Gilead Sciences Inc posted a third-quarter profit that topped Wall Street targets on Thursday, driven by drugs that fight the virus that causes AIDS, reversing a year-ago loss on acquisition-related costs.
Gilead said it now expects 2007 product revenue to land at the high end of its existing forecast range of $3.6 billion to $3.7 billion.
The fast-growing company also announced on Thursday that it named former Avaya Inc and Merck & Co Inc executive Caroline Dorsa chief financial officer,
"Overall it was a strong quarter," said Fariba Ghodsian, chief investment officer at Los Angeles-based Dafna Capital Management, which has $200 million under management and owns company shares.
Foster City, California-based Gilead reported a net profit of $398.3 million, or 42 cents per share, compared with a net loss of $52.2 million, or 6 cents per share, a year earlier, when the company took a large charge for its purchase of Corus Pharma.
Analysts, on average, had seen Gilead posting a profit of 39 cents per share, according to Reuters Estimates.
Total revenue grew 41 percent to $1.06 billion, helped by product revenue that increased 44 percent to $961.9 million during the quarter.
Sales of HIV drugs rose 45 percent to $805.8 million, which included a 32 percent jump in sales of the two-drug combination medicine Truvada to $409.1 million.
Sales of the newer Atripla, which combines Truvada with Bristol-Myers Squibb Co's Sustiva into a single pill, more than tripled to $241.1 million from $68.4 million in the year-ago period.
On Thursday, the European Medicines Agency said it recommended approval for Atripla. Company executives said on a conference call that final clearance could come before the end of the year.
That news comes a day after Canadian drug regulators approved Atripla for the treatment of HIV infection in adults.
Royalty, contract and other revenue rose 23 percent to $96.9 million. Gilead gets much of its royalty revenue from Roche Holding's sales of Tamiflu flu treatment.
As Roche reported earlier this week, third-quarter Tamiflu sales fell 60 percent following completion of orders for influenza pandemic stockpiles.
Ghodsian and other investors were tuned in for a progress report on Gilead's new drug Letairis, which was approved in June to treat pulmonary arterial hypertension -- a life-threatening condition.
Gilead said the launch of Letairis, which just completed its first full quarter of sales, is proceeding in line with its expectations.
Letairis sales since launch were just over $6 million.
Analysts suggested the drug's market impact is greater than that number suggests, since some patients are likely receiving samples, and sales of Actelion Ltd.'s rival drug Tracleer missed analysts' third-quarter forecasts.
Among other things, Gilead said more than 450 physicians have prescribed Letairis to date, with better than 20 percent of them prescribing it to five or more patients.
"When you put it together, it seems like they are making a nice inroad into the market," Ghodsian said.
Gilead shares closed up 1.9 percent at $43.51 on the Nasdaq prior to the company's financial report and settled just slightly lower at $43.50, in extended trading.
Gilead shares are up nearly 29 percent so far this year, more than twice that of the American Stock Exchange Biotech Index.
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