Gilead talks up strong HIV drug launch
The company raises sales guidance while reporting better-than-expected Q3 earnings.
Gilead Sciences (GILD) raised product sales guidance for the rest of the year when it reported quarterly results Tuesday, and said demand was high for a new HIV medicine launched just two months ago. Earnings in the third quarter also topped Wall Street expectations.
Shares of Gilead jumped 6% to $68.85 in morning trading Wednesday.
Net product sales guidance for the remainder of 2012 was raised to a range of $9.1 billion to $9.2 billion from the previous forecast of $8.8 billion to $9 billion. The new guidance, however, brackets current Street consensus of $9.1 billion.
Gilead's product sales guidance encompasses all the drugs sold by the company but excludes other revenue. The company does not provide earnings guidance but current consensus is pegged at $3.79 per share.
Sales of Stribild, Gilead's new four medicine-in-one HIV pill, totaled $17.5 million in the third quarter, in-line with consensus. Launched in late August, Gilead executives said the bulk of early Stribild sales went to fill wholesaler inventory but that demand for the drug was being seen in patients new to HIV therapy as well as from some patients seeking to switch off of protease inhibitor-containing HIV regimens.
Wall Street is paying close attention to Stribild because the new medicine could help Gilead maintain its dominant market share in HIV and staunch slowing growth as the company's older drugs lose patent protection and face generic competition.
On the hepatitis C front, Gilead confirmed that sustained virologic response (SVR) or "cure rate" data from a phase II study of its GS-7977/GS-5885 plus ribavirin all-oral regimen in genotype 1 patients will be presented at the upcoming AASLD Liver Meeting in November.
On Tuesday's conference call, Gilead, alluding to the Abbott data indirectly, acknowledged that the SVR rates from its all-oral combination "needs to be very high these days." But Gilead also stressed that other parameters besides high cure rates, including convenience and tolerability, will also play a role in which therapies become widely used.
Gilead has begun treatment-naive hepatitis C patients in a late-stage study of a single-pill combination of GS-7977 and GS-5885.
Phase III studies of GS-7977 plus long-acting interferon and ribavirin are nearing completion, with the first data to be announced in December, Gilead said. The company expects to file GS-7977 for regulatory approval in the second quarter of next year.
Moving back to HIV, Gilead is developing a follow-on version of its core HIV drug Viread. A phase II study of this drug, known as GS-7340, is nearing completion with results to be announced in November.
GS-7340 is designed to cause less kidney toxicity than Viread. If developed successfully, GS-7340 could also help blunt the financial blow of looming generic versions of Viread.
For the third quarter, net income was $675.5 millkon, or 85 cents per share, compared to $741.1 million, or 95 cents per share in the third quarter 2011. On a non-GAAP basis, which excludes acquisition-related charges and other expenses, net income for the quarter totaled $1 per share or 6 cents per share better than Street consensus.
Total revenue in the third quarter increased 14% to $2.43 billion from $2.12 billion one year ago.
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