Gilead Sciences rises on 3Q sales, greater outlook

Gilead Sciences climbs on strong 3rd-quarter sales and improved outlook for the full year

Associated Press

NEW YORK (AP) -- Shares of Gilead Sciences rose Wednesday after the drugmaker posted strong third-quarter sales and raised its annual forecast.

THE SPARK: Gilead said sales of its HIV drugs including Atripla, Stribild, and Truvada grew 14 percent to $2.33 billion and its overall revenue totaled $2.78 billion. That was about $60 million more than analysts expected. Excluding special items the company said it earned 52 cents per share, 4 cents more than Wall Street had expected.

The Foster City, Calif., company said it now expects between $10.3 billion and $10.4 billion in revenue this year, up from its previous guidance of $10 billion to $10.2 billion.

THE BIG PICTURE: Gilead Sciences Inc. is waiting for a Food and Drug Administration ruling on its experimental hepatitis C treatment sofosbuvir. On Friday an FDA advisory panel voted in favor of approving the drug, and the agency is scheduled to make a decision in December.

Hepatitis C is a blood-borne disease that causes liver damage and is blamed for 15,000 deaths in the U.S. each year. On Tuesday Gilead disclosed some of its marketing plans for sofosbuvir, saying it believes there are about 4.1 million U.S. patients and another 2.8 million people living with the disease in the European Union. The company says less than half of those patients have been diagnosed and less than 10 percent have been treated.

Current treatments for hepatitis C can take up to a year of therapy and only cure about three out of four patients. Sofosbuvir is a pill taken once per day, and in clinical trials it cured up to 90 percent of patients infected with the most common form of the virus in just 12 weeks. Gilead acquired the hepatitis C drug last year with the acquisition of Pharmasset for $11.1 billion.

THE ANALYSIS: William Blair & Co. analyst John Sonnier raised his sales expectations for Gilead's hepatitis C drugs and forecast a strong launch for sofosbuvir.

"We expect FDA approval of sofosbuvir in hepatitis C virus on the Dec. 8 regulatory action date and see potential for Gilead's hepatitis C virus franchise to represent the most successful drug launch in pharmaceutical history," he said. Sonnier said he now expects sofosbuvir to bring the company $1.64 billion in revenue in 2014. He had forecast $1.17 billion in sales of those drugs.

He maintained an "Outperform" rating on the stock.

SHARE ACTION: Gilead Sciences shares gained $3.01, or 4.3 percent, to $72.51 in afternoon trading. The stock has doubled in value over the last year and is trading at all-time highs, peaking at $73.08 Wednesday.

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