NEW YORK (AP) -- Shares of Gilead Sciences rose Thursday after the company reported successful results from a trial of an experimental cancer drug.
THE SPARK: After the market closed on Wednesday, Gilead said it was stopping a late-stage study of its drug idelalisib. The company said that according to independent monitors, an early review of data from the study showed patients who were treated with the idelalisib had longer time to death or disease progression.
The trial was designed to evaluate idelalisib as a treatment for chronic lymphocytic leukemia. Patients in the trial were treated with a combination of idelalisib and the cancer drug Rituxan or Rituxan alone. They had chronic lymphocytic leukemia and had been treated before, but were not fit for additional chemotherapy.
THE BIG PICTURE: Gilead Sciences Inc. has already asked the Food and Drug Administration to approve idelalisib as a treatment for slow-growing non-Hodgkin lymphoma that has recurred after treatment, and it plans to file for approval in the European Union before the end of the year.
The Foster City, Calif., company makes an array of HIV medicines including Atripla, Truvada, and Stribild. It reported $2.66 billion in product sales in the second quarter. Gilead is also developed a hepatitis C drug called sofosbuvir, which is seen as a promising treatment for the condition. The FDA is scheduled to make a decision on sofosbuvir by Dec. 8.
THE ANALYSIS: Citi Investment Research analyst Yaron Werber said idelalisib could be approved in the middle of 2014 and sales could eventually reach $1 billion to $2 billion a year. He kept a "Buy" rating on the company with a price target of $75 per share.
"The company continues to advance their oncology pipeline rapidly," he wrote.
SHARE ACTION: Gilead Sciences Inc. stock advanced $2.81, or 4.8 percent, to $61.71 in morning trading amid a broad market rally. The shares have climbed 74 percent over the last year.