Friday, May 1, 2015

Gilead - Strong hepatitis C drug sales

Gilead first-quarter profit doubles on strong hepatitis C drug sales

(Reuters) - Gilead Sciences Inc on Thursday said its quarterly profit nearly doubled, driven by strong sales of its hepatitis C drugs, as it topped Wall Street estimates.

Gilead signaled that, with its hepatitis C franchise established, it is a good time for the company to consider business development opportunities. "We want to stick very closely to therapeutic areas we are in today," Gilead Chief Operating Officer John Milligan said on a conference call.

Excluding items, Gilead earned $2.94 per share in the first quarter, beating the average Wall Street estimate of $2.32, according to Thomson Reuters I/B/E/S. The company's shares, which fell 1.8 percent in regular trading, rose 2 percent to $102.52 after hours.

Product sales rose 52 percent to $7.41 billion, including $4.55 billion for hepatitis C drugs Sovaldi and Harvoni. Analysts had expected hepatitis C sales of $3.54 billion, according to Deutsche Bank.

"It was an extremely strong quarter," said RBC Capital Markets analyst Michael Yee, noting that the sales guidance "signals confidence in the year."

Gilead said it now expects full-year product sales of $28 billion to $29 billion, up from a previous estimate of $26 billion to $27 billion.

In late 2013, Gilead prompted howls of protest about prescription drug prices when it launched Sovaldi at $1,000 a pill, and later Harvoni at an even higher price. But since AbbVie Inc launched a rival treatment late last year, both have fought for market share by offering rebates to group payers.

Gilead said earlier this year that its "gross-to-net" adjustment for hepatitis C sales would average 46 percent in 2015. The company declined to revisit that estimate on Thursday.

Gilead said more than 70,000 U.S. patients and 20,000 European patients were started on its hepatitis C drugs in the first quarter. Because the drugs cure nearly all patients, the market opportunity is limited.

Around 3.3 million Americans are believed to be infected with the liver-destroying hepatitis C virus, but only about half of them are aware that they are infected.

Gilead posted net income of $4.3 billion, or $2.76 per share, up from $2.2 billion, or $1.33 per share, a year earlier. Cash on hand at the end of the quarter totaled $14.5 billion.

"They could pretty much buy anything," said Sanford Bernstein analyst Geoffrey Porges. "The big question is whether they are going to swing the big bat that they have at their disposal."

(Reporting by Deena Beasley; Editing by Cynthia Osterman and Frances Kerry)

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