UPDATE 2-Gilead profit rises, but sales of older HIV drugs dip
By Deena Beasley
May 2 (Reuters) - Gilead Sciences Inc said on Thursday that its quarterly profit rose 63 percent as lower sales of its older HIV drugs were offset by strong sales of new products, but the results fell slightly short of Wall Street estimates.
Earlier in the day, Gilead reported positive results from a mid-stage trial of a combination of two of its experimental hepatitis C pills. The company's shares were flat in after-hours trade as investors quickly turned their focus back to that multi-billion-dollar market opportunity.
Gilead, the world's largest maker of branded HIV drugs, posted an adjusted first-quarter profit of 48 cents a share, compared with the 50 cents a share Wall Street analysts, on average, had expected, according to Thomson Reuters I/B/E/S.
"The revenues were a little light and EPS was 2 cents short, but they said a lot of it was inventory drawdown," said RBC Capital Markets analyst Michael Yee, who noted that other biotechnology companies including Amgen had similar inventory issues. "So the focus now will shift back to hep C."
Wells Fargo analyst Brian Abrahams called Gilead's HIV results for the quarter "mixed," with "light revenues for legacy products but strong growth of new launches, and solid progress with the diversifying pipeline."
Gilead's shares, which have nearly doubled over the past 12 months, were slightly higher at $52.30 after hours after rising 2 percent to close at $52.18 on Nasdaq.
Gilead, based in Foster City, California, is the world's largest maker of branded drugs to treat the human immunodeficiency virus, the cause of AIDS, but its near-term value is tightly linked to progress in developing new drugs to treat the liver-destroying hepatitis C virus.
The company said the small mid-stage trial showed that almost all patients taking a fixed-dose combination of two of its experimental hepatitis C pills appeared to have eliminated the hepatitis C virus after either eight weeks or 12 weeks of treatment.
Wall Street expects that any approved oral regimen for hepatitis C will garner billions of dollars in annual sales.
Gilead said first-quarter net profit rose to $722.2 million, or 43 cents per share, from $442 million, or 28 cents per share, a year earlier.
Sales of HIV drug Atripla fell 1 percent to $877.1 million, while sales of another older product, Truvada, fell 8 percent to $700.2 million, which Gilead attributed to de-stocking of inventory that buyers had built up in late 2012 ahead of price increases.
Sales of newer HIV drug Complera rose 184 percent to $148.2 million while sales of recently launched Stribild totaled $92.1 million for the quarter.
Gilead said the U.S. Department of Veterans Affairs nearly doubled its usual purchase level in the fourth quarter of last year and did "minimal" buying in the first quarter. The company said it expects those levels to return to normal for the remainder of the year.
Overall revenue for the quarter rose 11 percent to $2.53 billion. Analysts, on average, had expected $2.58 billion, according to Thomson Reuters I/B/E/S.
Gilead said it still expects full-year 2013 net product sales of $10 billion to $10.2 billion.