Gilead profit rises, shares jump on Vertex hepatitis setback
(Reuters) - Shares of biotechnology company Gilead Sciences Inc (GILD.O) jumped more than 5 percent late Thursday after rival Vertex Pharmaceuticals Inc (VRTX.O) announced a setback in development of its experimental hepatitis C drug.
The Vertex news came at the same time Gilead said its second-quarter profit rose nearly 9 percent, in line with Wall Street estimates, as sales, including those of its flagship HIV drugs, increased 14 percent.
Gilead is the world's largest maker of branded drugs to treat HIV, the virus that causes AIDS, but investors in recent years have focused on the company's progress in developing new drugs to treat the liver-destroying hepatitis C virus.
Vertex's statement that the U.S. Food and Drug Administration had placed a partial hold on a mid-stage study of its experimental hepatitis C drug because of potential liver problems "removes a short term competitive overhang," from Gilead's shares, RBC Capital Markets analyst Michael Yee said in an emailed statement.
Gilead has filed for U.S. approval of its own hepatitis C regimen and the FDA is slated to decide on the application by December 8. Its experimental drug sofosbuvir will be discussed at an FDA advisory committee meeting on October 25.
Norbert Bischofberger, Gilead's chief scientific officer, said results from pivotal trials of sofosubuvir in combination with another of the company's experimental oral hepatitis C drugs are expected in the first quarter of next year.
Wall Street expects that any approved oral regimen for hepatitis C will garner billions of dollars in annual sales.
The setback at Vertex "puts a large moat around Gilead's (hepatitis C) franchise," ISI Group analyst Mark Schoenebaum said in a note to investors.
Gilead has also begun to develop oncology drugs. Bischofberger said the company intends to file for regulatory approval in the fourth quarter of this year for idelalisib, an experimental treatment for a type of slow growing non-Hodgkin's lymphoma.
Gilead's second-quarter net profit rose to $772.6 million, or 46 cents per share, from $711.6 million, or 46 cents per share, a year earlier. The company had fewer shares outstanding a year ago.
Excluding items, the drugmaker earned 50 cents a share in the quarter, matching the average analyst estimate, as compiled by Thomson Reuters I/B/E/S.
Sales of HIV drug Atripla rose 4 percent to $938.1 million, while sales of an older product, Truvada, rose 3 percent to $807.8 million. Sales of newer HIV drug Complera more than doubled to $188.7 million, and recently launched Stribild had sales of $99.4 million for the quarter.
Revenue for the quarter rose 15 percent to $2.77 billion, outpacing the average analyst estimate of $2.66 billion.
Gilead said it still expects full-year 2013 net product sales of $10.0 billion to $10.2 billion.
The company's shares, which closed at $60.86 in regular trading on the Nasdaq exchange, rose to $64.25 after-hours. Shares of Gilead have nearly doubled over the past two years.
Shares of Vertex were down nearly 10 percent at $79.10 in after-hours trading on Thursday.
(Reporting by Deena Beasley in Los Angeles; editing by Phil Berlowitz and Matthew Lewis)
- 'Weird Al' Yankovic still trying to wrap head around No. 1 album
- French warplanes search Mali desert for crashed Air Algerie plane |
- Wreckage of Air Algerie plane carrying 116 people found in Mali |
- Crunch time for Gaza truce talks as death toll passes 800 |
- World's oldest joke traced back to 1900 BC