UPDATE 2-Gilead posts 17 pct profit rise, readies for HCV launch

Tue Oct 29, 2013 6:18pm EDT

By Deena Beasley

Oct 29 (Reuters) - Biotechnology company Gilead Sciences Inc reported a 17 percent jump in quarterly net profit on Tuesday and raised its outlook for full-year sales as revenue and demand for its flagship HIV drugs exceeded Wall Street estimates.

Analysts expect the company's sales to surge even higher next year when Gilead plans to launch a new so-called HCV treatment for people infected with the liver-destroying hepatitis C virus.

Adjusting for one-time items, Gilead earned 52 cents a share in the third quarter, exceeding the average analyst estimate of 48 cents a share, according to Thomson Reuters I/B/E/S.

"They beat, ... driven by better product revenues and lower expenses," said RBC Capital Markets analyst Michael Yee. "It was also positive that they took up their product sales guidance."

Sales of HIV drug Atripla rose 4 percent to $899.7 million, while sales of an older product, Truvada, rose 1 percent to $813.7 million. Sales of newer HIV drug Complera more than doubled to $210.7 million, and the recently launched Stribild had sales of $144 million in the quarter.

Gilead is the world's largest maker of branded drugs to treat the human immunodeficiency virus, the cause of AIDS.

Quarterly revenue rose 15 percent to $2.78 billion, beating the $2.72 billion forecast by analysts.

For the full year, Gilead raised its estimate for net product sales to between $10.3 billion and $10.4 billion, from a previous range of $10.0 billion to $10.2 billion.

An advisory panel to the U.S. Food and Drug Administration last week voted to recommend that the agency approve Gilead's application for experimental HCV drug sofosbuvir to combat the hepatitis C virus. A final FDA decision is expected by early December.

Gilead estimates that over 4 million Americans are infected with hepatitis C, which causes deadly illnesses such as cirrhosis and liver cancer.

Wall Street analysts have forecast sofosbuvir sales of $1.85 billion next year alone, assuming a price of $85,000 per patient, according to ISI Group.

"We feel we've got a very strong value proposition with sofosbuvir," Kevin Young, head of commercial operations at Gilead, said on a conference call with analysts and investors.

Clinical trials of sofosbuvir in combination with other experimental oral Gilead drugs - a regimen that has not yet been submitted for regulatory approval - resulted in more than 95 percent of patients being cured.

Gilead's third-quarter net profit rose to $788.6 million, or 47 cents per share, from $675.5 million, or 43 cents per share, a year earlier. The number of shares outstanding rose in the latest quarter from the prior-year period.

Chief Financial Officer Robin Washington said those buybacks will continue next year.

Shares of Gilead, which have more than doubled over the past 12 months, were up 1 percent in after-hours Nasdaq trading at $70.25.