* Gilead shares rise 5 pct, Vertex shares fall 10 pct
* Gilead adj EPS $0.50, meets analyst view
* Gilead is biggest maker of branded drugs to treat HIV
(Adds company and analyst comments, updates share price)
By Deena Beasley
July 25 Shares of biotechnology company Gilead
Sciences Inc jumped more than 5 percent late Thursday
after rival Vertex Pharmaceuticals Inc 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
Dec. 8. Its experimental drug sofosbuvir will be discussed at an
FDA advisory committee meeting on Oct. 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
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)