Gilead's earnings soar thanks to AIDS drugs

Gilead's earnings soar thanks to AIDS drugs
By Marni Leff Kottle and Angela Zimm, Bloomberg News

Gilead Sciences Inc.'s earnings rose 35 percent in the second quarter as doctors prescribed more of the company's Truvada pill that combines two AIDS drugs.

Net income jumped to $265.2 million, or 56 cents a share, from $196 million, or 41 cents, a year earlier, when Gilead didn't have to deduct employee stock options. The shares fell because investors were expecting an even greater increase.

"It's very solid," said Geoffrey Porges, an analyst at Sanford C. Bernstein & Co. in New York.

Sales of all the company's AIDS drugs climbed 38 percent to $475.4 million, the Foster City-based company said Thursday in a statement. Gilead last week won U.S. approval to introduce a pill called Atripla that provides three of the most widely prescribed AIDS medicines in one daily dose.

The company raised its sales forecast for medicines to fight the disease.

Government stockpiling of the influenza drug Tamiflu generated $73.3 million in payments for Gilead, up from $36.2 million. Gilead invented the drug, sold by the Swiss pharmaceutical company Roche Holding AG.

Gilead was expected to earn 54 cents a share, the average estimate of 22 analysts in a Thomson Financial survey. Although earnings beat the estimate by 3.9 percent, the typical gap is 8.8 percent, according to Bloomberg data.

All revenue rose 38 percent to $685.3 million, Gilead said. Sales of Truvada more than doubled to $299.3 million. The pill, approved in 2004, combines Gilead's Viread and Emtriva.

Gilead raised its 2006 sales forecast for its AIDS medicines to $1.95 billion to $2 billion from $1.83 billion to $1.88 billion. The company is competing with pharmaceutical giants such as GlaxoSmithKline Plc for a larger share of the market for drugs to fight the disease, which has killed more than 25 million people since it was identified in 1981.