Gilead Sciences, Inc. (GILD) 2 Wins for Gilead: HIV Present, HCV Future

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Gilead Sciences, Inc. (NASDAQ:GILD)‘ shares surged over 5% in after-hours trading on Thursday after the company announced its second-quarter earnings before giving up some of the gains. Yes, the results were pretty good — but they weren’t the sole reason the stock jumped. Gilead also benefited from a big setback from a key rival in the battle to win in the hepatitis C, or HCV, market. Here are the highlights from the latest developments.

HIV juggernaut
Revenue in the second quarter totaled $2.77 billion, a 15% increase over the same period in 2012, and better than the $2.66 billion expected by Wall Street. Gilead Sciences, Inc. (NASDAQ:GILD) reported earnings of $772.6 million, up 8.6% year over year. On a per-diluted-share basis, earnings for the quarter remained flat compared to last year, at $0.46 per diluted share.

Non-GAAP earnings showed higher gains. Net income, excluding acquisition-related, restructuring and stock-based compensation expenses, totaled $839.7 million, reflecting a 9.4% jump year over year. This translated to $0.50 per diluted share, a slight increase over the $0.49 per diluted share from second quarter of 2012, and met the average analyst estimate.

Gilead Sciences, Inc. (NASDAQ:GILD)Gilead Sciences, Inc. (NASDAQ:GILD)’s HIV drug portfolio continued to power the biotech’s sales and earnings in the last quarter. Atripla and Truvada generated the most revenue — $938.1 million and $807.8 million, respectively. Both drugs experienced modest revenue growth, with Atripla’s sales up 4% year over year, and Truvada’s sales increasing 3% year over year.

The biotech’s other two HIV drugs brought in lower amounts, but are showing strong growth. The Complera/Eviplera franchise garnered $188.7 million during the quarter, up a whopping 159% year over year. Newer drug combo Stribild made $99.4 million.

While HIV drugs accounted for most of Gilead Sciences, Inc. (NASDAQ:GILD)’s revenue, others made solid contributions. Hepatitis B drug Viread’s sales in the second quarter were $250.2 million, an increase of 16% from the same period last year. Combined sales for cardiovascular drugs Letairus and Ranexa increased by 19%, to $234.8 million.

Gilead’s future
HIV drugs helped Gilead Sciences, Inc. (NASDAQ:GILD)’s second quarter look good, but the after-hours stock gains stemmed more from HCV. The Food and Drug Administration placed a partial clinical hold on a mid-stage HCV study of rival Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX). The hold came after three patients experienced elevated liver enzyme levels.

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) stands as the leader in the HCV market currently, with Incivek, but other companies could challenge that position in the near future.The FDA’s move on Thursday will slow Vertex, while competitors keep advancing.

AbbVie Inc (NYSE:ABBV) currently has phase 3 trials under way for an all-oral HCV regimen. Its direct-acting antiviral combo of four drugs received Breakthrough Therapy designation from the FDA in May. Previous clinical studies demonstrated a 99% cure rate after 12 weeks for patients taking the AbbVie HCV combo.

Breakthrough Therapy status has become fairly commonplace these days for HCV drugs. Bristol Myers Squibb Co. (NYSE:BMY) also snagged the designation for its three-drug HCV combo in April. The company lags behind the others, though, and will initiate phase 3 trials in late 2013.

Meanwhile, the FDA granted priority review to Johnson & Johnson (NYSE:JNJ)‘s  New Drug Application, or NDA, for HCV drug simeprevir in May. That should mean an FDA decision will come by early 2014. However, simeprevir will be taken with injected drugs, so it’s not an all-oral regimen like the others.

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