Gilead Profit Rises on Flu Drug Royalties

FOSTER CITY, Calif. (TheStreet) --Gilead Sciences(GILD Quote) reported a 42% increase in adjusted third-quarter profits bolstered by royalty revenue coming out of the H1N1 pandemic and higher sales of the company's HIV drugs.

The biopharmaceutical firm reported net income of $673.7 million, or 72 cents a share, up from $495.9 million, or 52 cents a share in the year-ago quarter.

On an adjusted basis, Gilead earned 78 cents a share in the September quarter, surpassing the consensus analyst estimate of 72 cents a share.

Total revenue in the third quarter came in at $1.8 billion, up 31% from one year ago, topping Wall Street forecasts.

Gilead business is dominated by sales of drugs used to treat patients with HIV and other viral-based diseases. Total antiviral sales (which includes HIV and hepatitis B) rose 19% to $1.47 billion in the quarter.

Of note, sales of Atripla, a once-daily pill that combines three different HIV medicines including one from Bristol-Myers Squibb(BMY Quote), totaled $605 million, up 42% year over year, while sales of Truvada, another HIV combination pill, rose 13% to $620 million. Atripla sales were in line with consensus estimates while Truvada sales were slightly short.

Outside of HIV, Gilead reported strong royalty and contract revenue of $152.4 million, higher than analysts were expecting. Much of the upside came from royalties Gilead receives on sales of the antiviral drug Tamiflu sold by Roche. Tamiflu sales have skyrocketed in the wake of the H1N1 pandemic.

Sales of Ranexa totaled $49 million in the third quarter, matching expectations. Ranexa is a drug for chronic angina that was acquired when Gilead purchased CV Therapeutics earlier this year.

Ahead of its earnings announcement, Gilead shares closed Tuesday at $46.12.

-- Reported by Adam Feuerstein in Boston