Gilead Cites Health Reform in Lower Sales

Drug maker Gilead Sciences reports earnings per share a little light after the market close on Tuesday, as product sales increase at a rate less than the Street had been hoping for.
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FOSTER CITY, Calif. (

TheStreet

) -- Gilead Sciences reported revenue in line with Street forecasts after the market close on Tuesday -- just over $2 billion -- but its earnings per share of 92 cent was four cents short of Street consensus.

Gilead shares were down close to 3% in after market trading on Tuesday. Gilead shares had ended Tuesday regular trading session down 1.5%, on close to twice its average level of trading volume.

The Gilead report had a health care reform hook, too. Gilead lowered its 2010 net product sales projection to a range of $7.4 billion to $7.5 billion, citing the projected impact of health care reform.

Gilead's previous estimate for 2010 net product sales was $7.6 billion to $7.7 billion, or growth of 17% to 19% for the year.

The drug maker also said that product sales were reduced by $29.4 million in the first quarter of 2010 due to the impact of healthcare reform legislation in the United States.

Overall, product sales increased 24% to just under $1.8 billion in the first quarter of 2010, compared to $1.45 billion in the first quarter of 2009.

It may have been specific drug sales disappointments, though, that were making the market negative on Gilead in after hours trading, rather than the estimates from Gilead about health care reform.

Sales of Atripla, for the treatment of HIV infection, increased 36% to $692.9 million for the first quarter of 2010, up from $509.9 million in the first quarter of 2009. However, analysts were looking for sales of $726 million.

Sales of Truvada for the treatment of HIV infection increased 11% to $657.8 million for the first quarter of 2010, up from $590.4 million in the first quarter of 2009. However, analysts were looking for sales of $680 million.

The numbers were driven by sales into the U.S. and Europe.

Foreign exchange losses had a larger impact versus the fourth quarter of 2009, with a hit of $22.7 million on Gilead's first quarter revenue and $17.2 million on pre-tax earnings.

-- Reported by Eric Rosenbaum in New York.

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