Gilead Sciences (GILD)

Q2 2011 Earnings Call

July 26, 2011 5:00 pm ET

Executives

Robin Washington - Chief Financial Officer, Principal Accounting Officer and Senior Vice President

Susan Hubbard - Vice President of Investor Relations

John Martin - Chairman of the Board and Chief Executive Officer

John Milligan - President and Chief Operating Officer

Kevin Young - Executive Vice President of Commercial Operations

Norbert Bischofberger - Chief Scientific Officer and Executive Vice President of Research & Development

Analysts

Sapna Srivastava - Goldman Sachs Group Inc.

Robyn Karnauskas - Deutsche Bank AG

Joel Sendek - Lazard Capital Markets LLC

Geoffrey Porges - Sanford C. Bernstein & Co., Inc.

Ravi Mehrotra - Crédit Suisse AG

Thomas Wei - Jefferies & Company, Inc.

Brian Abrahams - Wells Fargo Securities, LLC

Joshua Schimmer - Leerink Swann LLC

Thomas Russo - Robert W. Baird & Co. Incorporated

M. Ian Somaiya - Piper Jaffray Companies

Yaron Werber - Citigroup Inc

Michael Yee - RBC Capital Markets, LLC

Mark Schoenebaum - ISI Group Inc.

Philip Nadeau - Cowen and Company, LLC

Rachel McMinn - BofA Merrill Lynch

Matthew Roden - UBS Investment Bank

Geoffrey Meacham - JP Morgan Chase & Co

Presentation

Operator

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Ladies and gentlemen, thank you for standing by, and welcome to Gilead Sciences Second Quarter 2011 Earnings Conference Call. My name is Stacy, and I will be your conference operator for today. [Operator Instructions] As a reminder, this conference call is being recorded today, July 26, 2011. I would now like to turn the call over to Susan Hubbard, Vice President of Investor Relations. Please, go ahead.

Susan Hubbard

Thank you, Stacy, and good afternoon, everyone. Welcome to Gilead's Second Quarter 2011 Earnings Conference Call. We issued a press release this afternoon providing earnings results for the quarter. This press release is available on our website, as are the slides that provide much more detail around the topics covered on today's call. Your speakers for today will be John Martin, Chairman and Chief Executive Officer; Robin Washington, Senior Vice President and Chief Financial Officer; and John Milligan, President and Chief Operating Officer. John Martin will review the second quarter milestones, Robin will discuss our financial results and commercial performance, and then John Milligan will provide an update on our research and development progress and discuss our future outlook and opportunities. Norbert Bischofberger, Executive Vice President of R&D and Chief Scientific Officer; and Kevin Young, Executive Vice President of Commercial Operations are here as well to answer your questions later in the call.

I'd first like to remind you that we will be making statements relating to future events, expectations, trends, objectives and financial results that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on certain assumptions and are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in any forward-looking statement. I refer you to our latest SEC disclosure documents and recent press releases for a detailed description of risk factors and other matters related to our business. In addition, please note that we undertake no obligation to update or revise these forward-looking statements. We will be making certain references to financial measures that are on a non-GAAP basis. We reconcile GAAP and non-GAAP numbers in the press release we just issued as well as on our corporate website. I will now turn the call over to John Martin to provide the highlights on the quarter.

John Martin

Thank you, Susan. I'm very pleased with our progress during the second quarter. In addition to solid financial results, we advanced a number of programs across our therapeutic areas, achieved several anticipated milestones and presented steady results that set the stage for key events during the second half of this year and in 2012.

On the HIV front. Two important milestones occurred since our last earnings call that put us another step closer to the introduction of our next single tablet regiments. First, in May, our partner, Tibotec Pharmaceuticals, announced the FDA's approval of Rilpivirine, their non-nucleoside reverse transcriptase inhibitor. Rilpivirine's indication's for use in combination with other antiretroviral agents for the treatment of HIV in treatment-naive adults. As you are most likely aware, we partnered with Tibotec in July of 2009 to develop a single tablet regimen combining Truvada with Rilpivirine. This potential product is currently under review by U.S. and EU regulatory authorities. We anticipate action by the authorities in both geographies in the second half of this year.

The second major milestone was the late breaker presentation of the 48-week data from our pivotal Phase III Study #145 at the International AIDS Society meeting in Rome. The data demonstrated that elvitegravir, our oral HIV integrase inhibitor was not inferior to the integrase inhibitor of raltegravir given via IV in treatment-experienced patients. At 48 weeks of treatment, 59% of patients receiving elvitegravir achieved and maintained HIV RNA levels, less than 50 copies per milliliter compared to 58% of patients receiving raltegravir. Discontinuation rates due to adverse events and safety and resistant profiles were comparable in both arms of the study.

This is an important result and is the first from the 4 Phase III studies supporting our Quad elvitegravir and cobicistat programs.

Continuing our vision of bringing additional fixed dose and single-tablet regimens forward to meet the individual needs of HIV patients, we announced in June that we entered into a license agreement with Tibotec for the development and commercialization of a new fixed-dose antiretroviral combination product containing cobicistat, our boosting agent, and their protease inhibitor, darunavir.

In connection with this agreement, we announced our current negotiations for the development and commercialization of a future single-tablet regimen combining darunavir with Emtriva, cobicistat and our investigation of next generation NRTI GS 7340. Because it is a substantially lower dose than Viread at 300 milligrams, GS 7340 allows for fixed-dose formulations not possible with Viread. And in this case, it would allow for the co-formulation of the first single-tablet regimen containing a protease inhibitor.

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