Updated from 4:47 p.m. EDT

Gilead Sciences

(GILD) - Get Report

said its first-quarter loss narrowed, bolstered by strong sales of its new anti-HIV drug, Viread.

The Foster City, Calif.-based biotech firm reported a first-quarter net loss of $3.8 million, or 2 cents per share, compared to a net loss of $21.7 million, or 11 cents per share in the year-ago quarter.

The net loss bested Wall Street expectations by 4 cents, according to consensus estimates compiled by Thomson Financial/First Call.

Viread sales in the quarter totaled $27.2 million, up strongly from sales of $13.2 million in the fourth quarter. Gilead launched the drug at the end of October.

On its conference call with analysts, company executives said almost all of Viread's sales reflected patient demand, with only minimal sales coming from wholesaler stocking. Gilead just launched Viread in a couple of European countries at the end of the quarter, and further expansion is ongoing.

Total revenue in the quarter rose 35% to $78.4 million, including net product sales of $70.7 million. First-quarter sales of the antifungal drug Ambisome fell 5% to $39.8 million, compared to the year-ago quarter.

Gilead executives declined to give financial guidance because Viread is still in the early stages of its launch, but it did say it expects to turn profitable by the end of the year. Wall Street is looking for Gilead to earn a penny in 2002, bolstered by Viread sales in the range of $145 million to $160 million.

On the drug pipeline front, the company said it expects to get its hepatitis B drug, Adefovir, approved and launched in the United States by the end of the year, although its European filing is delayed slightly.

Gilead closed Tuesday up $1.99, or 7%, to $31.12. Gilead is one of the more fundamentally strong companies in the biotech sector, but its valuation has been the source of much debate recently.

With a market cap exceeding $6 billion, Gilead trades at more than 15 times 2002 sales estimates, higher than the typical range of 8-10 times sales where most biotechs trade. But then again, investors have been willing to pay premiums for growth, something Gilead has in spades with Viread and Adefovir.