Gilead ( GILD) reported a 3-cent earnings beat, strong HIV franchise sales and a new CFO after Thursday's market close. Net income for the third quarter was $398.3 million, or 42 cents a diluted share, including after-tax stock-based compensation expenses of $31.8 million, compared to a loss of 3 cents in the year-ago quarter. Analysts surveyed by Thomson Financial expected 39 cents a share on revenue of $1 billion. Gilead reported total revenue of $1.1 billion and HIV product sales of $805.8 million in the third quarter of 2007, a 45% increase from $557.3 million for the same period in 2006. The increase was driven primarily by the sales volume growth in Truvada and Atripla (a single-pill combination of Truvada with Bristol-Myers Squibb's ( BMY) Sustiva), and beat the Street consensus of $954 million for total product sales and $794 million for the HIV franchise. Truvada sales were $409.1 million in the recent quarter (beating Street estimates of $390 million), an increase of 32% from $309 million in the third quarter of 2006. Truvada sales accounted for roughly 51% of Gilead's total HIV product sales and about 43% of the company's total product sales in the third quarter of 2007. Atripla sales came in at $241.1 million (just lighter than the Street consensus of $241 million), compared to $68.4 million recorded in the third quarter of 2006, the drug's first quarter of sales in the U.S. Viread (also for HIV) sales increased 13% to $149.1 million.
Earlier Thursday, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMEA) issued a positive opinion on a marketing authorization application for Atripla, and the company has said it expects an approval by the of the year. A question over the labeling had revolved around how the pill was to be administered. As the two pills that were combined within Atripla were indicated differently -- one with food and one at bedtime without food. The labeling that CHMP is recommending is for patients that are already on therapy, because that is the group for whom the company was able to provide data regarding the drug's administration. Gilead executives said they're working with regulators to look at what data can be added to extend the indication to naive patients as well, noting that 90% of the patients they're looking at don't fall into that group. Sales of Gilead's Hepsera for chronic hepatitis B were $79.3 million for the third quarter of 2007, a 44% increase from $55.1 million in the year-ago quarter, driven primarily by sales volume growth in the U.S. and Europe. Gilead also said on its conference call that it saw $6 million in year-to-date Letairis sales in the first quarter since the drug's launch and that 49 of 50 states are reimbursing the drug. The company said the drug has exceeded pre-approval expectations, but wouldn't disclose the number of patients, saying it would be an unreliable predictor.
Looking ahead, Gilead guided to the upper end of its $3.6 billion to $3.7 billion range for total product sales. Separately, the company announced that Caroline Dorsa will join the company in November as senior vice president and chief financial officer. Dorsa previously served as CFO at Avaya ( AV), a business communications services company, and previously spent 20 years at Merck ( MRK), most recently as vice president and treasurer. Shares were recently a penny lower at $43.50 in after-hours trading Thursday.