Investor attention will once again return to the performance of Gilead Sciences' ( GILD) HIV drug franchise when the company reports first-quarter earnings Tuesday.

Lately Wall Street has focused its attention on Gilead's efforts to diversify outside of the HIV treatment market. This includes a push into cardiovascular disease with the $1 billion acquisition of CV Therapeutics ( CVTX) and the release of initial phase III results from the company's experimental high blood pressure drug darusentan.

Yet it will be growth in Gilead's HIV drugs (primarily Atripla and Truvada) that is expected to fuel an 18% increase in adjusted first-quarter profits to 63 cents a share on total revenue of just over $1.5 billion, according to Thomson Reuters. In the year-ago quarter, Gilead earned 51 cents a share on revenue of $1.25 billion.

Biotech Select

Worldwide HIV sales are expected to increase about 5% to $1.26 billion in the quarter. Of that total, worldwide Atripla sales should total $507 million, up 9% sequentially and 56% year over year. Global sales of Truvada are expected to reach $571 million, up 2% sequentially and 20% year over year, according to the consensus analyst estimates.

Inventory reductions on the wholesale and retail level could weigh on Gilead's top-line performance. Inventory drawdowns hurt fourth-quarter 2008 sales to a degree. If that continued or intensified during the first quarter, Gilead would be at risk of missing consensus sales and earnings estimates.

Recently released prescription data for the first quarter has either signaled a slowdown in Gilead's HIV sales or matched consensus expectations, depending on different analyst interpretations. And Abbott Labs ( ABT) posted soft first-quarter sales of its leading HIV drug Kaletra.

All these worries have combined to put pressure on Gilead's share price ahead of Tuesday's earnings report. The stock closed Monday at $43.77.

Apart from the numbers, look for Gilead to provide an update on the CV Therapeutics ( CVTX) acquisition as well as a research update on the high blood pressure drug darusentan and the "Quad pill" for HIV.
At the time of publication, Feuerstein's Biotech Select model portfolio was long Gilead Sciences.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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