--Gilead revenue rises 18% as drug wholesalers make strategic
purchases ahead of price increases
--Company anticipates spending to accelerate in 2013 as it
assembles hepatitis C sales force
--Shares edge up after hours, after falling 2.4% to $39.59
during regular session
(Updates throughout with company comment, further details.)
By Joseph Walker
Gilead Sciences Inc.'s (GILD) fourth-quarter earnings rose 15%
as the biopharmaceutical company reported double-digit revenue
growth, driven mostly by strong sales of its HIV drugs.
However, sales also were boosted by wholesaler purchasers
looking to stockpile Gilead's drugs ahead of price increases
implemented in the beginning of 2013, the company warned.
"In total for the U.S., we estimate that $80 million to $100
million of fourth-quarter sales were a result of strategic
purchases beyond our control," said Kevin Young, executive vice
president of commercial operations. "We cannot predict whether
these purchaser activities will be repeated in 2013."
Gilead's stock surged last year amid investor expectations for
its new four-in-one HIV treatment Stribild, which launched in
August, and the potential for its experimental hepatitis C drugs.
The newer drugs will be vital to the company as it grapples with
patent expirations for some of its biggest selling products over
the next decade.
Earlier Monday, the company released data from two late-stage
studies of its lead hepatitis C candidate, sofosbuvir, which it
said would support a mid-2013 regulatory filing. While the trials
were successful, the data suggested the drug may only be suitable
to treat one of the three most common disease strains without an
injection, which sent shares down 2.4% through Monday's close.
However, if sofosbuvir is approved in 2014, as Gilead hopes, it
would become the first pill-based regimen for the deadly liver
disease that doesn't require injections, giving Gilead a
first-to-market advantage over competitors that have been fast on
its heels.
Gilead said it plans to increase spending this year on selling,
general and administrative costs as it assembles a sales force to
seize the all-oral hepatitis C opportunity. The company is also
testing additional combinations of drugs in its pipeline to expand
its all-oral offerings to more patients.
"Gilead will direct considerable resources to position itself as
the commercial leader in the space," Mr. Young said.
Shares recently rose 0.4% to $39.75 in after-hours trading.
For the latest quarter, Stribild sales more than doubled from
the third quarter to $40.02 million. Revenue from Complera, another
recent HIV-drug addition, also impressed, rising nearly sixfold
from a year ago to $117.81 million. Total revenue increased 18% to
$2.59 billion.
Gilead reported a profit of $762.5 million, or 47 cents a share,
up from $665.1 million, or 43 cents a share, a year earlier.
Excluding certain items, adjusted earnings were 50 cents a share,
beating the estimates of analysts polled by Thomson Reuters.
Despite economic austerity measures in Europe that have hurt
growth for many health-care companies, Gilead said sales rose 7%
there, bolstered by a strong showing in France, the second largest
HIV-drug market after the U.S.
For 2013, the company projected net product sales between $10
billion and $10.2 billion, roughly in line with the $10.24 billion
analysts had been expecting, according to data from ISI Group.
Gilead has aggressively looked to broaden its drug pipeline
beyond the HIV and AIDS drugs that generate the vast majority of
its revenue. In December, it agreed to buy Toronto-based YM
BioSciences Inc. (YMI) for $510 million as it aimed to boost its
cancer-drug portfolio. Gilead acquired hepatitis C drug maker
Pharmasett Inc. for $11 billion in January 2012.
-Tess Stynes contributed to this article.
Write to Joseph Walker at joseph.walker@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires