HIV, flu drug sales lift Gilead Sciences 1st-qtr profit 45 percent; stock slips on outlook cut

Gilead Sciences 1Q profit jumps, but outlook cut

FOSTER CITY, Calif. — Gilead Sciences Inc. on Tuesday posted a 45 percent leap in profit for the first quarter, driven by higher sales of its drugs to treat HIV.

While the results topped Wall Street expectations, the company lowered its full-year revenue forecast, citing the recent health care legislation, and shares fell in aftermarket trading.

For the three months ended March 31, Gilead’s net income jumped to $854.9 million, or 92 cents per share, compared with $589.1 million, or 63 cents per share, in the year-ago period.

Adjusted to exclude after-tax acquisition-related expenses, the company said profit came to 99 cents per share in the latest quarter.

Revenue rose 36 percent to $2.09 billion from $1.53 billion.

Analysts polled by Thomson Reuters, on average, expected profit of 96 cents per share on $2.07 billion revenue.

Gilead said first-quarter product sales increased 24 percent to $1.79 billion. The increase was mainly due to strong sales of its antiviral drugs to treat HIV-related conditions. Sales of those treatments climbed 19 percent to $1.6 billion. In particular, sales of Atripla rose 36 percent to $692.9 million, while sales of Truvada increased 11 percent to $657.8 million.

Gilead now expects 2010 revenue between $7.4 billion and $7.5 billion, down $200 million from its prior guidance for sales between $7.6 billion and $7.7 billion.

In a conference call to discuss the quarterly results, Chief Financial Officer Robin Washington said the decrease reflects the expected impact of the recently passed U.S. health care reform legislation. The company excluded the legislation from previous guidance because of the uncertainty of its passage, Washington said.

The impact of 15 cents per share will be felt mostly in its HIV business, Washington said, explaining, “nearly half of our payers are impacted by the legislation.”

In aftermarket trading, Gilead shares fell $1.57, or 3.5 percent, to $43.50. They stock closed the regular session down 67 cents at $45.07.