Gilead Sales Soar on Hepatitis Drugs

Gilead Sciences Inc. said its two key hepatitis C drugs, Sovaldi and Harvoni, generated about $4.9 billion in sales in the second quarter, topping Wall Street estimates, thanks to better-than-expected sales of the newer Harvoni.

For the year, the company again raised its guidance for net product sales, this time by $1 billion, and now expects sales to reach $29 billion to $30 billion.

Shares of Gilead, up 24% over the past year, rose 3.2% to $116.99 in recent after-hours trading

The hepatitis C drugs represent two of the most successful drug launches ever, marked by their high cure rates, fewer side effects and imposing price tags.

They also have been facing competition from new hepatitis C treatments like AbbVie Inc.'s Viekira Pak, which started sales in December. Merck & Co. in May submitted a new drug application for its combination treatment for hepatitis C to the U.S. Food and Drug Administration.

During the second quarter Sovaldi sales fell to $1.29 billion, a decline of 63% from a year earlier.

Harvoni, which combines Sovaldi with another drug and received regulatory approval in October, had $3.61 billion in sales in its third quarter on the market, compared with $3.58 billion in sales in its second quarter on the market and $2.11 billion in the previous quarter.

Analysts were expecting sales of $951 million for Sovaldi and $3.36 billion for Harvoni, according to a note by Evercore ISI analyst Mark Schoenebaum.

Some health plans and drug-benefit managers have complained about the high cost of Sovaldi and Harvoni, which carry price tags of $1,000 a day or more for certain patients. Investors likely will be watching for signs of how discounts related to contracts with pharmacy-benefit managers and the number of patients being treated in the U.S. are affecting growth, according to Mr. Schoenebaum's note.

Overall, Gilead reported a profit of $4.49 billion, or $2.92 a share, up from $3.66 billion, or $2.20 a share, a year earlier. Excluding expenses related to stock-based compensation, acquisitions and restructuring, as well as other items, per-share earnings rose to $3.15 from $2.36.

Revenue increased 26% to $8.24 billion.

Analysts polled by Thomson Reuters expected per-share profit of $2.71 and revenue of $7.61 billion.

On Friday, AbbVie Inc. reported weaker-than-expected sales of its new hepatitis C treatment. In addition, the FDA approved another AbbVie hepatitis C drug, Technivie, for treatment of patients with a subtype of the virus.

Write to Tess Stynes at [e-mail]

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