Gilead Posts 37% Gain in Earnings; Cheesecake Factory’s Profit Up 15%

Gilead Sciences Inc. said Tuesday that first-quarter profit climbed 37% as more doctors prescribed the company’s newest product, Truvada, an AIDS pill that combines two older Gilead drugs.

Net income rose to $157.1 million, or 34 cents a share, from $114.4 million, or 25 cents, a year earlier, the Foster City, Calif.-based company said. Revenue jumped 39% to $430.4 million.

The introduction of Truvada helped lift sales of Gilead’s HIV treatments 47% to $301.4 million, beating analysts’ estimates. Gilead expects AIDS drug revenue to rise to as much as $1.275 billion this year, exceeding an earlier forecast of as much as $1.25 billion, Chief Financial Officer John Milligan said on a conference call.

“It was a great quarter,” said Geoffrey Porges, an analyst at Sanford C. Bernstein & Co. in New York. “They showed great strength in their HIV products.”

Gilead is working with Bristol-Myers Squibb Co. on a once-daily triple combination pill and may seek U.S. approval of that medicine as early as the third quarter, Porges said. That will be important in winning market share from GlaxoSmithKline’s Combivir, he said.

Gilead released results after U.S. markets closed. Shares of Gilead gained 99 cents to $36.19 in regular Nasdaq trading. The shares gained 2.3% in the quarter, outperforming the 15% decline in the Nasdaq biotechnology index. In after-hours trading, the shares gained 85 cents to $37.04.

Truvada sales were $91.2 million in the quarter. Gilead won Food and Drug Administration approval to begin selling the product in August. Truvada combines Gilead’s Viread and Emtriva drugs, which the company also sells separately. Drug makers such as Gilead put multiple AIDS medicines into a single pill to help prevent patients from missing doses.

Truvada competes with Combivir and with GlaxoSmithKline’s Epzicom medicine. About 60% of newly diagnosed HIV patients who begin treatment in the U.S. are now receiving Truvada, Milligan said.

“That’s remarkable for a product that just came on the market in August,” he said.

Gilead also signed an agreement with Japan Tobacco Inc. for an experimental HIV drug during the quarter. Gilead plans to begin studying the product in HIV-infected patients by the middle of the year. A $15-million payment to Japan Tobacco pushed research costs to $70.4 million in the quarter from $58.5 million a year earlier, the company said.

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