Gilead Sciences' first-quarter profit nearly triples on strong Sovaldi sales

Gilead Sciences on Tuesday said that its profit for the first quarter totalled $2.2 billion, versus $722.2 million in the year-ago period, on better-than-expected sales of Sovaldi. The oral hepatitis C therapy, which was cleared by the FDA in December and later approved by European regulators, generated $2.3 billion in revenue for the quarter, outpacing analyst expectations of $1.1 billion. Shares of Gilead rose as much as 5 percent on the news.

"It's pretty remarkable that they can generate $2.3 billion in revenue [for Sovaldi] in the first three months on the market," commented Sanford Bernstein analyst Geoffrey Porges, adding that "people's numbers are going to go up dramatically for this year and next for Gilead." Meanwhile, Mark Schoenebaum of ISI Group remarked that Sovaldi sales are "above even the high end of buy-side expectations." Analysts estimate that the drug could generate as much as $11.9 billion in annual sales by 2017.

Gilead has drawn criticism from lawmakers and insurers over the $1000 a day price for Sovaldi in the US. Last month, US lawmakers asked the company to clarify how it determined the treatment's price, while pharmacy benefit manager Express Scripts warned that the price of the drug was unsustainable. Gilead previously asserted that doctors and insurers reacted positively to the drug's launch. For related analysis, read ViewPoints: Pharmacy benefit managers threaten to run with Congress' baton on Sovaldi pricing – Is Gilead Sciences a victim of its own success?

Overall quarterly revenue for the drugmaker nearly doubled to $5 billion, besting analyst forecasts of $4 billion. Revenue from Gilead's HIV treatment Complera/Eviplera rose 69 percent to $251 million, while Stribild recorded first-quarter sales of $215 million, up 134 percent year-over-year.

For 2014, the company continues to expect earnings of $0.63 per share to $0.66 per share on net product sales in the range of $11.3 billion and $11.5 billion, excluding Sovaldi.

To read more Top Story articles, click here.