- Associated Press - Tuesday, July 28, 2015

Blockbuster hepatitis C medicine Harvoni propelled Gilead Sciences Inc.’s second-quarter profit up 23 percent as total revenue for the biotech drugmaker jumped 26 percent and it raised its 2015 sales forecast for the second time. Its shares jumped in after-hours trading.

Harvoni and a second hepatitis C drug, Sovaldi, together posted sales about $500 million above expectations and HIV medicine sales were higher-than-expected across all products, noted Edward Jones analyst Ashtyn Evans. She called the quarter “impressive,” noting expenses were below expectations, too.

Gilead, based in Foster City, California, said Tuesday that its net income was $4.49 billion, or $2.92 per share. That was up from $3.66 billion, or $2.20 per share, in 2014’s second quarter. Analysts, on average, expected $2.64 per share.

Revenue soared to $8.24 billion, up from $6.54 billion a year ago and above expectations of $7.36 billion.

Gilead’s market-leading hepatitis C franchise accounted for a whopping 59 percent of revenue, with Harvoni bringing in an astounding $3.61 billion after just 10 months on the market, and its predecessor, Sovaldi, drawing $1.29 billion.

Gilead, until recently known mostly for its widely used HIV medicines - Truvada, Stribild and Complera - catapulted to become the world’s ninth-biggest drugmaker by revenue, up from No. 20 last year, propelled by Harvoni and, to a lesser extent, by Sovaldi. That was launched in December 2013, followed by Harvoni last October.

Harvoni, which carries a list price of about $95,000 for a 12-week course of treatment, includes Sovaldi and a second drug, ledipasvir. The company says it cures 96 percent to 99 percent of previously untreated patients with the liver-destroying virus. Since its approval last October, sales have plunged for Sovaldi, which costs about $84,000 for a course of treatment. Insurers have been extracting discounts estimated at up to 40 percent, though, and to date about 470,000 patients have received one of the drugs.

Those drugs and AbbVie Inc.’s Viekira Pak, launched in December, have revolutionized treatment for hepatitis C, which for decades required pills and periodic injections that caused awful flu-like side effects, lasted for up to a year and only cured about 60 percent of patients.

The high prices have led some U.S. insurers to deny coverage to patients who don’t yet have hepatitis complications, and the Veterans Administration has run out of funds for treatment temporarily.

However, Paul Carter, Gilead’s marketing head, said the market is still in early days, “with many more patients to be identified and treated,” and that the company is working to expand health plan coverage in the U.S. and Europe. It will soon launch the drugs in Japan and other countries.

Roughly 2.7 million Americans have it and millions more in other countries are infected. Over many years, it silently causes cirrhosis, liver failure requiring a transplant, liver cancer and other damage. The three new drugs have slashed treatment time to 12 weeks - even 8 weeks for those not too ill - and boosted cure rates to more than 90 percent, depending on which of several strains, or genotypes, the patient has and how advanced their disease is.

In the HIV franchise, Truvada posted sales of $849 million, and Stribild had $447 million, both up sharply, while Atripla sales dipped to $782 million. Other, smaller drugs had combined revenue of $495 million.

Despite the strong results, Evans said she has a “Hold” recommendation on Gilead shares because more competition is coming in hepatitis C: a Merck & Co. drug that could be approved at the start of 2016 and one from Bristol-Myers Squibb Co., possibly the following year, that will be a smaller player.

“That’ll only be good for patients,” Evans said. “It’ll give them options and hopefully lower the price.”

Gilead raised its revenue forecast to $29 billion to $30 billion for the full year, up from its initial 2015 forecast in February for $26 billion to $27 billion. It kept its earnings per share forecast at 82 cents to 87 cents per share.

In after-hours trading, Gilead shares added $3.37, or 3 percent, to $116.44.


Follow Linda A. Johnson at www.twitter.com/LindaJ_onPharma

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