Tuesday, January 25, 2011

Gilead Sciences Inc. (NASDAQ: GILD): Q4 Earnings Preview 2010

Gilead Sciences Inc. (NASDAQ: GILD), the world's largest maker of AIDS drugs, is scheduled to release its fourth-quarter financial results after the closing bell on Tuesday, January 25, 2011. Analysts, on average, expect the company to report earnings of 94 cents per share on revenue of $1.99 billion. In the year ago quarter, the company reported earnings of 93 cents per share on revenue of $2.03 billion.

Gilead Sciences, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutics for the treatment of life threatening diseases worldwide.

The company virtually dominates the HIV/AIDS drugs market. AIDS killed about 1.8 million people globally in 2009, the Joint United Nations Programme on HIV/AIDS, or UNAIDS, said in a report recently. That makes HIV the deadliest infection ahead of tuberculosis and malaria, World Health Organization data show.

Gilead’s portfolio of anti-HIV medicines will remain under patent protection for several more years and, given the continued global increase in new HIV cases, that area promises to remain a high-growth field. Still, Gilead, like rivals such as Johnson & Johnson (NYSE: JNJ), Pfizer (NYSE: PFE) and Merck (NYSE: MRK), is scrambling to develop new drugs in-house, while also acquiring smaller companies that own promising pipelines. The company is specifically looking at increasing its presence in the Asian hepatitis B virus (HBV) market, where the infection is quite prevalent. 

In the preceding third-quarter, the Foster City, California-based company's net income was $704.9 million, or 83 cents a share, compared to $673 million, or 72 cents, a year ago. On an adjusted basis, net income for the quarter was $759.67 million or 90 cents per share, compared to $730.28 million or 78 centsper share a year ago. Revenue rose 8% to $1.94 billion from $1.8 billion, Analysts, on average, expected the company to report earnings of 87 cents per share on revenue of $1.93 billion. 

Truvada, a HIV drug developed by Gilead Sciences (NASDAQ:GILD), was shown to decrease the risk of HIV infections by 44%, according to an article published in the New England Journal of Medicine, a significant finding in the path to find alternative ways to prevent AIDS. The findings may boost annual revenue for Gilead, the world’s largest maker of AIDS treatments, by $1 billion.

Late in December, the company stopped a late-stage trial of its experimental drug to treat lung scarring due to a lack of efficacy. Gilead was testing the drug ambrisentan in patients with idiopathic pulmonary fibrosis (IPF) - a condition in which the lungs suffer scarring due to unknown causes.

Among other developments, Gilead agreed to buy privately held biotechnology firm Arresto Biosciences for $225 million and potential payments based on sales, to expand its fibrotic diseases pipeline. Palo Alto, California-based Arresto develops medicines to treat fibrotic diseases and cancer by targeting enzymes involved in the synthesis of the extracellular matrix.

In terms of stock performance, Gilead shares have gained nearly 17 percent since the beginning of the year.

Full Disclosure: None.
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