UPDATE 1-Gilead profit rises, shares jump on Vertex hepatitis setback
July 25 (Reuters) - Shares of Gilead Sciences Inc jumped more than 5 percent late Thursday after rival Vertex Pharmaceuticals Inc announced a setback in development of its experimental hepatitis C drug.
The Vertex news came at the same time Gilead said its second-quarter profit rose nearly 9 percent, in line with Wall Street estimates, as sales, including those of its flagship HIV drugs, increased 14 percent.
Gilead is the world's largest maker of branded drugs to treat HIV, the virus that causes AIDS, but investors in recent years have focused on the company's progress in developing new drugs to treat the liver-destroying hepatitis C virus.
Vertex's statement that the U.S. Food and Drug Administration had placed a partial hold on a mid-stage study of its experimental hepatitis C drug because of potential liver problems "removes a short term competitive overhang," from Gilead's shares, RBC Capital Markets analyst Michael Yee said in an emailed statement.
Gilead has filed for U.S. approval of its own hepatitis regimen and the FDA is slated to decide on the application by Dec. 8.
Wall Street expects that any approved oral regimen for hepatitis C will garner billions of dollars in annual sales.
Gilead said its second-quarter net profit rose to $772.6 million, or 46 cents per share, from $711.6 million, or 46 cents per share, a year earlier.
Excluding items, Gilead earned 50 cents a share in the quarter, matching the average analyst estimate, as compiled by Thomson Reuters I/B/E/S.
Sales of HIV drug Atripla rose 4 percent to $938.1 million, while sales of an older product, Truvada, rose 3 percent to $807.8 million. Sales of newer HIV drug Complera more than doubled to $188.7 million, and recently launched Stribild had sales of $99.4 million for the quarter.
Revenue for the quarter rose 15 percent to $2.77 billion, outpacing the average analyst estimate of $2.66 billion.
Gilead said it still expects full-year 2013 net product sales of $10.0 billion to $10.2 billion.
The company's shares, which closed at $60.86 in regular trading on the Nasdaq exchange, were higher at $64 after hours.