Gilead Sciences rises on 3Q results, new outlook

NEW YORK -- Shares of Gilead Sciences Inc. rose Wednesday after the HIV drug maker reported strong third-quarter results and projected greater sales in 2012.

THE SPARK: The Foster City, Calif., company reported its results after the market closed on Tuesday. Gilead's adjusted income and revenue surpassed expectations and the company raised its full-year sales forecast. Gilead said sales of its biggest product, the HIV drug Atripla, rose 9 percent to $865.4 million. Total HIV drug sales grew 13 percent for the quarter. That includes $17.5 million in revenue from its newest drug, Stribild. Stribild, which combines four medications into a single pill, was approved by the Food and Drug Administration in August.

Gilead now forecasts $9.1 billion to $9.2 billion in revenue in 2012, up from its previous estimate of $8.9 billion to $9 billion. FactSet says analysts are more optimistic, expecting $9.36 billion in revenue, on average.

THE BIG PICTURE: Gilead gets most of its revenue from HIV drugs, but earlier this year the company made a large step into the market for hepatitis C treatments by buying drug developer Pharmasset. Gilead is studying Pharmasset's most advanced experimental drug, which is designated GS-7977, in a slew of clinical trials in combination with several other drugs.

Gilead said the results from the first of four late-stage trials of GS-7977 should be released in early December. It plans to file for marketing approval during the second quarter of 2013.

THE ANALYSIS: Credit Suisse analyst Ravi Mehrotra said the quarter was a bit better than he expected, and sales of Gilead's HIV drug Complera were strong. But he said Wall Street is focused on upcoming data from a study of GS-7977. Gilead will report some critical results from the study on Nov. 13, he said. The analyst kept a "Neutral" rating on Gilead shares and raised his price target to $65 per share from $54.

SHARE ACTION: Gilead Sciences stock rose $4, or 6.2 percent, to $68.91 in afternoon trading. The shares are up 39 percent since Gilead reported promising study results for the hepatitis C drug on April 19.