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Gilead Sciences Inc.'s quarterly product sales surpassed the $1 billion mark for the first time, as the firm soundly beat estimates for the final three-month period of 2007.

The Foster City, Calif.-based firm said total revenues for the quarter came in just shy of $1.1 billion. The company reported a net income of 426.8 million, or 44 cents per share, ahead of consensus estimates of 40 cents. Gilead's GAAP figures, which include after-tax stock-based compensation expenses of $25.1 million, result in a fourth-quarter net income of $401.6 million, or 41 cents per share.

For the year, Gilead's revenues rose to $4.2 billion, 40 percent higher than 2006 revenues

Product sales for the three months ending Dec. 31 totaled $1.03 billion, with most of that - $864.2 million - coming from the company's HIV franchise.

HIV drug sales were "driven primarily by the continued strong uptake of Atripla" in the U.S. and the "strong growth of Truvada across most major international regions," John Milligan, Gilead's chief operating officer and chief financial officer, said during the earnings call.

Atripla, a triple-drug combination therapy developed in a joint venture with New York-based Bristol-Myers Squibb Co., first gained FDA approval in July 2006.

The fixed-dose product - which is comprised of two Gilead HIV drugs, Viread (tenofovir disoproxil) and Emtriva (emtricitabine) and one BMS drug, Sustiva (efavirenz), and works by blocking reverse transcriptase - posted fourth-quarter sales of $259.7 million, an 89 percent increase over fourth-quarter 2006 sales of $137.4 million. (See BioWorld Today, July 13, 2006.)

About half of Gilead's HIV product sales came from Truvada, a two-drug combination product (Viread plus Emtriva). Sales totaled $448.8 million for the fourth quarter, up 33 percent from the same quarter a year ago, and seemed to allay some investor fears that Atripla's approval might significantly cut into Truvada's market share.

With increasing ex-U.S. sales of Truvada, "we now expect minimal cannibalization from Atripla beginning in 2008," analyst Joel Sendek, of New York-based Lazard Capital Markets wrote in a research note.

More than half of Truvada's sales - $211.8 million - came from the European market.

For the full year, sales of Atripla were $903.4 million and sales of Truvada totaled about $1.6 billion. The HIV franchise overall grew 48 percent over 2006.

Outside of HIV, Gilead's Hepsera (adefovir dipivoxil) for chronic hepatitis B pulled in $76.9 million in fourth-quarter revenue and totaled $302.7 million in full-year sales. Fungal infection product, AmBisome, had sales of $67.8 million for the quarter and $262.6 million for the year.

Analyst William Tanner, of Boston-based Leerink Swann & Co., maintained an "outperform" rating on the company's stock.

He wrote in a research note that Gilead appears to represent "one of the most attractive large-cap biotech investments in the sector, with a solid growing HIV franchise and its potential to expand into more diversified therapeutic areas."

In the cardiovascular space, the firm got the FDA's blessing last year for Letairis (ambrisentan), an endothelin A receptor antagonist, in pulmonary arterial hypertension. Gilead, which gained the drug through its 2006 acquisition of Denver-based Myogen Inc., did not provide a break-down of Letairis sales for the quarter.

Waiting in the wings is aztreonam lysine for inhalation, which currently is under FDA review for treating Pseudomonas aeruginosa infections in cystic fibrosis patients.

The agency also has in its hands a supplemental new drug application for Viread in chronic hepatitis B patients. Decisions on both of those applications are expected this year.

Although Gilead executives said potential revenues from unapproved products are not factored into the company's guidance for this year, the firm still anticipates 2008 growth between 26 percent and 29 percent over 2007, which puts its revenue projections between $4.7 billion and $4.8 billion, above consensus estimates of $4.6 billion.

Milligan told investors during the call that research and development costs for 2008 are expected to be in the range of $610 million and $630 million, while selling, general and administrative costs are anticipated to fall between $710 million and $730 million for the year.

As of Dec. 31, Gilead had cash, cash equivalents and marketable securities totaling $2.7 billion. Its cash flow for the year was partially offset by repurchases of $487.5 million under its ongoing repurchase programs.

The board authorized a stock repurchase program in October to buy back up to $3 billion of its common stock through the end of 2010, and as of Dec. 31, Gilead had about $2.9 billion of authorized stock repurchases remaining.

Shares of Gilead (NASDAQ:GILD) closed Thursday at $45.60, up 79 cents.

Cubicin Sales Rise 53 Percent in 2007

Anti-infective drug company Cubist Pharmaceuticals Inc. also reported its fourth-quarter earnings this week, showing that net sales of Cubicin (daptomycin for injection) increased 51 percent over the same three months last year to total $85.1 million.

That accounted for nearly all of the Lexington, Mass.-based firm's $85.6 million revenues for the quarter.

Cubist reported net income of $9.2 million, or 16 cents per share.

Cubicin, a once-daily intravenous antibiotic, is approved for complicated skin and skin structure infections and for bloodstream infections such endocarditis, and is in development in additional indications, such as prosthetic joint infections, though it faces looming competitive threats from the likes of South San Francisco-based Theravance Inc.'s telavancin, which the FDA deemed approvable in October, as well as generic products.

For the year, Cubist posted a net income of $49.3 million, or 89 cents per share. Total 2007 revenues were $294.6 million.

As of Dec. 31, the company had $398.3 million in cash, cash equivalents and investments.

Its shares (NASDAQ:CBST) fell $1.12 Thursday to close at $19.11.