West Coast Editor

Gilead Sciences Inc.'s HIV steamroller charged on, helped by strong sales of Atripla in the first quarter (though Truvada and Viread dipped) plus lowered expenses, and the firm bolstered its position in antibiotics with Phase III data on inhaled aztreonam lysine for cystic fibrosis patients with pulmonary Pseudomonas aeruginosa.

"Ultimately, I'm sure somebody will [challenge Gilead in HIV], but in terms of first-line therapy, Atripla's looking pretty unassailable," said Sharon Seiler, analyst with Punk, Ziegel & Co. in New York.

Earnings were disclosed Thursday, followed the next day by detailed results from the aztreonam study. Gilead's stock (NASDAQ:GILD) closed Friday at $82.39, up 68 cents.

Excluding stock-option expenses, Foster City, Calif.-based Gilead reported earnings per share of 93 cents, handily beating the 79-cent consensus, and revenues of $1.03 billion surpassed Wall Street's expectations of $996 million - rising 48 percent over revenues for the same period last year. Total expenses hit $468.3 million, near analysts' estimates, though net income of $407.4 million came in somewhat higher, thanks to higher interest income.

Product sales achieved a record $840.2 million, a 50 percent jump over $559.4 million in the first quarter of 2006, given the uptake of Atripla, which consists of Truvada combined with New York-based Bristol-Myers Squibb Co.'s HIV compound Sustiva (efavirenz). Atripla sales added up to $190.2 million, a sequential increase of 38 percent from $137.4 million in the fourth quarter of 2006. Sales of Atripla commenced in the U.S. in the third quarter of last year.

Truvada - the combo HIV drug pairing Gilead's Viread (tenofovir disoproxil fumarate) and Emtriva (emtricitabine), did especially well in Europe. Sales hit $345.9 million, an increase of 39 percent over the previous year's period. Truvada sales made up about 49 percent of total HIV product sales and about 41 percent of Gilead's total product sales in the first quarter of 2007.

Coming up in HIV, Gilead has the integrase inhibitor GS 9137 (elvitegravir), which proved effective in a Phase II trial, and Phase III talks are under way with the FDA. Seiler pointed to the likes of Whitehouse Station, N.J.-based Merck & Co. Inc.'s Isentress (raltegravir), also an integrase inhibitor, as a possible challenger to Gilead. Once-daily dosing for GS 9137, though, could give Gilead a leg up on twice-daily Isentress, though the latter is about a year ahead of Gilead's compound and is not boosted.

"I had very aggressive estimates for Atripla, and [Gilead] didn't quite make them," Seiler told BioWorld Today, but AmBisome and Hepsera (for non-HIV indications) proved "unusually strong" in the first quarter. Hepsera (adefovir dipivoxil), for chronic hepatitis B, and AmBisome (amphotericin B), the liposome-for-injection therapy for severe fungal infections, also enjoyed growth. The former sold $71.3 million, a 35 percent increase, and the latter brought in $61.5 million, a 14 percent rise, as volume grew in Europe, and Gilead reaped benefit from foreign currency exchanges. Gilead officials "want to get a sense of whether that [AmBisome] performance was a blip or was real," Seiler said. "Sometimes there's a cluster of infection in a particular institution that tends to raise sales."

Gilead stuck with net revenue guidance for the year of about $3.5 billion, which could be low if more patients switch to Atripla from Combivir (lamivudine and zidovudine, GlaxoSmithKline plc) and Sustiva (efavirenz, Bristol-Myers Squibb) combo regimens - a pool of about 30,000 more potential Atripla users. The changeover seems likely. IMS Health showed that, through the end of last year, Combivir patients dropped 32 percent since Truvada's summer 2004 launch. Gilead is pushing Atripla hard over Combivir, waving results from Study 934, disclosed in February.

That trial was designed to compare a regimen of Viread, Emtriva and Sustiva to Combivir and Sustiva in treatment-naive HIV patients. Preliminary 48-week data showed a statistically significant difference favoring the Viread/Emtriva regimen in the percentage of patients who achieved and kept HIV RNA less than 400 copies/mL at 48 weeks, based on the FDA time to loss of virologic response algorithm. The U.S. market for HIV keeps getting bigger, and tenofovir (in Atripla, Viread or Truvada) are deployed to treat most new patients.

Gilead also gets royalties from F. Hoffmann-La Roche Ltd., of Basel, Switzerland, on sales of the flu drug Tamiflu (oseltamivir), and Roche last week reported higher-than-expected first-quarter sales of the compound - with, again, benefit from foreign exchange rates. Still, those royalties are a "wild card" in Gilead's revenue, Seiler said.

Guidance for full-year revenues also does not include sales from ambrisentan, which could be launched this year. In February, the FDA granted priority-review status to the new drug application for ambrisentan to treat pulmonary arterial hypertension. Priority review was not a big surprise but was hardly viewed as a shoo-in, either, and puts the PDUFA date in mid-June. Seiler said she was surprised by the priority review.

Ambrisentan probably got the deciding boost from the AMB-222 study done by Myogen Inc., of Denver (acquired by Gilead last year). Top-line data disclosed in February showed none of the 36 PAH patients had a recurrence of liver function abnormalities that caused them to stop using the drug during the initial 12-week evaluation period, its primary endpoint. Participants in the trial had quit other endothelin receptor antagonists because of such problems.

The PDUFA date puts ambrisentan one business day ahead of the date for Houston-based Encysive Pharmaceuticals Inc.'s PAH drug Thelin (sitaxsentan), which has undergone three FDA reviews. Some analysts estimated potential peak sales of more than $400 million for ambrisentan. Thelin could be in jeopardy, given Gilead's marketing power - not to mention the mighty Actelion Ltd., of Allschwil, Switzerland, which in December agreed to buy CoTherix Inc. for about $420 million. That deal gave Actelion a second marketed PAH product in Ventavis (iloprost), an inhaled, synthetic prostacyclin analogue that gained FDA approval in 2004. Actelion already had Tracleer (bosentan) for PAH.

"They're really different classes, though, and I don't think I'd look at the second drug [Ventavis] as competitor" to ambrisentan, Seiler said.

Gilead's Phase III trial with aztreonam in CF patients randomized 246 patients to receive 28 days of treatment with 75 mg of aztreonam or volume-matched placebo each administered twice or three times daily by the eFlow Electronic Nebulizer. Patients were followed for an overall study period of 126 days, with 56 days of observation after receiving aztreonam therapy or placebo. Treatment with aztreonam lengthened the time to the need for inhaled or intravenous antibiotics - the primary endpoint of the study - by a median of greater than or equal to 21 days compared to placebo (pooled p-value=0.0070 by log rank test).

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