FOSTER CITY,
Calif. (AP) — Gilead Sciences
Inc.’s net income fell in the first quarter as much-lower sales of the flu
medication Tamiflu caused its royalty revenue to plummet, wiping out modest
gains in other areas.
The pharmaceutical company, based in Foster City, Calif.,
said drug royalties, including those for Tamiflu, dropped 79 percent to $62.5
million from $297.8 million a year earlier. Fewer world governments stockpiled
the drug to prepare for possible pandemics. The decrease caused Gilead’s revenue and net income to come in below the
previous year’s results.
Gilead’s net income for the
quarter ended March 31 fell 24 percent, to $651.1 million, or 80 cents per
share, from $854.9 million, or 92 cents per share a year earlier. The change
was attributed to the decrease in sales of Tamiflu. Royalties from that drug
alone decreased 95 percent.
Revenue fell 8 percent, to $1.93 billion from $2.09 billion.
Its overall product sales added about 4 percent, with drugs for cystic fibrosis
and some antiviral drugs showing modest gains. The lower royalty revenue
absorbed those increases.
Excluding one-time costs such as for acquisitions,
restructuring and stock-based compensation, Gilead’s
earnings fell to 87 cents per share, from 99 cents per share in the year-ago quarter,
the company said.
The results fell well short of analysts’ expectations.
Analysts surveyed by FactSet expected net income of 97 cents per share on
revenue of $2.03 billion. Analysts’ estimates typically exclude one-time items.
Gilead reiterated its
full-year guidance of $7.9 billion to $8.1 billion in net product sales. It
said one-time charges and compensation costs would reduce net income per share
this year by 25 to 28 cents.
Gilead develops and markets
drugs used in the treatment of HIV, the virus that causes AIDS; and hepatitis
B, among other conditions.
In after-hours trading, Gilead
shares lost $1.38, or 3.4 percent, to $39.40 after the earnings report was
released. The stock rose 15 cents to close at $40.78 in the regular session.
