IW 50 Best: Breakthrough HIV Treatment Shows Promise for Gilead Sciences

Study shows drug developed by Gilead significantly cuts a womans risk of contracting HIV.

Biopharmaceutical manufacturer Gilead Sciences Inc. is known for its developments in the areas of HIV/AIDS, liver disease and serious cardiovascular and respiratory conditions. In 2006 the Foster City, Calif., company introduced the first once-daily single-tablet regimen for adult HIV treatment called Atripla.

The 46th-ranked company on the IW Best Manufacturing Companies list has achieved significant gains over the years, including crossing the $7 billion revenue mark in 2009. Profit grew nearly 31% in 2009, and the company's 37.5% profit margin and 63% return on equity were well above IW 50 Best averages.

But as noted in an Ockham Research financial blog, concerns about the "lack of promising blockbusters" has contributed to stock falling 31% over a 12-month period. That could change, though, as a promising breakthrough for HIV treatment gains traction. A gel-formed version of a drug developed by Gilead called tenofovir may significantly reduce a woman's risk of being infected with HIV and genital herpes, according to study results released July 20 by the Centre for the AIDS Programme of Research (CAPRISA) in South Africa.

Tonofovir has been used as in pill form as part of various drug cocktails used to treat HIV. But when used as a vaginal gel, the drug appears to reduce a woman's risk of infection. The microbicide, which contains 1% tenofovir, was 39% effective in protecting women against HIV infection, CAPRISA reports. The treatment was 51% effective in preventing genital herpes.

Gilead donated the active ingredient to manufacture the tenofovir gel. The study involved 889 women in South Africa at high risk of contracting HIV.

"This new technology has the potential to alter the course of the HIV epidemic, especially in southern Africa where young women bear the brunt of this devastating disease," said Dr. Quarraisha Abdool Karim, associate director of CAPRISA and associate professor of epidemiology at Columbia University.

The same day CAPRISA released the study results, Gilead reported its second-quarter earnings. Revenue rose 17% to $1.93 billion compared with the year-earlier period. Net income increased to $712.1 million, or 79 cents a share, compared with profit of $571.4 million, or 61 cents a share, during the same period last year.

The company attributed a product sales increase of 15% primarily to strong growth in its Atripla brand. Atripla sales rose 26% to $715.8 million.


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