Gilead Sciences ends quarter with $3.2 billion of cash, $52.2 million net loss

By Angela McDaniels

Seattle, Oct. 18 - Gilead Sciences, Inc.'s cash, cash equivalents and marketable securities increased by 39% to $3.2 billion at Sept. 30 from $2.31 billion at Dec. 31, 2005, according to a company news release.

The company attributed the increase primarily to $738.6 million of operating cash flows generated during the first nine months of 2006 and $587.6 million of net proceeds from the issuance of convertible senior notes and related transactions, offset by $356.2 million in net cash paid for the acquisition of Corus Pharma, Inc. and $161.0 million paid toward principal on its term loan.

Total revenues for the third quarter ended Sept. 30 increased by 52% to $748.7 million from $493.5 million for the third quarter of 2005.

Product sales increased for the 12th consecutive quarter and totaled $670.1 million, a 43% increase over the same quarter of 2005. The company attributed the growth primarily to its HIV product franchise, including the strong performance of Truvada (emtricitabine and tenofovir disoproxil fumarate), the rapid uptake of Atripla (efavirenz 600 mg/emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg) following its U.S. launch in July and continued solid product sales of Hepsera (adefovir dipivoxil).

Sales of Truvada increased by 90% to $309.0 for the third quarter, sales of Atripla were $68.4 million and sales of Hepsera increased by 18% to $55.1 million.

The third-quarter net loss was $52.2 million, or $0.11 per diluted share, which Gilead said included a charge of $355.6 million for purchased in-process research and development incurred in connection with the acquisition of Corus Pharma in August and after-tax stock-based compensation expense of $25.6 million reflecting the impact of the adoption of the Financial Accounting Standards Board's Statement No. 123.

Excluding the impact of the in-process research and development charge, non-GAAP net income for the third quarter of 2006 was $303.4 million, or $0.64 per diluted share. In comparison, net income for the third quarter of 2005 was $179.2 million, or $0.38 per diluted share.

Total revenue for the nine months ended Sept. 30 was $2.1 billion, compared with $1.4 billion for the same period of 2005. Product sales rose to $1.8 billion from $1.3 billion over the same period.

Net income for the first nine months was $475.7 million, or $1.04 per basic share and $0.99 per diluted share, compared with $532.3 million, or $1.18 per basic share and $1.13 per diluted share, for the first nine months of 2005.

Gilead is a Foster City, Calif., biopharmaceutical company.

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