Gilead Sciences’ (GILD) CEO John Martin on Q2 2014 Results – Earnings Call Transcript

July 26, 2014 9:27 am | By More

Source: Seeking Alpha

 

Gilead Sciences, Inc. (NASDAQ:GILD)

Q2 2014 Earnings Conference Call

July 23, 2014 05:00 PM ET

Executives

Patrick O’Brien – VP, IR

John Martin – Chairman and CEO

John Milligan – President and COO

Norbert Bischofberger – EVP, Research and Development and CSO

Paul Carter – EVP, Commercial Operations

Robin Washington – EVP and CFO

Analysts

Geoff Meacham – JPMorgan

Geoffrey Porges – Bernstein

Mark Schoenebaum – ISI Group

Brian Abrahams – Wells Fargo

Matthew Roden – UBS Securities

Michael Yee – RBC Capital Markets

Phil Nadeau – Cowen & Company

Yaron Werber – Citi

Ian Somaiya – Nomura Security

Ravi Mehrotra – Credit Suisse

Robyn Karnauskas – Deutsche Bank

Josh Schimmer – Piper Jaffray

Howard Liang – Leerink

Brian Skorney – Robert W Baird

Matthew Harrison – Morgan Stanley

Thomas Wei – Jefferies & Company

Terence Flynn – Goldman Sachs

Operator

Ladies and gentlemen, thank you for standing-by and welcome to the Gilead Sciences’ Second Quarter 2014 Earnings Conference Call. My name is Samiya, and I will be your conference operator today. At this time, all participants are in a listen-only-mode and as a reminder this conference call is being recorded.

I would now like to turn the call over to Patrick O’Brien, Vice President of Investor Relations. Please go ahead.

Patrick O’Brien – VP, IR

Thank you, Sam. Good afternoon, everyone. We issued a press release this afternoon providing earnings results for the second quarter, which is available on our Web site where you can also find detailed slides that support today’s call.

For our prepared remarks and Q&A, I am joined by our Chairman and Chief Executive Officer, John Martin; our President and Chief Operating Officer, John Milligan; our Executive Vice President of Research & Development, Norbert Bischofberger; our Executive Vice President of Commercial Operations, Paul Carter; and our Executive Vice President and Chief Financial Officer, Robin Washington.

Before we begin our formal remarks, we want to remind you that we will be making forward-looking statements, including plans and expectations, with respect to our product candidates and financial projections, all of which involve certain assumptions, risks and uncertainties that are beyond our control and could cause our actual results to differ materially from these statements. A description of these risks can be found in our latest SEC disclosure documents and recent press releases.

In addition, Gilead does not undertake any obligation to update any forward-looking statements made during this call. We will also be using non-GAAP financial measures to help you understand our underlying business performance. The GAAP to non-GAAP reconciliations are provided in our press release as well as on our Web site.

I would now like to turn the call over to John Martin.

John Martin – Chairman and CEO

Thank you, Patrick, and thank you all for joining us today. I am pleased with our progress and would like to highlight a number of key milestones achieved during the quarter. Just today the U.S. Food & Drug Administration approved Zydelig for the treatment of three B-cell malignancies, chronic lymphocytic leukemia, follicular B-cell lymphoma and small lymphocytic lymphoma. Zydelig is the first in our new class oral medicines that targets PI3K delta and we are pleased to provide this additional treatment option for patients.

Moving to hepatitis C, the rapid adoption of Sovaldi reflects wide spread recognition across the medical community as the benefits of this break through products can brings two patients suffering from hepatitis C. Since approval more than 70,000 patients in United States and 10,000 patients in the EU have been treated with Sovaldi containing regimens. Sovaldi offers higher cure rates with shortened treatment duration at a cost that is comparable to that of alternative treatment options and for many patients who have failed treatment with older regimens Sovaldi provides a new possibility for a cure.

Gilead has generated and is continuing to generate clinical data that support the scientific and medical evidence for treating hepatitis C as many stages of the disease. In fact across all our hepatitis C clinical studies over 6,000 patients have been treated and cured to-date.

In Japan our new drug application has been submitted to Japan’s pharmaceutical and medical devices agency for approval of sofosbuvir in combination with ribavirin for the treatment of genotype 2 infected patients. In the Phase 3 study supporting this application, 97% of patients, dose for 12 weeks with sofosbuvir ribavirin achieving an SVR12, this filing represents Gilead’s first drug application in Japan and they have approved Sofosbuvir would be the first product to be launched and marketed by Gilead in that country.

Our innovation and investment in improving the treatment for hepatitis C continues with the single tablet regimen of ledipasvir/sofosbuvir for patients infected with genotype 1 hepatitis C virus. FDA has assigned a PDUFA date of October 10th and the European Union approval is expected to come later in this year.

In Japan the ledipasvir/sofosbuvir marketing authorization application will be filed in the fourth quarter of this year. This application will be supported by results of a Phase 3 clinical trial conducted in Japan in which genotype 1 infected patients were treated with ledipasvir/sofosbuvir with or without ribavirin for 12 weeks. 22% of the patients have cirrhosis. Overall the SVR12 rate was 99% and the cohort that received ledipasvir/sofosbuvir without ribavirin the SVR rate was 100%.

Ensuring patient access to Sovaldi and all our medicines has been and will continue to be a top priority for Gilead. And we have been actively engaging with payors compelling the benefits of Sovaldi. In addition, we are committed to making Sovaldi available to patients in developed countries and have recently entered agreement with Egypt a country that has the highest presence of hepatitis C in the world.

In HIV, the single-tablet regimen abbreviated ECF TAF is being evaluated in a number of studies including treatment experienced patients, patients on stable therapy switch ECF TAF, patients with mild-to-moderate renal impairment as well as adolescents.

Data from our two Phase 3 studies compared to ECF TAF to Stribild in treatment naïve patients should become available in the third quarter of this year. We anticipate filing for U.S. and European marketing authorization of ECF TAF in the first quarter of 2015 for the treatment — for the use in treatment naive, treatment experienced and renally impaired patients. TAF as a single agent is also being studied in chronic hepatitis B infection. Two studies in 1250 patients are 30% enrolled, one study is e-antigen positive and the other an e-antigen data of hepatitis B infected patients. We expect to complete enrollment of these studies around the end of this year.

We have significant activities ongoing across other therapeutic areas as well. A number of studies of Simtuzumab, our investigation of monoclonal antibody to organic LOXL2 protein are ongoing in a variety of fibrotic diseases and solid tumors. The Phase 2 study and non-alcoholic steatohepatitis is fully enrolled and data are expected in the middle of 2015. We also look forward to providing updates for the Simtuzumab studies in pancreatic and colorectal cancer and myelofibrosis before the end of the year.

GS-9620, a TLR-7 agonist has been evaluated in our Phase 2 study as a potential cure for hepatitis B in with the first patients have been screened at the beginning of July. GS-5745, a MMP9 monoclonal antibody inhibitor is firmly in Phase 1 and has been explored in Ulcerative Colitis and solid tumors. The synergistic activity of Ranolazine in combination with dronedarone an Atrial Fibrillation and the activity of GS-6615 and long QT-3 syndrome were presented recently at the annual Heart Rhythm Society meeting.

While I am only highlighting a few of our R&D accomplishments for this year I’m very pleased with our high level of innovation and productivity I would like the thank the more than 6,000 employees at Gilead and our collaborators and partners around the world for their dedication and immeasurable contributions for the Company. Their work and commitment have enabled us to achieve a number of milestones across different therapeutic areas of the business. And importantly continue to bring life changing therapies to patients and communities of need.

I would now like to turn the call over to Paul.

Paul Carter – EVP, Commercial Operations

Thanks John and good afternoon everyone. In the second quarter of 2014 our worldwide total net product revenue increased to $6.4 billion representing growth of a 141% over the second quarter last year. U.S. sales exceeded $4.8 billion and European sales exceeded 1.3 billion. This performance has been driven mainly by healthy demand in our HIV business and the uptake and stability which had sales totaling $3.5 billion. Of that number $3 billion represent U.S. sales with most of the rest of the remaining revenues coming from France and Germany. Patients are now being treated with Sovaldi in 34 countries worldwide and that number will continue to increase as further regulatory approvals and reimbursements are achieved.

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