It wasn't long ago that the pharmaceutical industry viewed HIV drugs as more of a public service than possible bestsellers.
Unlike in the case of cancer or heart disease, where drugs for patients in richer markets such as the United States and Europe can be instantly and startlingly profitable, two-thirds of people infected with HIV are in impoverished regions in Africa.
But something unexpected is happening: As treatment of HIV patients in the U.S. and abroad continues to improve, it has turned into a growing profit center for the drug industry.
No company is gaining more from the boom than once little-known Gilead Sciences Inc., a Northern California biotech that now sells medications to more than half of the HIV patients around the nation.
The rise in HIV profits is happening for several reasons: Many of those on HIV drugs today are expected to stay on them for years -- if not decades -- and the trend is to treat the disease earlier. A new generation of once-a-day pills has made the disease easier to treat.
At the same time, hopes for an HIV vaccine have faded and rates of new infections in some communities are climbing after years of stabilizing.
Although some of those developments might be bad news for public health, they're benefiting companies such as Foster City-based Gilead, whose name refers to a medicinal balm in the Bible. The firm saw revenue reach $4.3 billion last year, up a third from 2006. HIV product sales in 2007 were $3.14 billion, an increase of 48% compared with a year earlier.
Last year, Gilead's stock price rose by more than a third, and recently its market value climbed above $42 billion, making it the third-largest biotechnology company by market value in the world.
Should its growth continue apace, the company could soon be worth more than Thousand Oaks-based biotech giant Amgen Inc., analysts predict.
"They are a rare bright spot in biotechnology right now," Bear, Stearns & Co. biotech analyst Mark Schoenebaum said. "They saw a big market in HIV and have capitalized on it better than anyone."
Much of Gilead's success has come from its foresight in making HIV drugs easier to take. Just a few years ago, people with HIV took dozens of pills a day to remain healthy. But living with the disease has become significantly more manageable as a new generation of once-a-day drugs has arrived on the market.
