FDA Approves
Gilead AIDS Drug for Hepatitis B

Gilead Sciences Inc. prepared to expand its reach further beyond AIDS drugs Monday after federal regulators approved the biotech drug maker's signature anti-HIV therapy as a hepatitis B treatment.

Gilead announced that the Food and Drug Administration is joining regulators in Europe, Turkey, Australia and New Zealand by allowing the company to market Viread as a tool for suppressing the chronic liver disease.

Sales of Viread as a stand-alone pill have declined in recent years following Gilead's launch of Truvada and Atripla, which combine Viread with other drugs and currently dominate the market.

Viread debuted in 2001 and quickly became a top-selling anti-HIV treatment. Sales peaked at nearly $783 million in 2004 before Gilead's own competing drugs began chipping away at Viread's share of the AIDS drug market.

Viread had about $613 million in sales last year on total company revenues of $3.73 billion.

Wall Street analysts anticipating Viread's approval Monday have called the market for hepatitis B drugs significant, since only a small fraction of more than 1 million in the U.S. estimated to be infected with the virus have been diagnosed.

The Foster City-based company sells another hepatitis B treatment, Hepsera, which reported sales of $303 million last year.

The FDA's approval was based on two clinical trials that showed Viread was more effective than Hepsera at combatting liver inflammation and scarring caused by hepatitis B, the company said.

The infectious disease is blamed as a major cause of liver cancer and is especially common in the U.S. among Asian-Americans owing to the prevalence of hepatitis in Asian countries.

Also Monday, the 9th U.S. Circuit Court of Appeals in San Francisco reinstated a lawsuit against Gilead claiming the company cost shareholders money by allegedly marketing Viread for unapproved or "off-label" uses.

The appeals court reversed a lower court's decision dismissing the suit filed by disgruntled shareholders in November 2003. Gilead declined to comment on the court's decision Monday.

Gilead shares rose 57 cents or about 1 percent in after-hours trading Monday to $57.00. (AP)