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Annotated article summary from this weekend's Barron's. Receive all our Barron's summaries by signing up here:

Gilead's War on AIDS by Jay Palmer

Summary: Gilead Sciences (NASDAQ:GILD) shares are up 40% over the past year on its AIDS treatments, whose $705 million in sales account for 70% of the company's quarterly revenue, and make it the world leader in the battle against HIV. Its single-pill fixed-dose drugs (Truvada, Viread and Emtriva) save AIDS sufferers the hassle of complex multi-pill regimens. Its latest anti-HIV drug, Atripla, blasted though industry estimates in its first nine months and now rivals Truvada for Gilead's top spot, despite Truvada's use in over 80% of all new therapy starts. About 70% of Atripla patients are migrating from other drugs like GlaxoSmithKline's (NYSE:GSK) Combivir. Its Tamiflu anti bird-flu treatment is being stockpiled worldwide and accounts for almost 20% of Gilead's revenues. Last month, it got FDA approval for a new pulmonary arterial hypertension treatment, Letairis. With time, Letairis could capture 25% ($500m) of the condition's $2 billion/year market. CEO John Martin says he plans to use the company's $2b in cash for share buybacks and more acquisitions (after last year's Myogen [$2.5b] and Corus [$365m] buyouts). Analysts say revenue should rise 35% (to $4b) and earnings should gain 25% (to $1.50). Shares could still climb another 20-25%.

Related Links: Gilead: Is Biotech Weakness Creating A Buying Opportunity?Gilead Receives FDA Approval For Pulmonary Arterial Hypertension DrugGilead Sciences: Rapid Growth Expected From New ProductsHIV and Flu Drive Growth at Gilead

Earnings call transcript: Gilead Sciences Q1 2007

Gilead Sciences 08 07 2007

Source: Gilead Sciences: Shares Still Have 20-25% Upside - Barron's