Gilead Sciences just announced its blowout second-quarter ended June 2015 revenues of $8.24 billion, compared to $6.54 billion in 2014. Net income for the quarter was $4.85 billion, or $3.15 per diluted share in 2015, compared to $3.93 billion, or $2.36 per diluted share in 2014. Wall Street expected non-GAAP adjusted earnings of $2.71 a share on revenues of $7.61 billion for the quarter.

Gilead said that its combined revenues from their top selling hepatitis C drug Harvoni (ledipasvir/sofosbuvir) and Sovaldi (sofosbuvir) was $4.9 billion for the quarter, compared to $3.38 billion in sales of Sovaldi (sofosbuvir) last year during the same quarter. The company started selling Harvoni in October 2014, after the U.S. Food and Drug Administration (FDA) approved the drug to treat chronic hepatitis C virus (HCV) genotype 1 infections. The total hepatitis C drug sales were up 40.7% year-on-year, beating analysts' estimates of $4.4 billion.

Sales of Truvada (emtricitabine/tenofovir disoproxil fumarate), for the treatment of HIV-infected adults and also for reduction of the risk of HIV infection, rose 5% year-on-year to $849 million, beating analysts’ expectations of $795.8 million. Sales of Atripla (efavirenz/emtricitabine/tenofovir), for the treatment of HIV-infected adults to slow the progress of the disease, dropped 10% to $782 million, compared to $870 million during the same quarter last year. Sales of other HIV drugs including Stribild, Complera/Eviplera and Viread, were $1.09 billion, up 31% year-on-year.

Looking forward, the company raised its revenue guidance for the full year 2015 to between $29 billion to $30 billion, versus its prior forecast of between $28 billion to $29 billion. The current mean consensus estimates for the full year 2015 are $31.22 billion for revenue and EPS of $11.47. For the full year 2016, the mean consensus estimates are $30.98 billion for revenue and EPS of $11.47.

In April, Bernstein analyst Geoff Porges sent out a note to his clients that Gilead should buy cystic fibrosis (CF) drug maker Vertex Pharmaceuticals [NASDAQ:VRTX] for $45 billion to solve the long-term revenue cliff problem, citing that Gilead already has a product for CF, Cayston (aztreonam for inhalation solution), and a commercial infrastructure. Cayston was approved by the FDA in February 2010 for a treatment to improve respiratory symptoms in CF patients with Pseudomonas aeruginosa and generates an estimated annual revenue of less than $200 million.

Vertex just received FDA approval for the CF drug Orkambi (lumacaftor/ivacaftor) for the treatment of CF patients with two copies of the F508del mutation, the most common genetic mutation causing cystic fibrosis. Orkambi is a combination of lumacaftor, which is designed to increase the amount of mature protein at the cell surface by targeting the processing and trafficking defect of the F508del CFTR protein, and ivacaftor, which is designed to enhance the function of the CFTR protein once it reaches the cell surface. The company said the Orkambi therapy will cost $259,000 per patient, annually.

From our technical viewpoint, GILD stock has been stuck in a trading range since late 2014, between the $95 and $116.41 a share levels within an ascending wedge. Investors’ concerns may be shifting from sales of the hepatitis C drug to the company’s overall future revenue and earnings growth, as Wall Street sees no growth in 2016.

The stock could break out of the short-term symmetrical triangle to the upside and the near-term head resistance at the $125 a share level. One may want to pay attention to two key technical supports, at $116.41 and $110 a share, if the stock decides to pull back. There is a headline risk, as no one knows what Gilead’s next move might be to address their long-term growth concerns. The 12-month target price for GILD, based on Yahoo Finance, is $128.21 per share.

Disclosure: No position in GILD or VRTX with no recommendation.