Gilead Earnings Sound Death Knell (Again) for Large Sales Forces

Gilead's third quarter numbers blew everyone away -- revenues up 30 percent, net income up 26.5 percent.The numbers call into question the value of large sales forces.

A couple of days ago BNET noted that Abbott Labs got a "spectacular" $3.63 per dollar spent on marketing. The company achieved that in part by laying off staff.

But that was nothing compared to Gilead. Here are its comparable numbers: $7.25 in revenues and $5.66 in gross profit. Which makes Gilead one of the most effective marketers on the block. The growth in the productivity of its marketing dollars was 24 and 23 percent, respectively. Astonishing.

That growth came after its HIV drug, Truvada, beat GlaxoSmithKline's Epzicom in a head-to-head trial, making it the first-line defense against AIDS.

Anyone employed as a sales rep at a large pharma company should be very worried by Gilead's financial numbers. They strongly suggest that if your company has a drug that works you pretty much don't need marketing. Gilead spend less than 14 percent of its revenues on sales and ads, about half the margin in major pharma companies.