Gilead Sciences (NASDAQ:GILD) may have a high P/E, especially by today's knocked-down standards, but considering the solid growth it turns in quarter after quarter, I think it has earned it.

Sales in the second quarter were up a solid 29%. Atripla, the triple-combination HIV drug it sells with Bristol-Myers Squibb (NYSE:BMY), led the pack with whopping 60% growth over the year-ago quarter. Some of that was due to wholesale inventory increases in expectation of price increase, but it's still a nice showing.

Royalty revenue from sales of Tamiflu was up 38%, but that had nothing to do with the swine flu. Gilead records royalty revenue from sales of Tamiflu by Roche one quarter later. To see whether the outbreak of the swine flu, which started in the second quarter, is having an effect on royalties from Tamiflu, investors will have to wait until Roche reports earnings tomorrow.

The bottom line looked even better than the top. Earnings per share were up 43%, excluding costs for acquiring Rule Breakers pick CV Therapeutics and associated restructuring costs (but I did include stock-based compensation because it's a real expense).

Gilead continues to benefit from the increase in HIV-infected patients going on to medication. Over the past year, that number has increased 7% and, considering that most patients are taking one of Gilead's drugs, the company has benefited more than the smaller players like GlaxoSmithKline (NYSE:GSK), Merck (NYSE:MRK), and Johnson & Johnson (NYSE:JNJ).

Gilead isn't content to just sit there and enjoy the growth, though. It has set up a partnership with Johnson & Johnson to develop another triple-combination HIV drug, and it's working on a quad drug of its own, which should bring data from phase 2 trials by the end of the year. Plus, it's expanding into the cardiovascular realm with its aforementioned purchase of CV Therapeutics and its hypertension drug Darusentan, which should complete its second phase 3 trial in the fourth quarter.

Assuming Gilead can keep up the solid growth -- and I don't see why not -- it seems to be firmly planted in the camp for stocks that are cheaper than they appear.

Motley Fool Rule Breakers is always on the hunt for hot drug stocks and other cutting-edge picks. See all of our latest discoveries with a free 30-day trial.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Johnson & Johnson is a selection of the Income Investor newsletter. The Fool has a disclosure policy.