Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of
operations for the quarter ended September 30, 2014. Total revenues for
the third quarter of 2014 increased to $6.04 billion compared to $2.78
billion for the third quarter of 2013. Product sales for the third
quarter of 2014 increased to $5.97 billion compared to $2.71 billion for
the third quarter of 2013. Net income for the third quarter of 2014 was
$2.73 billion, or $1.67 per diluted share compared to $788.6 million or
$0.47 per diluted share for the third quarter of 2013. Included in our
GAAP and Non-GAAP earnings per share amounts for the third quarter of
2014 is a cumulative catch-up of $337 million ($0.21 per diluted share)
related to the non-tax deductible Branded Prescription Drug (BPD) Fee
for the final regulations in the Affordable Care Act issued during the
quarter. Non-GAAP net income for the third quarter of 2014, which
excludes acquisition-related, restructuring and stock-based compensation
expenses, was $3.01 billion, or $1.84 per diluted share compared to
$879.1 million or $0.52 per diluted share for the third quarter of 2013.
Excluding the $0.21 impact of the non-tax deductible BPD cumulative
catch-up fee, Non-GAAP diluted EPS would have been $2.05 for the third
quarter of 2014.
“To date approximately 117,000 patients have been treated with Sovaldi
and with the introduction of Harvoni - a single tablet regimen for the
treatment of HCV-infected individuals which does not require either
interferon or ribavirin - many more patients will have the potential to
be cured of HCV infection,” said John C. Martin, PhD, Gilead's Chairman
and Chief Executive Officer.
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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(In thousands, except per share amounts)
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2014
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2013
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2014
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2013
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Product sales
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$
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5,968,208
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$
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2,709,652
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$
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17,252,119
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$
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7,760,505
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Royalty, contract and other revenues
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73,624
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73,181
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323,612
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321,357
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Total revenues
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$
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6,041,832
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$
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2,782,833
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$
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17,575,731
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$
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8,081,862
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Net income attributable to Gilead
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$
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2,731,274
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$
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788,606
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$
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8,614,277
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$
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2,283,397
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Non-GAAP net income attributable to Gilead
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$
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3,013,691
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$
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879,081
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$
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9,431,033
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$
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2,520,749
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Diluted EPS
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$
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1.67
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$
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0.47
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$
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5.18
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$
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1.35
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Non-GAAP diluted EPS
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$
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1.84
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$
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0.52
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$
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5.68
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$
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1.49
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Product Sales
U.S. product sales for the third quarter of 2014 increased to $4.21
billion from $1.67 billion and Europe product sales increased to $1.44
billion from $823.6 million compared to the third quarter of 2013.
Antiviral Product Sales
Antiviral product sales increased to $5.54 billion for the third quarter
of 2014, up from $2.33 billion for the third quarter of 2013 primarily
due to sales of Sovaldi® (sofosbuvir 400 mg), which launched
in December 2013.
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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(In thousands, except percentages)
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2014
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2013
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% Change
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2014
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2013
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% Change
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Antiviral product sales
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$
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5,544,513
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$
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2,326,727
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138%
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$
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16,065,154
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$
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6,701,344
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140%
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Sovaldi
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2,796,093
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—
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—%
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8,550,768
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—
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—%
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Atripla
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894,787
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899,669
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(1)%
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2,545,089
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2,714,850
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(6)%
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Truvada
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875,454
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813,652
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8%
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2,441,764
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2,321,673
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5%
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Complera/Eviplera
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330,263
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210,736
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57%
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880,460
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547,608
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61%
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Stribild
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328,035
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143,953
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128%
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812,826
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335,495
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142%
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Viread
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275,637
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231,555
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19%
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746,996
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692,075
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8%
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Cardiovascular Product Sales
Cardiovascular product sales increased to $278.9 million for the third
quarter of 2014, compared to $250.9 million for the third quarter of
2013.
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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(In thousands, except percentages)
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2014
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2013
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% Change
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2014
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2013
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% Change
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Cardiovascular product sales
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$
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278,925
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$
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250,887
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11%
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$
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780,100
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$
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700,134
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11%
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Letairis
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146,415
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135,072
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8%
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414,016
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381,436
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9%
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Ranexa
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132,510
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115,815
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14%
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366,084
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318,698
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15%
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Operating Expenses
During the third quarter of 2014, compared to the same period in 2013:
-
Non-GAAP research and development (R&D) expenses increased primarily
due to the progression and expansion of our clinical studies.
-
Non-GAAP selling, general and administrative (SG&A) expenses increased
primarily due to a cumulative catch-up of $337 million ($0.21 per
diluted share) related to the non-tax deductible BPD fee for final
regulations in the Affordable Care Act issued during the quarter. SG&A
expense increases also reflect costs to support our business expansion
related primarily to Sovaldi and Zydelig® (idelalisib 150
mg).
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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(In thousands)
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2014
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2013
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2014
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2013
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Non-GAAP research and development expenses
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$
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586,325
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$
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488,535
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$
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1,686,104
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$
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1,436,282
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Non-GAAP selling, general and administrative expenses
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$
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888,251
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$
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376,841
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$
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1,957,586
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$
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1,086,241
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Note:
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Non-GAAP R&D and SG&A expenses exclude the impact of
acquisition-related, restructuring and stock-based compensation
expenses.
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Cash, Cash Equivalents and Marketable Securities
As of September 30, 2014, Gilead had $7.69 billion of cash, cash
equivalents and marketable securities compared to $9.58 billion as of
June 30, 2014. During the third quarter of 2014, Gilead generated $4.04
billion in operating cash flow and utilized $5.79 billion to repurchase
shares and settle the warrants related to the 2014 convertible senior
notes, which were retired in May 2014.
Revised 2014 Full Year Guidance
Gilead updated its full year 2014 guidance, which it initially provided
on February 4, 2014, updated on July 23, 2014, and further revised on
October 28, 2014:
(In millions, except percentages and per share amounts)
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Initially Provided February 4, 2014; Reiterated
April 22, 2014
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Updated July 23, 2014
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Provided on October 28, 2014
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Net Product Sales
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$11,300 - $11,500
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$21,000 - $23,000
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$22,000 - $23,000
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Non-GAAP*
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Product Gross Margin
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75% - 77%
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85% - 88%
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86% - 88%
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R&D
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$2,200 - $2,300
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$2,300 - $2,400
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$2,300 - $2,400
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SG&A
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$2,100 - $2,200
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$2,300 - $2,400
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$2,700 - $2,800 **
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Effective Tax Rate
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28% - 29%
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17.5% - 20.5%
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17.5% - 19.5%
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Diluted EPS Impact of Acquisition-Related, Restructuring and
Stock-Based Compensation Expenses
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$0.63 - $0.66
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$0.63 - $0.66
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$0.63 - $0.66
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* Non-GAAP product gross margin, expenses and effective tax rate
exclude the impact of acquisition-related, restructuring and
stock-based compensation expenses, where applicable.
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** Includes the impact of the Internal Revenue Service
regulations related to the change in accounting of the branded
prescription drug fee, which is estimated at approximately $400
million.
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Product & Pipeline Updates Announced by Gilead
During the Third Quarter of 2014 Include:
Antiviral Program
-
Announced that the Committee for Medicinal Products for Human Use, the
scientific committee of the European Medicines Agency, adopted a
positive opinion on Gilead's Marketing Authorization Application for
Harvoni® (ledipasvir 90 mg/sofosbuvir 400 mg).
-
Announced topline results from two Phase 3 clinical trials (Studies
104 and 111), which demonstrated that an investigational once-daily
single tablet regimen containing tenofovir alafenamide (TAF) for the
treatment of HIV-1 infection in treatment-naïve adults met their
primary objectives. The studies demonstrated that the single tablet
regimen (E/C/F/TAF) comprising elvitegravir, cobicistat, emtricitabine
and TAF, was non-inferior to Gilead's Stribild (elvitegravir
/cobicistat /emtricitabine /tenofovir disoproxil fumarate) based on
the proportion of patients with HIV RNA levels (viral load) of less
than 50 copies/mL at 48 weeks of therapy. In addition, E/C/F/TAF
demonstrated more favorable renal and bone safety compared to Stribild.
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Submitted a New Drug Application (NDA) to Japan's Pharmaceutical and
Medical Devices Agency for approval of a once-daily fixed-dose
combination of ledipasvir (LDV) 90 mg and sofosbuvir (SOF) 400 mg for
the treatment of chronic genotype 1 HCV infection in adults. If
approved, LDV/SOF would simplify HCV treatment for genotype 1 patients
in Japan to one daily tablet, eliminating the need for interferon and
ribavirin.
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Announced that Gilead has signed non-exclusive licensing agreements
with seven India-based generic pharmaceutical manufacturers to expand
access to its chronic HCV medicines in developing countries. The
agreements allow the companies to manufacture SOF and the single
tablet regimen of LDV/SOF for distribution in 91 developing countries.
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Announced a new agreement with the Medicines Patent Pool (MPP) to
expand access to TAF for HIV and hepatitis B, contingent on the
medicine's U.S. regulatory approval. Under the agreement, the MPP can
sub-license TAF to generic drug companies in India and China, who may
manufacture and distribute it in 112 developing countries.
Oncology Program
-
Received U.S. Food and Drug Administration approval for Zydelig for
the treatment of three B-cell blood cancers. Zydelig is indicated in
combination with rituximab for patients with relapsed chronic
lymphocytic leukemia (CLL) for whom rituximab alone would be
considered appropriate therapy and as monotherapy for patients with
relapsed follicular lymphoma (FL) and small lymphocytic lymphoma (SLL)
who have received at least two prior systemic therapies.
-
The European Commission granted marketing authorization for Zydelig
for CLL and FL. For the treatment of CLL, Zydelig has been approved
for use in combination with rituximab for patients who have received
at least one prior therapy; or in the presence of 17p deletion or TP53
mutation in patients unsuitable for chemo-immunotherapy. For the
treatment of FL, Zydelig has been approved as a monotherapy in
patients who are refractory to two prior lines of treatment.
Cardiovascular Program
-
Announced positive results from the AMBITION study (a randomized,
double-blind, multicenter study of first-line combination therapy with AMBrIsentan
and Tadalafil in patients with pulmonary arterial hypertensION),
which was conducted in collaboration with GlaxoSmithKline plc. In
AMBITION, first-line treatment of pulmonary arterial hypertension with
the combination of ambrisentan 10 mg and tadalafil 40 mg reduced the
risk of clinical failure by 50 percent compared to the pooled
ambrisentan and tadalafil monotherapy arm. The combination was also
statistically significant versus the individual ambrisentan and
tadalafil monotherapy groups for the primary endpoint.
Conference Call
At 4:30 p.m. Eastern Time today, Gilead's management will host a
conference call and a simultaneous webcast to discuss results from its
third quarter 2014 as well as provide a general business update. To
access the webcast live via the internet, please connect to the
company's website at www.gilead.com
15 minutes prior to the conference call to ensure adequate time for any
software download that may be needed to hear the webcast. Alternatively,
please call 1-877-359-9508 (U.S.) or 1-224-357-2393 (international) and
dial the conference ID 8029073 to access the call.
A replay of the webcast will be archived on the company's website for
one year, and a phone replay will be available approximately two hours
following the call through October 30, 2014. To access the phone replay,
please call 1-855-859-2056 (U.S.) or 1-404-537-3406 (international) and
dial the conference ID 8029073.
About Gilead
Gilead Sciences is a biopharmaceutical company that discovers, develops
and commercializes innovative therapeutics in areas of unmet medical
need. The company's mission is to transform and simplify care for people
with life-threatening illnesses around the world. Headquartered in
Foster City, California, Gilead has operations in North and South
America, Europe and Asia-Pacific.
Non-GAAP Financial Information
Gilead has presented certain financial information in accordance with
U.S. generally accepted accounting principles (GAAP) and also on a
non-GAAP basis. Management believes this non-GAAP information is useful
for investors, when considered in conjunction with Gilead's GAAP
financial statements, because management uses such information
internally for its operating, budgeting and financial planning purposes.
Non-GAAP information is not prepared under a comprehensive set of
accounting rules and should only be used to supplement an understanding
of Gilead's operating results as reported under GAAP. A reconciliation
between GAAP and non-GAAP financial information is provided in the table
on pages 7 and 8.
Forward-looking Statements
Statements included in this press release that are not historical in
nature are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Gilead cautions readers that
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially.
These risks and uncertainties include: Gilead's ability to achieve its
anticipated full year 2014 financial results; Gilead's ability to
sustain growth in revenues for its antiviral, cardiovascular and
respiratory programs; availability of funding for state AIDS Drug
Assistance Programs (ADAPs); continued fluctuations in ADAP purchases
driven by federal and state grant cycles which may not mirror patient
demand and may cause fluctuations in Gilead's earnings; the possibility
of unfavorable results from clinical trials involving TAF, including in
combination with other products; Gilead's ability to initiate clinical
trials in its currently anticipated timeframes; the levels of inventory
held by wholesalers and retailers which may cause fluctuations in
Gilead's earnings; Gilead's ability to submit NDAs for new product
candidates in the timelines currently anticipated; Gilead's ability to
receive regulatory approvals in a timely manner or at all, for new and
current products, including SOF and the fixed-dose combination of
LDV/SOF in Japan and the fixed-dose combination of LDV/SOF in the
European Union; Gilead's ability to successfully commercialize its
products, including Sovaldi, Harvoni, Stribild, Vitekta, Tybost and
Zydelig; the risk that physicians and patients may not see advantages of
these products over other therapies and may therefore be reluctant to
prescribe the products; the risk that estimates of patients with HCV or
anticipated patient demand may not be accurate; the risk that private
and public payers may be reluctant to provide coverage or reimbursement
for new products, including Sovaldi and Harvoni; Gilead's ability to
successfully develop its respiratory, cardiovascular, oncology and
inflammation programs; safety and efficacy data from clinical studies
may not warrant further development of Gilead's product candidates; the
potential for additional austerity measures in European countries that
may increase the amount of discount required on Gilead's products;
Gilead's ability to complete its May 2014 share repurchase program due
to changes in its stock price, corporate or other market conditions;
fluctuations in the foreign exchange rate of the U.S. dollar that may
cause an unfavorable foreign currency exchange impact on Gilead's future
revenues and pre-tax earnings; and other risks identified from time to
time in Gilead's reports filed with the U.S. Securities and Exchange
Commission (SEC). In addition, Gilead makes estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and
expenses and related disclosures. Gilead bases its estimates on
historical experience and on various other market specific and other
relevant assumptions that it believes to be reasonable under the
circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ significantly
from these estimates. You are urged to consider statements that include
the words may, will, would, could, should, might, believes, estimates,
projects, potential, expects, plans, anticipates, intends, continues,
forecast, designed, goal, or the negative of those words or other
comparable words to be uncertain and forward-looking. Gilead directs
readers to its press releases, Quarterly Report on Form 10-Q for the
quarter ended June 30, 2014 and other subsequent disclosure documents
filed with the SEC. Gilead claims the protection of the Safe Harbor
contained in the Private Securities Litigation Reform Act of 1995 for
forward-looking statements.
All forward-looking statements are based on information currently
available to Gilead, and Gilead assumes no obligation to update any such
forward-looking statements.
Gilead owns or has rights to various trademarks, copyrights and trade
names used in our business, including the following: GILEAD®,
GILEAD SCIENCES®, SOVALDI®, HARVONI®,
STRIBILD®, COMPLERA®, EVIPLERA®, TRUVADA®,
VIREAD®, EMTRIVA®, TYBOST®, ZYDELIG®,
HEPSERA®, VITEKTA®, LETAIRIS®, RANEXA®,
CAYSTON®, AMBISOME®, VISTIDE®, VOLIBRIS®,
and RAPISCAN®.
ATRIPLA® is a registered trademark belonging to Bristol-Myers
Squibb & Gilead Sciences, LLC. LEXISCAN® is a
registered trademark belonging to Astellas U.S. LLC. MACUGEN®
is a registered trademark belonging to Eyetech, Inc. SUSTIVA®
is a registered trademark of Bristol-Myers Squibb Pharma Company. TAMIFLU®
is a registered trademark belonging to Hoffmann-La Roche Inc.
For more information on Gilead Sciences, Inc., please visit www.gilead.com
or call the Gilead Public Affairs Department at 1-800-GILEAD-5
(1-800-445-3235).
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GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales
|
|
$
|
5,968,208
|
|
|
$
|
2,709,652
|
|
|
$
|
17,252,119
|
|
|
$
|
7,760,505
|
|
Royalty, contract and other revenues
|
|
73,624
|
|
|
73,181
|
|
|
323,612
|
|
|
321,357
|
|
Total revenues
|
|
6,041,832
|
|
|
2,782,833
|
|
|
17,575,731
|
|
|
8,081,862
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
987,306
|
|
|
681,868
|
|
|
2,725,220
|
|
|
2,000,979
|
|
Research and development
|
|
630,466
|
|
|
546,244
|
|
|
1,809,368
|
|
|
1,567,778
|
|
Selling, general and administrative
|
|
944,837
|
|
|
406,860
|
|
|
2,106,515
|
|
|
1,186,147
|
|
Total costs and expenses
|
|
2,562,609
|
|
|
1,634,972
|
|
|
6,641,103
|
|
|
4,754,904
|
|
Income from operations
|
|
3,479,223
|
|
|
1,147,861
|
|
|
10,934,628
|
|
|
3,326,958
|
|
Interest expense
|
|
(103,366
|
)
|
|
(73,949
|
)
|
|
(281,639
|
)
|
|
(233,744
|
)
|
Other income (expense), net
|
|
(5,037
|
)
|
|
5,777
|
|
|
(26,594
|
)
|
|
2,222
|
|
Income before provision for income taxes
|
|
3,370,820
|
|
|
1,079,689
|
|
|
10,626,395
|
|
|
3,095,436
|
|
Provision for income taxes
|
|
646,557
|
|
|
294,473
|
|
|
2,029,060
|
|
|
824,892
|
|
Net income
|
|
2,724,263
|
|
|
785,216
|
|
|
8,597,335
|
|
|
2,270,544
|
|
Net loss attributable to noncontrolling interest
|
|
7,011
|
|
|
3,390
|
|
|
16,942
|
|
|
12,853
|
|
Net income attributable to Gilead
|
|
$
|
2,731,274
|
|
|
$
|
788,606
|
|
|
$
|
8,614,277
|
|
|
$
|
2,283,397
|
|
Net income per share attributable to Gilead common stockholders -
basic
|
|
$
|
1.80
|
|
|
$
|
0.51
|
|
|
$
|
5.64
|
|
|
$
|
1.50
|
|
Net income per share attributable to Gilead common stockholders -
diluted
|
|
$
|
1.67
|
|
|
$
|
0.47
|
|
|
$
|
5.18
|
|
|
$
|
1.35
|
|
Shares used in per share calculation - basic
|
|
1,513,899
|
|
|
1,532,105
|
|
|
1,527,633
|
|
|
1,526,847
|
|
Shares used in per share calculation - diluted
|
|
1,636,530
|
|
|
1,691,898
|
|
|
1,662,281
|
|
|
1,689,647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(unaudited)
(in thousands, except percentages and per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Cost of goods sold reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of goods sold
|
|
$
|
987,306
|
|
|
$
|
681,868
|
|
|
$
|
2,725,220
|
|
|
$
|
2,000,979
|
|
Stock-based compensation expenses
|
|
(2,726
|
)
|
|
(1,823
|
)
|
|
(7,933
|
)
|
|
(6,296
|
)
|
Acquisition related-amortization of purchased intangibles
|
|
(201,490
|
)
|
|
(21,264
|
)
|
|
(599,950
|
)
|
|
(63,792
|
)
|
Non-GAAP cost of goods sold
|
|
$
|
783,090
|
|
|
$
|
658,781
|
|
|
$
|
2,117,337
|
|
|
$
|
1,930,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product gross margin reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP product gross margin
|
|
83.5
|
%
|
|
74.8
|
%
|
|
84.2
|
%
|
|
74.2
|
%
|
Stock-based compensation expenses
|
|
0.0
|
%
|
|
0.1
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
Acquisition related-amortization of purchased intangibles
|
|
3.4
|
%
|
|
0.8
|
%
|
|
3.5
|
%
|
|
0.8
|
%
|
Non-GAAP product gross margin(1)
|
|
86.9
|
%
|
|
75.7
|
%
|
|
87.7
|
%
|
|
75.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development expenses
|
|
$
|
630,466
|
|
|
$
|
546,244
|
|
|
$
|
1,809,368
|
|
|
$
|
1,567,778
|
|
Stock-based compensation expenses
|
|
(40,312
|
)
|
|
(27,740
|
)
|
|
(111,295
|
)
|
|
(79,261
|
)
|
Restructuring expenses
|
|
(43
|
)
|
|
31
|
|
|
(217
|
)
|
|
(4,793
|
)
|
Acquisition related-contingent consideration remeasurement
|
|
(3,786
|
)
|
|
(30,000
|
)
|
|
(11,752
|
)
|
|
(47,442
|
)
|
Non-GAAP research and development expenses
|
|
$
|
586,325
|
|
|
$
|
488,535
|
|
|
$
|
1,686,104
|
|
|
$
|
1,436,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling, general and administrative expenses
|
|
$
|
944,837
|
|
|
$
|
406,860
|
|
|
$
|
2,106,515
|
|
|
$
|
1,186,147
|
|
Stock-based compensation expenses
|
|
(56,298
|
)
|
|
(33,010
|
)
|
|
(145,466
|
)
|
|
(94,736
|
)
|
Restructuring expenses
|
|
(3
|
)
|
|
2,972
|
|
|
(8
|
)
|
|
2,534
|
|
Acquisition related-transaction costs
|
|
(4
|
)
|
|
300
|
|
|
(559
|
)
|
|
(6,860
|
)
|
Acquisition related-amortization of purchased intangibles
|
|
(281
|
)
|
|
(281
|
)
|
|
(2,896
|
)
|
|
(844
|
)
|
Non-GAAP selling, general and administrative expenses
|
|
$
|
888,251
|
|
|
$
|
376,841
|
|
|
$
|
1,957,586
|
|
|
$
|
1,086,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating margin
|
|
57.6
|
%
|
|
41.2
|
%
|
|
62.2
|
%
|
|
41.2
|
%
|
Stock-based compensation expenses
|
|
1.6
|
%
|
|
2.2
|
%
|
|
1.5
|
%
|
|
2.2
|
%
|
Restructuring expenses
|
|
0.0
|
%
|
|
(0.1
|
)%
|
|
0.0
|
%
|
|
0.0
|
%
|
Acquisition related-transaction costs
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
Acquisition related-amortization of purchased intangibles
|
|
3.3
|
%
|
|
0.8
|
%
|
|
3.4
|
%
|
|
0.8
|
%
|
Acquisition related-contingent consideration remeasurement
|
|
0.1
|
%
|
|
1.1
|
%
|
|
0.1
|
%
|
|
0.6
|
%
|
Non-GAAP operating margin(1)
|
|
62.6
|
%
|
|
45.2
|
%
|
|
67.2
|
%
|
|
44.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP other income (expense), net
|
|
$
|
(5,037
|
)
|
|
$
|
5,777
|
|
|
$
|
(26,594
|
)
|
|
$
|
2,222
|
|
Acquisition related-transaction costs
|
|
—
|
|
|
—
|
|
|
(1,851
|
)
|
|
—
|
|
Non-GAAP other income (expense), net
|
|
$
|
(5,037
|
)
|
|
$
|
5,777
|
|
|
$
|
(28,445
|
)
|
|
$
|
2,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts may not sum due to rounding.
|
|
|
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION -
(Continued)
(unaudited)
(in thousands, except percentages and per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Effective tax rate reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective tax rate
|
|
19.2
|
%
|
|
27.3
|
%
|
|
19.1
|
%
|
|
26.6
|
%
|
Restructuring expenses
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
Acquisition related-amortization of purchased intangibles
|
|
(1.0
|
)%
|
|
0.0
|
%
|
|
(0.9
|
)%
|
|
0.0
|
%
|
Acquisition related-contingent consideration remeasurement
|
|
0.0
|
%
|
|
(0.9
|
)%
|
|
0.0
|
%
|
|
(0.4
|
)%
|
Non-GAAP effective tax rate(1)
|
|
18.2
|
%
|
|
26.4
|
%
|
|
18.2
|
%
|
|
26.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Gilead reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable to Gilead, net of tax
|
|
$
|
2,731,274
|
|
|
$
|
788,606
|
|
|
$
|
8,614,277
|
|
|
$
|
2,283,397
|
|
Stock-based compensation expenses
|
|
81,261
|
|
|
46,576
|
|
|
216,596
|
|
|
132,335
|
|
Restructuring expenses
|
|
45
|
|
|
(2,076
|
)
|
|
218
|
|
|
3,048
|
|
Acquisition related-transaction costs
|
|
(90
|
)
|
|
(300
|
)
|
|
(956
|
)
|
|
6,860
|
|
Acquisition related-amortization of purchased intangibles
|
|
197,415
|
|
|
16,275
|
|
|
589,146
|
|
|
47,667
|
|
Acquisition related-contingent consideration remeasurement
|
|
3,786
|
|
|
30,000
|
|
|
11,752
|
|
|
47,442
|
|
Non-GAAP net income attributable to Gilead, net of tax
|
|
$
|
3,013,691
|
|
|
$
|
879,081
|
|
|
$
|
9,431,033
|
|
|
$
|
2,520,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per share
|
|
$
|
1.67
|
|
|
$
|
0.47
|
|
|
$
|
5.18
|
|
|
$
|
1.35
|
|
Stock-based compensation expenses
|
|
0.05
|
|
|
0.03
|
|
|
0.13
|
|
|
0.08
|
|
Restructuring expenses
|
|
0.00
|
|
|
(0.00
|
)
|
|
0.00
|
|
|
0.00
|
|
Acquisition related-transaction costs
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
0.00
|
|
Acquisition related-amortization of purchased intangibles
|
|
0.12
|
|
|
0.01
|
|
|
0.35
|
|
|
0.03
|
|
Acquisition related-contingent consideration remeasurement
|
|
0.00
|
|
|
0.02
|
|
|
0.01
|
|
|
0.03
|
|
Non-GAAP diluted earnings per share(1)
|
|
$
|
1.84
|
|
|
$
|
0.52
|
|
|
$
|
5.68
|
|
|
$
|
1.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculation (diluted) reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP shares used in per share calculation (diluted)
|
|
1,636,530
|
|
|
1,691,898
|
|
|
1,662,281
|
|
|
1,689,647
|
|
Share impact of current stock-based compensation rules
|
|
(620
|
)
|
|
(1,139
|
)
|
|
(837
|
)
|
|
(1,281
|
)
|
Non-GAAP shares used in per share calculation (diluted)
|
|
1,635,910
|
|
|
1,690,759
|
|
|
1,661,444
|
|
|
1,688,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustment summary:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold adjustments
|
|
$
|
204,216
|
|
|
$
|
23,087
|
|
|
$
|
607,883
|
|
|
$
|
70,088
|
|
Research and development expenses adjustments
|
|
44,141
|
|
|
57,709
|
|
|
123,264
|
|
|
131,496
|
|
Selling, general and administrative expenses adjustments
|
|
56,586
|
|
|
30,019
|
|
|
148,929
|
|
|
99,906
|
|
Other income (expense) adjustments
|
|
—
|
|
|
—
|
|
|
(1,851
|
)
|
|
—
|
|
Total non-GAAP adjustments before tax
|
|
304,943
|
|
|
110,815
|
|
|
878,225
|
|
|
301,490
|
|
Income tax effect
|
|
(22,526
|
)
|
|
(20,340
|
)
|
|
(61,469
|
)
|
|
(64,138
|
)
|
Total non-GAAP adjustments after tax
|
|
$
|
282,417
|
|
|
$
|
90,475
|
|
|
$
|
816,756
|
|
|
$
|
237,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts may not sum due to rounding.
|
|
GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
2014
|
|
2013(1)
|
|
|
(unaudited)
|
|
|
Cash, cash equivalents and marketable securities
|
|
$
|
7,691,726
|
|
|
$
|
2,570,590
|
Accounts receivable, net
|
|
2,850,367
|
|
|
2,100,286
|
Inventories
|
|
1,909,584
|
|
|
2,055,788
|
Property, plant and equipment, net
|
|
1,509,796
|
|
|
1,166,181
|
Intangible assets, net
|
|
11,306,547
|
|
|
11,900,106
|
Goodwill
|
|
1,171,561
|
|
|
1,169,023
|
Other assets
|
|
2,404,812
|
|
|
1,534,811
|
Total assets
|
|
$
|
28,844,393
|
|
|
$
|
22,496,785
|
|
|
|
|
|
|
Current liabilities
|
|
$
|
6,054,952
|
|
|
$
|
6,325,421
|
Long-term liabilities
|
|
8,898,449
|
|
|
4,363,032
|
Equity component of currently redeemable convertible notes
|
|
27,382
|
|
|
63,831
|
Stockholders’ equity(2)
|
|
13,863,610
|
|
|
11,744,501
|
Total liabilities and stockholders’ equity
|
|
$
|
28,844,393
|
|
|
$
|
22,496,785
|
|
(1) Derived from the audited consolidated financial
statements as of December 31, 2013.
|
(2) As of September 30, 2014, there were 1,513,593
shares of common stock issued and outstanding.
|
|
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY
(unaudited)
(in thousands)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Antiviral products:
|
|
|
|
|
|
|
|
|
|
|
|
Sovaldi – U.S.
|
|
$
|
2,199,519
|
|
|
$
|
—
|
|
|
$
|
7,328,817
|
|
|
$
|
—
|
Sovaldi – Europe
|
|
523,455
|
|
|
—
|
|
|
1,087,364
|
|
|
—
|
Sovaldi – Other International
|
|
73,119
|
|
|
—
|
|
|
134,587
|
|
|
—
|
|
|
2,796,093
|
|
|
—
|
|
|
8,550,768
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Atripla – U.S.
|
|
621,088
|
|
|
575,533
|
|
|
1,689,366
|
|
|
1,740,689
|
Atripla – Europe
|
|
222,723
|
|
|
256,853
|
|
|
693,559
|
|
|
805,848
|
Atripla – Other International
|
|
50,976
|
|
|
67,283
|
|
|
162,164
|
|
|
168,313
|
|
|
894,787
|
|
|
899,669
|
|
|
2,545,089
|
|
|
2,714,850
|
|
|
|
|
|
|
|
|
|
|
|
|
Truvada – U.S.
|
|
471,162
|
|
|
430,173
|
|
|
1,238,514
|
|
|
1,153,575
|
Truvada – Europe
|
|
326,345
|
|
|
313,963
|
|
|
987,512
|
|
|
970,982
|
Truvada – Other International
|
|
77,947
|
|
|
69,516
|
|
|
215,738
|
|
|
197,116
|
|
|
875,454
|
|
|
813,652
|
|
|
2,441,764
|
|
|
2,321,673
|
|
|
|
|
|
|
|
|
|
|
|
|
Complera / Eviplera – U.S.
|
|
183,061
|
|
|
126,888
|
|
|
467,333
|
|
|
350,372
|
Complera / Eviplera – Europe
|
|
134,311
|
|
|
74,025
|
|
|
375,437
|
|
|
172,288
|
Complera / Eviplera – Other International
|
|
12,891
|
|
|
9,823
|
|
|
37,690
|
|
|
24,948
|
|
|
330,263
|
|
|
210,736
|
|
|
880,460
|
|
|
547,608
|
|
|
|
|
|
|
|
|
|
|
|
|
Stribild – U.S.
|
|
278,840
|
|
|
134,700
|
|
|
695,347
|
|
|
323,639
|
Stribild – Europe
|
|
38,343
|
|
|
7,911
|
|
|
93,281
|
|
|
9,759
|
Stribild – Other International
|
|
10,852
|
|
|
1,342
|
|
|
24,198
|
|
|
2,097
|
|
|
328,035
|
|
|
143,953
|
|
|
812,826
|
|
|
335,495
|
|
|
|
|
|
|
|
|
|
|
|
|
Viread – U.S.
|
|
122,654
|
|
|
108,718
|
|
|
320,261
|
|
|
305,311
|
Viread – Europe
|
|
87,177
|
|
|
86,177
|
|
|
258,833
|
|
|
262,425
|
Viread – Other International
|
|
65,806
|
|
|
36,660
|
|
|
167,902
|
|
|
124,339
|
|
|
275,637
|
|
|
231,555
|
|
|
746,996
|
|
|
692,075
|
|
|
|
|
|
|
|
|
|
|
|
|
Harvoni – Europe
|
|
19,966
|
|
|
—
|
|
|
20,405
|
|
|
—
|
|
|
19,966
|
|
|
—
|
|
|
20,405
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Antiviral – U.S.
|
|
13,634
|
|
|
13,706
|
|
|
34,125
|
|
|
47,116
|
Other Antiviral – Europe
|
|
9,027
|
|
|
11,320
|
|
|
27,333
|
|
|
35,146
|
Other Antiviral – Other International
|
|
1,617
|
|
|
2,136
|
|
|
5,388
|
|
|
7,381
|
|
|
24,278
|
|
|
27,162
|
|
|
66,846
|
|
|
89,643
|
|
|
|
|
|
|
|
|
|
|
|
|
Total antiviral products – U.S.
|
|
3,889,958
|
|
|
1,389,718
|
|
|
11,773,763
|
|
|
3,920,702
|
Total antiviral products – Europe
|
|
1,361,347
|
|
|
750,249
|
|
|
3,543,724
|
|
|
2,256,448
|
Total antiviral products – Other International
|
|
293,208
|
|
|
186,760
|
|
|
747,667
|
|
|
524,194
|
|
|
5,544,513
|
|
|
2,326,727
|
|
|
16,065,154
|
|
|
6,701,344
|
|
|
|
|
|
|
|
|
|
|
|
|
Letairis
|
|
146,415
|
|
|
135,072
|
|
|
414,016
|
|
|
381,436
|
Ranexa
|
|
132,510
|
|
|
115,815
|
|
|
366,084
|
|
|
318,698
|
AmBisome
|
|
98,108
|
|
|
97,812
|
|
|
284,995
|
|
|
258,224
|
Zydelig
|
|
5,862
|
|
|
—
|
|
|
5,862
|
|
|
—
|
Other products
|
|
40,800
|
|
|
34,226
|
|
|
116,008
|
|
|
100,803
|
|
|
423,695
|
|
|
382,925
|
|
|
1,186,965
|
|
|
1,059,161
|
|
|
|
|
|
|
|
|
|
|
|
|
Total product sales
|
|
$
|
5,968,208
|
|
|
$
|
2,709,652
|
|
|
$
|
17,252,119
|
|
|
$
|
7,760,505
|
Copyright Business Wire 2014