- Product Sales of $5.5 billion -
- Diluted EPS of $1.60 per share -
- Non-GAAP Diluted EPS of $1.84 per share -
- Revised Full Year 2018 Guidance -
Company Website:
http://www.gilead.com
FOSTER CITY, Calif. -- (Business Wire)
Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of
operations for the third quarter ended September 30, 2018. The financial
results that follow represent a year-over-year comparison of the third
quarter 2018 to the third quarter 2017. Total revenues were $5.6 billion
in 2018 compared to $6.5 billion in 2017. Net income was $2.1 billion or
$1.60 per diluted share in 2018 compared to $2.7 billion or $2.06 per
diluted share in 2017. Non-GAAP net income was $2.4 billion or $1.84 per
diluted share in 2018 compared to $3.0 billion or $2.27 per diluted
share in 2017.
|
| Three Months Ended |
| Nine Months Ended |
| | September 30, | | September 30, |
(In millions, except per share amounts) | | 2018 |
| 2017 | | 2018 |
| 2017 |
Product sales
| |
$
|
5,455
| | |
$
|
6,402
| | |
$
|
15,996
| | |
$
|
19,825
|
Royalty, contract and other revenues
| |
141
|
| |
110
|
| |
336
|
| |
333
|
Total revenues
| |
$
|
5,596
|
| |
$
|
6,512
|
| |
$
|
16,332
|
| |
$
|
20,158
|
| | | | | | | |
|
Net income attributable to Gilead
| |
$
|
2,097
| | |
$
|
2,718
| | |
$
|
5,452
| | |
$
|
8,493
|
Non-GAAP net income
| |
$
|
2,403
| | |
$
|
2,990
| | |
$
|
6,855
| | |
$
|
9,311
|
| | | | | | | |
|
Diluted earnings per share
| |
$
|
1.60
| | |
$
|
2.06
| | |
$
|
4.15
| | |
$
|
6.44
|
Non-GAAPdiluted earnings per share
| |
$
|
1.84
| | |
$
|
2.27
| | |
$
|
5.22
| | |
$
|
7.06
|
| | | | | | | | | | | | | | |
|
Product Sales
Total product sales for the third quarter of 2018 were $5.5 billion
compared to $6.4 billion for the same period in 2017. Product sales for
the third quarter of 2018 were $4.1 billion in the United States, $873
million in Europe and $451 million in other locations. Product sales for
the third quarter of 2017 were $4.5 billion in the United States, $1.2
billion in Europe and $663 million in other locations.
___________________________________
Note: Non-GAAP financial information excludes acquisition-related,
up-front collaboration, stock-based compensation and other expenses,
fair value adjustments of marketable equity securities and measurement
period adjustments relating to the enactment of the 2017 Tax Cuts and
Jobs Act (Tax Reform). A reconciliation between GAAP and non-GAAP
financial information is provided in the tables on page 7, 8 and 9.
- HIV product sales(1) were $3.7 billion for
the third quarter of 2018 compared to $3.3 billion for the same period
in 2017. The increase was primarily due to the continued uptake of
products containing emtricitabine (FTC) and tenofovir alafenamide
(TAF), which include Biktarvy® (bictegravir 50
mg/emtricitabine 200 mg/tenofovir alafenamide 25 mg), Descovy®
(emtricitabine 200 mg/tenofovir alafenamide 25 mg), Genvoya®
(elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir
alafenamide 10 mg) and Odefsey® (emtricitabine 200
mg/rilpivirine 25 mg/tenofovir alafenamide 25 mg).
- Chronic hepatitis C (HCV) product sales, which consist of
Epclusa® (sofosbuvir 400 mg/velpatasvir 100 mg), Harvoni®
(ledipasvir 90 mg/sofosbuvir 400 mg), Vosevi®
(sofosbuvir 400 mg/velpatasvir 100 mg/voxilaprevir 100 mg) and Sovaldi®
(sofosbuvir 400 mg), were $902 million for the third quarter of 2018
compared to $2.2 billion for the same period in 2017. The decline was
primarily due to lower sales of Harvoni and Epclusa across all major
markets as a result of increased competition.
- Yescarta® (axicabtagene ciloleucel), which
was launched in the United States in October 2017, generated $75
million in sales during the third quarter of 2018.
-
Other product sales, which include products from Gilead’s chronic
hepatitis B (HBV), cardiovascular, oncology and other categories
inclusive of Vemlidy® (tenofovir alafenamide 25 mg), Viread®
(tenofovir disoproxil fumarate 300 mg), Letairis®
(ambrisentan 5 mg and 10 mg), Ranexa® (ranolazine 500 mg
and 1000 mg), Zydelig® (idelalisib 150 mg) and AmBisome®
(amphotericin B liposome for injection 50 mg/vial), were $751 million
for the third quarter of 2018 compared to $874 million for the same
period in 2017.
Operating Expenses
|
| Three Months Ended |
| Nine Months Ended |
| | September 30, | | September 30, |
(In millions) | | 2018 |
| 2017 | | 2018 |
| 2017 |
Research and development expenses (R&D)
| |
$
|
939
| | |
$
|
789
| | |
$
|
3,068
| | |
$
|
2,584
|
Non-GAAP R&D expenses
| |
$
|
844
| | |
$
|
745
| | |
$
|
2,579
| | |
$
|
2,446
|
| | | | | | | |
|
Selling, general and administrative expenses (SG&A)
| |
$
|
948
| | |
$
|
879
| | |
$
|
2,925
| | |
$
|
2,626
|
Non-GAAP SG&A expenses
| |
$
|
852
| | |
$
|
806
| | |
$
|
2,576
| | |
$
|
2,440
|
| | | | | | | | | | | | | | |
|
During the third quarter of 2018, compared to the same period in 2017:
-
R&D and SG&A expenses increased primarily due to higher costs to
support the growth of Gilead’s business following the acquisition of
Kite Pharma, Inc. (Kite) and stock-based compensation expenses
associated with Gilead’s acquisition of Kite.
-
Non-GAAP R&D and non-GAAP SG&A expenses increased primarily due to
higher costs to support the growth of Gilead’s business following the
acquisition of Kite.
Cash, Cash Equivalents and Marketable Securities
As of September 30, 2018, Gilead had $30.8 billion of cash, cash
equivalents and marketable securities compared to $31.7 billion as of
June 30, 2018. During the third quarter of 2018, Gilead generated $2.2
billion in operating cash flow. Gilead repaid $1.8 billion principal
amount of senior unsecured notes due in September 2018, paid cash
dividends of $742 million and utilized $449 million on stock repurchases.
___________________________________
(1) Excludes sales of Viread as Viread is primarily used for
treatment of chronic HBV.
Revised Full Year 2018 Guidance
Gilead revised its full year 2018 guidance, initially provided on
February 6, 2018 and revised on July 25, 2018:
(In millions, except percentages and per share amounts) |
| Initially Provided February 6, 2018 Reiterated
May 1, 2018 |
| Updated July 25, 2018 |
| Updated October 25, 2018 |
Net Product Sales
| |
$20,000 - $21,000
| |
$20,000 - $21,000
| |
$20,800 - $21,300
|
Non-GAAP
| | | | | | |
Product Gross Margin
| |
85% - 87%
| |
85% - 87%
| |
85% - 87%
|
R&D Expenses
| |
$3,400 - $3,600
| |
$3,400 - $3,600
| |
$3,400 - $3,600
|
SG&A Expenses
| |
$3,400 - $3,600
| |
$3,400 - $3,600
| |
$3,400 - $3,600
|
Effective Tax Rate
| |
21.0% - 23.0%
| |
19.0% - 21.0%
| |
18.0% - 20.0%
|
Diluted EPS Impact of Acquisition-related, Up-front Collaboration,
Stock-based Compensation and Other Expenses
| |
$1.41 - $1.51
| |
$1.50 - $1.60
| |
$1.50 - $1.60
|
| | | | | |
|
Corporate Highlights
-
Announced that John F. Milligan, Ph.D., will step down as President
and Chief Executive Officer (CEO).
-
John C. Martin, Ph.D., announced his intent to step down from the
Board at the time a new CEO joins the company.
-
Announced plans to launch authorized generic versions of Epclusa and
Harvoni in the United States through a newly created subsidiary,
Asegua Therapeutics LLC.
-
Announced that Laura Hamill has joined the company as Executive Vice
President, Worldwide Commercial Operations.
-
Announced that Gregg Alton has been appointed Chief Patient Officer
and that Diana Brainard, M.D., has been promoted to Senior Vice
President, HIV and Emerging Viral Infections. Also announced that
Andrew Cheng, M.D., Ph.D., Chief Medical Officer, decided to leave
Gilead to pursue another opportunity.
-
Announced that Michael Amoroso has joined the company as Senior Vice
President and Head of Worldwide Commercial, Cell Therapy.
Product and Pipeline Updates announced by
Gilead during the Third Quarter of 2018 include:
HIV and Liver Diseases Programs
-
Announced a strategic collaboration with Precision BioSciences
(Precision) to develop therapies targeting the in vivo
elimination of HBV virus with Precision’s proprietary genome editing
platform, ARCUS.
-
Announced that the China National Drug Administration has approved
Genvoya for the treatment of HIV-1 infection.
-
Presented data at the 22nd International AIDS Conference,
which included the announcement of a retrospective nationwide analysis
of the impact of Truvada® (emtricitabine 200mg and
tenofovir disoproxil fumarate 300mg) for pre-exposure prophylaxis
(PrEP) use across all 50 U.S. states and the District of Columbia.
Conducted in collaboration with researchers at Emory University
Rollins School of Public Health and the Centers for Disease Control
and Prevention, these data demonstrated that use of once-daily oral
Truvada for PrEP has had an independent and significant impact on the
number of new HIV infections diagnosed in the United States from 2012
to 2016.
Oncology and Cell Therapy Programs
-
Announced a license agreement with Trianni, Inc. (Trianni) that grants
Gilead the use of the Trianni transgenic human monoclonal antibody
discovery platform to support drug discovery efforts.
-
Announced that the European Commission has granted Marketing
Authorization for Yescarta as a treatment for adult patients with
relapsed or refractory diffuse large B-cell lymphoma and primary
mediastinal large B-cell lymphoma, after two or more lines of systemic
therapy.
-
Announced a strategic collaboration with Gadeta B.V. (Gadeta) to
develop novel gamma delta T cell receptor therapies in various cancers.
Inflammation Programs
-
Announced that FINCH 2, a global, randomized, placebo-controlled,
Phase 3 study of filgotinib, an investigational, selective JAK1
inhibitor, in adults with moderately-to-severely active rheumatoid
arthritis and prior inadequate response/intolerance to biologic
agents, achieved its primary endpoint in the proportion of patients
achieving an American College of Rheumatology 20 percent response at
week 12.
-
Announced that the randomized, placebo-controlled Phase 2 TORTUGA
study of filgotinib achieved its primary efficacy endpoint in adults
with moderately to severely active ankylosing spondylitis (AS). In the
study, patients treated with filgotinib achieved significantly greater
improvements in AS Disease Activity Score, the primary endpoint, at
week 12, with a mean change from baseline of -1.5 versus -0.6 for
those treated with placebo (p<0.0001).
Non-GAAP Financial Information
The information presented in this document has been prepared by Gilead
in accordance with U.S. generally accepted accounting principles (GAAP),
unless otherwise noted as non-GAAP. Management believes non-GAAP
information is useful for investors, when considered in conjunction with
Gilead’s GAAP financial information, 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. Non-GAAP measures may be defined and calculated differently
by other companies in the same industry. A reconciliation between GAAP
and non-GAAP financial information is provided in the tables on pages 7,
8 and 9.
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 2018 and a general business update. To access the webcast
live via the internet, please connect to the company’s website at www.gilead.com/investors
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 (877) 359-9508 (U.S.) or (224) 357-2393 (international) and
dial the conference ID 1789278 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 27, 2018. To access the phone replay,
please call (855) 859-2056 (U.S.) or (404) 537-3406 (international) and
dial the conference ID 1789278.
About Gilead Sciences
Gilead Sciences, Inc. is a research-based biopharmaceutical company that
discovers, develops and commercializes innovative medicines in areas of
unmet medical need. The company strives to transform and simplify care
for people with life-threatening illnesses around the world. Gilead has
operations in more than 35 countries worldwide, with headquarters in
Foster City, California.
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 2018 financial results; Gilead’s ability to
sustain growth in revenues for its antiviral and other programs; the
risk that private and public payers may be reluctant to provide, or
continue to provide, coverage or reimbursement for new products,
including Yescarta, Biktarvy and Vemlidy; austerity measures in European
countries that may increase the amount of discount required on Gilead’s
products; an increase in discounts, chargebacks and rebates due to
ongoing contracts and future negotiations with commercial and government
payers; a larger than anticipated shift in payer mix to more highly
discounted payer segments and geographic regions and decreases in
treatment duration; 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; market share and
price erosion caused by the introduction of generic versions of Viread
and Truvada, an uncertain global macroeconomic environment; and
potential amendments to the Affordable Care Act or other government
action that could have the effect of lowering prices or reducing the
number of insured patients; 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 develop products utilizing Precision’s
ARCUS platform and Trianni’s transgenic human monoclonal antibody
platform; Gilead’s ability to develop products under its collaboration
with Gadeta; Gilead’s ability to submit new drug applications 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; Gilead’s ability to successfully
commercialize its products, including Biktarvy and Yescarta; 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; safety and efficacy data from clinical studies may not warrant
further development of Gilead’s product candidates, including
filgotinib; Gilead’s ability to pay dividends or complete its 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 (the 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. There may be other
factors of which Gilead is not currently aware that may affect matters
discussed in the forward-looking statements and may also cause actual
results to differ significantly from these estimates. Further, results
for the quarter ended September 30, 2018 are not necessarily indicative
of operating results for any future periods. 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, 2018 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 or
supplement any such forward-looking statements other than as required by
law. Any forward-looking statements speak only as of the date hereof or
as of the dates indicated in the statements.
Gilead owns or has rights to various trademarks, copyrights and trade
names used in its business, including the following: GILEAD®,
GILEAD SCIENCES®, AMBISOME®, ATRIPLA®,
AXI-CELTM, BIKTARVY®, CAYSTON®, COMPLERA®,
DESCOVY®,EMTRIVA®, EPCLUSA®,
EVIPLERA®, GENVOYA®, HARVONI®, HEPSERA®,
LETAIRIS®, ODEFSEY®, RANEXA®, SOVALDI®,
STRIBILD®, TRUVADA®, TYBOST®, VEMLIDY®,
VIREAD®, VOLIBRIS®, VOSEVI®, YESCARTA®
and ZYDELIG®.
LEXISCAN® is a registered trademark of Astellas U.S. LLC.
MACUGEN® is a registered trademark of Eyetech, Inc. SYMTUZA®
is a registered trademark of Janssen Sciences Ireland UC (Janssen).
TAMIFLU® is a registered trademark of 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).
|
GILEAD SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in millions, except per share amounts) |
|
| |
| |
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
Revenues:
| | | | | | | | |
Product sales
| |
$
|
5,455
| | |
$
|
6,402
| | |
$
|
15,996
| | |
$
|
19,825
| |
Royalty, contract and other revenues
| |
141
|
| |
110
|
| |
336
|
| |
333
|
|
Total revenues
| |
5,596
|
| |
6,512
|
| |
16,332
|
| |
20,158
|
|
Costs and expenses:
| | | | | | | | |
Cost of goods sold
| |
1,086
| | |
1,032
| | |
3,283
| | |
3,115
| |
Research and development expenses
| |
939
| | |
789
| | |
3,068
| | |
2,584
| |
Selling, general and administrative expenses
| |
948
|
| |
879
|
| |
2,925
|
| |
2,626
|
|
Total costs and expenses
| |
2,973
|
| |
2,700
|
| |
9,276
|
| |
8,325
|
|
Income from operations
| |
2,623
| | |
3,812
| | |
7,056
| | |
11,833
| |
Interest expense
| |
(264
|
)
| |
(291
|
)
| |
(820
|
)
| |
(821
|
)
|
Other income (expense), net
| |
305
|
| |
150
|
| |
547
|
| |
391
|
|
Income before provision for income taxes
| |
2,664
| | |
3,671
| | |
6,783
| | |
11,403
| |
Provision for income taxes
| |
565
|
| |
959
|
| |
1,326
|
| |
2,923
|
|
Net income
| |
2,099
| | |
2,712
| | |
5,457
| | |
8,480
| |
Net income (loss) attributable to noncontrolling interest
| |
2
|
| |
(6
|
)
| |
5
|
| |
(13
|
)
|
Net income attributable to Gilead
| |
$
|
2,097
|
| |
$
|
2,718
|
| |
$
|
5,452
|
| |
$
|
8,493
|
|
| | | | | | | |
|
Net income per share attributable to Gilead common stockholders -
basic
| |
$
|
1.62
| | |
$
|
2.08
| | |
$
|
4.19
| | |
$
|
6.50
| |
Shares used in per share calculation - basic
| |
1,296
| | |
1,306
| | |
1,302
| | |
1,307
| |
Net income per share attributable to Gilead common stockholders -
diluted
| |
$
|
1.60
| | |
$
|
2.06
| | |
$
|
4.15
| | |
$
|
6.44
| |
Shares used in per share calculation - diluted
| |
1,307
| | |
1,319
| | |
1,313
| | |
1,319
| |
Cash dividends declared per share
| |
$
|
0.57
| | |
$
|
0.52
| | |
$
|
1.71
| | |
$
|
1.56
| |
| | | | | | | | | | | | | | | |
|
GILEAD SCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (unaudited) (in millions, except percentages and per share amounts) |
|
| |
| |
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
Cost of goods sold reconciliation: | | | | | | | | |
GAAP cost of goods sold
| |
$
|
1,086
| | |
$
|
1,032
| | |
$
|
3,283
| | |
$
|
3,115
| |
Acquisition-related – amortization of purchased intangibles
| |
(301
|
)
| |
(209
|
)
| |
(902
|
)
| |
(629
|
)
|
Stock-based compensation expenses(1) | |
(15
|
)
| |
(4
|
)
| |
(49
|
)
| |
(12
|
)
|
Other(2) | |
1
|
| |
2
|
| |
1
|
| |
(18
|
)
|
Non-GAAP cost of goods sold
| |
$
|
771
|
| |
$
|
821
|
| |
$
|
2,333
|
| |
$
|
2,456
|
|
Product gross margin reconciliation: | | | | | | | | |
GAAP product gross margin
| |
80.1
|
%
| |
83.9
|
%
| |
79.5
|
%
| |
84.3
|
%
|
Acquisition-related – amortization of purchased intangibles
| |
5.5
|
%
| |
3.3
|
%
| |
5.6
|
%
| |
3.2
|
%
|
Stock-based compensation expenses(1) | |
0.3
|
%
| |
—
|
%
| |
0.3
|
%
| |
—
|
%
|
Other(2) | |
—
|
%
| |
—
|
%
| |
—
|
%
| |
0.1
|
%
|
Non-GAAP product gross margin(4) | |
85.9
|
%
| |
87.2
|
%
| |
85.4
|
%
| |
87.6
|
%
|
Research and development expenses reconciliation: | | | | | | | | |
GAAP research and development expenses
| |
$
|
939
| | |
$
|
789
| | |
$
|
3,068
| | |
$
|
2,584
| |
Up-front collaboration expenses
| |
—
| | |
—
| | |
(160
|
)
| |
—
| |
Acquisition-related – other costs
| |
3
| | |
—
| | |
(22
|
)
| |
—
| |
Stock-based compensation expenses(1) | |
(99
|
)
| |
(53
|
)
| |
(304
|
)
| |
(142
|
)
|
Other(2) | |
1
|
| |
9
|
| |
(3
|
)
| |
4
|
|
Non-GAAP research and development expenses
| |
$
|
844
|
| |
$
|
745
|
| |
$
|
2,579
|
| |
$
|
2,446
|
|
Selling, general and administrative expenses reconciliation: | | | | | | | | |
GAAP selling, general and administrative expenses
| |
$
|
948
| | |
$
|
879
| | |
$
|
2,925
| | |
$
|
2,626
| |
Acquisition-related – transaction costs
| |
—
| | |
(12
|
)
| |
—
| | |
(12
|
)
|
Acquisition-related – other costs
| |
(8
|
)
| |
—
| | |
(23
|
)
| |
—
| |
Stock-based compensation expenses(1) | |
(84
|
)
| |
(56
|
)
| |
(317
|
)
| |
(150
|
)
|
Other(2) | |
(4
|
)
| |
(5
|
)
| |
(9
|
)
| |
(24
|
)
|
Non-GAAP selling, general and administrative expenses
| |
$
|
852
|
| |
$
|
806
|
| |
$
|
2,576
|
| |
$
|
2,440
|
|
Operating margin reconciliation: | | | | | | | | |
GAAP operating margin
| |
46.9
|
%
| |
58.5
|
%
| |
43.2
|
%
| |
58.7
|
%
|
Up-front collaboration expenses
| |
—
|
%
| |
—
|
%
| |
1.0
|
%
| |
—
|
%
|
Acquisition-related – amortization of purchased intangibles
| |
5.4
|
%
| |
3.2
|
%
| |
5.5
|
%
| |
3.1
|
%
|
Acquisition-related – transaction costs
| |
—
|
%
| |
0.2
|
%
| |
—
|
%
| |
0.1
|
%
|
Acquisition-related – other costs
| |
0.1
|
%
| |
—
|
%
| |
0.3
|
%
| |
—
|
%
|
Stock-based compensation expenses(1) | |
3.5
|
%
| |
1.7
|
%
| |
4.1
|
%
| |
1.5
|
%
|
Other(2) | |
—
|
%
| |
(0.1
|
)%
| |
0.1
|
%
| |
0.2
|
%
|
Non-GAAP operating margin(4) | |
55.9
|
%
| |
63.6
|
%
| |
54.2
|
%
| |
63.6
|
%
|
Interest expense reconciliation: | | | | | | | | |
GAAP interest expense
| |
$
|
(264
|
)
| |
$
|
(291
|
)
| |
$
|
(820
|
)
| |
$
|
(821
|
)
|
Acquisition-related – transaction costs
| |
—
|
| |
18
|
| |
—
|
| |
18
|
|
Non-GAAP interest expense
| |
$
|
(264
|
)
| |
$
|
(273
|
)
| |
$
|
(820
|
)
| |
$
|
(803
|
)
|
Other income (expense), net reconciliation: | | | | | | | | |
GAAP other income (expense), net
| |
$
|
305
| | |
$
|
150
| | |
$
|
547
| | |
$
|
391
| |
Unrealized gains from marketable equity securities(3) | |
(168
|
)
| |
—
|
| |
(149
|
)
| |
—
|
|
Non-GAAP other income (expense), net
| |
$
|
137
|
| |
$
|
150
|
| |
$
|
398
|
| |
$
|
391
|
|
| | | | | | | | | | | | | | | |
|
GILEAD SCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION -
(Continued) (unaudited) (in millions, except percentages and per share amounts) |
|
| |
| |
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
Effective tax rate reconciliation: | | | | | | | | |
GAAP effective tax rate
| |
21.2
|
%
| |
26.1
|
%
| |
19.5
|
%
| |
25.6
|
%
|
Up-front collaboration expenses
| |
—
|
%
| |
—
|
%
| |
0.1
|
%
| |
—
|
%
|
Acquisition-related – amortization of purchased intangibles
| |
(1.5
|
)%
| |
(1.2
|
)%
| |
(1.5
|
)%
| |
(1.2
|
)%
|
Stock-based compensation expenses(1) | |
(1.0
|
)%
| |
0.8
|
%
| |
(0.1
|
)%
| |
0.6
|
%
|
Unrealized gains from marketable equity securities(3) | |
1.3
|
%
| |
—
|
%
| |
0.4
|
%
| |
—
|
%
|
Tax Reform adjustments
| |
—
|
%
| |
—
|
%
| |
0.1
|
%
| |
—
|
%
|
Non-GAAP effective tax rate(4) | |
19.9
|
%
| |
25.7
|
%
| |
18.5
|
%
| |
25.0
|
%
|
Net income attributable to Gilead reconciliation: | | | | | | | | |
GAAP net income attributable to Gilead
| |
$
|
2,097
| | |
$
|
2,718
| | |
$
|
5,452
| | |
$
|
8,493
| |
Up-front collaboration expenses
| |
—
| | |
—
| | |
125
| | |
—
| |
Acquisition-related – amortization of purchased intangibles
| |
281
| | |
201
| | |
843
| | |
605
| |
Acquisition-related – transaction costs
| |
—
| | |
24
| | |
—
| | |
24
| |
Acquisition-related – other costs
| |
4
| | |
—
| | |
36
| | |
—
| |
Stock-based compensation expenses(1) | |
184
| | |
55
| | |
546
| | |
161
| |
Unrealized gains from marketable equity securities(3) | |
(164
|
)
| |
—
| | |
(146
|
)
| |
—
| |
Tax Reform adjustments
| |
—
| | |
—
| | |
(10
|
)
| |
—
| |
Other(2) | |
1
|
| |
(8
|
)
| |
9
|
| |
28
|
|
Non-GAAP net income attributable to Gilead
| |
$
|
2,403
|
| |
$
|
2,990
|
| |
$
|
6,855
|
| |
$
|
9,311
|
|
Diluted earnings per share reconciliation: | | | | | | | | |
GAAP diluted earnings per share
| |
$
|
1.60
| | |
$
|
2.06
| | |
$
|
4.15
| | |
$
|
6.44
| |
Up-front collaboration expenses
| |
—
| | |
—
| | |
0.10
| | |
—
| |
Acquisition-related – amortization of purchased intangibles
| |
0.21
| | |
0.15
| | |
0.64
| | |
0.46
| |
Acquisition-related – transaction costs
| |
—
| | |
0.02
| | |
—
| | |
0.02
| |
Acquisition-related – other costs
| |
—
| | |
—
| | |
0.03
| | |
—
| |
Stock-based compensation expenses(1) | |
0.14
| | |
0.04
| | |
0.42
| | |
0.12
| |
Unrealized gains from marketable equity securities(3) | |
(0.13
|
)
| |
—
| | |
(0.11
|
)
| |
—
| |
Tax Reform adjustments
| |
—
| | |
—
| | |
(0.01
|
)
| |
—
| |
Other(2) | |
—
|
| |
(0.01
|
)
| |
0.01
|
| |
0.02
|
|
Non-GAAP diluted earnings per share(4) | |
$
|
1.84
|
| |
$
|
2.27
|
| |
$
|
5.22
|
| |
$
|
7.06
|
|
Non-GAAP adjustment summary: | | | | | | | | |
Cost of goods sold adjustments
| |
$
|
315
| | |
$
|
211
| | |
$
|
950
| | |
$
|
659
| |
Research and development expenses adjustments
| |
95
| | |
44
| | |
489
| | |
138
| |
Selling, general and administrative expenses adjustments
| |
96
| | |
73
| | |
349
| | |
186
| |
Interest expense adjustments
| |
—
| | |
18
| | |
—
| | |
18
| |
Other income (expense), net adjustments
| |
(168
|
)
| |
—
|
| |
(149
|
)
| |
—
|
|
Total non-GAAP adjustments before tax
| |
338
| | |
346
| | |
1,639
| | |
1,001
| |
Income tax effect
| |
(32
|
)
| |
(74
|
)
| |
(226
|
)
| |
(183
|
)
|
Tax Reform adjustments
| |
—
|
| |
—
|
| |
(10
|
)
| |
—
|
|
Total non-GAAP adjustments after tax
| |
$
|
306
|
| |
$
|
272
|
| |
$
|
1,403
|
| |
$
|
818
|
|
Notes:
|
(1) |
Stock-based compensation expenses for the three and nine months
ended September 30, 2018 include $63 million and $323 million,
respectively, associated with Gilead’s acquisition of Kite
|
(2) |
Amounts represent restructuring, contingent consideration and/or
other individually insignificant amounts
|
(3) |
Amounts represent fair value adjustments of marketable equity
securities recorded in Other income (expense), net, on Gilead’s
Condensed Consolidated Statements of Income as a result of the
adoption of Accounting Standards Update No. 2016-01 “Financial
Instruments - Overall: Recognition and Measurement of Financial
Assets and Financial Liabilities” in 2018
|
(4) |
Amounts may not sum due to rounding
|
|
|
GILEAD SCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP 2018 FULL YEAR GUIDANCE (unaudited) (in millions, except percentages and per share amounts) |
|
| |
| |
| | Initially Provided February 6, 2018Reiterated May 1, 2018 | | Updated July 25, 2018 Reiterated October 25, 2018 |
Projected product gross margin GAAP to non-GAAP reconciliation: | | | | |
GAAP projected product gross margin
| |
78% - 80%
| |
78% - 80%
|
Acquisition-related expenses
| |
7% - 7%
| |
7% - 7%
|
Non-GAAP projected product gross margin(1) | |
85% - 87%
| |
85% - 87%
|
Projected research and development expenses GAAP to non-GAAP
reconciliation: | | | | |
GAAP projected research and development expenses
| |
$3,785 - $4,050
| |
$3,965 - $4,260
|
Stock-based compensation expenses(2) | |
(315) - (350)
| |
(365) - (400)
|
Acquisition-related expenses / up-front collaboration expenses
| |
(70) - (100)
| |
(200) - (260)
|
Non-GAAP projected research and development expenses
| |
$3,400 - $3,600
| |
$3,400 - $3,600
|
Projected selling, general and administrative expenses GAAP to
non-GAAP reconciliation: | | | | |
GAAP projected selling, general and administrative expenses
| |
$3,865 - $4,110
| |
$3,835 - $4,080
|
Stock-based compensation expenses(2) | |
(425) - (450)
| |
(395) - (420)
|
Acquisition-related expenses
| |
(40) - (60)
| |
(40) - (60)
|
Non-GAAP projected selling, general and administrative expenses
| |
$3,400 - $3,600
| |
$3,400 - $3,600
|
Projected diluted EPS impact of acquisition-related, up-front
collaboration, stock-based compensation and other expenses(3): | | | | |
Stock-based compensation expenses(2) | |
$0.50 - $0.56
| |
$0.50 - $0.54
|
Acquisition-related expenses / up-front collaboration expenses
| |
$0.91 - $0.95
| |
$1.00 - $1.06
|
Projected diluted EPS impact of acquisition-related, up-front
collaboration, stock-based compensation and other expenses(3) | |
$1.41 - $1.51
| |
$1.50 - $1.60
|
Notes:
|
(1) |
Stock-based compensation expenses have a less than one percent
impact on non-GAAP projected product gross margin
|
(2) |
Includes stock-based compensation expenses associated with
Gilead’s acquisition of Kite
|
(3) |
Excludes fair value adjustments of marketable equity securities,
as Gilead is unable to project future fair value adjustments, and
measurement period adjustments during 2018 relating to Tax Reform.
Gilead is unable to project an effective tax rate on a GAAP basis
|
|
|
GILEAD SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in millions) |
|
| |
| |
| | September 30, | | December 31, |
| | 2018 | | 2017 |
| | | |
|
Cash, cash equivalents and marketable securities
| |
$
|
30,844
| | |
$
|
36,694
|
Accounts receivable, net
| |
3,465
| | |
3,851
|
Inventories
| |
816
| | |
801
|
Property, plant and equipment, net
| |
3,791
| | |
3,295
|
Intangible assets, net
| |
16,314
| | |
17,100
|
Goodwill
| |
4,117
| | |
4,159
|
Other assets
| |
4,958
|
| |
4,383
|
Total assets
| |
$
|
64,305
|
| |
$
|
70,283
|
| | | |
|
Current liabilities
| |
$
|
10,116
| | |
$
|
11,635
|
Long-term liabilities
| |
31,182
| | |
38,147
|
Stockholders’ equity(1) | |
23,007
|
| |
20,501
|
Total liabilities and stockholders’ equity
| |
$
|
64,305
|
| |
$
|
70,283
|
Note:
|
(1) |
As of September 30, 2018, there were 1,294 million shares of
common stock issued and outstanding
|
|
|
GILEAD SCIENCES, INC. PRODUCT SALES SUMMARY (unaudited) (in millions) |
|
| |
| |
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| | | | | | | |
|
Atripla – U.S.
| |
$
|
221
| | |
$
|
324
| | |
$
|
723
| | |
$
|
974
|
Atripla – Europe
| |
29
| | |
79
| | |
119
| | |
259
|
Atripla – Other International
| |
8
|
| |
36
|
| |
79
|
| |
133
|
| |
258
|
| |
439
|
| |
921
|
| |
1,366
|
| | | | | | | |
|
Biktarvy – U.S.
| |
375
| | |
—
| | |
593
| | |
—
|
Biktarvy – Europe
| |
11
| | |
—
| | |
13
| | |
—
|
Biktarvy – Other International
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
386
|
| |
—
|
| |
606
|
| |
—
|
| | | | | | | |
|
Complera / Eviplera – U.S.
| |
61
| | |
91
| | |
210
| | |
315
|
Complera / Eviplera – Europe
| |
67
| | |
133
| | |
279
| | |
385
|
Complera / Eviplera – Other International
| |
11
|
| |
13
|
| |
39
|
| |
44
|
| |
139
|
| |
237
|
| |
528
|
| |
744
|
| | | | | | | |
|
Descovy – U.S.
| |
310
| | |
241
| | |
895
| | |
682
|
Descovy – Europe
| |
81
| | |
65
| | |
234
| | |
149
|
Descovy – Other International
| |
15
|
| |
10
|
| |
41
|
| |
22
|
| |
406
|
| |
316
|
| |
1,170
|
| |
853
|
| | | | | | | |
|
Genvoya – U.S.
| |
921
| | |
810
| | |
2,678
| | |
2,189
|
Genvoya – Europe
| |
203
| | |
146
| | |
596
| | |
358
|
Genvoya – Other International
| |
52
|
| |
32
|
| |
144
|
| |
67
|
| |
1,176
|
| |
988
|
| |
3,418
|
| |
2,614
|
| | | | | | | |
|
Odefsey – U.S.
| |
323
| | |
255
| | |
905
| | |
688
|
Odefsey – Europe
| |
95
| | |
37
| | |
230
| | |
87
|
Odefsey – Other International
| |
5
|
| |
4
|
| |
15
|
| |
6
|
| |
423
|
| |
296
|
| |
1,150
|
| |
781
|
| | | | | | | |
|
Stribild – U.S.
| |
111
| | |
181
| | |
388
| | |
632
|
Stribild – Europe
| |
20
| | |
40
| | |
83
| | |
161
|
Stribild – Other International
| |
15
|
| |
8
|
| |
36
|
| |
38
|
| |
146
|
| |
229
|
| |
507
|
| |
831
|
| | | | | | | |
|
Truvada – U.S.
| |
665
| | |
604
| | |
1,821
| | |
1,635
|
Truvada – Europe
| |
62
| | |
154
| | |
245
| | |
527
|
Truvada – Other International
| |
30
|
| |
53
|
| |
108
|
| |
175
|
| |
757
|
| |
811
|
| |
2,174
|
| |
2,337
|
| | | | | | | |
|
Other HIV(1) – U.S.
| |
10
| | |
13
| | |
30
| | |
34
|
Other HIV(1) – Europe
| |
2
| | |
2
| | |
6
| | |
5
|
Other HIV(1) – Other International
| |
2
|
| |
—
|
| |
10
|
| |
2
|
| |
14
|
| |
15
|
| |
46
|
| |
41
|
| | | | | | | |
|
Revenue share – Symtuza(2) – U.S.
| |
8
| | |
—
| | |
8
| | |
—
|
Revenue share – Symtuza(2) – Europe
| |
14
|
| |
—
|
| |
34
|
| |
—
|
| |
22
|
| |
—
|
| |
42
|
| |
—
|
| | | | | | | |
|
Total HIV – U.S.
| |
3,005
| | |
2,519
| | |
8,251
| | |
7,149
|
Total HIV – Europe
| |
584
| | |
656
| | |
1,839
| | |
1,931
|
Total HIV – Other International
| |
138
|
| |
156
|
| |
472
|
| |
487
|
| |
$
|
3,727
|
| |
$
|
3,331
|
| |
$
|
10,562
|
| |
$
|
9,567
|
| | | | | | | | | | | | | | |
|
GILEAD SCIENCES, INC. PRODUCT SALES SUMMARY - (Continued) (unaudited) (in millions) |
|
| |
| |
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| | | | | | | |
|
AmBisome – U.S.
| |
$
|
9
| | |
$
|
9
| | |
$
|
40
| | |
$
|
26
|
AmBisome – Europe
| |
59
| | |
51
| | |
170
| | |
153
|
AmBisome – Other International
| |
34
|
| |
32
|
| |
102
|
| |
97
|
| |
102
|
| |
92
|
| |
312
|
| |
276
|
| | | | | | | |
|
Epclusa – U.S.
| |
225
| | |
543
| | |
733
| | |
2,142
|
Epclusa – Europe
| |
136
| | |
263
| | |
502
| | |
649
|
Epclusa – Other International
| |
116
|
| |
76
|
| |
278
|
| |
154
|
| |
477
|
| |
882
|
| |
1,513
|
| |
2,945
|
| | | | | | | |
|
Harvoni – U.S.
| |
185
| | |
718
| | |
649
| | |
2,628
|
Harvoni – Europe
| |
38
| | |
110
| | |
116
| | |
583
|
Harvoni – Other International
| |
88
|
| |
145
|
| |
225
|
| |
515
|
| |
311
|
| |
973
|
| |
990
|
| |
3,726
|
| | | | | | | |
|
Letairis – U.S.
| |
241
|
| |
213
|
| |
689
|
| |
654
|
| | | | | | | |
|
Ranexa – U.S.
| |
178
|
| |
164
|
| |
581
|
| |
517
|
| | | | | | | |
|
Vemlidy – U.S.
| |
66
| | |
34
| | |
172
| | |
66
|
Vemlidy – Europe
| |
2
| | |
2
| | |
8
| | |
3
|
Vemlidy – Other International
| |
19
|
| |
1
|
| |
41
|
| |
1
|
| |
87
|
| |
37
|
| |
221
|
| |
70
|
| | | | | | | |
|
Viread – U.S.
| |
17
| | |
137
| | |
40
| | |
395
|
Viread – Europe
| |
10
| | |
55
| | |
72
| | |
202
|
Viread – Other International
| |
43
|
| |
82
|
| |
137
|
| |
237
|
| |
70
|
| |
274
|
| |
249
|
| |
834
|
| | | | | | | |
|
Vosevi – U.S.
| |
78
| | |
117
| | |
250
| | |
117
|
Vosevi – Europe
| |
21
| | |
5
| | |
57
| | |
5
|
Vosevi – Other International
| |
4
|
| |
1
|
| |
12
|
| |
1
|
| |
103
|
| |
123
|
| |
319
|
| |
123
|
| | | | | | | |
|
Yescarta – U.S.
| |
75
|
| |
—
|
| |
183
|
| |
—
|
| | | | | | | |
|
Zydelig – U.S.
| |
15
| | |
18
| | |
46
| | |
52
|
Zydelig – Europe
| |
4
| | |
22
| | |
44
| | |
57
|
Zydelig – Other International
| |
1
|
| |
—
|
| |
2
|
| |
1
|
| |
20
|
| |
40
|
| |
92
|
| |
110
|
| | | | | | | |
|
Other(3) – U.S.
| |
37
| | |
70
| | |
93
| | |
228
|
Other(3) – Europe
| |
19
| | |
33
| | |
75
| | |
279
|
Other(3) – Other International
| |
8
|
| |
170
|
| |
117
|
| |
496
|
| |
64
|
| |
273
|
| |
285
|
| |
1,003
|
| | | | | | | |
|
Total product sales – U.S.
| |
4,131
| | |
4,542
| | |
11,727
| | |
13,974
|
Total product sales – Europe
| |
873
| | |
1,197
| | |
2,883
| | |
3,862
|
Total product sales – Other International
| |
451
|
| |
663
|
| |
1,386
|
| |
1,989
|
| |
$
|
5,455
|
| |
$
|
6,402
|
| |
$
|
15,996
|
| |
$
|
19,825
|
Notes:
|
(1) |
Includes Emtriva and Tybost
|
(2) |
Represents Gilead’s revenue from cobicistat (C), FTC and TAF in
Symtuza (darunavir/C/FTC/TAF), a fixed dose combination product
commercialized by Janssen
|
(3) |
Includes Cayston, Hepsera and Sovaldi
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20181025005978/en/
Contacts:
Gilead Sciences, Inc.
Investors
Robin
Washington, 650-522-5688
Sung Lee, 650-524-7792
or
Media
Amy
Flood, 650-522-5643
Source: Gilead Sciences, Inc.
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