Gilead Sciences, Inc. (Nasdaq:GILD) announced today its results
of operations for the quarter ended September 30, 2009. Total
revenues for the third quarter of 2009 were $1.80 billion, up 31
percent compared to total revenues of $1.37 billion for the third
quarter of 2008. Net income for the third quarter of 2009 was
$673.0 million, or $0.72 per diluted share. Net income for the
third quarter of 2008 was $495.9 million, or $0.52 per diluted
share. Non-GAAP net income for the third quarter of 2009, which
excludes after-tax acquisition-related expenses, restructuring
expenses and stock-based compensation expenses, was $730.3 million,
or $0.78 per diluted share. Non-GAAP net income for the third
quarter of 2008, which excluded after-tax stock-based compensation
expenses of $30.1 million, was $525.9 million, or $0.55 per diluted
share.
Product Sales
Product sales increased 23 percent to a record $1.65 billion for
the third quarter of 2009, compared to $1.34 billion in the third
quarter of 2008. This increase in sales was driven primarily by
Gilead’s antiviral franchise, including the strong growth in sales
of Atripla® (efavirenz 600 mg/ emtricitabine 200 mg/ tenofovir
disoproxil fumarate 300 mg) and continued growth in sales of
Truvada® (emtricitabine/tenofovir disoproxil fumarate), as well as
the addition of Ranexa® (ranolazine) to our commercial
portfolio.
Antiviral Franchise
Antiviral product sales increased 19 percent to $1.47 billion in
the third quarter of 2009, up from $1.23 billion for the same
quarter of 2008. The increase was driven primarily by sales volume
growth of Atripla and Truvada.
Truvada sales increased 13 percent to $620.6 million for the
third quarter of 2009, up from $549.1 million in the third quarter
of 2008, driven primarily by sales volume growth in the United
States and Europe.
Atripla sales increased 42 percent to $605.3 million for the
third quarter of 2009, up from $427.6 million in the third quarter
of 2008, driven primarily by sales volume growth in the United
States and Europe.
Viread® (tenofovir disoproxil fumarate) sales increased nine
percent to $169.7 million for the third quarter of 2009, up from
$156.0 million in the third quarter of 2008, driven primarily by
sales volume growth in the United States and Europe.
Other antiviral product sales which consist of Hepsera®
(adefovir dipivoxil) and Emtriva® (emtricitabine) were $74.7
million for the third quarter of 2009.
Letairis
Sales of Letairis® (ambrisentan) for the treatment of pulmonary
arterial hypertension increased 52 percent to $48.1 million for the
third quarter of 2009, up from $31.7 million for the third quarter
of 2008, driven primarily by sales volume growth in the United
States.
Ranexa
Sales of Ranexa for the treatment of chronic angina were $49.0
million for the third quarter of 2009.
Royalty, Contract and Other
Revenues
Royalty, contract and other revenues resulting primarily from
collaborations with corporate partners were $152.4 million in the
third quarter of 2009, compared to $32.8 million for the third
quarter of 2008. This increase was driven primarily by higher
Tamiflu® (oseltamivir phosphate) royalties from F. Hoffmann-La
Roche Ltd of $113.5 million in the third quarter of 2009, compared
to Tamiflu royalties of $8.6 million in the third quarter of 2008
resulting from increased sales related to pandemic planning
initiatives worldwide. The Tamiflu royalties contributed
approximately $0.09 to Gilead’s earnings per share in the third
quarter of 2009.
Research and
Development
Research and development (R&D) expenses in the third quarter
of 2009 were $269.9 million compared to $188.1 million for the
third quarter of 2008. Non-GAAP R&D expenses for the third
quarter of 2009, which exclude restructuring and stock-based
compensation expenses, were $242.2 million compared to $170.4
million for the third quarter of 2008, which excluded stock-based
compensation expenses. This increase was driven primarily by
R&D expense reimbursement related to Gilead’s collaboration
with Tibotec Pharmaceuticals (Tibotec) as well as higher headcount
and expenses to support the growth of Gilead’s R&D
activities.
Selling, General and
Administrative
Selling, general and administrative (SG&A) expenses in the
third quarter of 2009 were $227.4 million compared to $189.2
million for the third quarter of 2008. Non-GAAP SG&A expenses
for the third quarter of 2009, which exclude acquisition-related
transaction costs, restructuring expenses and stock-based
compensation expenses, were $200.3 million, compared to $167.9
million for the same quarter in 2008, which excluded stock-based
compensation expenses. This increase was driven primarily by higher
headcount and expenses to support Gilead’s expanding commercial
activities.
Net Foreign Currency Exchange
Impact
The net foreign currency exchange impact on third quarter 2009
revenues and pre-tax earnings, which includes revenues and expenses
generated from outside the United States, was an unfavorable $51.0
million and $22.1 million, respectively, compared to the third
quarter of 2008.
Cash, Cash Equivalents and
Marketable Securities
As of September 30, 2009, Gilead had cash, cash equivalents and
marketable securities of $3.29 billion compared to $3.24 billion as
of December 31, 2008. This increase was primarily due to cash flows
generated from operations, partially offset by cash paid to acquire
CV Therapeutics and share repurchase activities. For the first nine
months of 2009, Gilead generated $2.12 billion of operating cash
flows including $860.6 million in the third quarter of 2009.
Adoption of New Accounting
Pronouncements
On July 1, 2009, Gilead adopted Statement of Financial
Accounting Standards (SFAS) No. 168, “The Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) and
the Hierarchy of Generally Accepted Accounting Principles (GAAP) -
a replacement of SFAS No. 162” (SFAS 168), which establishes
the FASB ASC as the source of authoritative U.S. GAAP recognized by
the FASB to be applied by non-governmental entities. As a result of
the adoption of SFAS 168, the majority of references to
historically issued accounting pronouncements are now superseded by
references to the FASB ASC, with no financial impact. Certain
accounting pronouncements, such as SFAS 168, will remain
authoritative until they are integrated into the codification
standard.
On January 1, 2009, Gilead adopted guidance in the Debt Topic of
the FASB ASC (formerly FASB Staff Position APB No. 14-1,
“Accounting for Convertible Debt Instruments That May Be Settled In
Cash Upon Conversion (Including Partial Cash Settlement)”) and
recorded additional after-tax interest expense for the third
quarter of 2009 of $8.8 million. This guidance requires
retrospective application upon adoption; therefore, net income
attributable to Gilead for the third quarter of 2008 has been
adjusted from that which was previously reported to reflect
additional after-tax interest expense of $8.2 million.
On January 1, 2009, Gilead adopted guidance in the Consolidation
Topic of the FASB ASC (formerly SFAS No. 160, “Noncontrolling
Interests in Consolidated Financial Statements, an amendment of
Accounting Research Bulletin No. 51, Consolidated Financial
Statements”), and reflected the change in presentation of the
noncontrolling interest (formerly minority interest) on a
retrospective basis in Gilead’s financial statements.
Corporate
Highlights
In July 2009, Gilead announced that Kevin E. Lofton had been
appointed to the company’s Board of Directors. Mr. Lofton is
currently the President and Chief Executive Officer of Catholic
Health Initiatives, a Denver-based healthcare system operating the
full continuum of services from hospitals to home health agencies
throughout the nation.
In August 2009, Gilead announced the promotion of Gregg H. Alton
to Executive Vice President, Corporate and Medical Affairs. Mr.
Alton was previously Senior Vice President and General Counsel,
responsible for legal, government and public affairs and
international access operations, and recently assumed the
additional responsibility of management for Gilead’s global medical
affairs activities and personnel.
Product and Pipeline
Update
Antiviral Franchise
In July 2009, Gilead announced that it had entered into a
license and collaboration agreement with Tibotec for the
development and commercialization of a new once-daily fixed-dose
antiretroviral regimen containing Gilead’s Truvada and Tibotec’s
investigational non-nucleoside reverse transcriptase inhibitor
TMC278 (rilpivirine hydrochloride, 25 mg) for treatment-naïve
HIV-infected individuals.
Also in July, Gilead highlighted results from the DART
(Development of Anti-Retroviral Treatment in Africa) study, which
evaluated the need for routine laboratory monitoring in adults
taking antiretroviral therapy in Africa. Data from this study were
presented at the 5th International AIDS Society Conference on HIV
Pathogenesis, Treatment and Prevention (IAS 2009) in Cape Town,
South Africa on July 21, 2009.
Cardiovascular Franchise
In September 2009, Gilead announced the online publication in
The Lancet of data from DAR-311 (DORADO), a Phase III clinical
trial evaluating the company’s once-daily oral endothelin receptor
antagonist darusentan as an add-on treatment for resistant
hypertension.
Respiratory Franchise
In September 2009, Gilead announced that the European Commission
had granted conditional marketing authorization for Cayston® 75 mg
powder and solvent for nebuliser solution for the suppressive
therapy of chronic pulmonary infections due to Pseudomonas
aeruginosa in patients with cystic fibrosis aged 18 years and
older. Cayston will be made available in certain countries of the
European Union, subject to the requirements of national
authorities, beginning in early 2010. Also in September, Cayston
received conditional marketing approval in Canada.
Conference Call
At 4:30 p.m. Eastern Time today, Gilead will host a conference
call and a simultaneous webcast to discuss the results of its third
quarter of 2009. During this call/webcast, Gilead’s management will
discuss the company’s third quarter of 2009 results and provide a
general business update. The webcast will be available live via the
internet by accessing Gilead’s website at www.gilead.com. To access
the webcast, please connect to the company’s website at least 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 1-800-299-0148 (U.S.) or 1-617-801-9711
(international) and dial the participant passcode 45136998 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 23,
2009. To access the phone replay, please call 1-888-286-8010 (U.S.)
or 1-617-801-6888 (international) and dial the participant passcode
98856771.
About Gilead
Gilead Sciences is a biopharmaceutical company that discovers,
develops and commercializes innovative therapeutics in areas of
unmet medical need. Gilead’s mission is to advance the care of
patients suffering from life-threatening diseases worldwide.
Headquartered in Foster City, California, Gilead has operations in
North America, Europe and Australia.
Non-GAAP Financial
Information
Non-GAAP net income attributable to Gilead and net income
attributable to Gilead per diluted share for the three and nine
months ended September 30, 2009 are presented excluding the
after-tax impact of acquisition-related transaction costs,
amortization of inventory mark-up and amortization of purchased
intangibles; restructuring expenses; and stock-based compensation
expenses, and have been adjusted for the application of Accounting
Principles Board Opinion No. 25, “Accounting for Stock Issued to
Employees” (APB 25), in computing non-GAAP dilutive securities.
Non-GAAP net income attributable to Gilead and net income
attributable to Gilead per diluted share for the three months ended
September 30, 2008 are presented excluding the after-tax impact of
stock-based compensation expenses, and have been adjusted for the
application of APB 25 in computing non-GAAP dilutive securities.
Non-GAAP net income attributable to Gilead and net income
attributable to Gilead per diluted share for the nine months ended
September 30, 2008 are presented excluding the after-tax impact of
stock-based compensation expenses and purchased in-process R&D
expense, and have been adjusted for the application of APB 25 in
computing non-GAAP dilutive securities. Non-GAAP R&D expenses
for the three and nine months ended September 30, 2009 are
presented excluding the impact of restructuring expenses and
stock-based compensation expenses. Non-GAAP SG&A expenses for
the three and nine months ended September 30, 2009 are presented
excluding the impact of acquisition-related transaction costs,
restructuring expenses and stock-based compensation expenses.
Non-GAAP R&D expenses and SG&A expenses for the three and
nine months ended September 30, 2008 are presented excluding the
impact of stock-based compensation expenses. Management believes
this non-GAAP information is useful for investors, taken 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 U.S. GAAP.
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 sustain growth in revenues for its antiviral
and cardiovascular franchises; unpredictable variability of Tamiflu
royalties and the strong relationship between this royalty revenue
and global pandemic planning and supply; Gilead’s ability to
receive regulatory approvals in a timely manner or at all, for new
and current products, darusentan for resistant hypertension and
full marketing authorization of Cayston in the European Union and
Canada; Gilead’s ability to advance the fixed-dose antiretroviral
regimen under its collaboration with Tibotec Pharmaceuticals;
Gilead’s ability to successfully commercialize any products that
receive regulatory approvals; Gilead’s ability to successfully
develop its respiratory and cardiovascular franchises; initiating
and completing clinical trials may take longer or cost more than
expected; fluctuations in the foreign exchange rate of the U.S.
dollar that may reduce or eliminate the favorable foreign currency
exchange impact on Gilead’s future revenues and pre-tax earnings;
our ability to consummate additional purchases under our share
repurchase program due to changes in our stock price, corporate or
other market conditions; Gilead’s ability to increase sales of CV
Therapeutics’ approved products and its ability to advance pipeline
programs; and other risks identified from time to time in Gilead’s
reports filed with the U.S. Securities and Exchange Commission. 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 Annual Report on
Form 10-K for the year ended December 31, 2008, its Quarterly
Reports on Form 10-Q for the first and second quarters of 2009 and
its subsequent Current Reports on Form 8-K. 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.
Truvada, Viread, Emtriva, Hepsera,
AmBisome, Letairis, Ranexa and Cayston are registered trademarks of
Gilead Sciences, Inc.
Atripla is a registered trademark of
Bristol-Myers Squibb & Gilead Sciences, LLC.
Tamiflu is a registered trademark of
F. Hoffmann-La Roche Ltd.
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 thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30, 2009 2008
2009 2008 Revenues: Product sales $
1,648,955 $ 1,338,502 $ 4,664,913 $ 3,697,024 Royalty, contract and
other revenues 152,434 32,766
314,091 210,521 Total revenues
1,801,389 1,371,268 4,979,004
3,907,545 Costs and expenses: Cost of goods sold
409,700 300,183 1,122,159 805,715 Research and development 269,856
188,062 700,273 519,905 Selling, general and administrative 227,427
189,189 692,789 603,679 Purchased in-process research and
development - - -
10,851 Total costs and expenses 906,983
677,434 2,515,221 1,940,150
Income from operations 894,406 693,834 2,463,783 1,967,395 Interest
and other income, net 14,017 3,637 31,098 40,363 Interest expense
(1) (17,217 ) (16,382 ) (52,372 )
(48,811 ) Income before provision for income taxes 891,206 681,089
2,442,509 1,958,947 Provision for income taxes (1) 220,728
187,396 616,310 546,206
Net income (2) 670,478 493,693 1,826,199 1,412,741 Net loss
attributable to noncontrolling interest (2) 2,555
2,160 7,344 6,195 Net
income attributable to Gilead (2) $ 673,033 $ 495,853
$ 1,833,543 $ 1,418,936 Net income per share
attributable to Gilead common stockholders - basic (2) $ 0.75
$ 0.54 $ 2.02 $ 1.54 Net income per
share attributable to Gilead common stockholders - diluted (2) $
0.72 $ 0.52 $ 1.96 $ 1.47 Shares used
in per share calculation - basic 903,319
920,807 906,213 923,894 Shares
used in per share calculation - diluted 932,424
960,585 936,530 964,267
Notes: (1) On January 1, 2009, Gilead adopted
guidance in the Debt Topic of the FASB ASC (formerly FSP APB 14-1)
on a retrospective basis for its convertible senior notes and
reflected additional after-tax interest expense of $8.8 million and
$8.2 million for the three months ended September 30, 2009 and
2008, respectively, and reflected additional after-tax interest
expense of $25.6 million and $24.0 million for the nine months
ended September 30, 2009 and 2008, respectively. (2) On
January 1, 2009, Gilead adopted guidance in the Consolidation Topic
of the FASB ASC (formerly SFAS 160) and presented on a
retrospective basis its noncontrolling interest (formerly minority
interest) as net loss attributable to noncontrolling interest which
is a component of consolidated net income.
GILEAD
SCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION (unaudited) (in thousands, except per share
amounts) Three Months Ended Nine
Months Ended September 30, September 30, 2009
2008 2009 2008 Net income
attributable to Gilead (GAAP) $ 673,033 $ 495,853 $ 1,833,543 $
1,418,936 Acquisition-related transaction costs 239 - 8,404 -
Acquisition-related amortization of inventory mark-up 3,667 - 6,326
- Acquisition-related amortization of purchased intangibles 10,866
- 19,775 - Restructuring expenses 6,260 - 24,052 - Stock-based
compensation expenses 36,218 30,081 106,467 82,491 Purchased
in-process research and development expense -
- - 7,769 Net income
attributable to Gilead (Non-GAAP) $ 730,283 $ 525,934
$ 1,998,567 $ 1,509,196 Net income per
share attributable to Gilead common stockholders - diluted (GAAP) $
0.72 $ 0.52 $ 1.96 $ 1.47 Acquisition-related transaction costs
0.00 - 0.01 - Acquisition-related amortization of inventory mark-up
0.00 - 0.01 - Acquisition-related amortization of purchased
intangibles 0.01 - 0.02 - Restructuring expenses 0.01 - 0.03 -
Stock-based compensation expenses 0.04 0.03 0.11 0.09 Purchased
in-process research and development expense -
- - 0.01 Net income per share
attributable to Gilead common stockholders - diluted (Non-GAAP) (1)
$ 0.78 $ 0.55 $ 2.13 $ 1.56
Shares used in per share calculation - diluted (GAAP)
932,424 960,585 936,530 964,267 Effect of SFAS 123R (119 )
1,924 245 2,103 Shares
used in per share calculation - diluted (Non-GAAP) 932,305
962,509 936,775 966,370
Research and development expenses (GAAP) $ 269,856 $
188,062 $ 700,273 $ 519,905 Restructuring expenses (5,780 ) -
(17,031 ) - Stock-based compensation expenses (21,916 )
(17,680 ) (63,192 ) (49,945 ) Research and
development expenses (Non-GAAP) $ 242,160 $ 170,382 $
620,050 $ 469,960 Selling, general and
administrative expenses (GAAP) $ 227,427 $ 189,189 $ 692,789 $
603,679 Acquisition-related transaction costs (239 ) - (8,404 ) -
Restructuring expenses (2,623 ) - (15,478 ) - Stock-based
compensation expenses (24,230 ) (21,322 )
(72,255 ) (57,526 ) Selling, general and administrative
expenses (Non-GAAP) $ 200,335 $ 167,867 $ 596,652
$ 546,153 Note: (1) Amounts may not sum
due to rounding
GILEAD SCIENCES, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands)
September 30, December 31, 2009 2008 (unaudited) (Note 2)
Cash, cash equivalents and marketable securities $ 3,292,130
$ 3,239,639 Accounts receivable, net 1,339,165 1,023,397
Inventories 1,017,827 927,868 Property, plant and equipment, net
701,371 528,799 Intangible assets (1) 1,555,602 123,008 Other
assets (3) 1,030,885 1,094,120 Total assets $
8,936,980 $ 6,936,831 Current liabilities $ 1,889,249 $
1,220,992 Long-term liabilities (3)(4) 1,295,574 1,250,256
Stockholders’ equity (3)(4) 5,752,157 4,465,583 Total
liabilities and stockholders’ equity $ 8,936,980 $ 6,936,831
Notes: (1) In April 2009, Gilead acquired CV Therapeutics for $1.39
billion. Gilead allocated the purchase price in accordance with
guidance in the Business Combinations Topic of the FASB ASC
(formerly SFAS 141R) and recorded $951.2 million in intangible
assets relating to marketed products, which constituted a
significant portion of the purchase price allocation. (2)
Derived from audited consolidated financial statements at that date
adjusted for retrospective application of guidance per notes 3 and
4 below. (3) On January 1, 2009, Gilead adopted guidance in
the Debt Topic of the FASB ASC (formerly FSP APB 14-1) on a
retrospective basis for its convertible senior notes. As of
December 31, 2008, the retrospective adoption of this guidance
decreased deferred tax assets and debt issuance costs included in
other assets by an aggregate of $81.7 million, decreased
convertible senior notes included in long-term liabilities by
$201.8 million, and increased total stockholders’ equity by $120.1
million after a charge of $82.6 million to retained earnings.
(4) On January 1, 2009, Gilead adopted guidance in the
Consolidation Topic of the FASB ASC (formerly SFAS 160) and
reclassified its noncontrolling interest (formerly minority
interest) of $193.0 million from liabilities to stockholders’
equity on a retrospective basis.
GILEAD SCIENCES,
INC. PRODUCT SALES SUMMARY (unaudited) (in thousands)
Three Months Ended Nine Months
Ended September 30, September 30,
2009
2008 2009 2008 Antiviral products: Truvada – U.S. $ 292,918 $
262,065 $ 859,603 $ 736,999 Truvada – Europe 292,819 257,315
859,036 716,593 Truvada – Other International 34,827
29,721 100,357 91,043 620,564 549,101
1,818,996 1,544,635 Atripla – U.S. 407,896 346,377
1,180,072 965,254 Atripla – Europe 182,222 71,028 461,836 122,727
Atripla – Other International 15,181 10,218
42,416 18,960 605,299 427,623 1,684,324
1,106,941 Viread – U.S. 74,675 63,431 212,122 184,913 Viread
– Europe 67,989 66,320 199,329 193,309 Viread – Other International
27,047 26,207 77,790 81,084
169,711 155,958 489,241 459,306 Hepsera – U.S.
25,795 36,744 74,218 102,600 Hepsera – Europe 38,123 49,437 117,837
148,431 Hepsera – Other International 4,010 5,036
15,661 13,573 67,928 91,217
207,716 264,604 Emtriva – U.S. 3,865 4,001 11,211 11,945
Emtriva – Europe 1,863 2,762 6,369 7,437 Emtriva – Other
International 1,001 871 3,421 4,729
6,729 7,634 21,001 24,111 Total
Antiviral products – U.S. 805,149 712,618 2,337,226 2,001,711 Total
Antiviral products – Europe 583,016 446,862 1,644,407 1,188,497
Total Antiviral products – Other International 82,066
72,053 239,645 209,389 1,470,231
1,231,533 4,221,278 3,399,597 AmBisome 77,064 72,884
214,645 213,680 Letairis 48,073 31,656 131,781 76,679 Ranexa 49,005
- 85,070 - Other products 4,582 2,429 12,139
7,068 178,724 106,969 443,635
297,427 Total product sales $ 1,648,955 $ 1,338,502 $ 4,664,913 $
3,697,024
Gilead Sciences (NASDAQ:GILD)
Historical Stock Chart
From May 2024 to Jun 2024
Gilead Sciences (NASDAQ:GILD)
Historical Stock Chart
From Jun 2023 to Jun 2024