- Fourth Quarter Product Sales of $5.8
billion -
- Full Year 2019 Product Sales of $22.1
billion -
- Full Year 2019 Diluted EPS of $4.22 per
share -
- Full Year 2019 Non-GAAP Diluted EPS of
$6.63 per share -
Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results
of operations for the fourth quarter and full year 2019. Total
revenues for the fourth quarter of 2019 were $5.9 billion compared
to $5.8 billion for the same period in 2018. Net income for the
fourth quarter of 2019 was $2.7 billion, or $2.12 per diluted
share, compared to net income of $3 million, or $0.00 per diluted
share, for the same period in 2018. Non-GAAP net income for the
fourth quarter of 2019 was $1.7 billion, or $1.30 per diluted
share, compared to $1.9 billion, or $1.44 per diluted share, for
the same period in 2018.
Full year 2019 total revenues were $22.4 billion, compared to
$22.1 billion for 2018. Net income for 2019 was $5.4 billion, or
$4.22 per diluted share, compared to $5.5 billion, or $4.17 per
diluted share, for 2018. Non-GAAP net income for 2019 was $8.5
billion, or $6.63 per diluted share, compared to $8.7 billion, or
$6.67 per diluted share, for 2018.
Three Months Ended
Twelve Months Ended
December 31,
December 31,
(In millions, except per share
amounts)
2019
2018
2019
2018
Product sales
$
5,796
$
5,681
$
22,119
$
21,677
Royalty, contract and other revenues
83
114
330
450
Total revenues
$
5,879
$
5,795
$
22,449
$
22,127
Net income attributable to Gilead
$
2,696
$
3
$
5,386
$
5,455
Non-GAAP net income attributable to
Gilead
$
1,653
$
1,873
$
8,466
$
8,728
Diluted earnings per share
$
2.12
$
0.00
$
4.22
$
4.17
Non-GAAP diluted earnings per share
$
1.30
$
1.44
$
6.63
$
6.67
________________________________
Non-GAAP financial information excludes
acquisition-related, up-front collaboration and licensing,
stock-based compensation and other expenses, fair value adjustments
of equity securities and discrete tax charges or benefits
associated with changes in tax related laws and guidelines. A
reconciliation between GAAP and non-GAAP financial information is
provided in the tables on pages 9 through 12.
For the fourth quarter of 2019, compared to the same period in
2018, net income attributable to Gilead increased primarily due to
the net favorable tax effects of intra-entity intangible asset
transfers to different tax jurisdictions and an increase in net
gains from equity securities. In addition, during the fourth
quarter of 2019 and 2018, Gilead recorded pre-tax impairment
charges of $800 million and $820 million, respectively, related to
in-process research and development (IPR&D) intangible assets
acquired in connection with the acquisition of Kite Pharma, Inc.
(Kite) and pre-tax write-downs of $500 million and $410 million,
respectively, for slow moving and excess raw material and work in
process inventory.
In addition to the factors noted above, the full year 2019,
compared to the same period in 2018, was impacted by pre-tax
up-front collaboration and licensing expenses of $3.92 billion
related to Gilead’s global research and development collaboration
agreement with Galapagos NV (Galapagos) in 2019.
The following tables summarize significant items that impacted
the comparability of net income attributable to Gilead and diluted
earnings per share in the periods presented:
Three Months Ended December
31,
2019
2018
(In millions, except per share amounts,
net of tax)(1)
Net Income Impact unfavorable/
(favorable)
EPS Impact unfavorable/
(favorable)
Net Income Impact unfavorable/
(favorable)
EPS Impact unfavorable/
(favorable)
Write-downs for excess inventory
$
500
$
0.39
$
410
$
0.31
IPR&D impairments
623
0.49
696
0.54
(Gains) losses from equity securities,
net
(921
)
(0.72
)
59
0.05
Discrete tax (benefit) charge related to
intra-entity transfers
(1,240
)
(0.97
)
588
0.45
Total
$
(1,038
)
$
(0.81
)
$
1,753
$
1.35
Twelve Months Ended December
31,
2019
2018
(In millions, except per share amounts,
net of tax)(1)
Net Income Impact unfavorable/
(favorable)
EPS Impact unfavorable/
(favorable)
Net Income Impact unfavorable/
(favorable)
EPS Impact unfavorable/
(favorable)
Write-downs for excess inventory
$
544
$
0.43
$
440
$
0.34
Galapagos up-front collaboration and
licensing expenses
3,036
2.38
—
—
IPR&D impairments
623
0.49
696
0.53
Gains from equity securities, net
(1,241
)
(0.97
)
(87
)
(0.07
)
Discrete tax (benefit) charge related to
intra-entity transfers
(1,240
)
(0.97
)
588
0.45
Total
$
1,722
$
1.36
$
1,637
$
1.25
________________________________
(1)
With the exception of the write-downs for
excess inventory discussed in further detail on page 3, all items
presented were excluded from non-GAAP net income and non-GAAP
diluted earnings per share. A reconciliation between GAAP and
non-GAAP financial information is provided in the tables on pages 9
through 11.
Product Sales
Total product sales for the fourth quarter of 2019 were $5.8
billion, compared to $5.7 billion for the same period in 2018.
Product sales for the fourth quarter of 2019 were $4.5 billion in
the United States, $840 million in Europe and $440 million in other
locations. Product sales for the fourth quarter of 2018 were $4.5
billion in the United States, $813 million in Europe and $398
million in other locations.
Total product sales in 2019 were $22.1 billion, compared to
$21.7 billion in 2018. For 2019, product sales were $16.6 billion
in the United States, $3.6 billion in Europe and $2.0 billion in
other locations. For 2018, product sales were $16.2 billion in the
United States, $3.7 billion in Europe and $1.8 billion in other
locations.
- HIV product sales were $4.6 billion for the fourth
quarter of 2019 compared to $4.1 billion for the same period in
2018. For 2019, HIV product sales were $16.4 billion compared to
$14.6 billion in 2018. The increases were primarily driven by
higher sales volume as a result of the continued uptake of
Biktarvy® (bictegravir 50 mg/emtricitabine 200 mg/tenofovir
alafenamide 25 mg).
- Chronic hepatitis C virus (HCV) product sales were $630
million for the fourth quarter of 2019 compared to $738 million for
the same period in 2018. For 2019, HCV product sales were $2.9
billion compared to $3.7 billion in 2018. The declines were
primarily due to lower average net selling price.
- Yescarta® (axicabtagene ciloleucel) generated $122
million in sales during the fourth quarter of 2019 compared to $81
million in 2018. For 2019, Yescarta sales were $456 million
compared to $264 million in 2018. The increases were driven by a
higher number of therapies provided to patients and the continued
expansion in Europe.
- Other product sales, which include products from chronic
hepatitis B virus (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), AmBisome® (amphotericin B
liposome for injection 50 mg/vial) and Cayston® (aztreonam for
inhalation solution 75 mg/vial), were $467 million for the fourth
quarter of 2019 compared to $797 million for the same period in
2018. For 2019, other product sales were $2.3 billion compared to
$3.1 billion in 2018. The decreases were expected and primarily due
to declines in Ranexa and Letairis sales after generic entries in
2019.
Cost of Goods Sold and Product Gross
Margin
Three Months Ended
Twelve Months Ended
December 31,
December 31,
(In millions, except
percentages)
2019
2018
2019
2018
Cost of goods sold
$
1,683
$
1,570
$
4,675
$
4,853
Non-GAAP cost of goods sold
$
1,406
$
1,257
$
3,539
$
3,590
Product gross margin
71.0
%
72.4
%
78.9
%
77.6
%
Non-GAAP product gross margin
75.7
%
77.9
%
84.0
%
83.4
%
For the fourth quarter of 2019, compared to the same period in
2018:
- Cost of goods sold and non-GAAP cost of goods sold increased
primarily due to higher inventory write-downs, partially offset by
lower royalty expenses. During the fourth quarter of 2019 and 2018,
Gilead recorded write-downs of $500 million and $410 million,
respectively, for slow moving and excess raw material and work in
process inventory primarily due to lower long-term demand for
Gilead’s HCV products.
- Product gross margin and non-GAAP product gross margin
decreased primarily due to the factors noted above.
For the full year 2019, compared to the same period in 2018:
- Cost of goods sold and non-GAAP cost of goods sold decreased
primarily due to lower royalty expenses, partially offset by higher
inventory write-downs. Costs of goods sold also decreased due to
lower amortization expense related to intangible assets associated
with Ranexa.
- Product gross margin and non-GAAP product gross margin
increased primarily due to changes in product mix and the factors
noted above.
Operating Expenses
Three Months Ended
Twelve Months Ended
December 31,
December 31,
(In millions)
2019
2018
2019
2018
Research and development (R&D)
expenses
$
1,899
$
1,950
$
9,106
$
5,018
Non-GAAP R&D expenses
$
1,029
$
939
$
3,770
$
3,518
Selling, general and administrative
(SG&A) expenses
$
1,204
$
1,131
$
4,381
$
4,056
Non-GAAP SG&A expenses
$
1,132
$
1,032
$
4,076
$
3,608
For the fourth quarter of 2019, compared to the same period in
2018:
- R&D expenses decreased primarily due to lower up-front
collaboration and licensing expenses, partially offset by higher
personnel costs to support Gilead’s cell therapy business and
increased investment in Gilead’s research projects. Gilead recorded
impairment charges of $800 million in 2019 for the IPR&D
intangible assets acquired in connection with the acquisition of
Kite primarily related to the treatment of indolent non-Hodgkin
lymphoma and $820 million in 2018 related to the KITE-585 program
(an anti-B cell maturation antigen being evaluated for the
treatment of multiple myeloma).
- Non-GAAP R&D expenses increased primarily due to higher
personnel costs to support Gilead’s cell therapy business and
increased investment in Gilead’s research projects.
- SG&A expenses and non-GAAP SG&A expenses increased
primarily due to higher promotional expenses in the United States
and expenses associated with the expansion of Gilead’s business in
Japan.
For the full year 2019, compared to the same period in 2018:
- R&D expenses increased primarily due to up-front
collaboration and licensing expenses of $3.92 billion related to
Gilead’s global research and development collaboration agreement
with Galapagos, partially offset by lower stock-based compensation
expense associated with Gilead’s acquisition of Kite. Furthermore,
R&D expenses and non-GAAP R&D expenses increased primarily
due to higher personnel costs to support Gilead’s cell therapy
business.
- SG&A expenses increased primarily due to promotional
expenses in the United States and expenses associated with the
expansion of Gilead’s business in Japan and China, partially offset
by lower stock-based compensation expense associated with Gilead’s
acquisition of Kite.
- Non-GAAP SG&A increased primarily due to promotional
expenses in the United States and expenses associated with the
expansion of Gilead’s business in Japan and China.
Cash, Cash Equivalents and Marketable
Debt Securities
As of December 31, 2019, Gilead had $25.8 billion of cash, cash
equivalents and marketable debt securities compared to $31.5
billion as of December 31, 2018. During 2019, Gilead generated $9.1
billion in operating cash flow, paid $5.6 billion in connection
with the global research and development collaboration agreement
with Galapagos and equity investments in Galapagos, repaid $2.8
billion of principal amount of debt, paid cash dividends of $3.2
billion and utilized $1.7 billion on stock repurchases.
Full Year 2020 Guidance
Gilead provides its full year 2020 guidance below. Starting in
2020, Gilead will no longer regularly exclude stock-based
compensation expense from its non-GAAP financial information.
For comparability purposes, full
year 2019 non-GAAP operating income and non-GAAP diluted earnings
per share would have been $10.4 billion and $6.13, respectively,
had stock-based compensation expense not been excluded.
(In millions, except percentages and
per share amounts)
February 4, 2020
Product Sales
$21,800 - $22,200
Non-GAAP
Product Gross Margin
86% - 87%
R&D Expenses
Mid-single digit percentage
growth
SG&A Expenses
Mid-single digit percentage
growth
Operating Income
$10,100 - $10,800
Effective Tax Rate
~ 21%
Diluted EPS
$6.05 - $6.45
GAAP Diluted EPS
$5.15 - $5.55
Corporate, Product and Pipeline Updates
for the Fourth Quarter, Including the Announcement
of:
Viral Diseases
- Licensing of The Rockefeller University’s portfolio of broadly
neutralizing antibodies against HIV, including the two
clinical-stage agents 3BNC117 and 10-1074.
- Approval of Vosevi® (sofosbuvir 400 mg/velpatasvir 100
mg/voxilaprevir 100 mg) by the China National Medical Products
Administration for the treatment of chronic HCV infection in adults
without cirrhosis or with compensated cirrhosis who have failed
prior treatment with a direct-acting antiviral therapy.
- Donation to the National AIDS Memorial to support relocation of
The Aids Memorial Quilt to San Francisco, as well as related
educational programs, under the stewardship of the National AIDS
Memorial.
- Presentation of data at The Liver Meeting®, which included new
data on Vemlidy evaluating its safety profile compared with
tenofovir disoproxil fumarate in patients with chronic HBV
infection.
- Presentation of data at the 17th European AIDS Conference,
which included:
- 96-week results from the DISCOVER trial, evaluating the safety
and efficacy of Descovy® (emtricitabine 200 mg/tenofovir
alafenamide 25 mg) for HIV pre-exposure prophylaxis (PrEP),
compared with Truvada for PrEP® (emtricitabine 200 mg/tenofovir
disoproxil fumarate 300 mg).
- Data on investigational HIV-1 capsid inhibitor GS-6207 as a
potential component of long-acting HIV therapy.
- Findings from two Phase 3 studies evaluating the safety and
efficacy of Biktarvy compared with dolutegravir-containing regimens
for the treatment of HIV-1 infection in adults new to HIV
therapy.
Inflammatory Diseases
- Collaboration with Kyverna Therapeutics, Inc. to research and
develop advanced cell therapies for the treatment of autoimmune
disease.
- Agreement with Eisai Co., Ltd. for the distribution and
co-promotion of filgotinib in Japan, pending regulatory approval
from the Japan Ministry of Health, Labor and Welfare (MHLW), for
the treatment of rheumatoid arthritis (RA).
- Submission of a New Drug Application under priority review to
the U.S. Food and Drug Administration (FDA) for filgotinib for the
treatment of adults with moderate-to-severe RA.
- Presentation of data at the 2019 American College of
Rheumatology/Association of Rheumatology Professionals Annual
Meeting from the clinical research collaboration with Galapagos
evaluating the efficacy and safety of filgotinib in adults with
moderately-to-severely acute RA.
Oncology
- European Medicines Agency’s validation of the marketing
authorization application and submission of a Biologics License
Application to the FDA for KTE-X19, an investigational chimeric
antigen receptor (CAR) T cell therapy for the treatment of adult
patients with relapsed or refractory mantle cell lymphoma
(MCL).
- Collaboration with Kiniksa Pharmaceuticals, Ltd. to conduct a
Phase 2, multicenter study of mavrilimumab, an investigational
fully human monoclonal antibody that targets granulocyte macrophage
colony stimulating factor receptor alpha, in combination with
Yescarta in patients with relapsed or refractory large B-cell
lymphoma.
- The presentation of data at the 61st American Society of
Hematology Annual Meeting & Exposition, which included:
- Long-term data from the ZUMA-1 trial of Yescarta in adult
patients with refractory large B-cell lymphoma.
- Positive results from ZUMA-2 Phase 2 study of KTE-X19, an
investigational CD19 CAR T cell therapy, in adult patients with
relapsed or refractory MCL.
- Positive real-world data from ongoing post-marketing study
evaluating the safety and efficacy of Yescarta in adult patients
with relapsed or refractory large B-cell lymphoma.
Fibrotic Diseases
- Topline results from the Phase 2 ATLAS study of combination and
monotherapy investigational treatments in patients with bridging
fibrosis (F3) and compensated cirrhosis (F4) due to nonalcoholic
steatohepatitis (NASH).
- Presentation of data at The Liver Meeting, which included new
data showing potential for machine learning to advance
understanding of NASH.
- Collaboration with Glympse Bio, Inc. to determine clinical
trial participants’ stage of disease at initial screening and to
determine responses to study treatment in Gilead’s NASH clinical
program.
Non-GAAP Financial
Information
The information presented in this document has been prepared 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 9 through 12.
Conference Call
At 4:30 p.m. Eastern Time today, Gilead’s management will host a
conference call and a simultaneous webcast to discuss the company’s
fourth quarter and full year 2019 financial results and provide a
business update. The live webcast of the call can be accessed at
Gilead’s Investors page at http://investors.gilead.com. Please connect to the
website at least 15 minutes prior to the start of the call to allow
adequate time for any software download that may be required to
listen to the webcast. Alternatively, please call 877-359-9508
(U.S.) or 224-357-2393 (international) and dial the conference ID
9634129 to access the call. Telephone replay will be available
approximately two hours after the call through 8:00 p.m. Eastern
Time, February 6, 2020. To access the replay, please call
855-859-2056 (U.S.) or 404-537-3406 (international) and dial the
conference ID 9634129. The webcast will be archived on www.gilead.com for one year.
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 2020
financial results; Gilead’s ability to accelerate or sustain
revenues for its antiviral and other programs; Gilead’s ability to
realize the potential benefits of collaborations or licensing
arrangements, including those with The Rockefeller University,
Kyverna Therapeutics, Inc., Eisai Co., Ltd., Kiniksa
Pharmaceuticals, Ltd. and Glympse Bio, Inc.; Gilead’s ability to
initiate clinical trials in its currently anticipated timeframes;
the risk that safety and efficacy data from clinical studies may
not warrant further development of Gilead’s product candidates,
including Yescarta in combination with mavrilimumab, 3BNC117,
10-1074, GS-6207 and product candidates evaluated for bridging
fibrosis and compensated cirrhosis due to NASH; 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, including FDA and MHLW approvals for filgotinib
for the treatment of RA and FDA and European Commission approvals
of KTE-X19 for the treatment of mantle cell lymphoma; Gilead’s
ability to successfully commercialize its products, including
expansion in China; the risk that private and public payers may be
reluctant to provide, or continue to provide, coverage or
reimbursement for new products; a larger than anticipated shift in
payer mix to more highly discounted payer segments; market share
and price erosion caused by the introduction of generic versions of
Gilead products; 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; 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 and the year
ended December 31, 2019 are not necessarily indicative of operating
results for any future periods. Gilead directs readers to its press
releases, Quarterly Report on Form 10-Q for the quarter ended
September 30, 2019 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®, BIKTARVY®, CAYSTON®, COMPLERA®, DESCOVY®, DESCOVY FOR
PREP®, EMTRIVA®, EPCLUSA®, EVIPLERA®, GENVOYA®, HARVONI®, HEPSERA®,
LETAIRIS®, ODEFSEY®, RANEXA®, SOVALDI®, STRIBILD®, TRUVADA®,
TRUVADA FOR PREP®, TYBOST®, VEMLIDY®, VIREAD®, VOSEVI®, YESCARTA®
and ZYDELIG®.
LEXISCAN® is a registered trademark of Astellas
U.S. LLC. MACUGEN® is a registered trademark of Bausch Health
Ireland Limited. SYMTUZA® is a registered trademark of Janssen
Sciences Ireland UC. TAMIFLU® is a registered trademark of
Hoffmann-La Roche Inc. This report also refers to trademarks,
service marks and trade names of other companies.
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
Twelve Months Ended
December 31,
December 31,
2019
2018
2019
2018
Revenues:
Product sales
$
5,796
$
5,681
$
22,119
$
21,677
Royalty, contract and other revenues
83
114
330
450
Total revenues
5,879
5,795
22,449
22,127
Costs and expenses:
Cost of goods sold
1,683
1,570
4,675
4,853
Research and development expenses
1,899
1,950
9,106
5,018
Selling, general and administrative
expenses
1,204
1,131
4,381
4,056
Total costs and expenses
4,786
4,651
18,162
13,927
Income from operations
1,093
1,144
4,287
8,200
Interest expense
(243
)
(257
)
(995
)
(1,077
)
Other income (expense), net
1,051
129
1,868
676
Income before provision for income
taxes
1,901
1,016
5,160
7,799
Provision for income taxes
(788
)
1,013
(204
)
2,339
Net income
2,689
3
5,364
5,460
Net (loss) income attributable to
noncontrolling interest
(7
)
—
(22
)
5
Net income attributable to Gilead
$
2,696
$
3
$
5,386
$
5,455
Net income per share attributable to
Gilead common stockholders - basic
$
2.13
$
0.00
$
4.24
$
4.20
Shares used in per share calculation -
basic
1,266
1,290
1,270
1,298
Net income per share attributable to
Gilead common stockholders - diluted
$
2.12
$
0.00
$
4.22
$
4.17
Shares used in per share calculation -
diluted
1,273
1,299
1,277
1,308
Cash dividends declared per share
$
0.63
$
0.57
$
2.52
$
2.28
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL INFORMATION
(unaudited)
(in millions, except
percentages and per share amounts)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2019
2018
2019
2018
Cost of goods sold
reconciliation:
GAAP cost of goods sold
$
1,683
$
1,570
$
4,675
$
4,853
Acquisition-related – amortization of
purchased intangibles
(266
)
(301
)
(1,088
)
(1,203
)
Stock-based compensation expenses(1)
(11
)
(12
)
(48
)
(61
)
Other(2)
—
—
—
1
Non-GAAP cost of goods sold
$
1,406
$
1,257
$
3,539
$
3,590
Product gross margin
reconciliation:
GAAP product gross margin
71.0
%
72.4
%
78.9
%
77.6
%
Acquisition-related – amortization of
purchased intangibles
4.6
%
5.3
%
4.9
%
5.5
%
Stock-based compensation expenses(1)
0.2
%
0.2
%
0.2
%
0.3
%
Non-GAAP product gross margin(6)
75.7
%
77.9
%
84.0
%
83.4
%
Research and development expenses
reconciliation:
GAAP research and development expenses
$
1,899
$
1,950
$
9,106
$
5,018
Up-front collaboration and licensing
expenses
—
(118
)
(4,251
)
(278
)
Acquisition-related – IPR&D
impairment
(800
)
(820
)
(800
)
(820
)
Acquisition-related – other costs
—
1
—
(21
)
Stock-based compensation expenses(1)
(74
)
(75
)
(289
)
(379
)
Other(2)
4
1
4
(2
)
Non-GAAP research and development
expenses
$
1,029
$
939
$
3,770
$
3,518
Selling, general and administrative
expenses reconciliation:
GAAP selling, general and administrative
expenses
$
1,204
$
1,131
$
4,381
$
4,056
Acquisition-related – other costs
—
(1
)
—
(24
)
Stock-based compensation expenses(1)
(72
)
(88
)
(299
)
(405
)
Other(2)
—
(10
)
(6
)
(19
)
Non-GAAP selling, general and
administrative expenses
$
1,132
$
1,032
$
4,076
$
3,608
Operating margin
reconciliation:
GAAP operating margin
18.6
%
19.7
%
19.1
%
37.1
%
Up-front collaboration and licensing
expenses
—
%
2.0
%
18.9
%
1.3
%
Acquisition-related – amortization of
purchased intangibles
4.5
%
5.2
%
4.8
%
5.4
%
Acquisition-related – IPR&D
impairment
13.6
%
14.2
%
3.6
%
3.7
%
Acquisition-related – other costs
—
%
—
%
—
%
0.2
%
Stock-based compensation expenses(1)
2.7
%
3.0
%
2.8
%
3.8
%
Other(2)
(0.1
)%
0.2
%
—
%
0.1
%
Non-GAAP operating margin(6)
39.3
%
44.3
%
49.3
%
51.6
%
Other income (expense), net
reconciliation:
GAAP other income (expense), net
$
1,051
$
129
$
1,868
$
676
(Gains) losses from equity securities,
net
(929
)
34
(1,241
)
(115
)
Non-GAAP other income (expense), net
$
122
$
163
$
627
$
561
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL INFORMATION - (Continued)
(unaudited)
(in millions, except
percentages and per share amounts)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2019
2018
2019
2018
Net income attributable to Gilead
reconciliation:
GAAP net income attributable to Gilead
$
2,696
$
3
$
5,386
$
5,455
Up-front collaboration and licensing
expenses
—
91
3,294
216
Acquisition-related – amortization of
purchased intangibles
247
281
1,006
1,124
Acquisition-related – IPR&D
impairment
623
696
623
696
Acquisition-related – other costs
—
—
—
36
Stock-based compensation
expenses(1)(3)
253
135
638
681
(Gains) losses from equity securities,
net
(921
)
59
(1,241
)
(87
)
Discrete tax (benefit) charge(4)
(1,240
)
588
(1,240
)
588
Tax Reform adjustments(5)
—
14
—
4
Other(2)
(5
)
6
—
15
Non-GAAP net income attributable to
Gilead
$
1,653
$
1,873
$
8,466
$
8,728
Diluted earnings per share
reconciliation:
GAAP diluted earnings per share
$
2.12
$
0.00
$
4.22
$
4.17
Up-front collaboration and licensing
expenses
—
0.07
2.58
0.17
Acquisition-related – amortization of
purchased intangibles
0.19
0.22
0.79
0.86
Acquisition-related – IPR&D
impairment
0.49
0.54
0.49
0.53
Acquisition-related – other costs
—
—
—
0.03
Stock-based compensation
expenses(1)(3)
0.20
0.10
0.50
0.52
(Gains) losses from equity securities,
net
(0.72
)
0.05
(0.97
)
(0.07
)
Discrete tax (benefit) charge(4)
(0.97
)
0.45
(0.97
)
0.45
Tax Reform adjustments(5)
—
0.01
—
—
Other(2)
—
—
—
0.01
Non-GAAP diluted earnings per share(6)
$
1.30
$
1.44
$
6.63
$
6.67
Effective tax rate
reconciliation:
GAAP effective tax rate
(41.5
)%
99.6
%
(4.0
)%
30.0
%
Income tax effect of above non-GAAP
adjustments
66.4
%
(75.4
)%
25.1
%
(10.2
)%
Non-GAAP effective tax rate
24.9
%
24.2
%
21.1
%
19.8
%
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL INFORMATION - (Continued)
(unaudited)
(in millions, except
percentages and per share amounts)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2019
2018
2019
2018
Non-GAAP adjustment summary:
Cost of goods sold adjustments
$
277
$
313
$
1,136
$
1,263
Research and development expenses
adjustments
870
1,011
5,336
1,500
Selling, general and administrative
expenses adjustments
72
99
305
448
Other income (expense), net
adjustments
(929
)
34
(1,241
)
(115
)
Total non-GAAP adjustments before tax
290
1,457
5,536
3,096
Income tax effect
(93
)
(189
)
(1,216
)
(415
)
Discrete tax (benefit) charge(4)
(1,240
)
588
(1,240
)
588
Tax Reform adjustments(5)
—
14
—
4
Total non-GAAP adjustments after tax
$
(1,043
)
$
1,870
$
3,080
$
3,273
____________________
(1)
The year-over-year decrease was primarily
due to stock-based compensation expenses incurred in 2018 following
Gilead’s acquisition of Kite
(2)
Amounts related to restructuring,
contingent consideration and/or other individually insignificant
amounts
(3)
The fourth quarter and full year 2019
included a $114 million income tax charge following the U.S. Court
of Appeals decision in Altera Corp v. Commissioner, which requires
related parties in an intercompany cost sharing arrangement to
share expenses related to stock-based compensation
(4)
The fourth quarter and full year 2019
included a deferred tax benefit related to intangible asset
transfers from a foreign subsidiary to Ireland and the United
States. The fourth quarter and full year 2018 included a deferred
tax charge related to a transfer of acquired intangible assets from
a foreign subsidiary to the United States
(5)
Amounts represent measurement period
adjustments relating to the enactment of the 2017 Tax Cuts and Jobs
Act (Tax Reform)
(6)
Amounts may not sum due to rounding
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO
NON-GAAP 2020 FULL YEAR GUIDANCE(1)(2)
(unaudited)
(in millions, except
percentages and per share amounts)
Provided February 4,
2020
Projected product gross margin GAAP to
non-GAAP reconciliation:
GAAP projected product gross margin
81% - 82%
Acquisition-related expenses
5%
Non-GAAP projected product gross
margin
86% - 87%
Projected operating income GAAP to
non-GAAP reconciliation:
GAAP projected operating income
$8,980 - $9,680
Acquisition-related and up-front
collaboration and licensing expenses
1,120
Non-GAAP projected operating income
$10,100 - $10,800
Projected effective tax rate GAAP to
non-GAAP reconciliation:
GAAP projected effective tax rate
~ 23%
Amortization of deferred tax assets and
tax rate effects of adjustments noted above
(2%)
Non-GAAP projected effective tax rate
~ 21%
Projected diluted EPS GAAP to non-GAAP
reconciliation:
GAAP projected diluted EPS
$5.15 - $5.55
Acquisition-related, up-front
collaboration and licensing expenses and amortization of deferred
tax assets
0.90
Non-GAAP projected diluted EPS
$6.05 - $6.45
____________________
(1)
Starting
in 2020, Gilead will no longer regularly exclude stock-based
compensation expense from its non-GAAP financial information. For
comparability purposes, full year 2019 non-GAAP operating income
and non-GAAP diluted earnings per share would have been $10.4
billion and $6.13, respectively, had stock-based compensation
expense not been excluded
(2)
Excludes
the impact of any potential future acquisition-related, up-front
collaboration and licensing and other expenses, fair value
adjustments of equity securities and discrete tax charges or
benefits associated with changes in tax related laws and guidelines
as Gilead is unable to project such amounts
GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited)
(in millions)
December 31,
December 31,
2019
2018
Cash, cash equivalents and marketable
securities
$
25,840
$
31,512
Accounts receivable, net
3,582
3,327
Inventories
2,067
2,630
Property, plant and equipment, net
4,502
4,006
Intangible assets, net
13,786
15,738
Goodwill
4,117
4,117
Other assets
7,733
2,345
Total assets
$
61,627
$
63,675
Current liabilities
$
9,759
$
10,605
Long-term liabilities
29,218
31,536
Stockholders’ equity(1)
22,650
21,534
Total liabilities and stockholders’
equity
$
61,627
$
63,675
____________________
(1)
As of December 31, 2019, there were 1,266
million shares of common stock issued and outstanding
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY
(unaudited)
(in millions)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2019
2018
2019
2018
Atripla – U.S.
$
114
$
244
$
501
$
967
Atripla – Europe
8
12
60
131
Atripla – Other International
6
29
39
108
128
285
600
1,206
Biktarvy – U.S.
1,357
551
4,225
1,144
Biktarvy – Europe
141
26
370
39
Biktarvy – Other International
72
1
143
1
1,570
578
4,738
1,184
Complera / Eviplera – U.S.
34
66
160
276
Complera / Eviplera – Europe
35
48
214
327
Complera / Eviplera – Other
International
6
11
32
50
75
125
406
653
Descovy – U.S.
343
322
1,078
1,217
Descovy – Europe
55
74
255
308
Descovy – Other International
39
15
167
56
437
411
1,500
1,581
Genvoya – U.S.
762
953
2,984
3,631
Genvoya – Europe
142
198
664
794
Genvoya – Other International
54
55
283
199
958
1,206
3,931
4,624
Odefsey – U.S.
315
337
1,180
1,242
Odefsey – Europe
110
105
438
335
Odefsey – Other International
10
6
37
21
435
448
1,655
1,598
Stribild – U.S.
60
117
268
505
Stribild – Europe
15
14
75
97
Stribild – Other
International
(4
)
6
26
42
71
137
369
644
Truvada – U.S.
744
784
2,640
2,605
Truvada – Europe
13
15
101
260
Truvada – Other International
11
24
72
132
768
823
2,813
2,997
Other HIV(1) – U.S.
7
10
30
40
Other HIV(1) – Europe
2
1
5
7
Other HIV(1) – Other International
1
4
12
14
10
15
47
61
Revenue share – Symtuza(2) – U.S.
84
19
249
27
Revenue share – Symtuza(2) – Europe
41
18
130
52
Revenue share – Symtuza(2) – Other
International
—
—
—
—
125
37
379
79
Total HIV – U.S.
3,820
3,403
13,315
11,654
Total HIV – Europe
562
511
2,312
2,350
Total HIV – Other International
195
151
811
623
4,577
4,065
16,438
14,627
AmBisome – U.S.
10
6
37
46
AmBisome – Europe
60
59
234
229
AmBisome – Other International
40
43
136
145
110
108
407
420
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY -
(Continued)
(unaudited)
(in millions)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2019
2018
2019
2018
Ledipasvir/Sofosbuvir(3) – U.S.
$
55
$
153
$
312
$
802
Ledipasvir/Sofosbuvir(3) – Europe
8
28
71
144
Ledipasvir/Sofosbuvir(3) – Other
International
38
51
260
276
101
232
643
1,222
Letairis – U.S.
96
254
618
943
Ranexa – U.S.
11
177
216
758
Sofosbuvir/Velpatasvir(4) – U.S.
240
201
971
934
Sofosbuvir/Velpatasvir(4) – Europe
125
152
553
654
Sofosbuvir/Velpatasvir(4) – Other
International
100
100
441
378
465
453
1,965
1,966
Vemlidy – U.S.
95
73
309
245
Vemlidy – Europe
6
4
21
12
Vemlidy – Other International
36
23
158
64
137
100
488
321
Viread – U.S.
4
10
32
50
Viread – Europe
12
10
69
82
Viread – Other International
23
38
142
175
39
58
243
307
Vosevi – U.S.
38
54
178
304
Vosevi – Europe
11
21
54
78
Vosevi – Other International
7
2
25
14
56
77
257
396
Yescarta – U.S.
98
80
373
263
Yescarta – Europe
24
1
83
1
Yescarta – Other International
—
—
—
—
122
81
456
264
Zydelig – U.S.
11
15
47
61
Zydelig – Europe
12
26
54
70
Zydelig – Other International
1
—
2
2
24
41
103
133
Other(5) – U.S.
38
44
157
137
Other(5) – Europe
20
1
116
76
Other(5) – Other International
—
(10
)
12
107
58
35
285
320
Total product sales – U.S.
4,516
4,470
16,565
16,197
Total product sales – Europe
840
813
3,567
3,696
Total product sales – Other
International
440
398
1,987
1,784
$
5,796
$
5,681
$
22,119
$
21,677
____________________
(1)
Includes Emtriva and Tybost
(2)
Represents Gilead’s revenue from
cobicistat (C), emtricitabine (FTC) and tenofovir alafenamide (TAF)
in Symtuza (darunavir/C/FTC/TAF), a fixed dose combination product
commercialized by Janssen Sciences Ireland UC
(3)
Amounts consist of sales of Harvoni and
the authorized generic version of Harvoni sold by Gilead’s separate
subsidiary, Asegua Therapeutics LLC
(4)
Amounts consist of sales of Epclusa and
the authorized generic version of Epclusa sold by Gilead’s separate
subsidiary, Asegua Therapeutics LLC
(5)
Includes Cayston, Hepsera and Sovaldi. The
period-over-period changes in Europe and Other International
locations were primarily due to adjustments for statutory rebates
related to sales of Sovaldi made in prior years
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200204005925/en/
Investors Andrew Dickinson
(650) 524-0862
Douglas Maffei (650) 522-2739
Media Amy Flood (650)
522-5643
Gilead Sciences (NASDAQ:GILD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Gilead Sciences (NASDAQ:GILD)
Historical Stock Chart
From Sep 2023 to Sep 2024