Gilead Sciences, Inc. (Nasdaq: GILD) today announced the company
has revised certain elements of its full year 2020 guidance.
Updated Full Year 2020
Guidance
(In millions, except percentages and
per share amounts)
Previously Updated October 28,
2020
Updated January 11,
2021
Product Sales
$23,000 - $23,500
$24,300 - $24,350
Product Sales excluding Veklury
$21,500 - $21,525
Veklury
$2,800 - $2,825
Non-GAAP
Product Gross Margin
86% - 87%
~ 86.5%
R&D Expenses
Mid-teens percentage growth
~ 20% growth
SG&A Expenses
Low double-digit percentage
growth
~ 10% growth
Operating Income
$10,700 - $11,200
$11,650 - $11,750
Effective Tax Rate
~ 20%
~ 19.0% - 19.5%
Diluted EPS
$6.25 - $6.60
$6.98 - $7.08
GAAP Diluted Earnings (Loss) Per Share
$(0.25) - $0.10
$(0.08) - $0.02
The following provides additional details on the company’s
updated guidance:
- Gilead delivered solid performance, despite the global impacts
of COVID-19.
- Total product sales guidance range is now $24.30 billion to
$24.35 billion, reflecting increased Veklury® (remdesivir) sales as
hospitalization and treatment rates were higher than expected given
the most recent COVID-19 surge.
- As a reminder, full year 2020 total product sales excluding
Veklury reflects the underlying strong Biktarvy® (bictegravir 50
mg/emtricitabine 200 mg/tenofovir alafenamide 25 mg) uptake,
partially offset by the Truvada® (emtricitabine 200 mg/tenofovir
disoproxil fumarate 300 mg) loss of exclusivity in the United
States and the impact of COVID-19 primarily on Gilead’s
pre-exposure prophylaxis (“PrEP”) franchise and chronic hepatitis C
virus (“HCV”) franchise.
- Guidance for Research and development (“R&D”) expense
changed to reflect the increase in expense for obligations under
the previously disclosed new commercialization and development
agreement for Jyseleca® (filgotinib) with Galapagos NV. In
addition, R&D expense for the full year 2020 reflects growth
due to higher clinical trial and manufacturing ramp-up expenses
related to Gilead’s COVID-19 treatment remdesivir.
- Selling, general and administrative (“SG&A”) expense
reflects the low-end of Gilead’s previous guidance. As a reminder,
SG&A expense grew for the full year 2020 due to a legal accrual
related to a previously disclosed legal settlement, expenses
associated with the acquisitions of Forty Seven, Inc. and
Immunomedics, Inc., and certain remdesivir donations.
- GAAP Diluted EPS guidance is ($0.08) to $0.02 and Non-GAAP
Diluted EPS guidance is $6.98 to $7.08 for full year 2020.
The updated 2020 guidance range provided in this document is
based on Gilead’s preliminary fourth quarter 2020 results, which
are subject to change in connection with the completion of the
company’s final closing procedures, final adjustments and other
developments that may arise in the course of the preparation or
audit of its financial statements. Gilead’s management will host a
conference call to discuss the company’s fourth quarter and full
year 2020 results in the coming weeks.
Webcast of J.P. Morgan Healthcare Conference
Gilead is scheduled to provide an overview of the company,
including updated full year 2020 guidance and a review of key
events at the 39th Annual J.P. Morgan Healthcare Conference on
Monday, January 11, 2021 at 12:40 p.m. Pacific Time. The live
webcast for the J.P. Morgan Healthcare Conference can be accessed
at the company’s Investors page at http://investors.gilead.com.
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 financial
information excludes acquisition-related expenses including
amortization, acquired in-process research and development
(“IPR&D”) expenses including the initial costs of externally
developed IPR&D with no alternative future use, upfront
collaboration and licensing expenses and IPR&D impairments, and
other items that are considered unusual or not representative of
underlying trends of Gilead’s business, fair value adjustments of
equity securities and discrete and related tax charges or benefits
associated with changes in tax related laws and guidelines.
Although Gilead consistently excludes the amortization of acquired
intangible assets from the non-GAAP financial information,
management believes that it is important for investors to
understand that such intangible assets were recorded as part of
acquisitions and contribute to ongoing revenue generation. Non-GAAP
measures may be defined and calculated differently by other
companies in the same industry. Reconciliations of the non-GAAP
financial measures to the most directly comparable GAAP financial
measures are provided in the table on page 4.
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: the risks and uncertainties related to the impact of the
COVID-19 pandemic on Gilead’s business, financial condition and
results of operations; the risks and uncertainties related to the
development, manufacturing and distribution of Veklury as a
treatment for COVID-19, including the uncertainty of the amount and
timing of future Veklury revenues and the risk that Gilead may be
unable to recoup the expenses incurred to date and future expenses
related to the development and production of Veklury and Gilead may
be unable to effectively manage the global supply and distribution
of Veklury; Gilead’s ability to achieve its anticipated full year
2020 financial results, including as a result of potential adverse
revenue impacts from COVID-19, increases in R&D expenses and
potential revenues from Veklury; Gilead’s ability to make progress
on any of its long-term ambitions laid out in its corporate
strategy; Gilead’s ability to accelerate or sustain revenues for
its antiviral and other programs; Gilead’s ability to realize the
potential benefits of acquisitions, collaborations or licensing
arrangements; the ability of the parties to complete the MYR GmbH
acquisition in a timely manner or at all; Gilead’s ability to
initiate, progress or complete clinical trials within currently
anticipated timeframes; the possibility of unfavorable results from
ongoing and additional clinical trials; the risk that safety and
efficacy data from clinical studies may not warrant further
development of Gilead’s product candidates or the product
candidates of Gilead’s strategic partners; Gilead’s ability to
submit new drug applications for new product candidates in the
currently anticipated timelines; Gilead’s ability to receive
regulatory approvals in a timely manner or at all, and the risk
that any such approval may be subject to significant limitations on
use; Gilead’s ability to successfully commercialize its products;
the risk of potential disruptions to the manufacturing and supply
chain of Gilead’s products; the risk that private and public payers
may be reluctant to provide, or continue to provide, coverage or
reimbursement for new products; the risk that efforts to control
prescription drug prices could have a material adverse effect on
Gilead’s business; 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; 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. These forward-looking statements should also be considered
in light of various important factors, including, but not limited
to, the following: completion of Gilead’s final closing procedures,
final adjustments and other developments that may arise in the
course of audit procedures. 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. Information about these
and other risks, uncertainties and factors can be found in Gilead’s
periodic reports filed with the SEC, including annual reports on
Form 10-K, quarterly reports on Form 10-Q and 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 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®,
JYSELECA®, LETAIRIS®, ODEFSEY®, RANEXA®, SOVALDI®, STRIBILD®,
TECARTUSTM, TRODELVY®, TRUVADA®, TRUVADA FOR PREP®, TYBOST®,
VEKLURY®, VEMLIDY®, VIREAD®, VOSEVI®, YESCARTA® and ZYDELIG®.
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.
RECONCILIATION OF GAAP TO
NON-GAAP 2020 FULL YEAR GUIDANCE(1)(2)
(unaudited)
(in millions, except percentages and
per share amounts)
Previously Updated October 28,
2020
Updated January 11,
2021
Projected product gross margin GAAP to
non-GAAP reconciliation:
GAAP projected product gross margin
81% - 82%
~ 81.5%
Acquisition-related expenses
5%
5.0%
Non-GAAP projected product gross
margin
86% - 87%
~ 86.5%
Projected operating income GAAP to
non-GAAP reconciliation:
GAAP projected operating income
$2,200 - $2,700
$4,050 - $4,150
Acquisition-related and acquired IPR&D
expenses
8,500
7,600
Non-GAAP projected operating income
$10,700 - $11,200
$11,650 - $11,750
GAAP projected effective tax rate
~110%
~102.0% - 102.5%
Projected effective tax rate GAAP to non-GAAP
reconciliation:
Amortization of deferred tax assets and
tax rate effects of adjustments noted
above
(90)%
(83.0)%
Non-GAAP projected effective tax rate
~ 20%
~ 19.0% - 19.5%
Projected diluted EPS GAAP to non-GAAP
reconciliation:
$(0.25) - $0.10
$(0.08) - $0.02
GAAP projected diluted EPS (loss per
share)
Acquisition-related, acquired IPR&D
expenses, amortization of deferred tax assets and historical fair
value adjustments of equity securities
6.50
7.06
Non-GAAP projected diluted EPS
$6.25 - $6.60
$6.98 - $7.08
_______________
(1)
Starting in 2020, Gilead no longer
regularly excludes stock-based compensation expense from its
non-GAAP financial information.
(2)
The updated 2020 guidance non-GAAP
financial information excludes acquisition-related expenses
including amortization, acquired IPR&D expenses including the
initial costs of externally developed IPR&D with no alternative
future use, upfront collaboration and licensing expenses and
IPR&D impairments, and other items that are considered unusual
or not representative of underlying trends of Gilead’s business,
fair value adjustments of equity securities and discrete and
related tax charges or benefits associated with changes in tax
related laws and guidelines.
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Investors Monica
Tellado (650) 574-3000 Media Amy Flood (650)
522-5643
Gilead Sciences (NASDAQ:GILD)
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