Second Quarter 2021 Product Sales Increased 21%
Year-Over-Year Primarily Driven by Veklury
Biktarvy Sales Increased 24% Year-Over-Year
Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results
of operations for the second quarter 2021.
“We maintained our positive momentum in the second quarter, with
both a solid financial performance and strong progress across our
increasingly diverse portfolio. Our flagship HIV therapy, Biktarvy,
saw continued growth and gains in market share, despite the ongoing
impact of the pandemic,” said Daniel O’Day, Chairman and Chief
Executive Officer, Gilead Sciences. “The series of promising
pipeline updates included the data from the landmark ZUMA-7 study
for the treatment of second-line large B-cell lymphoma. In
virology, recent results from our lenacapavir study reinforce its
potential as a long-acting therapy for people living with HIV, and
positive interim results from our Hepcludex studies in HDV moved us
closer to a U.S. filing.”
Second Quarter 2021 Financial
Results
- Total second quarter 2021 revenue of $6.2 billion increased 21%
compared to the same period in 2020, primarily due to Veklury®
(remdesivir), higher demand for Biktarvy (bictegravir 50
mg/FTC/tenofovir alafenamide 25 mg (“TAF”)) and our hepatitis C
virus (“HCV”) products, as well as continued uptake in the United
States of Trodelvy® (sacituzumab govitecan-hziy) and Tecartus®
(brexucabtagene autoleucel).
- Diluted Earnings Per Share (“EPS”) increased to $1.21 for the
second quarter 2021 compared to net loss per share of $2.66 for the
same period in 2020. This was primarily driven by the impact of
higher in-process research and development (“IPR&D”) expenses
in the second quarter 2020 related to the Forty Seven, Inc.
acquisition and revenue growth in the second quarter 2021, offset
by fair value loss adjustments on Gilead’s equity investment in
Galapagos NV.
- Non-GAAP diluted EPS increased 68% to $1.87 for the second
quarter 2021 compared to the same period in 2020, primarily due to
higher operating income partially offset by lower interest
income.
- As of June 30, 2021, Gilead had $7.4 billion of cash, cash
equivalents and marketable debt securities compared to $7.9 billion
as of December 31, 2020.
- During the second quarter 2021, Gilead generated $2.3 billion
in operating cash flow.
- During the second quarter 2021, Gilead paid cash dividends of
$894 million and utilized $43 million to repurchase common
stock.
Product Sales Performance
Total second quarter 2021 product sales increased 21% to $6.2
billion compared to the same period in 2020. Total product sales
excluding Veklury increased 5% to $5.3 billion for the second
quarter 2021 compared to the same period in 2020, reflecting
continued uptake of Trodelvy and Tecartus in the United States as
well as improving trends in HIV and HCV, offset, as expected, by
loss of exclusivity of Truvada® (emtricitabine 200mg
(“FTC”)/tenofovir disoproxil fumarate 300mg (“TDF”)) and Atripla®
(efavirenz 600mg/FTC/TDF) in the United States.
HIV product sales decreased 2% to $3.9 billion for the second
quarter 2021 compared to the same period in 2020, reflecting the
expected loss of exclusivity of Truvada and Atripla in the United
States, offset in part by increased demand.
- Biktarvy® sales increased 24% year-over-year in the
second quarter 2021, reflecting higher demand in all
geographies.
- Descovy® (FTC/TAF) sales increased 4% year-over-year in
the second quarter 2021, driven by increased pre-exposure
prophylaxis (“PrEP”) demand in the United States and the impact in
the same period last year of the COVID-related channel inventory
drawdown, offset by lower average net selling price.
- Truvada and Atripla sales decreased 72%
year-over-year to $108 million and 42% year-over-year to $60
million, respectively, in the second quarter 2021 due to generic
entrants in the United States following loss of exclusivity in late
2020.
HCV product sales increased 23% to $549 million for the second
quarter 2021 compared to the same period in 2020, driven primarily
by improved market starts in the United States and Europe as well
as an unfavorable change in estimate of government rebates in the
second quarter 2020.
Hepatitis B virus (“HBV”) and hepatitis delta virus (“HDV”)
product sales increased 8% to $237 million for the second quarter
2021 compared to the same period in 2020. Vemlidy®
(tenofovir alafenamide 25 mg) sales increased 32% in the second
quarter 2021 compared to the same period in 2020 driven by
increased demand primarily in geographies outside the United States
and Europe. Hepcludex® (bulevirtide) contributed $7 million
in the second quarter 2021 reflecting the first full quarter of
sales for Gilead.
Cell Therapy product sales increased 39% to $219 million for the
second quarter 2021 compared to the same period in 2020.
- Yescarta® (axicabtagene ciloleucel) sales increased to
$178 million in the second quarter 2021, reflecting continued
uptake in relapsed or refractory indolent follicular lymphoma
(“FL”) in the United States following its approval by the U.S. Food
and Drug Administration (“FDA”) in the first quarter 2021 and
expansion in Europe.
- Tecartus sales were $41 million for the second quarter
2021, driven by the launch in mantle cell lymphoma in the United
States and Europe.
Trodelvy sales for the second quarter 2021 were $89
million. Launch activities continue following the full FDA approval
for second-line metastatic triple-negative breast cancer (“mTNBC”)
and accelerated approval for metastatic urothelial cancer.
Veklury sales were $829 million for the second quarter
2021. Sales of Veklury are generally affected by COVID-19 related
rates of infections, hospitalizations and vaccinations.
Other product sales increased 20% to $291 million for the second
quarter 2021 compared to the same period in 2020.
- AmBisome® (amphotericin B) sales increased in the second
quarter 2021 compared to the same period in 2020 driven by an
increase in shipments outside the United States, primarily in India
and Europe.
Second Quarter 2021 Product Gross Margin, Operating Expenses
and Tax
- Product gross margin was 77.4% for the second quarter 2021
compared to 79.0% in the same period in 2020, reflecting additional
amortization of intangibles acquired from Immunomedics, Inc. and
MYR GmbH. Non-GAAP product gross margin was 86.4% for the second
quarter 2021 compared to 84.3% in the same period in 2020, driven
by lower royalty expense.
- Research and Development (“R&D”) expenses for the second
quarter 2021 were $1.1 billion compared to $1.3 billion in the same
period in 2020. Non-GAAP R&D expenses for the second quarter
2021 were $1.1 billion compared to $1.2 billion in the same period
in 2020. Lower R&D expenses reflect completion or wind-down of
remdesivir-related programs, partly offset by increases in Trodelvy
and magrolimab clinical activities.
- Sales, General and Administrative (“SG&A”) expenses for the
second quarter 2021 were $1.4 billion compared to $1.2 billion in
the same period in 2020. The increase in SG&A expenses was
driven primarily by a significant donation of equity securities to
the Gilead Foundation. Non-GAAP SG&A expenses for the second
quarter 2021 were $1.1 billion compared to $1.2 billion in the same
period in 2020. The decrease in non-GAAP SG&A expenses was
driven by lower legal expenses primarily due to a prior year
settlement associated with a Department of Justice investigation,
offset by increases in promotional and commercialization activities
in geographies outside the United States.
- The GAAP effective tax rate (“ETR”) and non-GAAP ETR for the
second quarter 2021 were 16.5% and 19.6%, respectively, compared to
(12.5)% and 22.8%, respectively, for the same periods in 2020.
Key Updates Since Our Last Quarterly Release
Viral Diseases
- Gilead presented additional lenacapavir clinical development
program data at the International AIDS Society (“IAS”) 2021
Conference on HIV Science. Phase 2 data from CALIBRATE, an ongoing,
open-label, active-controlled trial in treatment-naïve people with
HIV-1 infection showed lenacapavir, given subcutaneously or orally,
in combination with oral daily emtricitabine/tenofovir alafenamide
(“F/TAF”) led to high rates of viral suppression by Week 28. These
results support the ongoing evaluation and further development of
lenacapavir in combination with other long-acting partner agents
for the treatment of HIV-1 infection and will support Gilead’s
long-acting oral and injectable development program.
- Gilead also announced at IAS 2021 new results from the ongoing
Phase 2/3 CAPELLA trial evaluating lenacapavir in heavily
treatment-experienced people living with multi-drug resistant HIV.
The findings demonstrate that lenacapavir administered
subcutaneously every six months in combination with other
antiretrovirals achieved high rates of virologic suppression at
Week 26.
- Gilead filed a New Drug Application to FDA seeking approval of
lenacapavir for the treatment of HIV-1 infection in heavily
treatment-experienced people with multi-drug resistant
infection.
- Gilead announced interim results from the Phase 3 study
(MYR301) of bulevirtide for the treatment of HDV at the
International Liver Congress (“ILC”) 2021 annual meeting. After 24
weeks, 36.7% of patients receiving a 2mg dose of bulevirtide and
28% of patients receiving a 10mg dose of bulevirtide showed a
combined virological and biological response compared to 0% in the
no treatment group.
- Gilead also announced at ILC 2021 the interim results from the
Phase 2b study (MYR204) of bulevirtide for the treatment of HDV. At
week 24, results showed that bulevirtide alone or in combination
with peginterferon alfa-2a, is associated with a significant HDV
RNA decline and improvements in biochemical disease activity.
- Gilead received FDA approval for a new formulation of Epclusa,
expanding the pediatric indication for the treatment of HCV to now
include children as young as 3 years of age.
Oncology
- Kite announced top-line results from the primary analysis of
ZUMA-7 trial of Yescarta in second-line relapsed or refractory
large B-cell lymphoma (“LBCL”). At a median follow-up of two years,
Yescarta improved event free survival by 60% over the standard of
care chemotherapy plus stem cell transplant. The study also met the
key secondary endpoint of objective response rate. Full data will
be presented later this year and discussions are underway with
global regulatory authorities.
- Kite announced that Fosun Kite Biotechnology Co., Ltd., a joint
venture between Kite and Shanghai Fosun Pharmaceutical (Group) Co.,
Ltd., received approval from the China National Medical Products
Administration for axicabtagene ciloleucel (FKC876) for the
treatment of adult patients with relapsed or refractory LBCL after
two or more lines of systemic therapy. Yescarta is the first and
only commercially available chimeric antigen receptor (“CAR”)
T-cell therapy approved in China.
- Kite announced a partnership with Shoreline Biosciences, Inc.
to develop allogeneic candidates for a range of hematologic
malignancies. The collaboration will focus initially on CAR NK
targets, with Kite having an option to expand the collaboration to
include an induced pluripotent stem cell CAR Macrophage
program.
- Kite announced follow-up results from the pivotal ZUMA-5 trial
of Yescarta in relapsed or refractory FL at the American Society of
Clinical Oncology (“ASCO”) 2021 annual meeting. At a minimum
follow-up of 18 months, 94% of patients had achieved a response,
and secondary endpoints of median progression-free survival and
overall survival were not yet reached.
- Kite announced at ASCO 2021, with a publication in The Lancet,
primary analysis of ZUMA-3 evaluating Tecartus in adult patients
with relapsed or refractory B-cell precursor acute lymphoblastic
leukemia. In the pivotal Phase 2 portion of the trial, 71 patients
with relapsed or refractory disease were enrolled and Kite observed
a response rate of 71%. Importantly, the majority of these
responses were associated with undetectable minimal residual
disease. The findings have been designated for Priority Review by
FDA with a Prescription Drug User Fee Act (“PDUFA”) date of October
1, 2021.
- Gilead announced analyses from Phase 3 ASCENT study at ASCO
2021 in patients with relapsed or refractory mTNBC. Treatment with
Trodelvy demonstrated significantly greater survival benefit over
chemotherapy in patients treated in the second-line setting and in
patients greater than 65 years old.
Corporate
- Kite announced a purchase agreement with BioNTech SE to acquire
Kite’s solid tumor neoantigen T cell receptor R&D platform and
clinical manufacturing facility in Gaithersburg, Maryland.
- Gilead welcomed William Grossman, MD, PhD, as Senior Vice
President, Oncology Clinical Research. Dr. Grossman brings
extensive experience as a clinician and a veteran biopharmaceutical
executive.
- Gilead announced that the company’s Board of Directors has
declared a quarterly dividend of $0.71 per share of common stock
for the third quarter of 2021. The dividend is payable on September
29, 2021, to stockholders of record at the close of business on
September 15, 2021. Future dividends will be subject to Board
approval.
Guidance and Outlook
Gilead has updated its full-year guidance, and now expects:
- Total product sales between $24.4 billion and $25.0 billion,
compared to $23.7 billion and $25.1 billion previously, reflecting
solid results in the first half of the year and our updated
expectations for the second half of 2021.
- Total product sales, excluding Veklury, between $21.7 billion
and $21.9 billion, compared to $21.7 billion to $22.1 billion
previously, primarily reflecting the longer than expected pandemic
impact on our HIV business, including the latest increase in
COVID-19 cases.
- Total Veklury sales between $2.7 billion and $3.1 billion,
compared to $2.0 billion to $3.0 billion previously, reflecting the
ongoing role of Veklury in the pandemic, in addition to the
continued uncertainties around the path of the pandemic since
Veklury revenue tends to track hospitalization rates.
- GAAP earnings per share between $4.70 and $5.05, compared to
$4.75 to $5.45 previously.
- Non-GAAP earnings per share between $6.90 and $7.25, compared
to $6.75 to $7.45 previously.
A reconciliation between GAAP and non-GAAP financial information
for the 2021 guidance is provided in the accompanying tables. Also
see the Forward-Looking Statements described below. The financial
guidance is subject to a number of risks and uncertainties,
including uncertainty around the duration and magnitude of the
COVID-19 pandemic. While the pandemic can be expected to continue
to impact Gilead’s business and broader market dynamics, the rate
and degree of these impacts as well as the corresponding recovery
from the pandemic may vary across Gilead’s business.
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 of acquired intangible assets and inventory step-up
charges in cost of goods sold, acquired IPR&D expenses, 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.
Acquired IPR&D expenses reflect IPR&D impairments as well
as the initial costs of externally developed IPR&D projects,
acquired directly in a transaction other than a business
combination, that do not have an alternative future use, including
upfront and other payments related to various collaborations and
the initial costs of rights to IPR&D projects. 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 accompanying tables.
Conference Call
At 1:30 p.m. Pacific Time today, Gilead will host a conference
call to discuss Gilead’s results. A live webcast will be available
on http://investors.gilead.com and will be archived on
www.gilead.com for one year.
About Gilead Sciences
Gilead Sciences, Inc. is a biopharmaceutical company that has
pursued and achieved breakthroughs in medicine for more than three
decades, with the goal of creating a healthier world for all
people. The company is committed to advancing innovative medicines
to prevent and treat life-threatening diseases, including HIV,
viral hepatitis and cancer. Gilead operates 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 those
relating to: the impact of the COVID-19 pandemic on Gilead’s
business, financial condition and results of operations; the
development, manufacturing and distribution of Veklury as a
treatment for COVID-19, including the uncertainty of the amount and
timing of future Veklury sales, Gilead’s ability to recoup the
expenses incurred to date and future expenses related to the
development and production of Veklury, and Gilead’s ability to
effectively manage the global supply and distribution of Veklury;
Gilead’s ability to achieve its anticipated full year 2021
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 or strategic priorities 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, including those involving
Shoreline Biosciences, Inc.; Gilead’s ability to initiate, progress
or complete clinical trials within currently anticipated timeframes
or at all; the possibility of unfavorable results from ongoing and
additional clinical trials, including those involving Hepcludex
(bulevirtide), Tecartus, Trodelvy and Yescarta; the risk that
safety and efficacy data from clinical studies may not warrant
further development of Gilead’s product candidates, including those
involving lenacapavir, 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, including those involving Hepcludex
(bulevirtide) for treatment of HDV, Tecartus for treatment of
relapsed or refractory B-cell precursor acute lymphoblastic
leukemia and Yescarta for treatment of second-line relapsed or
refractory LBCL; Gilead’s ability to receive regulatory approvals
in a timely manner or at all, including FDA approval of lenacapavir
for treatment of HIV-1 infection in heavily treatment-experienced
people with multi-drug resistant infection, and the risk that any
such approvals 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; pricing and reimbursement pressures from
government agencies and other third parties, including required
rebates and other discounts; 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 SEC, including
annual reports on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K. 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 June 30,
2021 are not necessarily indicative of operating results for any
future periods. Gilead directs readers to its press releases,
annual reports on Form 10-K, quarterly reports on Form 10-Q 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.
The reader is cautioned that forward-looking statements are not
guarantees of future performance and is cautioned not to place
undue reliance on these 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®,
HEPCLUDEX® (BULEVIRTIDE), HEPSERA®, JYSELECA®, LETAIRIS®, ODEFSEY®,
RANEXA®, SOVALDI®, STRIBILD®, TECARTUS®, TRODELVY®, TRUVADA®,
TRUVADA FOR PREP®, TYBOST®, VEKLURY®, VEMLIDY®, VIREAD®, VOSEVI®,
YESCARTA® and ZYDELIG®. This report may also refer 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 OPERATIONS
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions, except per share
amounts)
2021
2020
2021
2020
Revenues:
Product sales
$
6,152
$
5,067
$
12,492
$
10,534
Royalty, contract and other revenues
65
76
148
157
Total revenues
6,217
5,143
12,640
10,691
Costs and expenses:
Cost of goods sold
1,390
1,064
2,751
2,033
Research and development expenses
1,134
1,299
2,189
2,303
Acquired in-process research and
development expenses
96
4,524
158
4,621
Selling, general and administrative
expenses
1,351
1,239
2,406
2,315
Total costs and expenses
3,971
8,126
7,504
11,272
Income (loss) from operations
2,246
(2,983
)
5,136
(581
)
Interest expense
(256
)
(240
)
(513
)
(481
)
Other income (expense), net
(173
)
250
(542
)
92
Income (loss) before income taxes
1,817
(2,973
)
4,081
(970
)
Income tax expense
(300
)
(373
)
(842
)
(838
)
Net income (loss)
1,517
(3,346
)
3,239
(1,808
)
Net loss attributable to noncontrolling
interest
5
7
12
20
Net income (loss) attributable to
Gilead
$
1,522
$
(3,339
)
$
3,251
$
(1,788
)
Net income (loss) per share attributable
to Gilead common stockholders - basic
$
1.21
$
(2.66
)
$
2.59
$
(1.42
)
Shares used in per share calculation -
basic
1,255
1,255
1,256
1,258
Net income (loss) per share attributable
to Gilead common stockholders - diluted
$
1.21
$
(2.66
)
$
2.58
$
(1.42
)
Shares used in per share calculation -
diluted
1,260
1,255
1,261
1,258
Cash dividends declared per share
$
0.71
$
0.68
$
1.42
$
1.36
GILEAD SCIENCES, INC.
TOTAL REVENUE SUMMARY
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions, except
percentages)
2021
2020
Change
2021
2020
Change
Product sales:
HIV
$
3,938
$
4,000
(2
)%
$
7,588
$
8,134
(7
)%
HCV
549
448
23
%
1,059
1,177
(10
)%
HBV/HDV(1)
237
219
8
%
457
405
13
%
Cell Therapy
219
157
39
%
410
297
38
%
Trodelvy
89
—
NM
161
—
NM
Other
291
243
20
%
532
521
2
%
Total product sales excluding Veklury
5,323
5,067
5
%
10,207
10,534
(3
)%
Veklury
829
—
NM
2,285
—
NM
Total product sales
6,152
5,067
21
%
12,492
10,534
19
%
Royalty, contract and other revenues
65
76
(14
)%
148
157
(6
)%
Total revenues
$
6,217
$
5,143
21
%
$
12,640
$
10,691
18
%
NM - Not Meaningful
(1)
The six months ended June 30, 2021
includes $13 million of Hepcludex sales recorded subsequent to
Gilead’s acquisition of MYR GmbH (“MYR”). The six months ended June
30, 2021 of Hepcludex sales, including the period prior to the
completion of Gilead’s acquisition of MYR, were $20 million.
GILEAD SCIENCES, INC.
NON-GAAP FINANCIAL
INFORMATION(1)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions, except
percentages)
2021
2020
Change
2021
2020
Change
Non-GAAP:
Cost of goods sold
$
836
$
798
5
%
$
1,691
$
1,501
13
%
Research and development expenses
$
1,084
$
1,186
(9
)%
$
2,133
$
2,190
(3
)%
Selling, general and administrative
expenses
$
1,121
$
1,164
(4
)%
$
2,154
$
2,240
(4
)%
Other income (expense), net
$
1
$
49
(98
)%
$
(17
)
$
174
(110
)%
Diluted EPS
$
1.87
$
1.11
68
%
$
3.95
$
2.80
41
%
Product gross margin
86.4
%
84.3
%
210 bps
86.5
%
85.8
%
70 bps
Research and development expenses as a %
of revenues
17.4
%
23.1
%
(6
)%
16.9
%
20.5
%
(4
)%
Selling, general and administrative
expenses as a % of revenues
18.0
%
22.6
%
(5
)%
17.0
%
21.0
%
(4
)%
Operating expenses as a % of revenues
35.5
%
45.7
%
(10
)%
33.9
%
41.4
%
(8
)%
Operating margin
51.1
%
38.8
%
1230 bps
52.7
%
44.5
%
820 bps
Effective tax rate
19.6
%
22.8
%
(3
)%
19.0
%
21.0
%
(2
)%
NM - Not Meaningful
(1)
A reconciliation between GAAP and non-GAAP
financial information is provided in the accompanying tables.
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL INFORMATION
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions, except percentages and
per share amounts)
2021
2020
2021
2020
Cost of goods sold
reconciliation:
GAAP cost of goods sold
$
1,390
$
1,064
$
2,751
$
2,033
Acquisition-related – amortization of
acquired intangibles and inventory step-up charges
(554
)
(266
)
(1,060
)
(532
)
Non-GAAP cost of goods sold
$
836
$
798
$
1,691
$
1,501
Product gross margin
reconciliation:
GAAP product gross margin
77.4
%
79.0
%
78.0
%
80.7
%
Acquisition-related – amortization of
acquired intangibles and inventory step-up charges
9.0
%
5.2
%
8.5
%
5.1
%
Non-GAAP product gross margin(1)
86.4
%
84.3
%
86.5
%
85.8
%
Research and development expenses
reconciliation:
GAAP research and development expenses
$
1,134
$
1,299
$
2,189
$
2,303
Acquisition-related – other costs(2)
(6
)
(113
)
(12
)
(113
)
Other
(44
)
—
(44
)
—
Non-GAAP research and development
expenses
$
1,084
$
1,186
$
2,133
$
2,190
Acquired IPR&D expenses
reconciliation:
GAAP acquired IPR&D expenses
$
96
$
4,524
$
158
$
4,621
Acquired IPR&D expenses
(96
)
(4,524
)
(158
)
(4,621
)
Non-GAAP acquired IPR&D expenses
$
—
$
—
$
—
$
—
Selling, general and administrative
expenses reconciliation:
GAAP selling, general and administrative
expenses
$
1,351
$
1,239
$
2,406
$
2,315
Acquisition-related – other costs(2)
(10
)
(77
)
(32
)
(77
)
Other(3)
(220
)
2
(220
)
2
Non-GAAP selling, general and
administrative expenses
$
1,121
$
1,164
$
2,154
$
2,240
Operating income
reconciliation:
GAAP operating income (loss)
$
2,246
$
(2,983
)
$
5,136
$
(581
)
Acquired IPR&D expenses
96
4,524
158
4,621
Acquisition-related – amortization of
acquired intangibles and inventory step-up charges
554
266
1,060
532
Acquisition-related – other costs(2)
16
190
44
190
Other(3)
264
(2
)
264
(2
)
Non-GAAP operating income
$
3,176
$
1,995
$
6,662
$
4,760
Operating margin
reconciliation:
GAAP operating margin
36.1
%
(58.0
)
%
40.6
%
(5.4
)
%
Acquired IPR&D expenses
1.5
%
88.0
%
1.2
%
43.2
%
Acquisition-related – amortization of
acquired intangibles and inventory step-up charges
8.9
%
5.2
%
8.4
%
5.0
%
Acquisition-related – other costs(2)
0.3
%
3.7
%
0.3
%
1.8
%
Other(3)
4.2
%
—
%
2.1
%
—
%
Non-GAAP operating margin(1)
51.1
%
38.8
%
52.7
%
44.5
%
Other income (expense), net
reconciliation:
GAAP other income (expense), net
$
(173
)
$
250
$
(542
)
$
92
Losses (gains) from equity securities,
net
174
(201
)
525
82
Non-GAAP other income (expense), net
$
1
$
49
$
(17
)
$
174
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL INFORMATION - (Continued)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions, except percentages and
per share amounts)
2021
2020
2021
2020
Effective tax rate
reconciliation:
GAAP effective tax rate
16.5
%
(12.5
)
%
20.6
%
(86.4
)
%
Income tax effect of above non-GAAP
adjustments and discrete and related tax adjustments
3.1
%
35.3
%
(1.6
)
%
107.4
%
Non-GAAP effective tax rate(1)
19.6
%
22.8
%
19.0
%
21.0
%
Net income attributable to Gilead
reconciliation:
GAAP net income (loss) attributable to
Gilead
$
1,522
$
(3,339
)
$
3,251
$
(1,788
)
Acquired IPR&D expenses (after
tax)
75
4,514
125
4,589
Acquisition-related – amortization of
acquired intangibles and inventory step-up charges (after tax)
446
224
855
448
Acquisition-related – other costs (after
tax)(2)
15
148
37
148
Losses (gains) from equity securities, net
(after tax)
169
(149
)
533
107
Discrete and related tax charges
(benefits)(4)
(40
)
4
14
37
Other (after tax)(3)
166
(2
)
166
(2
)
Non-GAAP net income attributable to
Gilead
$
2,353
$
1,400
$
4,981
$
3,539
Diluted EPS reconciliation:
GAAP diluted earnings (loss) per share
$
1.21
$
(2.66
)
$
2.58
$
(1.42
)
Acquired IPR&D expenses
0.06
3.58
0.10
3.62
Acquisition-related – amortization of
acquired intangibles and inventory step-up charges
0.35
0.18
0.68
0.35
Acquisition-related – other costs(2)
0.01
0.12
0.03
0.12
Losses (gains) from equity securities,
net
0.13
(0.12
)
0.42
0.08
Discrete and related tax charges
(benefits)(4)
(0.03
)
—
0.01
0.03
Other(3)
0.13
—
0.13
—
Non-GAAP diluted EPS(1)
$
1.87
$
1.11
$
3.95
$
2.80
Non-GAAP adjustment summary:
Cost of goods sold adjustments
$
554
$
266
$
1,060
$
532
Research and development expenses
adjustments
50
113
56
113
Acquired IPR&D expenses
adjustments
96
4,524
158
4,621
Selling, general and administrative
expenses adjustments
230
75
252
75
Total non-GAAP adjustments before other
income (expense), net, and income taxes
930
4,978
1,526
5,341
Other income (expense), net,
adjustments
174
(201
)
525
82
Total non-GAAP adjustments before income
taxes
1,104
4,777
2,051
5,423
Income tax effect of non-GAAP adjustments
above
(233
)
(42
)
(335
)
(133
)
Discrete and related tax charges
(benefits)(4)
(40
)
4
14
37
Total non-GAAP adjustments after tax
$
831
$
4,739
$
1,730
$
5,327
(1)
Amounts may not sum due to rounding.
(2)
Includes primarily employee-related
expenses and contingent consideration, as well as other expenses
associated with Gilead’s acquisitions of Immunomedics, Inc., Forty
Seven, Inc. and MYR GmbH.
(3)
Includes primarily a significant donation
of equity securities to the Gilead Foundation, a California
nonprofit public benefit corporation.
(4)
Primarily represents discrete and related
deferred tax charges or benefits associated with a transfer of
intangible assets from a foreign subsidiary to Ireland and the
United States.
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO
NON-GAAP 2021 FULL YEAR GUIDANCE(1)
(unaudited)
(in millions, except percentages and
per share amounts)
Provided
February 4, 2021
Updated
April 29, 2021
Updated
July 29, 2021
Projected product sales GAAP to
non-GAAP reconciliation:
GAAP projected product sales
$23,700 - $25,100
Unchanged
$24,400 - $25,000
Less: Veklury sales
2,000 - 3,000
2,700 - 3,100
Non-GAAP projected product sales excluding
Veklury sales
$21,700 - $22,100
$21,700 - $21,900
Projected product gross margin GAAP to
non-GAAP reconciliation:
GAAP projected product gross margin
78% - 79%
Unchanged
77% - 78%
Acquisition-related expenses
9%
9%
Non-GAAP projected product gross
margin
87% - 88%
86% - 87%
Projected operating income GAAP to
non-GAAP reconciliation:
GAAP projected operating income
$9,300 - $10,700
$9,000 - $10,400
$9,200 - $9,900
Acquisition-related, acquired IPR&D
and other expenses
2,200
2,500
2,700
Non-GAAP projected operating income
$11,500 - $12,900
$11,500 - $12,900
$11,900 - $12,600
Projected effective tax rate GAAP to
non-GAAP reconciliation:
GAAP projected effective tax rate
~ 23%
Unchanged
Unchanged
Less: Income tax effect of non-GAAP
adjustments and discrete and related tax adjustments
2%
Non-GAAP projected effective tax rate
~ 21%
Projected diluted EPS GAAP to non-GAAP
reconciliation:
GAAP projected diluted EPS
$5.25 - $5.95
$4.75 - $5.45
$4.70 - $5.05
Acquisition-related, acquired IPR&D
and other expenses, historical fair value adjustments of equity
securities, related tax effects as well as discrete and related tax
adjustments
1.50
2.00
2.20
Non-GAAP projected diluted EPS
$6.75 - $7.45
$6.75 - $7.45
$6.90 - $7.25
(1)
The 2021 guidance non-GAAP financial
information excludes the impact of any potential future
acquisition-related, acquired IPR&D and other expenses, fair
value adjustments of equity securities and discrete tax and related
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)
June 30,
December 31,
(in millions)
2021
2020
Assets
Cash, cash equivalents and marketable
securities
$
7,361
$
7,910
Accounts receivable, net
4,149
4,892
Inventories
2,988
3,014
Property, plant and equipment, net
4,996
4,967
Intangible assets, net
34,341
33,126
Goodwill
8,334
8,108
Other assets
5,815
6,390
Total assets
$
67,984
$
68,407
Liabilities and Stockholders’
Equity
Current liabilities
$
10,214
$
11,397
Long-term liabilities
38,060
38,789
Stockholders’ equity(1)
19,710
18,221
Total liabilities and stockholders’
equity
$
67,984
$
68,407
(1)
As of June 30, 2021 and December 31, 2020,
there were 1,254 shares of common stock issued and outstanding.
GILEAD SCIENCES, INC.
SELECTED CASH FLOW
INFORMATION
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions)
2021
2020
2021
2020
Net cash provided by operating
activities
$
2,316
$
2,566
$
4,926
$
4,002
Net cash used in investing activities
(577
)
(5,023
)
(2,619
)
(5,367
)
Net cash used in financing activities
(931
)
(874
)
(3,408
)
(3,485
)
Effect of exchange rate changes on cash
and cash equivalents
20
26
(3
)
(35
)
Net change in cash and cash
equivalents
828
(3,305
)
(1,104
)
(4,885
)
Cash and cash equivalents at beginning of
period
4,065
10,051
5,997
11,631
Cash and cash equivalents at end of
period
$
4,893
$
6,746
$
4,893
$
6,746
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions)
2021
2020
2021
2020
Net cash provided by operating
activities
$
2,316
$
2,566
$
4,926
$
4,002
Capital expenditures
(119
)
(143
)
(284
)
(314
)
Free cash flow
$
2,197
$
2,423
$
4,642
$
3,688
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions)
2021
2020
2021
2020
HIV Products
Descovy (FTC/TAF) Based
Products
Biktarvy – U.S.
$
1,586
$
1,350
$
3,051
$
2,762
Biktarvy – Europe
237
153
453
334
Biktarvy – Other International
171
101
314
201
1,994
1,604
3,818
3,297
Descovy – U.S.
357
337
639
700
Descovy – Europe
44
46
86
107
Descovy – Other International
34
34
69
68
435
417
794
875
Genvoya – U.S.
551
646
1,057
1,258
Genvoya – Europe
100
109
206
260
Genvoya – Other International
55
61
116
122
706
816
1,379
1,640
Odefsey – U.S.
258
273
498
542
Odefsey – Europe
111
98
224
225
Odefsey – Other International
13
11
27
24
382
382
749
791
Revenue share – Symtuza(1) – U.S.
86
90
175
162
Revenue share – Symtuza(1) – Europe
40
40
84
78
Revenue share – Symtuza(1) – Other
International
3
2
5
4
129
132
264
244
Total Descovy (FTC/TAF) Based Products –
U.S.
2,838
2,696
5,420
5,424
Total Descovy (FTC/TAF) Based Products –
Europe
532
446
1,053
1,004
Total Descovy (FTC/TAF) Based Products –
Other International
276
209
531
419
3,646
3,351
7,004
6,847
Truvada (FTC/TDF) Based
Products
Atripla – U.S.
52
95
75
176
Atripla – Europe
4
5
8
12
Atripla – Other International
4
3
8
10
60
103
91
198
Complera / Eviplera – U.S.
20
27
45
51
Complera / Eviplera – Europe
39
42
73
89
Complera / Eviplera – Other
International
3
3
7
8
62
72
125
148
Stribild – U.S.
35
39
66
73
Stribild – Europe
11
12
22
29
Stribild – Other International
5
8
9
10
51
59
97
112
Truvada – U.S.
94
370
213
753
Truvada – Europe
6
6
13
14
Truvada – Other International
8
11
17
26
108
387
243
793
Total Truvada (FTC/TDF) Based Products –
U.S.
201
531
399
1,053
Total Truvada (FTC/TDF) Based Products –
Europe
60
65
116
144
Total Truvada (FTC/TDF) Based Products –
Other International
20
25
41
54
281
621
556
1,251
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY -
(Continued)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions)
2021
2020
2021
2020
Other HIV(2) – U.S.
5
11
11
14
Other HIV(2) – Europe
4
1
5
3
Other HIV(2) – Other International
2
16
12
19
11
28
28
36
Total HIV – U.S.
3,044
3,238
5,830
6,491
Total HIV – Europe
596
512
1,174
1,151
Total HIV – Other International
298
250
584
492
3,938
4,000
7,588
8,134
HCV Products
Ledipasvir / Sofosbuvir(3) – U.S.
30
24
49
77
Ledipasvir / Sofosbuvir(3) – Europe
3
4
19
15
Ledipasvir / Sofosbuvir(3) – Other
International
29
39
50
87
62
67
118
179
Sofosbuvir / Velpatasvir(4) – U.S.
262
165
476
476
Sofosbuvir / Velpatasvir(4) – Europe
82
57
157
179
Sofosbuvir / Velpatasvir(4) – Other
International
98
113
190
244
442
335
823
899
Other HCV(5) – U.S.
35
31
60
65
Other HCV(5) – Europe
8
9
52
24
Other HCV(5) – Other International
2
6
6
10
45
46
118
99
Total HCV – U.S.
327
220
585
618
Total HCV – Europe
93
70
228
218
Total HCV – Other International
129
158
246
341
549
448
1,059
1,177
HBV/HDV Products
Vemlidy – U.S.
86
76
163
149
Vemlidy – Europe
8
7
16
14
Vemlidy – Other International
106
68
202
124
200
151
381
287
Viread – U.S.
3
3
7
7
Viread – Europe
8
8
15
19
Viread – Other International
17
54
37
79
28
65
59
105
Other HBV/HDV(6) – U.S.
1
1
1
9
Other HBV/HDV(6) – Europe
8
2
16
4
9
3
17
13
Total HBV/HDV – U.S.
90
80
171
165
Total HBV/HDV – Europe
24
17
47
37
Total HBV/HDV – Other International
123
122
239
203
237
219
457
405
Veklury
Veklury – U.S.
416
—
1,236
—
Veklury – Europe
264
—
652
—
Veklury – Other International
149
—
397
—
829
—
2,285
—
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY -
(Continued)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions)
2021
2020
2021
2020
Cell Therapy
Products
Tecartus – U.S.
32
—
59
—
Tecartus – Europe
9
1
13
1
41
1
72
1
Yescarta – U.S.
108
95
200
198
Yescarta – Europe
61
56
122
93
Yescarta – Other International
9
5
16
5
178
156
338
296
Total Cell Therapy – U.S.
140
95
259
198
Total Cell Therapy – Europe
70
57
135
94
Total Cell Therapy – Other
International
9
5
16
5
219
157
410
297
Trodelvy -
U.S.
89
—
161
—
Other
Products
AmBisome – U.S.
13
10
25
28
AmBisome – Europe
69
49
135
108
AmBisome – Other International
74
36
117
78
156
95
277
214
Letairis – U.S.
57
80
111
163
Ranexa – U.S.
2
1
5
9
Zydelig – U.S.
8
8
16
16
Zydelig – Europe
13
9
20
21
Zydelig – Other International
1
1
1
1
22
18
37
38
Other(7) – U.S.
27
38
54
71
Other(7) – Europe
18
10
31
22
Other(7) – Other International
9
1
17
4
54
49
102
97
Total Other – U.S.
107
137
211
287
Total Other – Europe
100
68
186
151
Total Other – Other International
84
38
135
83
291
243
532
521
Total product sales – U.S.
4,213
3,770
8,453
7,759
Total product sales – Europe
1,147
724
2,422
1,651
Total product sales – Other
International
792
573
1,617
1,124
$
6,152
$
5,067
$
12,492
$
10,534
(1)
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.
(2)
Includes Emtriva and Tybost.
(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 Vosevi and Sovaldi.
(6)
The six months ended June 30, 2021
includes $13 million of Hepcludex sales recorded subsequent to
Gilead’s acquisition of MYR. The six months ended June 30, 2021 of
Hepcludex sales, including the period prior to the completion of
Gilead’s acquisition of MYR, were $20 million.
(7)
Includes Cayston and Jyseleca.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210729005981/en/
Investors: Jacquie Ross, CFA (650) 358-1054
Media: Sonia Choi (650) 425-5483
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