Full Press Release Details
| CONTACTS: | Investors | Media | ||
| Robin Washington | Amy Flood | |||
| (650) 522-5688 | (650) 522-5643 | |||
| Sung Lee | ||||
| (650) 524-7792 | ||||
| For Immediate Release |
GILEAD SCIENCES ANNOUNCES THIRD QUARTER 2019 FINANCIAL RESULTS
- Product Sales of $5.5 billion -
- GAAP Loss of $0.92 per share -
- Non-GAAP Diluted EPS of $1.75 per share -
- Revised Full Year 2019 Guidance -
Foster City, CA, October 24, 2019 - Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the third quarter ended September 30, 2019. The financial results that follow represent a year-over-year comparison of the third quarter of 2019 to the third quarter of 2018. Total revenues were $5.6 billion for the third quarter of 2019 compared to $5.6 billion for the same period in 2018. Net loss for the third quarter of 2019 was $1.2 billion, or $0.92 per diluted share, compared to net income of $2.1 billion or $1.60 per diluted share for the same period in 2018. The net loss for the third quarter of 2019 includes up-front collaboration and licensing expenses of $3.92 billion, or $2.40 per share, related to Gilead's global research and development collaboration agreement with Galapagos NV (Galapagos). Non-GAAP net income was $2.2 billion or $1.75 per diluted share for the third quarter of 2019 compared to $2.4 billion or $1.84 per diluted share for the same period in 2018.
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (In millions, except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Product sales | $ | 5,516 | $ | 5,455 | $ | 16,323 | $ | 15,996 | ||||||||
| Royalty, contract and other revenues | 88 | 141 | 247 | 336 | ||||||||||||
| Total revenues | $ | 5,604 | $ | 5,596 | $ | 16,570 | $ | 16,332 | ||||||||
| Net income (loss) attributable to Gilead | $ | (1,165 | ) | $ | 2,097 | $ | 2,690 | $ | 5,452 | |||||||
| Non-GAAP net income | $ | 2,224 | $ | 2,403 | $ | 6,813 | $ | 6,855 | ||||||||
| Diluted earnings (loss) per share | $ | (0.92 | ) | $ | 1.60 | $ | 2.10 | $ | 4.15 | |||||||
| Non-GAAP diluted earnings per share | $ | 1.75 | $ | 1.84 | $ | 5.33 | $ | 5.22 |
___________________________________
Note: 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 7 through 9.
| Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA | www.gilead.com |
| phone (650) 574-3000 facsimile (650) 578-9264 |
Total product sales for the third quarter of 2019 were $5.5 billion compared to $5.5 billion for the same period in 2018. For the third quarter of 2019, product sales in the United States, Europe and other locations were $4.2 billion, $804 million and $513 million, respectively. For the third quarter of 2018, product sales in the United States, Europe and other locations were $4.1 billion, $873 million and $451 million, respectively.
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Research and development expenses (R&D) | $ | 4,990 | $ | 939 | $ | 7,207 | $ | 3,068 | ||||||||
| Non-GAAP R&D expenses | $ | 954 | $ | 844 | $ | 2,741 | $ | 2,579 | ||||||||
| Selling, general and administrative expenses (SG&A) | $ | 1,052 | $ | 948 | $ | 3,177 | $ | 2,925 | ||||||||
| Non-GAAP SG&A expenses | $ | 967 | $ | 852 | $ | 2,944 | $ | 2,576 |
During the third quarter of 2019, compared to the same period in 2018:
Cash, Cash Equivalents and Marketable Debt Securities
As of September 30, 2019, Gilead had $25.1 billion of cash, cash equivalents and marketable debt securities, compared to $31.5 billion as of December 31, 2018. During the third quarter of 2019, Gilead generated $2.6 billion in operating cash flow, paid $5.05 billion in connection with the global research and development collaboration agreement and stock purchase agreement with Galapagos, repaid $1.5 billion of debt, paid cash dividends of $804 million and utilized $223 million on stock repurchases. The $5.05 billion paid to Galapagos was classified as cash flows from investing activities and included a $1.1 billion equity investment.
Revised Full Year 2019 Guidance
Gilead revised its full year 2019 guidance, initially provided on February 4, 2019 and revised on July 30, 2019.
| (In millions, except percentages and per share amounts) | Initially Provided February 4, 2019 Reiterated May 2, 2019 | Updated July 30, 2019 | Updated October 24, 2019 | |||
| Product Sales | $21,300 - $21,800 | $21,600 - $22,100 | $21,800 - $22,100 | |||
| Non-GAAP | ||||||
| Product Gross Margin | 85% - 87% | 85% - 87% | 85% - 87% | |||
| R&D Expenses | $3,600 - $3,800 | $3,600 - $3,800 | $3,700 - $3,800 | |||
| SG&A Expenses | $3,900 - $4,100 | $3,900 - $4,100 | $4,000 - $4,100 | |||
| Effective Tax Rate | 20.0% - 21.0% | 20.0% - 21.0% | 20.0% - 21.0% | |||
| Diluted EPS Impact of Acquisition-related, Up-front Collaboration and Licensing, Stock-based Compensation and Other Expenses | $1.40 - $1.50 | $3.90 - $4.00 | $3.90 - $4.00 |
Corporate Highlights, Including the Announcement of:
Product and Pipeline Updates, Including the Announcement of:
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 7 through 9.
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 6094972 to access the call. Telephone replay will be available approximately two hours after the call through 8:00 p.m. Eastern Time, October 26, 2019. To access the replay, please call 855-859-2056 (U.S.) or 404-537-3406 (international) and dial the conference ID 6094972. 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 2019 financial results; Gilead's ability to sustain growth in revenues for its antiviral and other programs; the risk that private and public payers may be reluctant to provide, or continue to provide, coverage or reimbursement for new products; austerity measures in European countries that may increase the amount of discount required on Gilead's products; an increase in discounts, chargebacks and rebates due to ongoing contracts and future negotiations with commercial and government payers; a larger than anticipated shift in payer mix to more highly discounted payer segments and geographic regions and decreases in treatment duration; availability of funding for state AIDS Drug Assistance Programs (ADAPs); continued fluctuations in ADAP purchases driven by federal and state grant cycles as well as purchases by retail pharmacies and other non-
wholesaler locations with whom Gilead has no inventory management agreements may not mirror patient demand and may cause fluctuations in Gilead's earnings; market share and price erosion caused by the introduction of generic versions of our products; an uncertain global macroeconomic environment; potential amendments to the Affordable Care Act or other government action that could have the effect of lowering prices or reducing the number of insured patients; Gilead's ability to initiate clinical trials in its currently anticipated timeframes; the levels of inventory held by wholesalers and retailers which may cause fluctuations in Gilead's earnings; Gilead's ability to realize the potential benefits of collaborations or licensing arrangements, including with Galapagos and Renown; Gilead's ability to submit new drug applications for new product candidates in the timelines currently anticipated, including a new drug application to FDA for filgotinib for the treatment of RA; Gilead's ability to receive regulatory approvals in a timely manner or at all, for new and current products, including EMA and MHLW approvals for filgotinib; Gilead's ability to successfully commercialize its products, including Yescarta and Biktarvy in China; the risk that physicians and patients may not see advantages of these products over other therapies and may therefore be reluctant to prescribe the products; safety and efficacy data from clinical studies may not warrant further development of Gilead's product candidates, including filgotinib; Gilead's ability to pay dividends or complete its share repurchase program due to changes in its stock price, corporate or other market conditions; fluctuations in the foreign exchange rate of the U.S. dollar that may cause an unfavorable foreign currency exchange impact on Gilead's future revenues and pre-tax earnings; and other risks identified from time to time in Gilead's reports filed with the U.S. Securities and Exchange Commission (the SEC). In addition, Gilead makes estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. Gilead bases its estimates on historical experience and on various other market specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There may be other factors of which Gilead is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ significantly from these estimates. Further, results for the quarter ended September 30, 2019 are not necessarily indicative of operating results for any future periods. You are urged to consider statements that include the words may, will, would, could, should, might, believes, estimates, projects, potential, expects, plans, anticipates, intends, continues, forecast, designed, goal or the negative of those words or other comparable words to be uncertain and forward-looking. Gilead directs readers to its press releases, Quarterly Report on Form 10-Q for the quarter ended June 30, 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 Eyetech, Inc. SYMTUZA is a registered trademark of Janssen Sciences Ireland UC. TAMIFLU is a registered trademark of Hoffmann-La Roche Inc.
For more information on Gilead Sciences, Inc., please visit www.gilead.com or
call the Gilead Public Affairs Department at 1-800-GILEAD-5 (1-800-445-3235).
GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenues: | ||||||||||||||||
| Product sales | $ | 5,516 | $ | 5,455 | $ | 16,323 | $ | 15,996 | ||||||||
| Royalty, contract and other revenues | 88 | 141 | 247 | 336 | ||||||||||||
| Total revenues | 5,604 | 5,596 | 16,570 | 16,332 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of goods sold | 1,035 | 1,086 | 2,992 | 3,283 | ||||||||||||
| Research and development expenses | 4,990 | 939 | 7,207 | 3,068 | ||||||||||||
| Selling, general and administrative expenses | 1,052 | 948 | 3,177 | 2,925 | ||||||||||||
| Total costs and expenses | 7,077 | 2,973 | 13,376 | 9,276 | ||||||||||||
| Income (loss) from operations | (1,473 | ) | 2,623 | 3,194 | 7,056 | |||||||||||
| Interest expense | (250 | ) | (264 | ) | (752 | ) | (820 | ) | ||||||||
| Other income (expense), net | 222 | 305 | 817 | 547 | ||||||||||||
| Income (loss) before provision (benefit) for income taxes | (1,501 | ) | 2,664 | 3,259 | 6,783 | |||||||||||
| Provision (benefit) for income taxes | (333 | ) | 565 | 584 | 1,326 | |||||||||||
| Net income (loss) | (1,168 | ) | 2,099 | 2,675 | 5,457 | |||||||||||
| Net income (loss) attributable to noncontrolling interest | (3 | ) | 2 | (15 | ) | 5 | ||||||||||
| Net income (loss) attributable to Gilead | $ | (1,165 | ) | $ | 2,097 | $ | 2,690 | $ | 5,452 | |||||||
| Net income (loss) per share attributable to Gilead common stockholders - basic | $ | (0.92 | ) | $ | 1.62 | $ | 2.12 | $ | 4.19 | |||||||
| Shares used in per share calculation - basic | 1,267 | 1,296 | 1,271 | 1,302 | ||||||||||||
| Net income (loss) per share attributable to Gilead common stockholders - diluted | $ | (0.92 | ) | $ | 1.60 | $ | 2.10 | $ | 4.15 | |||||||
| Shares used in per share calculation - diluted | 1,267 | 1,307 | 1,278 | 1,313 | ||||||||||||
| Cash dividends declared per share | $ | 0.63 | $ | 0.57 | $ | 1.89 | $ | 1.71 |
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(in millions, except percentages and per share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Cost of goods sold reconciliation: | ||||||||||||||||
| GAAP cost of goods sold | $ | 1,035 | $ | 1,086 | $ | 2,992 | $ | 3,283 | ||||||||
| Acquisition-related - amortization of purchased intangibles | (266 | ) | (301 | ) | (822 | ) | (902 | ) | ||||||||
| Stock-based compensation expenses (1) | (10 | ) | (15 | ) | (37 | ) | (49 | ) | ||||||||
| Other (2) | - | 1 | - | 1 | ||||||||||||
| Non-GAAP cost of goods sold | $ | 759 | $ | 771 | $ | 2,133 | $ | 2,333 | ||||||||
| Product gross margin reconciliation: | ||||||||||||||||
| GAAP product gross margin | 81.2 | % | 80.1 | % | 81.7 | % | 79.5 | % | ||||||||
| Acquisition-related - amortization of purchased intangibles | 4.8 | % | 5.5 | % | 5.0 | % | 5.6 | % | ||||||||
| Stock-based compensation expenses | 0.2 | % | 0.3 | % | 0.2 | % | 0.3 | % | ||||||||
| Non-GAAP product gross margin (5) | 86.2 | % | 85.9 | % | 86.9 | % | 85.4 | % | ||||||||
| Research and development expenses reconciliation: | ||||||||||||||||
| GAAP research and development expenses | $ | 4,990 | $ | 939 | $ | 7,207 | $ | 3,068 | ||||||||
| Up-front collaboration and licensing expenses | (3,960 | ) | - | (4,251 | ) | (160 | ) | |||||||||
| Acquisition-related - other costs | - | 3 | - | (22 | ) | |||||||||||
| Stock-based compensation expenses (1) | (74 | ) | (99 | ) | (215 | ) | (304 | ) | ||||||||
| Other (2) | (2 | ) | 1 | - | (3 | ) | ||||||||||
| Non-GAAP research and development expenses | $ | 954 | $ | 844 | $ | 2,741 | $ | 2,579 | ||||||||
| Selling, general and administrative expenses reconciliation: | ||||||||||||||||
| GAAP selling, general and administrative expenses | $ | 1,052 | $ | 948 | $ | 3,177 | $ | 2,925 | ||||||||
| Acquisition-related - other costs | - | (8 | ) | - | (23 | ) | ||||||||||
| Stock-based compensation expenses (1) | (78 | ) | (84 | ) | (227 | ) | (317 | ) | ||||||||
| Other (2) | (7 | ) | (4 | ) | (6 | ) | (9 | ) | ||||||||
| Non-GAAP selling, general and administrative expenses | $ | 967 | $ | 852 | $ | 2,944 | $ | 2,576 | ||||||||
| Operating margin reconciliation: | ||||||||||||||||
| GAAP operating margin | (26.3 | )% | 46.9 | % | 19.3 | % | 43.2 | % | ||||||||
| Up-front collaboration and licensing expenses | 70.7 | % | - | % | 25.7 | % | 1.0 | % | ||||||||
| Acquisition-related - amortization of purchased intangibles | 4.7 | % | 5.4 | % | 5.0 | % | 5.5 | % | ||||||||
| Acquisition-related - other costs | - | % | 0.1 | % | - | % | 0.3 | % | ||||||||
| Stock-based compensation expenses | 2.9 | % | 3.5 | % | 2.9 | % | 4.1 | % | ||||||||
| Other (2) | 0.2 | % | - | % | - | % | 0.1 | % | ||||||||
| Non-GAAP operating margin (5) | 52.2 | % | 55.9 | % | 52.8 | % | 54.2 | % | ||||||||
| Other income (expense), net reconciliation: | ||||||||||||||||
| GAAP other income (expense), net | $ | 222 | $ | 305 | $ | 817 | $ | 547 | ||||||||
| Unrealized gains from equity securities, net | (58 | ) | (168 | ) | (312 | ) | (149 | ) | ||||||||
| Non-GAAP other income (expense), net | $ | 164 | $ | 137 | $ | 505 | $ | 398 |
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION - (Continued)
(in millions, except percentages and per share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Effective tax rate reconciliation: | ||||||||||||||||
| GAAP effective tax rate | 22.2 | % | 21.2 | % | 17.9 | % | 19.5 | % | ||||||||
| Up-front collaboration and licensing expenses | 0.6 | % | - | % | 2.6 | % | 0.1 | % | ||||||||
| Acquisition-related - amortization of purchased intangibles | (1.6 | )% | (1.5 | )% | (1.3 | )% | (1.5 | )% | ||||||||
| Stock-based compensation expenses (1) | (0.4 | )% | (1.0 | )% | (0.2 | )% | (0.1 | )% | ||||||||
| Unrealized gains from equity securities, net | 0.9 | % | 1.3 | % | 1.0 | % | 0.4 | % | ||||||||
| Tax Reform adjustments (3) | - | % | - | % | - | % | 0.1 | % | ||||||||
| Non-GAAP effective tax rate (5) | 21.7 | % | 19.9 | % | 20.1 | % | 18.5 | % | ||||||||
| Net income (loss) attributable to Gilead reconciliation: | ||||||||||||||||
| GAAP net income (loss) attributable to Gilead | $ | (1,165 | ) | $ | 2,097 | $ | 2,690 | $ | 5,452 | |||||||
| Up-front collaboration and licensing expenses | 3,068 | - | 3,294 | 125 | ||||||||||||
| Acquisition-related - amortization of purchased intangibles | 247 | 281 | 759 | 843 | ||||||||||||
| Acquisition-related - other costs | - | 4 | - | 36 | ||||||||||||
| Stock-based compensation expenses (1) | 133 | 184 | 385 | 546 | ||||||||||||
| Unrealized gains from equity securities, net | (66 | ) | (164 | ) | (320 | ) | (146 | ) | ||||||||
| Tax Reform adjustments (3) | - | - | - | (10 | ) | |||||||||||
| Other (2) | 7 | 1 | 5 | 9 | ||||||||||||
| Non-GAAP net income attributable to Gilead | $ | 2,224 | $ | 2,403 | $ | 6,813 | $ | 6,855 | ||||||||
| Diluted earnings (loss) per share reconciliation: | ||||||||||||||||
| GAAP diluted earnings (loss) per share (4) | $ | (0.92 | ) | $ | 1.60 | $ | 2.10 | $ | 4.15 | |||||||
| Up-front collaboration and licensing expenses | 2.41 | - | 2.58 | 0.10 | ||||||||||||
| Acquisition-related - amortization of purchased intangibles | 0.19 | 0.21 | 0.59 | 0.64 | ||||||||||||
| Acquisition-related - other costs | - | - | - | 0.03 | ||||||||||||
| Stock-based compensation expenses (1) | 0.10 | 0.14 | 0.30 | 0.42 | ||||||||||||
| Unrealized gains from equity securities, net | (0.05 | ) | (0.13 | ) | (0.25 | ) | (0.11 | ) | ||||||||
| Tax Reform adjustments (3) | - | - | - | (0.01 | ) | |||||||||||
| Other (2) | 0.01 | - | - | 0.01 | ||||||||||||
| Non-GAAP diluted earnings per share (5) | $ | 1.75 | $ | 1.84 | $ | 5.33 | $ | 5.22 | ||||||||
| Non-GAAP adjustment summary: | ||||||||||||||||
| Cost of goods sold adjustments | $ | 276 | $ | 315 | $ | 859 | $ | 950 | ||||||||
| Research and development expenses adjustments | 4,036 | 95 | 4,466 | 489 | ||||||||||||
| Selling, general and administrative expenses adjustments | 85 | 96 | 233 | 349 | ||||||||||||
| Other income (expense), net adjustments | (58 | ) | (168 | ) | (312 | ) | (149 | ) | ||||||||
| Total non-GAAP adjustments before tax | 4,339 | 338 | 5,246 | 1,639 | ||||||||||||
| Income tax effect | (950 | ) | (32 | ) | (1,123 | ) | (226 | ) | ||||||||
| Tax Reform adjustments (3) | - | - | - | (10 | ) | |||||||||||
| Total non-GAAP adjustments after tax | $ | 3,389 | $ | 306 | $ | 4,123 | $ | 1,403 | ||||||||
| ____________________ | ||||||||||||||||
| Notes: | ||||||||||||||||
| (1) The decreases were primarily due to stock-based compensation expenses incurred in 2018 following Gilead's acquisition of Kite Pharma, Inc. | ||||||||||||||||
| (2) Amounts represent restructuring, contingent consideration and/or other individually insignificant amounts | ||||||||||||||||
| (3) Amounts represent measurement period adjustments relating to the enactment of the 2017 Tax Cuts and Jobs Act (Tax Reform) | ||||||||||||||||
| (4) Shares used in loss per share calculation for the three months ended September 30, 2019 exclude 7 million shares from dilutive equity awards | ||||||||||||||||
| (5) Amounts may not sum due to rounding |
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP 2019 FULL YEAR GUIDANCE
(in millions, except percentages and per share amounts)
| Initially Provided February 4, 2019 Reiterated May 2, 2019 | Updated July 30, 2019 | Updated October 24, 2019 | ||||
| Projected product gross margin GAAP to non-GAAP reconciliation: | ||||||
| GAAP projected product gross margin | 80% - 81% | 80% - 81% | 80% - 81% | |||
| Acquisition-related expenses | 5% - 6% | 5% - 6% | 5% - 6% | |||
| Non-GAAP projected product gross margin (1) | 85% - 87% | 85% - 87% | 85% - 87% | |||
| Projected research and development expenses GAAP to non-GAAP reconciliation: | ||||||
| GAAP projected research and development expenses | $4,195 - $4,480 | $8,290 - $8,595 | $8,390 - $8,595 | |||
| Stock-based compensation expenses | (345) - (380) | (290) - (325) | (290) - (325) | |||
| Up-front collaboration and licensing expenses | (250) - (300) | (4,400) - (4,470) | (4,400) - (4,470) | |||
| Non-GAAP projected research and development expenses | $3,600 - $3,800 | $3,600 - $3,800 | $3,700 - $3,800 | |||
| Projected selling, general and administrative expenses GAAP to non-GAAP reconciliation: | ||||||
| GAAP projected selling, general and administrative expenses | $4,255 - $4,490 | $4,205 - $4,440 | $4,305 - $4,440 | |||
| Stock-based compensation expenses | (355) - (390) | (305) - (340) | (305) - (340) | |||
| Non-GAAP projected selling, general and administrative expenses | $3,900 - $4,100 | $3,900 - $4,100 | $4,000 - $4,100 | |||
| Projected effective tax rate GAAP to non-GAAP reconciliation: | ||||||
| GAAP projected effective tax rate (2) | 21.5% - 22.5% | 21.5% - 22.5% | 19.0% - 20.0% | |||
| Tax rate effect of adjustments noted above (2) | (1.5%) - (1.5%) | (1.5%) - (1.5%) | 1.0% - 1.0% | |||
| Non-GAAP projected effective tax rate | 20.0% - 21.0% | 20.0% - 21.0% | 20.0% - 21.0% | |||
| Projected diluted EPS impact of acquisition-related, up-front collaboration and licensing, stock-based compensation and other expenses (2) : | ||||||
| Acquisition-related expenses / up-front collaboration and licensing expenses | $0.93 - $0.97 | $3.47 - $3.51 | $3.47 - $3.51 | |||
| Stock-based compensation expenses | $0.47 - $0.53 | $0.43 - $0.49 | $0.43 - $0.49 | |||
| Projected diluted EPS impact of acquisition-related, up-front collaboration and licensing, stock-based compensation and other expenses (2) | $1.40 - $1.50 | $3.90 - $4.00 | $3.90 - $4.00 | |||
| ____________________ | ||||||
| Notes: | ||||||
| (1) Total stock-based compensation expenses have a less than one percent impact on non-GAAP projected product gross margin | ||||||
| (2) Excludes fair value adjustments of equity securities and the associated income tax effect, as Gilead is unable to project future fair value adjustments, and other discrete tax charges or benefits |
GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, | December 31, | |||||||
| 2019 | 2018 | |||||||
| Cash, cash equivalents and marketable securities | $ | 25,051 | $ | 31,512 | ||||
| Accounts receivable, net | 3,315 | 3,327 | ||||||
| Inventories | 882 | 814 | ||||||
| Property, plant and equipment, net | 4,377 | 4,006 | ||||||
| Intangible assets, net | 14,864 | 15,738 | ||||||
| Goodwill | 4,117 | 4,117 | ||||||
| Other assets | 6,540 | 4,161 | ||||||
| Total assets | $ | 59,146 | $ | 63,675 | ||||
| Current liabilities | $ | 9,567 | $ | 10,605 | ||||
| Long-term liabilities | 28,843 | 31,536 | ||||||
| Stockholders' equity (1) | 20,736 | 21,534 | ||||||
| Total liabilities and stockholders' equity | $ | 59,146 | $ | 63,675 | ||||
| ____________________ | ||||||||
| Note: | ||||||||
| (1) As of September 30, 2019, there were 1,266 million shares of common stock issued and outstanding |
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Atripla - U.S. | $ | 132 | $ | 221 | $ | 387 | $ | 723 | ||||||||
| Atripla - Europe | 10 | 29 | 52 | 119 | ||||||||||||
| Atripla - Other International | 7 | 8 | 33 | 79 | ||||||||||||
| 149 | 258 | 472 | 921 | |||||||||||||
| Biktarvy - U.S. | 1,106 | 375 | 2,868 | 593 | ||||||||||||
| Biktarvy - Europe | 108 | 11 | 229 | 13 | ||||||||||||
| Biktarvy - Other International | 45 | - | 71 | - | ||||||||||||
| 1,259 | 386 | 3,168 | 606 | |||||||||||||
| Complera / Eviplera - U.S. | 40 | 61 | 126 | 210 | ||||||||||||
| Complera / Eviplera - Europe | 45 | 67 | 179 | 279 | ||||||||||||
| Complera / Eviplera - Other International | 8 | 11 | 26 | 39 | ||||||||||||
| 93 | 139 | 331 | 528 | |||||||||||||
| Descovy - U.S. | 256 | 310 | 735 | 895 | ||||||||||||
| Descovy - Europe | 63 | 81 | 200 | 234 | ||||||||||||
| Descovy - Other International | 44 | 15 | 128 | 41 | ||||||||||||
| 363 | 406 | 1,063 | 1,170 | |||||||||||||
| Genvoya - U.S. | 761 | 921 | 2,222 | 2,678 | ||||||||||||
| Genvoya - Europe | 152 | 203 | 522 | 596 | ||||||||||||
| Genvoya - Other International | 65 | 52 | 229 | 144 | ||||||||||||
| 978 | 1,176 | 2,973 | 3,418 | |||||||||||||
| Odefsey - U.S. | 317 | 323 | 865 | 905 | ||||||||||||
| Odefsey - Europe | 111 | 95 | 328 | 230 | ||||||||||||
| Odefsey - Other International | 8 | 5 | 27 | 15 | ||||||||||||
| 436 | 423 | 1,220 | 1,150 | |||||||||||||
| Stribild - U.S. | 63 | 111 | 208 | 388 | ||||||||||||
| Stribild - Europe | 18 | 20 | 60 | 83 | ||||||||||||
| Stribild - Other International | 13 | 15 | 30 | 36 | ||||||||||||
| 94 | 146 | 298 | 507 | |||||||||||||
| Truvada - U.S. | 688 | 665 | 1,896 | 1,821 | ||||||||||||
| Truvada - Europe | 14 | 62 | 88 | 245 | ||||||||||||
| Truvada - Other International | 19 | 30 | 61 | 108 | ||||||||||||
| 721 | 757 | 2,045 | 2,174 | |||||||||||||
| Other HIV (1) - U.S. | 3 | 10 | 23 | 30 | ||||||||||||
| Other HIV (1) - Europe | 1 | 2 | 3 | 6 | ||||||||||||
| Other HIV (1) - Other International | 1 | 2 | 11 | 10 | ||||||||||||
| 5 | 14 | 37 | 46 | |||||||||||||
| Revenue share - Symtuza (2) - U.S. | 68 | 8 | 165 | 8 | ||||||||||||
| Revenue share - Symtuza (2) - Europe | 36 | 14 | 89 | 34 | ||||||||||||
| Revenue share - Symtuza (2) - Other International | - | - | - | - | ||||||||||||
| 104 | 22 | 254 | 42 | |||||||||||||
| Total HIV - U.S. | 3,434 | 3,005 | 9,495 | 8,251 | ||||||||||||
| Total HIV - Europe | 558 | 584 | 1,750 | 1,839 | ||||||||||||
| Total HIV - Other International | 210 | 138 | 616 | 472 | ||||||||||||
| 4,202 | 3,727 | 11,861 | 10,562 | |||||||||||||
| AmBisome - U.S. | 9 | 9 | 27 | 40 | ||||||||||||
| AmBisome - Europe | 57 | 59 | 174 | 170 | ||||||||||||
| AmBisome - Other International | 33 | 34 | 96 | 102 | ||||||||||||
| 99 | 102 | 297 | 312 |
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY - (Continued)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Ledipasvir/Sofosbuvir (3) - U.S. | $ | 54 | $ | 185 | $ | 257 | $ | 649 | ||||||||
| Ledipasvir/Sofosbuvir (3) - Europe | 14 | 38 | 63 | 116 | ||||||||||||
| Ledipasvir/Sofosbuvir (3) - Other International | 56 | 88 | 222 | 225 | ||||||||||||
| 124 | 311 | 542 | 990 | |||||||||||||
| Letairis - U.S. | 121 | 241 | 522 | 689 | ||||||||||||
| Ranexa - U.S. | 31 | 178 | 205 | 581 | ||||||||||||
| Sofosbuvir/Velpatasvir (4) - U.S. | 282 | 225 | 731 | 733 | ||||||||||||
| Sofosbuvir/Velpatasvir (4) - Europe | 118 | 136 | 428 | 502 | ||||||||||||
| Sofosbuvir/Velpatasvir (4) - Other International | 116 | 116 | 341 | 278 | ||||||||||||
| 516 | 477 | 1,500 | 1,513 | |||||||||||||
| Vemlidy - U.S. | 78 | 66 | 214 | 172 | ||||||||||||
| Vemlidy - Europe | 6 | 2 | 15 | 8 | ||||||||||||
| Vemlidy - Other International | 50 | 19 | 122 | 41 | ||||||||||||
| 134 | 87 | 351 | 221 | |||||||||||||
| Viread - U.S. | 7 | 17 | 28 | 40 | ||||||||||||
| Viread - Europe | 15 | 10 | 57 | 72 | ||||||||||||
| Viread - Other International | 35 | 43 | 119 | 137 | ||||||||||||
| 57 | 70 | 204 | 249 | |||||||||||||
| Vosevi - U.S. | 42 | 78 | 140 | 250 | ||||||||||||
| Vosevi - Europe | 12 | 21 | 43 | 57 | ||||||||||||
| Vosevi - Other International | 9 | 4 | 18 | 12 | ||||||||||||
| 63 | 103 | 201 | 319 | |||||||||||||
| Yescarta - U.S. | 86 | 75 | 275 | 183 | ||||||||||||
| Yescarta - Europe | 32 | - | 59 | - | ||||||||||||
| Yescarta - Other International | - | - | - | - | ||||||||||||
| 118 | 75 | 334 | 183 | |||||||||||||
| Zydelig - U.S. | 13 | 15 | 36 | 46 | ||||||||||||
| Zydelig - Europe | 13 | 4 | 42 | 44 | ||||||||||||
| Zydelig - Other International | - | 1 | 1 | 2 | ||||||||||||
| 26 | 20 | 79 | 92 | |||||||||||||
| Other (5) - U.S. | 42 | 37 | 119 | 93 | ||||||||||||
| Other (5) - Europe | (21 | ) | 19 | 96 | 75 | |||||||||||
| Other (5) - Other International | 4 | 8 | 12 | 117 | ||||||||||||
| 25 | 64 | 227 | 285 | |||||||||||||
| Total product sales - U.S. | 4,199 | 4,131 | 12,049 | 11,727 | ||||||||||||
| Total product sales - Europe | 804 | 873 | 2,727 | 2,883 | ||||||||||||
| Total product sales - Other International | 513 | 451 | 1,547 | 1,386 | ||||||||||||
| $ | 5,516 | $ | 5,455 | $ | 16,323 | $ | 15,996 | |||||||||
| ____________________ | ||||||||||||||||
| Notes: | ||||||||||||||||
| (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. In Europe, the period-over-period changes were primarily due to adjustments recorded in 2019 for statutory rebates related to sales of Sovaldi made in prior years |