- Record Total Revenues of $1.53 Billion, Up 22 Percent over First Quarter 2008 -FOSTER CITY, Calif.--(BUSINESS WIRE)--Apr. 21, 2009--
Gilead Sciences, Inc. (Nasdaq:GILD) announced today its results of
operations for the quarter ended March 31, 2009. Total revenues for the
first quarter of 2009 were $1.53billion, up 22percent
compared to total revenues of $1.26 billion for the first quarter of
2008. Net income attributable to Gilead for the first quarter of 2009
was $589.1 million, or $0.63 per diluted share, including after-tax
stock-based compensation expense of $30.3 million. Non-GAAP net income
attributable to Gilead for the first quarter of 2009, which excludes
after-tax stock-based compensation expense, was $619.4 million, or $0.66
per diluted share. Non-GAAP net income attributable to Gilead for the
first quarter of 2008, which excluded after-tax stock-based compensation
expense of $26.0 million, was $514.3 million, or $0.53 per diluted share.
Product Sales
Product sales increased 27 percent to a record $1.45 billion for the
first quarter of 2009, compared to $1.14 billion in the first quarter of
2008. This was driven primarily by Gilead’s antiviral franchise,
including the strong growth in sales of Atripla® (efavirenz
600 mg/ emtricitabine 200 mg/ tenofovir disoproxil fumarate 300 mg), as
well as continued growth in sales of Truvada®
(emtricitabine/tenofovir disoproxil fumarate).
Antiviral Franchise
Antiviral product sales increased 28 percent to $1.34 billion in the
first quarter of 2009 from $1.05 billion for the same quarter in 2008.
The increase was driven primarily by sales volume growth of Atripla and
Truvada.
Truvada sales increased 23 percent to $590.4 million for the first
quarter of 2009 from $479.4 million in the first quarter of 2008, driven
primarily by sales volume growth in the United States and Europe.
Atripla sales increased 57 percent to $509.9 million for the first
quarter of 2009 from $324.2 million in the first quarter of 2008, driven
primarily by sales volume growth in the United States and Europe.
Other antiviral product sales, including Viread® (tenofovir
disoproxil fumarate), Hepsera® (adefovir dipivoxil) and
Emtriva® (emtricitabine), decreased one percent to $240.6
million for the first quarter of 2009 from $244.1 million in the first
quarter of 2008 as increased Viread product sales from sales volume
growth were offset by sales volume decreases in Hepsera product sales.
Letairis
Sales of Letairis® (ambrisentan) for the treatment of
pulmonary arterial hypertension increased 95 percent to $39.6 million
for the first quarter of 2009 from $20.3 million for the first quarter
of 2008, driven primarily by sales volume growth in the United States.
Royalty, Contract and Other Revenues
Royalty, contract and other revenues resulting primarily from
collaborations with corporate partners were $82.9 million for the first
quarter of 2009, a decrease of 29 percent from $116.8 million in the
first quarter of 2008. This decrease was driven primarily by lower
Tamiflu® (oseltamivir phosphate) royalties from F.
Hoffmann-La Roche Ltd (Roche) of $33.2 million in the first quarter of
2009, compared to Tamiflu royalties of $93.4 million in the first
quarter of 2008 due to decreased sales related to pandemic planning
initiatives worldwide. This decrease was partially offset by the
recognition of $23.7 million of previously deferred collaboration
payments from a corporate partner as we no longer have substantive
ongoing performance obligations.
Research and Development
Research and development (R&D) expenses in the first quarter of 2009
were $188.8 million compared to $155.3 million for the first quarter of
2008. Non-GAAP R&D expenses, which exclude stock-based compensation
expense, for the first quarter of 2009 were $171.8 million, compared to
$138.4 million for the first quarter in 2008, primarily as a result of
higher headcount and increased clinical study activity related to the
growth in Gilead’s business.
Selling, General and Administrative
Selling, general and administrative (SG&A) expenses in the first quarter
of 2009 were $204.0 million compared to $195.0 million for the first
quarter of 2008. Non-GAAP SG&A expenses, which exclude stock-based
compensation expense, for the first quarter of 2009 were $183.1 million,
compared to $177.4 million for the same quarter in 2008, primarily as a
result of higher headcount to support the continued growth in Gilead’s
business.
Net Foreign Currency Exchange Impact
The net foreign currency exchange impact on first quarter 2009 revenues
and pre-tax earnings, which includes revenues and expenses generated
from outside the United States, was an unfavorable $22.3 million and
$11.7 million, respectively, compared to the first quarter of 2008.
Cash, Cash Equivalents and Marketable
Securities
As of March 31, 2009, Gilead had cash, cash equivalents and marketable
securities of $3.61 billion compared to $3.24 billion as of December 31,
2008. For the first quarter of 2009, Gilead generated $641.3 million of
operating cash flows.
Adoption of New Accounting
Pronouncements
On January 1, 2009, Gilead adopted Financial Accounting Standards Board
Staff Position APB 14-1, “Accounting for Convertible Debt Instruments
That May Be Settled In Cash Upon Conversion (Including Partial Cash
Settlement)” (FSP APB 14-1) and recorded additional after-tax interest
expense for the first quarter of 2009 of $8.3 million. FSP APB 14-1
requires retrospective application upon adoption; therefore, net income
attributable to Gilead for the first quarter of 2008 has been adjusted
from that which was previously reported to reflect additional after-tax
interest expense of $7.8 million.
On January 1, 2009, Gilead adopted Statement of Financial Accounting
Standards No. 160, “Noncontrolling Interests in Consolidated Financial
Statements, an amendment of Accounting Research Bulletin No. 51,
Consolidated Financial Statements” (SFAS 160), and reflected the change
in presentation of the noncontrolling interest (formerly minority
interest) on a retrospective basis in our financial statements.
Corporate Highlights
In February 2009, Gilead announced the promotion of Andrew Cheng, MD,
PhD to the newly created role of Senior Vice President, Development
Operations. In this role, Dr. Cheng is responsible for Gilead’s
biometrics, clinical operations, drug safety and public health, project
and portfolio management, and regulatory affairs activities, and will be
a member of Gilead’s executive committee.
In March 2009, Gilead announced an agreement to acquire CV Therapeutics,
Inc. for $20.00 per share. This transaction, valued at approximately
$1.4 billion, closed on April 17, 2009, at which time CV Therapeutics
became a wholly-owned subsidiary of Gilead.
Product and Pipeline Update
Antiviral Franchise
In February 2009, Gilead announced preclinical data and results from two
Phase I studies for GS 9350, an investigational compound being developed
as a pharmacoenhancing agent (“booster”) to increase blood levels and
allow once-daily dosing for certain medicines, including Gilead’s
investigational HIV integrase inhibitor, elvitegravir. These data were
presented during an oral session at the 16th Conference on Retroviruses
and Opportunistic Infections in Montreal. Elvitegravir is currently
being evaluated in combination with ritonavir-boosted HIV protease
inhibitors, in comparison to twice-daily raltegravir, in a Phase III
clinical trial among treatment-experienced HIV patients. Gilead has
initiated a Phase II study of the complete single-tablet fixed-dose
regimen containing elvitegravir, GS 9350 and Truvada in treatment-naïve
patients in April of this year.
Cardiovascular Franchise
In March 2009, Gilead announced that it had begun enrolling patients in
a Phase II clinical trial of cicletanine hydrochloride, an oral agent in
development for the treatment of pulmonary arterial hypertension.
Respiratory Franchise
In February 2009, Gilead announced that it had received a response from
the U.S. Food and Drug Administration (FDA) to its appeal, submitted
under the formal Dispute Resolution process, regarding the agency’s
Complete Response Letter for its New Drug Application (NDA) for
aztreonam for inhalation solution. In its review under the Dispute
Resolution process, the FDA reiterated its position outlined in the
Complete Response Letter, including the need for Gilead to conduct an
additional clinical study of aztreonam for inhalation solution before
the company can resubmit its NDA.
In March 2009, Gilead announced that the Committee for Medicinal
Products for Human Use, the scientific committee of the European
Medicines Agency, had adopted a negative opinion on the company’s
Marketing Authorisation Application for aztreonam lysine 75 mg powder
and solvent for nebuliser solution in the European Union.
Conference Call
At 4:30 p.m. Eastern Time today, Gilead will host a conference call and
a simultaneous webcast to discuss the results of its first quarter of
2009. During this call/webcast, Gilead’s management will discuss the
company’s first quarter of 2009 results and provide a general business
update. The webcast will be available live via the internet by accessing
Gilead’s website at www.gilead.com.
To access the webcast, please connect to the company’s website at least
15 minutes prior to the conference call to ensure adequate time for any
software download that may be needed to hear the webcast. Alternatively,
please call 1-800-901-5259 (U.S.) or 1-617-786-4514 (international) and
dial the participant passcode 58961103 to access the call.
A replay of the webcast will be archived on the company’s website for
one year, and a phone replay will be available approximately two hours
following the call through April 24, 2009. To access the phone replay,
please call 1-888-286-8010 (U.S.) or 1-617-801-6888 (international) and
dial the participant passcode 42508678.
About Gilead
Gilead Sciences is a biopharmaceutical company that discovers, develops
and commercializes innovative therapeutics in areas of unmet medical
need. Gilead’s mission is to advance the care of patients suffering from
life-threatening diseases worldwide. Headquartered in Foster City,
California, Gilead has operations in North America, Europe and Australia.
Non-GAAP Financial Information
Non-GAAP net income attributable to Gilead and net income attributable
to Gilead per diluted share for the three months ended March 31, 2009
and 2008 are presented excluding the after-tax impact of stock-based
compensation expense and have been adjusted for the application of APB
25 in computing non-GAAP dilutive securities. Non-GAAP R&D expenses and
SG&A expenses for the three months ended March 31, 2009 and 2008 are
presented excluding the impact of stock-based compensation expense.
Management believes this non-GAAP information is useful for investors,
taken in conjunction with Gilead’s GAAP financial statements, because
management uses such information internally for its operating, budgeting
and financial planning purposes. Non-GAAP information is not prepared
under a comprehensive set of accounting rules and should only be used to
supplement an understanding of Gilead’s operating results as reported
under United States generally accepted accounting principles.
Forward-looking Statements
Statements included in this press release that are not historical in
nature are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Gilead cautions
readers that forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially.
These risks and uncertainties include: Gilead’s ability to sustain
growth in revenues for its antiviral and cardiovascular franchises;
unpredictable variability of Tamiflu royalties and the strong
relationship between this royalty revenue and global pandemic planning
and supply; Gilead’s ability to receive regulatory approvals in a timely
manner or at all, for new and current products, including GS 9350, a
single-tablet fixed-dose regimen containing elvitegravir, GS 9350 and
Truvada, cicletanine hydrochloride or aztreonam for inhalation solution;
Gilead’s ability to successfully commercialize any products that receive
regulatory approvals; Gilead’s ability to successfully develop its
respiratory and cardiovascular franchises; initiating and completing
clinical trials may take longer or cost more than expected; fluctuations
in the foreign exchange rate of the U.S. dollar that may reduce or
eliminate the favorable foreign currency exchange impact on Gilead’s
future revenues and pre-tax earnings; our ability to consummate
additional purchases under our share repurchase program due to changes
in our stock price, corporate or other market conditions; risks and
uncertainties related to Gilead’s ability to successfully integrate the
products and employees of Gilead and CV Therapeutics, including its
ability to increase sales of CV Therapeutics’ approved products and its
ability to advance pipeline programs; and other risks identified from
time to time in Gilead’s reports filed with the U.S. Securities and
Exchange Commission. In addition, Gilead makes estimates and judgments
that affect the reported amounts of assets, liabilities, revenues and
expenses and related disclosures. Gilead bases its estimates on
historical experience and on various other market-specific and other
relevant assumptions that it believes to be reasonable under the
circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ significantly
from these estimates. You are urged to consider statements that include
the words “may,” “will,” “would,” “could,” “should,” “might,”
“believes,” “estimates,” “projects,” “potential,” “expects,” “plans,”
“anticipates,” “intends,” “continues,” “forecast,” “designed,” “goal,”
or the negative of those words or other comparable words to be uncertain
and forward-looking.
Gilead directs readers to its Annual Report on Form 10-K for the year
ended December 31, 2008 and its subsequent Current Reports on Form 8-K.
Gilead claims the protection of the Safe Harbor contained in the Private
Securities Litigation Reform Act of 1995 for forward-looking statements.
All forward-looking statements are based on information currently
available to Gilead, and Gilead assumes no obligation to update any such
forward-looking statements.
Truvada, Viread, Hepsera, AmBisome and Letairis are registered
trademarks of Gilead Sciences, Inc.
Atripla is a registered trademark of Bristol-Myers Squibb & Gilead
Sciences, LLC.
Tamiflu is a registered trademark of F. Hoffmann-La Roche Ltd.
For more information on Gilead Sciences, Inc.,please visit www.gilead.com
orcall the Gilead Public Affairs Department at 1-800-GILEAD-5
(1-800-445-3235).
| GILEAD SCIENCES, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|
(unaudited)
|
|
(in thousands, except per share amounts)
|
|
Three Months Ended
|
|
March 31,
|
|
2009
|
2008
|
|
Revenues:
|
|
Product sales
|
$
|
1,447,580
|
$
|
1,141,306
|
|
Royalty, contract and other revenues
|
82,880
|
116,846
|
|
Total revenues
|
1,530,460
|
1,258,152
|
|
Costs and expenses:
|
|
Cost of goods sold (1)
|
329,414
|
239,848
|
|
Research and development (1)
|
188,779
|
155,301
|
|
Selling, general and administrative (1)
|
203,951
|
194,957
|
|
Total costs and expenses
|
722,144
|
590,106
|
|
Income from operations
|
808,316
|
668,046
|
|
Interest and other income, net
|
4,159
|
22,700
|
|
Interest expense (2)
|
(16,671
|
)
|
(16,001
|
)
|
|
Income before provision for income taxes
|
795,804
|
674,745
|
|
Provision for income taxes (1)(2)
|
209,227
|
188,320
|
|
Net income (3)
|
586,577
|
486,425
|
|
Net loss attributable to noncontrolling interest (3)
|
2,535
|
1,875
|
|
Net income attributable to Gilead (3)
|
$
|
589,112
|
$
|
488,300
|
|
Net income per share attributable to Gilead common stockholders -
basic (3)
|
$
|
0.65
|
$
|
0.53
|
|
Net income per share attributable to Gilead common stockholders -
diluted (3)
|
$
|
0.63
|
$
|
0.51
|
|
Shares used in per share calculation - basic
|
909,780
|
928,104
|
|
Shares used in per share calculation - diluted
|
942,479
|
966,554
|
|
Notes:
|
|
(1)
|
Stock-based compensation expense included in the respective captions
of the condensed consolidated statements of income shown above is as
follows:
|
|
Three Months Ended
|
|
March 31,
|
|
2009
|
2008
|
|
Stock-based compensation expense:
|
|
Cost of goods sold
|
$
|
3,254
|
$
|
1,694
|
|
Research and development
|
16,955
|
16,895
|
|
Selling, general and administrative
|
20,836
|
17,547
|
|
Income tax effect
|
(10,757
|
)
|
(10,135
|
)
|
|
Total stock-based compensation expense, net of tax
|
$
|
30,288
|
$
|
26,001
|
|
(2)
|
On January 1, 2009, Gilead adopted FSP APB 14-1 on a retrospective
basis for its convertible senior notes and recorded additional
after-tax interest expense of $8.3 million, net of a tax benefit of
$5.3 million, for the three months ended March 31, 2009, and
reflected additional after-tax interest expense of $7.8 million, net
of a tax benefit of $5.1 million, for the three months ended March
31, 2008.
|
|
(3)
|
On January 1, 2009, Gilead adopted SFAS 160 and presented on a
retrospective basis its noncontrolling interest (formerly minority
interest) as net loss attributable to noncontrolling interest which
is a component of consolidated net income.
|
| GILEAD SCIENCES, INC. |
| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION |
|
(unaudited)
|
|
(in thousands, except per share amounts)
|
Included below is a reconciliation of GAAP net income attributable
to Gilead and diluted per share amounts as reported in the
attached press release. Non-GAAP net income attributable to
Gilead and net income attributable to Gilead per diluted share for
the three months ended March 31, 2009 and 2008 are presented
excluding the after-tax impact of stock-based compensation expense
and have been adjusted for the application of APB 25 in computing
non-GAAP dilutive securities. Management believes this non-GAAP
information is useful for investors, taken in conjunction with
Gilead’s GAAP financial statements, because management uses such
information internally for its operating, budgeting and financial
planning purposes. Non-GAAP information is not prepared under a
comprehensive set of accounting rules and should only be used to
supplement an understanding of Gilead's operating results as
reported under GAAP.
|
|
Three Months Ended
|
|
March 31,
|
|
2009
|
2008
|
|
Net income attributable to Gilead (GAAP)
|
$
|
589,112
|
$
|
488,300
|
|
Stock-based compensation expense, net of tax
|
30,288
|
26,001
|
|
Net income attributable to Gilead (Non-GAAP)
|
$
|
619,400
|
$
|
514,301
|
|
Shares used in per share calculation - diluted (GAAP)
|
942,479
|
966,554
|
|
Dilutive securities
|
799
|
2,121
|
|
Shares used in per share calculation - diluted (Non-GAAP)
|
943,278
|
968,675
|
|
Net income per share attributable to Gilead common stockholders -
diluted (GAAP)
|
$
|
0.63
|
$
|
0.51
|
|
Net income per share attributable to Gilead common stockholders -
diluted (Non-GAAP)
|
$
|
0.66
|
$
|
0.53
|
| GILEAD SCIENCES, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
|
(in thousands)
|
|
March 31,
|
December 31,
|
|
2009
|
2008
|
|
(unaudited)
|
(Note 1)
|
|
Cash, cash equivalents and marketable securities
|
$
|
3,608,889
|
$
|
3,239,639
|
|
Accounts receivable, net
|
1,068,000
|
1,023,397
|
|
Inventories
|
936,727
|
927,868
|
|
Property, plant and equipment, net
|
679,437
|
528,799
|
|
Other assets (2)
|
1,226,861
|
1,217,128
|
|
Total assets
|
$
|
7,519,914
|
$
|
6,936,831
|
|
Current liabilities
|
$
|
1,261,797
|
$
|
1,220,992
|
|
Long-term liabilities (2)(3)
|
1,240,834
|
1,250,256
|
|
Stockholders’ equity (2)(3)
|
5,017,283
|
4,465,583
|
|
Total liabilities and stockholders’ equity
|
$
|
7,519,914
|
$
|
6,936,831
|
|
Note:
|
|
(1)
|
Derived from audited consolidated financial statements at that date
adjusted for retrospective application of FSP APB 14-1 and SFAS 160
per notes 2 and 3 below.
|
|
(2)
|
On January 1, 2009, Gilead adopted FSP APB 14-1 on a retrospective
basis for its convertible senior notes. As of December 31, 2008, the
retrospective adoption of FSP APB 14-1 decreased deferred tax assets
and debt issuance costs included in other assets by an aggregate of
$81.7 million, decreased convertible senior notes included in
long-term liabilities by $201.8 million, and increased total
stockholders’ equity by $120.1 million after a charge of $82.6
million to retained earnings.
|
|
(3)
|
On January 1, 2009, Gilead adopted SFAS 160 and reclassified its
noncontrolling interest (formerly minority interest) of $193.0
million from liabilities to stockholders’ equity on a retrospective
basis.
|
| GILEAD SCIENCES, INC. |
| PRODUCT SALES SUMMARY |
|
(unaudited)
|
|
(in thousands)
|
|
Three Months Ended
|
|
March 31,
|
|
2009
|
2008
|
|
(Note 1)
|
|
Antiviral products:
|
|
Truvada – U.S.
|
$
|
280,997
|
$
|
238,532
|
|
Truvada – Europe
|
278,440
|
218,367
|
|
Truvada – Other International
|
30,916
|
22,486
|
|
590,353
|
479,385
|
|
Atripla – U.S.
|
374,132
|
306,485
|
|
Atripla – Europe
|
124,779
|
14,195
|
|
Atripla – Other International
|
10,972
|
3,537
|
|
509,883
|
324,217
|
|
Viread – U.S.
|
69,589
|
63,068
|
|
Viread – Europe
|
65,331
|
65,716
|
|
Viread – Other International
|
25,685
|
23,883
|
|
160,605
|
152,667
|
|
Hepsera – U.S.
|
25,652
|
31,275
|
|
Hepsera – Europe
|
38,917
|
48,463
|
|
Hepsera – Other International
|
8,145
|
3,284
|
|
72,714
|
83,022
|
|
Emtriva – U.S.
|
3,630
|
3,838
|
|
Emtriva – Europe
|
2,354
|
2,581
|
|
Emtriva – Other International
|
1,250
|
1,970
|
|
7,234
|
8,389
|
|
Total Antiviral products – U.S.
|
754,000
|
643,198
|
|
Total Antiviral products – Europe
|
509,821
|
349,322
|
|
Total Antiviral products – Other International
|
76,968
|
55,160
|
|
1,340,789
|
1,047,680
|
|
AmBisome
|
64,271
|
71,028
|
|
Letairis
|
39,580
|
20,337
|
|
Other products
|
2,940
|
2,261
|
|
106,791
|
93,626
|
|
Total product sales
|
$
|
1,447,580
|
$
|
1,141,306
|
|
(1)
|
Certain prior period amounts have been reclassified to conform to
the current period presentation.
|
Source: Gilead Sciences, Inc.
Gilead Sciences, Inc.InvestorsRobin
Washington, 650-522-5688Susan Hubbard, 650-522-5715MediaAmy
Flood, 650-522-5643
