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- Product Sales of
- GAAP Diluted EPS of
- Non-GAAP Diluted EPS of
- Reiterates Full Year 2016 Guidance -
| Three Months Ended | |||||
| March 31, | |||||
| (In millions, except per share amounts) | 2016 | 2015 | |||
| Product sales | $ | 7,681 | $ | 7,405 | |
| Royalty, contract and other revenues | 113 | 189 | |||
| Total revenues | $ | 7,794 | $ | 7,594 | |
| Net income attributable to Gilead | $ | 3,566 | $ | 4,333 | |
| Non-GAAP net income attributable to Gilead | $ | 4,274 | $ | 4,604 | |
| Diluted EPS | $ | 2.53 | $ | 2.76 | |
| Non-GAAP diluted EPS | $ | 3.03 | $ | 2.94 | |
Product Sales
Total product sales for the first quarter of 2016 were
Antiviral Product Sales
Antiviral product sales, which include products in our HIV and liver
disease areas, were
-
In the U.S., antiviral product sales were
$4.0 billion for the first quarter of 2016 compared to$4.9 billion in 2015, primarily due to a decline in sales of Harvoni® (ledipasvir 90 mg/sofosbuvir 400 mg), partially offset by increases in sales of Sovaldi® (sofosbuvir 400 mg), Truvada® (emtricitabine and tenofovir disoproxil fumarate) and Genvoya® (elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir alafenamide 10 mg). Genvoya was launched in the U.S. inNovember 2015 . -
In
Europe , antiviral product sales were$1.6 billion for the first quarter of 2016 compared to$1.7 billion in 2015, primarily due to a decline in sales of Sovaldi. -
In
Japan , antiviral product sales were$1.1 billion . Sovaldi and Harvoni were launched inJapan in May andSeptember 2015 , respectively.
Other Product Sales
Other product sales, which include Letairis® (ambrisentan),
Ranexa® (ranolazine) and AmBisome® (amphotericin B
liposome for injection), were
Cost of Goods Sold
Non-GAAP* cost of goods sold increased to
Operating Expenses
| Three Months Ended | |||||
| March 31, | |||||
| (In millions) | 2016 | 2015 | |||
| Non-GAAP* research and development expenses (R&D) | $ | 769 | $ | 651 | |
| Non-GAAP* selling, general and administrative expenses (SG&A) | $ | 638 | $ | 600 | |
* Non-GAAP Cost of Goods Sold, R&D and SG&A expenses exclude acquisition-related, up-front collaboration, stock-based compensation and other expenses
During the first quarter of 2016, compared to the same period in 2015:
- Non-GAAP research and development expenses increased primarily due to the progression of Gilead's clinical studies.
- Non-GAAP selling, general and administrative expenses increased primarily due to higher costs to support Gilead's geographic expansion of its business, partially offset by a decrease in our Branded Prescription Drug fee expense.
Cash,
As of
Full Year 2016 Guidance
Gilead reiterates its full year 2016 guidance, initially provided on
| (In millions, except percentages and per share amounts) | Provided February 2, 2016 | ||
| Net Product Sales | $30,000 - $31,000 | ||
| Non-GAAP* | |||
| Product Gross Margin | 88% - 90% | ||
| R&D expenses | $3,200 - $3,500 | ||
| SG&A expenses | $3,300 - $3,600 | ||
| Effective Tax Rate | 18.0% - 20.0% | ||
| Diluted EPS Impact Related to Acquisition, Up-front Collaboration, Stock-based Compensation and Other Expenses | $1.10 - $1.16 | ||
* Non-GAAP Product Gross Margin, R&D and SG&A expenses and effective tax rate exclude acquisition-related, up-front collaboration, stock-based compensation and other expenses.
Corporate Highlights
-
Announced that Chairman and Chief Executive Officer (CEO)
John C. Martin , PhD assumed the role of Executive Chairman of the company.John F. Milligan , PhD, formerly President and Chief Operating Officer, was promoted to President and CEO, effectiveMarch 10, 2016 , and appointed to the company’s Board of Directors. - Announced that Gilead will provide grants for up to three years to academic institutions, nonprofit organizations and community groups engaged in HIV cure activities. The unrestricted grants are awarded to organizations with a track record of excellence in results-driven research.
-
Announced that the Board of Directors approved the repurchase of an
additional
$12 billion of the company’s common stock which commenced upon completion of the company’s existing$15 billion repurchase program authorized inJanuary 2015 .
Product & Pipeline Updates announced by Gilead during the First Quarter of 2016 include:
-
Announced that
U.S. Food and Drug Administration (FDA ) approved Odefsey® (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir alafenamide 25 mg or R/F/TAF) for the treatment of HIV-1 infection in certain patients. Emtricitabine and tenofovir alafenamide are from Gilead while rilpivirine is from Janssen Sciences Ireland UC, one of the Janssen Pharmaceutical Companies ofJohnson & Johnson . Odefsey is Gilead’s second TAF-based regimen to receiveFDA approval and represents the smallest pill of any single-tablet regimen available today for the treatment of HIV. -
Announced that the
Committee for Medicinal Products for Human Use , the scientific committee of theEuropean Medicines Agency (EMA), adopted a positive opinion on the company’s Marketing Authorization Application (MAA) for two doses of Descovy® (emtricitabine 200 mg/tenofovir alafenamide 25 mg, F/TAF), an investigational fixed-dose combination for the treatment of HIV-1 infection in adults and adolescents (ages 12 years and older with body weight at least 35 kg) in combination with other HIV antiretroviral agents. -
Presented data at the 2016 Conference on Retroviruses and
Opportunistic Infections, which included the announcement of:
- 48-week results from a Phase 3 study (Study 1089) evaluating the safety and efficacy of switching virologically suppressed HIV-1 infected adult patients from regimens containing Truvada to regimens containing the investigational fixed-dose combination of emtricitabine and F/TAF. At Week 48, the F/TAF-based regimens were found to be statistically non-inferior to the emtricitabine and tenofovir disoproxil fumarate (F/TDF) -based regimens, based on percentages of patients with HIV-1 RNA levels less than 50 copies/mL. The study also demonstrated statistically significant improvements in renal and bone laboratory parameters among patients receiving F/TAF-based regimens.
-
Results from a preclinical study conducted in collaboration with
researchers at
Beth Israel Deaconess Medical Center evaluating a proprietary investigational oral toll-like receptor 7 (TLR7) agonist, GS-9620, and a related molecular analogue, GS-986, as part of an HIV eradication strategy. Data from the study conducted in simian immunodeficiency virus (SIV)-infected virally suppressed rhesus macaques on antiretroviral therapy (ART) demonstrate that TLR7 agonist treatment induced transient plasma SIV RNA blips and reduced SIV DNA. In addition, TLR7 agonist treatment resulted in subsequent prolonged virus suppression in some of the macaques after stopping ART.
- Announced that the company’s Type II variation application for once-daily Truvada in combination with safer sex practices to reduce the risk of sexually acquired HIV-1 infection among uninfected adults at high risk, a strategy known as pre-exposure prophylaxis or PrEP, was fully validated and under evaluation by the EMA.
-
Announced that the company’s MAA for TAF 25 mg, an investigational,
once-daily treatment for adults with chronic hepatitis B virus (HBV)
infection, was fully validated and under assessment by the EMA. The
company also submitted a new drug application (NDA) to
FDA for TAF 25 mg for the treatment for adults with chronic HBV infection. -
Announced that
FDA approved two supplemental indications for Harvoni for use in chronic hepatitis C patients with advanced liver disease. Harvoni in combination with ribavirin for 12 weeks was approved for use in chronic hepatitis C virus (HCV) genotype 1- or 4-infected liver transplant recipients without cirrhosis or with compensated cirrhosis (Child-Pugh A), and for HCV genotype 1-infected patients with decompensated cirrhosis (Child-Pugh B or C), including those who have undergone liver transplantation. Harvoni is approved for use in HCV genotypes 1, 4, 5 and 6, HCV/HIV-1 coinfection, HCV genotype 1 and 4 liver transplant recipients, and genotype 1-infected patients with decompensated cirrhosis. -
Announced that
FDA granted priority review to the company’s NDA for an investigational once-daily fixed-dose combination of sofosbuvir and velpatasvir (SOF/VEL), for the treatment of chronic genotype 1-6 HCV infection.FDA has set a target action date under the Prescription Drug User Fee Act ofJune 28, 2016 .
Conference Call
At
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
About Gilead
Non-GAAP Financial Information
Gilead has presented certain financial information in accordance with U.S. generally accepted accounting principles (GAAP) and also on a non-GAAP basis. Management believes this non-GAAP information is useful for investors, when considered 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. A reconciliation between GAAP and non-GAAP financial information is provided in the tables on pages 7 and 8.
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 2016 financial results; Gilead's ability to
sustain growth in revenues for its antiviral and other programs;
availability of funding for state AIDS Drug Assistance Programs (ADAPs);
continued fluctuations in ADAP purchases driven by federal and state
grant cycles which may not mirror patient demand and may cause
fluctuations in Gilead's earnings; the possibility of unfavorable
results from clinical trials involving investigational compounds,
including GS-9620 and GS-986; 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 submit new drug applications for
new product candidates in the timelines currently anticipated; Gilead's
ability to receive regulatory approvals in a timely manner or at all,
for new and current products, including SOF/VEL and TAF for the
treatment of chronic HBV; Gilead's ability to successfully commercialize
its products, including Genvoya, Odefsey and Descovy; 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; the risk that estimates of patients with HCV or anticipated
patient demand may not be accurate; the risk that private and public
payers may be reluctant to provide, or continue to provide, coverage or
reimbursement for new products, including Sovaldi and Harvoni; Gilead's
ability to successfully develop its oncology, inflammation,
cardiovascular and respiratory programs; safety and efficacy data from
clinical studies may not warrant further development of Gilead's product
candidates; the potential for pricing pressure from additional
competitive HCV launches or austerity measures in European countries and
All forward-looking statements are based on information currently available to Gilead, and Gilead assumes no obligation to update any such forward-looking statements.
Gilead owns or has rights to various trademarks, copyrights and trade
names used in our business, including the following: GILEAD®,
ATRIPLA® is a registered trademark belonging to Bristol-Myers
Squibb &
For more information on
GILEAD SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in millions, except per share amounts) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2016 | 2015 | |||||||
| Revenues: | ||||||||
| Product sales | $ | 7,681 | $ | 7,405 | ||||
| Royalty, contract and other revenues | 113 | 189 | ||||||
| Total revenues | 7,794 | 7,594 | ||||||
| Costs and expenses: | ||||||||
| Cost of goods sold | 1,193 | 882 | ||||||
| Research and development expenses | 1,265 | 696 | ||||||
| Selling, general and administrative expenses | 685 | 645 | ||||||
| Total costs and expenses | 3,143 | 2,223 | ||||||
| Income from operations | 4,651 | 5,371 | ||||||
| Interest expense | (230 | ) | (153 | ) | ||||
| Other income (expense), net | 81 | 21 | ||||||
| Income before provision for income taxes | 4,502 | 5,239 | ||||||
| Provision for income taxes | 935 | 907 | ||||||
| Net income | 3,567 | 4,332 | ||||||
| Net income (loss) attributable to noncontrolling interest | 1 | (1 | ) | |||||
| Net income attributable to Gilead | $ | 3,566 | $ | 4,333 | ||||
| Net income per share attributable to Gilead common stockholders - basic | $ | 2.58 | $ | 2.91 | ||||
| Shares used in per share calculation - basic | 1,383 | 1,488 | ||||||
| Net income per share attributable to Gilead common stockholders - diluted | $ | 2.53 | $ | 2.76 | ||||
| Shares used in per share calculation - diluted | 1,412 | 1,569 | ||||||
| Cash dividends declared per share | $ | 0.43 | $ | — | ||||
GILEAD SCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (unaudited) (in millions, except percentages and per share amounts) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2016 | 2015 | |||||||
| Cost of goods sold reconciliation: | ||||||||
| GAAP cost of goods sold | $ | 1,193 | $ | 882 | ||||
| Acquisition related-amortization of purchased intangibles | (210 | ) | (206 | ) | ||||
| Stock-based compensation expenses | (3 | ) | (3 | ) | ||||
| Other(1) | 3 | 1 | ||||||
| Non-GAAP cost of goods sold | $ | 983 | $ | 674 | ||||
| Product gross margin reconciliation: | ||||||||
| GAAP product gross margin | 84.5 | % | 88.1 | % | ||||
| Acquisition related-amortization of purchased intangibles | 2.7 | % | 2.8 | % | ||||
| Non-GAAP product gross margin(2) | 87.2 | % | 90.9 | % | ||||
| Research and development expenses reconciliation: | ||||||||
| GAAP research and development expenses | $ | 1,265 | $ | 696 | ||||
| Up-front collaboration expenses | (368 | ) | — | |||||
| Acquisition related-IPR&D impairment | (114 | ) | — | |||||
| Stock-based compensation expenses | (41 | ) | (42 | ) | ||||
| Other(1) | 27 | (3 | ) | |||||
| Non-GAAP research and development expenses | $ | 769 | $ | 651 | ||||
| Selling, general and administrative expenses reconciliation: | ||||||||
| GAAP selling, general and administrative expenses | $ | 685 | $ | 645 | ||||
| Stock-based compensation expenses | (44 | ) | (47 | ) | ||||
| Other(1) | (3 | ) | 2 | |||||
| Non-GAAP selling, general and administrative expenses | $ | 638 | $ | 600 | ||||
| Operating margin reconciliation: | ||||||||
| GAAP operating margin | 59.7 | % | 70.7 | % | ||||
| Up-front collaboration expenses | 4.7 | % | — | % | ||||
| Acquisition related-amortization of purchased intangibles | 2.7 | % | 2.7 | % | ||||
| Acquisition related-IPR&D impairment | 1.5 | % | — | % | ||||
| Stock-based compensation expenses | 1.1 | % | 1.2 | % | ||||
| Other(1) | (0.3 | )% | — | % | ||||
| Non-GAAP operating margin(2) | 69.3 | % | 74.7 | % | ||||
| Notes: | ||||||||
| (1) Amounts related to consolidation of a contract manufacturer, contingent consideration and/or other individually insignificant amounts | ||||||||
(2) Amounts may not sum due to rounding | ||||||||
GILEAD SCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION - (Continued) (unaudited) (in millions, except percentages and per share amounts) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2016 | 2015 | |||||||
| Effective tax rate reconciliation: | ||||||||
| GAAP effective tax rate | 20.8 | % | 17.3 | % | ||||
| Up-front collaboration expenses | (1.5 | )% | — | % | ||||
| Acquisition related-amortization of purchased intangibles | (0.7 | )% | (0.4 | )% | ||||
| Other (1) | 0.1 | % | — | % | ||||
| Non-GAAP effective tax rate(2) | 18.7 | % | 16.9 | % | ||||
| Net income attributable to Gilead reconciliation: | ||||||||
| GAAP net income attributable to Gilead | $ | 3,566 | $ | 4,333 | ||||
| Up-front collaboration expenses | 368 | — | ||||||
| Acquisition related-amortization of purchased intangibles | 204 | 201 | ||||||
| Acquisition related-IPR&D impairment | 99 | — | ||||||
| Stock-based compensation expenses | 64 | 69 | ||||||
| Other(1) | (27 | ) | 1 | |||||
| Non-GAAP net income attributable to Gilead | $ | 4,274 | $ | 4,604 | ||||
| Diluted earnings per share reconciliation: | ||||||||
| GAAP diluted earnings per share | $ | 2.53 | $ | 2.76 | ||||
| Up-front collaboration expenses | 0.26 | — | ||||||
| Acquisition related-amortization of purchased intangibles | 0.14 | 0.13 | ||||||
| Acquisition related-IPR&D impairment | 0.07 | — | ||||||
| Stock-based compensation expenses | 0.05 | 0.04 | ||||||
| Other(1) | (0.02 | ) | — | |||||
| Non-GAAP diluted earnings per share(2) | $ | 3.03 | $ | 2.94 | ||||
| Shares used in per share calculation (diluted) reconciliation: | ||||||||
| GAAP shares used in per share calculation (diluted) | 1,412 | 1,569 | ||||||
| Share impact of current stock-based compensation rules | (1 | ) | (1 | ) | ||||
| Non-GAAP shares used in per share calculation (diluted) | 1,411 | 1,568 | ||||||
| Non-GAAP adjustment summary: | ||||||||
| Cost of goods sold adjustments | $ | 210 | $ | 208 | ||||
| Research and development expenses adjustments | 496 | 45 | ||||||
| Selling, general and administrative expenses adjustments | 47 | 45 | ||||||
| Total non-GAAP adjustments before tax | 753 | 298 | ||||||
| Income tax effect | (45 | ) | (28 | ) | ||||
| Other(1) | — | 1 | ||||||
| Total non-GAAP adjustments after tax attributable to Gilead | $ | 708 | $ | 271 | ||||
| Notes: | ||||||||
| (1) Amounts related to consolidation of a contract manufacturer, contingent consideration and/or other individually insignificant amounts | ||||||||
(2) Amounts may not sum due to rounding | ||||||||
GILEAD SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in millions) | |||||||
| March 31, | December 31, | ||||||
| 2016 | 2015(1) | ||||||
| Cash, cash equivalents and marketable securities | $ | 21,322 | $ | 26,208 | |||
| Accounts receivable, net | 6,163 | 5,854 | |||||
| Inventories | 1,880 | 1,955 | |||||
| Property, plant and equipment, net | 2,431 | 2,276 | |||||
| Intangible assets, net | 9,923 | 10,247 | |||||
| Goodwill | 1,172 | 1,172 | |||||
| Other assets | 4,874 | 4,004 | |||||
| Total assets | $ | 47,765 | $ | 51,716 | |||
| Current liabilities | $ | 10,910 | $ | 9,890 | |||
| Long-term liabilities | 22,836 | 22,711 | |||||
| Equity component of currently redeemable convertible notes | — | 2 | |||||
| Stockholders’ equity(2) | 14,019 | 19,113 | |||||
| Total liabilities and stockholders’ equity | $ | 47,765 | $ | 51,716 | |||
| Notes: | |||||||
(1) Derived from the audited consolidated financial statements as of December 31, 2015. Certain amounts have been reclassified to conform to current presentation. | |||||||
(2) As of March 31, 2016, there were 1,348 million shares of common stock issued and outstanding. | |||||||
GILEAD SCIENCES, INC. PRODUCT SALES SUMMARY (Unaudited) (in millions) | |||||||
| Three Months Ended | |||||||
| March 31, | |||||||
| 2016 | 2015 | ||||||
| Antiviral products: | |||||||
| Harvoni – U.S. | $ | 1,407 | $ | 3,016 | |||
| Harvoni – Europe | 555 | 477 | |||||
| Harvoni – Japan | 887 | — | |||||
| Harvoni – Other International | 168 | 86 | |||||
| 3,017 | 3,579 | ||||||
| Sovaldi – U.S. | 645 | 421 | |||||
| Sovaldi – Europe | 280 | 483 | |||||
| Sovaldi – Japan | 202 | — | |||||
| Sovaldi – Other International | 150 | 68 | |||||
| 1,277 | 972 | ||||||
| Truvada – U.S. | 576 | 409 | |||||
| Truvada – Europe | 251 | 301 | |||||
| Truvada – Other International | 71 | 61 | |||||
| 898 | 771 | ||||||
| Atripla – U.S. | 489 | 494 | |||||
| Atripla – Europe | 143 | 194 | |||||
| Atripla – Other International | 43 | 46 | |||||
| 675 | 734 | ||||||
| Stribild – U.S. | 376 | 282 | |||||
| Stribild – Europe | 81 | 61 | |||||
| Stribild – Other International | 20 | 13 | |||||
| 477 | 356 | ||||||
| Complera / Eviplera – U.S. | 222 | 163 | |||||
| Complera / Eviplera – Europe | 146 | 145 | |||||
| Complera / Eviplera – Other International | 13 | 12 | |||||
| 381 | 320 | ||||||
| Viread – U.S. | 123 | 100 | |||||
| Viread – Europe | 76 | 80 | |||||
| Viread – Other International | 73 | 54 | |||||
| 272 | 234 | ||||||
| Genvoya – U.S. | 141 | — | |||||
| Genvoya – Europe | 16 | — | |||||
| Genvoya – Other International | 1 | — | |||||
| 158 | — | ||||||
| Other Antiviral – U.S. | 21 | 14 | |||||
| Other Antiviral – Europe | 6 | 7 | |||||
| Other Antiviral – Other International | 1 | 1 | |||||
| 28 | 22 | ||||||
| Total antiviral products – U.S. | 4,000 | 4,899 | |||||
| Total antiviral products – Europe | 1,554 | 1,748 | |||||
| Total antiviral products – Japan | 1,089 | — | |||||
| Total antiviral products – Other International | 540 | 341 | |||||
| 7,183 | 6,988 | ||||||
GILEAD SCIENCES, INC. PRODUCT SALES SUMMARY (Continued) (Unaudited) (in millions) | |||||||
| Three Months Ended | |||||||
| March 31, | |||||||
| 2016 | 2015 | ||||||
| Total antiviral products sales | $ | 7,183 | $ | 6,988 | |||
| Other products: | |||||||
| Letairis | 175 | 151 | |||||
| Ranexa | 144 | 117 | |||||
| AmBisome | 86 | 85 | |||||
| Zydelig | 49 | 26 | |||||
| Other | 44 | 38 | |||||
| 498 | 417 | ||||||
| Total product sales | $ | 7,681 | $ | 7,405 | |||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160428006734/en/
Source:
Gilead Sciences, Inc.InvestorsRobin Washington, 650-522-5688Sung Lee, 650-524-7792Patrick O'Brien, 650-522-1936MediaAmy Flood, 650-522-5643
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