- Product Sales of $7.7 billion -
- Diluted EPS of $2.58 per share -
- Non-GAAP Diluted EPS of $3.08 per share
-
- Revised Full Year 2016 Guidance -
Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results
of operations for the second quarter ended June 30, 2016. The
financial results that follow represent a year-over-year comparison
of second quarter 2016 to the second quarter 2015. Total revenues
were $7.8 billion in 2016 compared to $8.2 billion in 2015. Net
income was $3.5 billion or $2.58 per diluted share in 2016 compared
to $4.5 billion or $2.92 per diluted share in 2015. Non-GAAP net
income, which excludes amounts related to acquisition-related,
up-front collaboration, stock-based compensation and other
expenses, was $4.2 billion or $3.08 per diluted share in 2016
compared to $4.8 billion or $3.15 per diluted share in 2015.
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions, except per share
amounts)
2016
2015
2016
2015
Product sales $ 7,651 $ 8,126 $ 15,332 $ 15,531 Royalty, contract
and other revenues 125 118 238 307
Total revenues $ 7,776 $ 8,244 $ 15,570 $ 15,838 Net income
attributable to Gilead $ 3,497 $ 4,492 $ 7,063 $ 8,825 Non-GAAP net
income* $ 4,177 $ 4,845 $ 8,451 $ 9,449 Diluted earnings per share
$ 2.58 $ 2.92 $ 5.11 $ 5.68 Non-GAAP diluted earnings per share* $
3.08 $ 3.15 $ 6.11 $ 6.08
* Non-GAAP net income and non-GAAP diluted earnings per share
exclude acquisition-related, up-front collaboration, stock-based
compensation and other expenses. A reconciliation between GAAP and
non-GAAP financial information is provided in the tables on pages 8
and 9.
Product Sales
Total product sales for the second quarter of 2016 were $7.7
billion compared to $8.1 billion for the same period in 2015.
Product sales for the second quarter of 2016 were $4.9 billion in
the U.S., $1.6 billion in Europe, $619 million in Japan and $531
million in other locations. Product sales for the second quarter of
2015 were $5.6 billion in the U.S., $2.0 billion in Europe, $62
million in Japan and $515 million in other locations.
Antiviral Product Sales
Antiviral product sales, which include products in Gilead's HIV
and liver disease areas, were $7.1 billion for the second quarter
of 2016 compared to $7.6 billion for the same period in 2015.
- HIV and other antiviral product sales
were $3.1 billion compared to $2.7 billion for the same period in
2015 primarily due to increases in sales of our tenofovir
alafenamide (TAF) based products, Genvoya® (elvitegravir 150
mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir alafenamide 10
mg), Descovy® (emtricitabine 200 mg/tenofovir alafenamide 25 mg)
and Odefsey® (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir
alafenamide 25 mg).
- HCV product sales, which consist of
Harvoni® (ledipasvir 90 mg/sofosbuvir 400 mg), Sovaldi® (sofosbuvir
400 mg) and Epclusa® (sofosbuvir 400 mg/velpatasvir 100 mg), were
$4.0 billion compared to $4.9 billion for the same period in 2015
primarily due to a decline in sales of Harvoni.
Other Product Sales
Other product sales, which include Letairis® (ambrisentan),
Ranexa® (ranolazine) and AmBisome® (amphotericin B liposome for
injection), were $525 million for the second quarter of 2016
compared to $495 million for the same period in 2015.
Cost of Goods Sold
During the second quarter of 2016, compared to the same period
in 2015, cost of goods sold decreased to $864 million from $998
million and non-GAAP cost of goods sold* decreased to $653 million
from $788 million, reflecting the reversal of the $200 million
litigation reserve recorded in the first quarter of 2016 following
a favorable court decision.
Operating Expenses
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions)
2016
2015
2016
2015
Research and development expenses (R&D) $ 1,484 $ 818 $
2,749 $ 1,514 Non-GAAP research and development expenses* $ 1,040 $
702 $ 1,809 $ 1,353 Selling, general and administrative expenses
(SG&A) $ 890 $ 812 $ 1,575 $ 1,457 Non-GAAP selling, general
and administrative expenses* $ 838 $ 761 $ 1,476 $ 1,361
* Non-GAAP Cost of Goods Sold, R&D and SG&A expenses
exclude acquisition-related, up-front collaboration, stock-based
compensation and other expenses. A reconciliation between GAAP and
non-GAAP financial information is provided in the tables on pages 8
and 9.
During the second quarter of 2016, compared to the same period
in 2015:
- Research and development expenses and
non-GAAP research and development expenses* increased primarily due
to Gilead's purchase of a U.S. Food and Drug Administration (FDA)
priority review voucher and the overall progression of Gilead's
clinical studies. Research and development expenses for the second
quarter of 2016 also include Gilead’s purchase of Nimbus Apollo,
Inc. (Nimbus).
- Selling, general and administrative
expenses and non-GAAP selling, general and administrative expenses*
increased primarily due to higher costs to support Gilead's new
product launches and geographic expansion of its business.
Cash, Cash Equivalents and Marketable
Securities
As of June 30, 2016, Gilead had $24.6 billion of cash, cash
equivalents and marketable securities compared to $21.3 billion as
of March 31, 2016. Cash flow from operating activities was $4.9
billion for the quarter. During the second quarter and the first
six months of 2016, Gilead utilized $1.0 billion and $9.0 billion
on stock repurchases, respectively.
Revised 2016 Full Year
Guidance
Gilead revised its full year 2016 guidance, which it initially
provided on February 2, 2016:
(In millions, except percentages and
per share amounts)
Initially ProvidedFebruary 2,
2016ReiteratedApril 28, 2016
UpdatedJuly 25, 2016
Net Product Sales
Non-GAAP*
$30,000 - $31,000
$29,500 - $30,500
Product Gross Margin 88% - 90% 88% - 90% R&D Expenses $3,200 -
$3,500 $3,600 - $3,800 SG&A Expenses $3,300 - $3,600 $3,100 -
$3,300 Effective Tax Rate 18.0% - 20.0% 18.0% - 20.0%
Diluted EPS Impact of Acquisition-related,
Up-front Collaboration, Stock-based Compensation and Other
Expenses
$1.10 - $1.16 $1.47 - $1.53
* 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. A
reconciliation between GAAP and non-GAAP full year 2016 guidance is
provided in the tables on page 10.
Corporate Highlights
- Announced that Kevin Young CBE was
appointed Chief Operating Officer, and Martin Silverstein, MD was
appointed Executive Vice President, Strategy. Both Mr. Young and
Dr. Silverstein will report to John F. Milligan, PhD, President and
Chief Executive Officer.
- Announced that Gilead acquired Nimbus,
a wholly-owned subsidiary of Nimbus Therapeutics, and its Acetyl-
CoA Carboxylase (ACC) inhibitor program. The Nimbus program
includes the lead candidate NDI-010976, an ACC inhibitor, and other
pre-clinical ACC inhibitors for the potential treatment of
non-alcoholic steatohepatitis, hepatocellular carcinoma and other
diseases. NDI-010976 was granted Fast Track designation by FDA in
February 2016.
Product & Pipeline Updates
announced by Gilead during the Second Quarter of 2016
include:
- Announced that FDA approved Epclusa
(sofosbuvir 400 mg/velpatasvir 100 mg; SOF/VEL), the first
all-oral, pan-genotypic, single tablet regimen (STR) for the
treatment of adults with genotype 1-6 chronic hepatitis C virus
(HCV) infection. Epclusa is also the first STR approved for the
treatment of patients with HCV genotype 2 and 3, without the need
for ribavirin (RBV). Epclusa for 12 weeks was approved in patients
without cirrhosis or with compensated cirrhosis (Child-Pugh A), and
in combination with RBV for patients with decompensated cirrhosis
(Child-Pugh B or C). FDA granted Epclusa a Priority Review and
Breakthrough Therapy designation, which is given to investigational
medicines that may offer major advances in treatment over existing
options. Additionally, the Committee for Medicinal Products for
Human Use, the scientific committee of the European Medicines
Agency, adopted a positive opinion on the company’s Marketing
Authorization Application and in July 2016, the European Commission
granted marketing authorization for Epclusa.
- Announced that the European Commission
granted marketing authorization for the once-daily STR Odefsey
(emtricitabine 200 mg/rilpivirine 25 mg/tenofovir alafenamide 25
mg) for the treatment of HIV-1 infection. Odefsey combines Gilead's
emtricitabine and tenofovir alafenamide (marketed as Descovy) with
rilpivirine, marketed by Janssen Sciences Ireland UC, one of the
Janssen Pharmaceutical Companies of Johnson & Johnson. Odefsey
is Gilead's second STR based on the Descovy backbone to receive
marketing authorization in the European Union and is currently the
smallest STR for the treatment of HIV.
- Announced positive data from four
pre-clinical and Phase 1 studies evaluating bictegravir (GS-9883),
a novel, unboosted, investigational once-daily integrase inhibitor.
The studies, which examined the antiviral potency, resistance
profile, pharmacokinetics and safety of bictegravir, were presented
at the American Society of Microbiology Microbe 2016
Conference.
- Presented data at the 51st Annual
Meeting of the European Association for the Study of the Liver,
which included the announcement of:
- Positive results from the open-label,
Phase 3 ASTRAL-5 study evaluating once-daily SOF/VEL for 12 weeks
among patients with HCV genotype 1-6 who are co-infected with HIV
demonstrated that SOF/ VEL was well-tolerated and resulted in high
SVR12 rates.
- Positive results from three Phase 2
trials evaluating SOF/VEL plus voxilaprevir (VOX), a pan-genotypic
protease inhibitor (Studies 1168 and 1169 and TRILOGY-3). Studies
1168 and 1169 evaluated 6 weeks of SOF/VEL plus VOX among
treatment-naïve patients, 8 weeks of SOF/VEL plus VOX, with or
without RBV, among treatment-naïve patients, and 12 weeks of
SOF/VEL plus VOX among patients who failed prior treatment
including those previously exposed to a direct acting antiviral
(DAA) regimen. Study 1168 evaluated genotype 1 patients and Study
1169 evaluated genotype 2-6 patients. TRILOGY-3 featured data from
the Phase 2 trial evaluating 12 weeks of a fixed-dose combination
of SOF/VEL/ VOX, with or without RBV, among genotype 1,
DAA-experienced, HCV-infected patients, including patients with
cirrhosis.
- Announced that the European Commission
granted marketing authorization for two doses of Descovy (200/10 mg
and 200/25 mg), a fixed-dose combination for the treatment of HIV-1
infection. Descovy is Gilead's second TAF-based therapy to receive
marketing authorization in the European Union. Descovy was approved
by FDA and is indicated in combination with other antiretroviral
agents for the treatment of HIV-1 infection in adults and pediatric
patients 12 years of age and older.
Non-GAAP Financial
Information
The information presented in this document has been prepared by
Gilead 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
8, 9, and 10.
Conference Call
At 4:30 p.m. Eastern Time today, Gilead's management will host a
conference call and a simultaneous webcast to discuss results from
its second quarter 2016 as well as provide a general business
update. To access the webcast live via the internet, please connect
to the company's website at www.gilead.com/investors 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 1-877-359-9508 (U.S.) or 1-224-357-2393
(international) and dial the conference ID 34263799 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 July 27, 2016.
To access the phone replay, please call 1-855-859-2056 (U.S.) or
1-404-537-3406 (international) and dial the conference ID
34263799.
About Gilead
Gilead Sciences is a biopharmaceutical company that discovers,
develops and commercializes innovative therapeutics in areas of
unmet medical need. The company's mission is to advance the care of
patients suffering from life-threatening diseases. Gilead has
operations in more than 30 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 2016
financial results; Gilead's ability to sustain growth in revenues
for its antiviral and other programs; 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 Epclusa, Genvoya, Sovaldi and Harvoni; the
potential for increased pricing pressure and contracting pressure
as well as decreased volume and market share from additional
competitive HCV launches, austerity measures in European countries
and Japan that may increase the amount of discount required on
Gilead's products, additional negotiated discounts for patient
access, shifts in payer mix to more deeply discounted government
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 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 bictegravir and SOF/VEL/VOX;
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; Gilead's ability to successfully
commercialize its products, including Epclusa, 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; 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; Gilead's ability to 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 (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. 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 press releases,
Quarterly Report on Form 10-Q for the quarter ended March 31, 2016
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 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®, GILEAD SCIENCES®, AMBISOME®,
CAYSTON®, COMPLERA®, DESCOVY®, EMTRIVA®, EPCLUSA®, EVIPLERA®,
GENVOYA®, HARVONI®, HEPSERA®, LETAIRIS®, ODEFSEY®, RANEXA®,
RAPISCAN®, SOVALDI®, STRIBILD®, TRUVADA®, TYBOST®, VIREAD®,
VITEKTA®, VOLIBRIS®, and ZYDELIG®.
ATRIPLA® is a registered trademark belonging to Bristol-Myers
Squibb & Gilead Sciences, LLC. LEXISCAN® is a registered
trademark belonging to Astellas U.S. LLC. MACUGEN® is a registered
trademark belonging to Eyetech, Inc. SUSTIVA® is a registered
trademark of Bristol-Myers Squibb Pharma Company. TAMIFLU® is a
registered trademark belonging to 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 INCOME (unaudited) (in millions, except
per share amounts) Three Months
Ended Six Months Ended June 30, June 30,
2016 2015
2016 2015 Revenues: Product
sales $ 7,651 $ 8,126 $ 15,332 $ 15,531 Royalty, contract and other
revenues 125 118 238
307 Total revenues 7,776 8,244
15,570 15,838 Costs and
expenses: Cost of goods sold 864 998 2,057 1,880 Research and
development expenses 1,484 818 2,749 1,514 Selling, general and
administrative expenses 890 812
1,575 1,457 Total costs and expenses
3,238 2,628 6,381 4,851
Income from operations 4,538 5,616 9,189 10,987 Interest
expense (227 ) (140 ) (457 ) (293 ) Other income (expense), net
88 35 169 56
Income before provision for income taxes 4,399 5,511 8,901
10,750 Provision for income taxes 902 1,014
1,837 1,921 Net income 3,497
4,497 7,064 8,829 Net income attributable to noncontrolling
interest — 5 1 4
Net income attributable to Gilead $ 3,497 $ 4,492
$ 7,063 $ 8,825 Net income per share
attributable to Gilead common stockholders - basic $ 2.62 $ 3.05 $
5.20 $ 5.96 Shares used in per share calculation - basic 1,335
1,472 1,359 1,480 Net income per share attributable to Gilead
common stockholders - diluted $ 2.58 $ 2.92 $ 5.11 $ 5.68 Shares
used in per share calculation - diluted 1,355 1,540 1,383 1,555
Cash dividends declared per share $ 0.47 0.43 $ 0.90 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 Six Months
Ended June 30, June 30, 2016
2015 2016
2015 Cost of goods sold reconciliation: GAAP
cost of goods sold $ 864 $ 998 $ 2,057 $ 1,880 Acquisition
related-amortization of purchased intangibles (210 ) (207 ) (420 )
(413 ) Stock-based compensation expenses (4 ) (3 ) (7 ) (6 ) Other
(1) 3 — 6 1
Non-GAAP cost of goods sold $ 653 $ 788 $ 1,636
$ 1,462
Product gross margin
reconciliation: GAAP product gross margin 88.7 % 87.7 % 86.6 %
87.9 % Acquisition related-amortization of purchased intangibles
2.7 % 2.5 % 2.7 % 2.7 % Non-GAAP
product gross margin(2) 91.5 % 90.3 % 89.3 %
90.6 %
Research and development expenses
reconciliation: GAAP research and development expenses $ 1,484
$ 818 $ 2,749 $ 1,514 Up-front collaboration expenses — — (368 ) —
Acquisition related expenses-acquired IPR&D (400 ) (66 ) (400 )
(66 ) Acquisition related-IPR&D impairment — — (114 ) —
Stock-based compensation expenses (44 ) (42 ) (85 ) (84 ) Other (1)
— (8 ) 27 (11 ) Non-GAAP
research and development expenses $ 1,040 $ 702 $
1,809 $ 1,353
Selling, general and
administrative expenses reconciliation: GAAP selling, general
and administrative expenses $ 890 $ 812 $ 1,575 $ 1,457 Stock-based
compensation expenses (47 ) (51 ) (91 ) (98 ) Other (1) (5 )
— (8 ) 2 Non-GAAP selling,
general and administrative expenses $ 838 $ 761 $
1,476 $ 1,361
Operating margin
reconciliation: GAAP operating margin 58.4 % 68.1 % 59.0 % 69.4
% Up-front collaboration expenses — % — % 2.4 % — % Acquisition
related-amortization of purchased intangibles 2.7 % 2.5 % 2.7 % 2.6
% Acquisition related expenses-acquired IPR&D 5.1 % 0.8 % 2.6 %
0.4 % Acquisition related-IPR&D impairment — % — % 0.7 % — %
Stock-based compensation expenses 1.2 % 1.2 % 1.2 % 1.2 % Other (1)
— % 0.1 % (0.2 )% 0.1 % Non-GAAP
operating margin(2) 67.5 % 72.7 % 68.4 %
73.6 %
(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 Six Months
Ended
June 30,
June 30, 2016 2015
2016 2015
Effective tax rate reconciliation: GAAP effective tax
rate 20.5 % 18.4 % 20.6 % 17.9 % Up-front collaboration expenses —
% — % (0.7 )% — % Acquisition related-amortization of purchased
intangibles (0.7 )% (0.5 )% (0.7 )% (0.5 )% Acquisition related
expenses-acquired IPR&D (1.5 )% (0.2 )% (0.8 )% (0.1 )% Other
(1) — % — % 0.1 % — % Non-GAAP
effective tax rate (2) 18.3 % 17.7 %
18.5 % 17.3 %
Net income
attributable to Gilead reconciliation: GAAP net income
attributable to Gilead $ 3,497 $ 4,492 $ 7,063 $ 8,825 Up-front
collaboration expenses — — 368 — Acquisition related-amortization
of purchased intangibles 204 202 408 403 Acquisition related
expenses-acquired IPR&D 400 66 400 66 Acquisition
related-IPR&D Impairment — — 99 — Stock-based compensation
expenses 69 71 133 140 Other (1) 7 14
(20 ) 15 Non-GAAP net
income $ 4,177 $ 4,845 $ 8,451
$ 9,449
Diluted earnings per share
reconciliation: GAAP diluted earnings per share $ 2.58 $ 2.92 $
5.11 $ 5.68 Up-front collaboration expenses — — 0.27 — Acquisition
related-amortization of purchased intangibles 0.15 0.13 0.30 0.26
Acquisition related expenses-acquired IPR&D 0.30 0.04 0.29 0.04
Acquisition related-IPR&D Impairment — — 0.07 — Stock-based
compensation expenses 0.05 0.05 0.10 0.09 Other (1) 0.01
— (0.01 ) 0.01 Non-GAAP
diluted earnings per share(2) $ 3.08 $ 3.15
$ 6.11 $ 6.08
Shares used in
per share calculation (diluted) reconciliation: GAAP shares
used in per share calculation (diluted) 1,355 1,540 1,383 1,555
Share impact of current stock-based compensation rules (1 )
— — —
Non-GAAP shares used in per share calculation (diluted)
1,354 1,540 1,383
1,555
Non-GAAP adjustment
summary: Cost of goods sold adjustments $ 211 $ 210 $ 421 $ 418
Research and development expenses adjustments 444 116 940 161
Selling, general and administrative expenses adjustments 52
51 99
96 Total non-GAAP adjustments before tax 707 377
1,460 675 Income tax effect (32 ) (30 ) (77 ) (58 ) Other(1)
5 6 5
7 Total non-GAAP adjustments after tax $ 680
$ 353 $ 1,388 $ 624
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 2016 FULL YEAR GUIDANCE (unaudited) (in
millions, except percentages and per share amounts)
Initially ProvidedFebruary 2,
2016ReiteratedApril 28, 2016
Updated
July 25, 2016
Projected product gross margin GAAP to non-GAAP
reconciliation: GAAP projected product gross margin 85% - 87%
85% - 87% Acquisition-related expenses 3% - 3% 3% - 3% Non-GAAP
projected product gross margin * 88% - 90% 88% - 90%
Projected research and development expenses GAAP to non-GAAP
reconciliation: GAAP projected research and development
expenses $3,837 - $4,182 $4,700 - $4,945 Acquisition-related
expenses / up-front collaboration expenses (447) - (477) (915) -
(945) Stock-based compensation expenses (190) - (205) (185) - (200)
Non-GAAP projected research and development expenses $3,200 -
$3,500 $3,600 - $3,800
Projected selling, general and
administrative expenses GAAP to non-GAAP reconciliation:
GAAP projected selling, general and administrative expenses $3,530
- $3,840 $3,305 - $3,515 Stock-based compensation expenses (230) -
(240) (205) - (215) Non-GAAP projected selling, general and
administrative expenses $3,300 - $3,600 $3,100 - $3,300
Projected diluted EPS impact of acquisition-related, up-front
collaboration, stock-based compensation and other expenses:
Acquisition-related expenses / up-front collaboration expenses
$0.88 - $0.92 $1.26 - $1.30 Stock-based compensation expenses $0.22
- $0.24 $0.21 - $0.23 Projected diluted EPS impact of
acquisition-related, up-front collaboration, stock-based
compensation and other expenses $1.10 - $1.16 $1.47 - $1.53
Notes:* Stock-based compensation expenses have a less than one
percent impact on non-GAAP projected product gross margin.
GILEAD SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited) (in millions)
June 30, December 31, 2016
2015(1)
Cash, cash equivalents and marketable securities $ 24,616 $
26,208 Accounts receivable, net 5,752 5,854 Inventories 1,862 1,955
Property, plant and equipment, net 2,599 2,276 Intangible assets,
net 9,713 10,247 Goodwill 1,172 1,172 Other assets 4,266
4,004 Total assets $ 49,980 $ 51,716
Current liabilities $ 10,444 $ 9,890 Long-term liabilities 23,421
22,711 Equity component of currently redeemable convertible notes —
2 Stockholders’ equity(2) 16,115 19,113 Total
liabilities and stockholders’ equity $ 49,980 $ 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 year presentation.(2) As of June
30, 2016, there were 1,331 million shares of common stock issued
and outstanding.
GILEAD SCIENCES, INC. PRODUCT SALES SUMMARY
(unaudited) (in millions)
Three Months Ended Six Months Ended June 30,
June 30, 2016 2015 2016 2015
Antiviral products: Harvoni – U.S. $ 1,474 $ 2,826 $ 2,881 $ 5,842
Harvoni – Europe 512 623 1,067 1,100 Harvoni – Japan 448 — 1,335 —
Harvoni – Other International 130 159 298
245 2,564 3,608 5,581 7,187
Sovaldi – U.S. 775 615 1,420 1,036 Sovaldi – Europe 263 522
543 1,005 Sovaldi – Japan 171 62 373 62 Sovaldi – Other
International 149 92 299 160
1,358 1,291 2,635 2,263 Truvada – U.S.
631 500 1,207 909 Truvada – Europe 245 277 496 578 Truvada – Other
International 66 72 137 133 942
849 1,840 1,620 Atripla – U.S. 479 549
968 1,043 Atripla – Europe 140 178 283 372 Atripla – Other
International 54 55 97 101 673
782 1,348 1,516 Stribild – U.S. 326 364
702 646 Stribild – Europe 84 65 165 126 Stribild – Other
International 19 18 39 31 429
447 906 803 Complera / Eviplera – U.S.
199 207 421 370 Complera / Eviplera – Europe 156 145 302 290
Complera / Eviplera – Other International 13 15
26 27 368 367 749 687
Genvoya – U.S. 268 — 409 — Genvoya – Europe 30 — 46 —
Genvoya – Other International 4 — 5 —
302 — 460 — Viread – U.S. 142
134 265 234 Viread – Europe 81 77 157 157 Viread – Other
International 64 60 137 114 287
271 559 505 Epclusa – U.S. 64
— 64 — Descovy – U.S. 49 — 49 — Descovy
– Europe 12 — 12 — 61 —
61 — Odefsey – U.S. 58 —
69 —
GILEAD SCIENCES, INC. PRODUCT SALES
SUMMARY - (Continued) (unaudited) (in millions)
Three Months Ended Six Months
Ended June 30, June 30, 2016
2015 2016 2015 Other
Antiviral - US $ 12 $ 8 $ 22 $ 22 Other Antiviral - Europe 7 7 13
14 Other Antiviral - Other International 1 1
2 2 20 16
37 38 Total antiviral products – U.S.
4,477 5,203 8,477 10,102 Total antiviral products – Europe 1,530
1,894 3,084 3,642 Total antiviral products – Japan 619 62 1,708 62
Total antiviral products – Other International 500
472 1,040 813 7,126
7,631 14,309 14,619 Other
products: Letairis 203 176 378 327 Ranexa 153 141 297 258 AmBisome
85 103 171 188 Zydelig 41 30 90 56 Other 43 45
87 83 525 495
1,023 912 Total product sales $
7,651 $ 8,126 $ 15,332 $ 15,531
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version on businesswire.com: http://www.businesswire.com/news/home/20160725006279/en/
Gilead Sciences, Inc.InvestorsRobin Washington, 650-522-5688Sung
Lee, 650-524-7792orMediaAmy
Flood, 650-522-5643
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