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press release

July 29, 2021, 4:01 p.m. EDT

Gilead Sciences Announces Second Quarter 2021 Financial Results

Second Quarter 2021 Product Sales Increased 21% Year-Over-Year Primarily Driven by VekluryBiktarvy Sales Increased 24% Year-Over-Year

Gilead Sciences, Inc. /zigman2/quotes/210293917/composite GILD -0.05% announced today its results of operations for the second quarter 2021.

“We maintained our positive momentum in the second quarter, with both a solid financial performance and strong progress across our increasingly diverse portfolio. Our flagship HIV therapy, Biktarvy, saw continued growth and gains in market share, despite the ongoing impact of the pandemic,” said Daniel O’Day, Chairman and Chief Executive Officer, Gilead Sciences. “The series of promising pipeline updates included the data from the landmark ZUMA-7 study for the treatment of second-line large B-cell lymphoma. In virology, recent results from our lenacapavir study reinforce its potential as a long-acting therapy for people living with HIV, and positive interim results from our Hepcludex studies in HDV moved us closer to a U.S. filing.”

Second Quarter 2021 Financial Results

  • Total second quarter 2021 revenue of $6.2 billion increased 21% compared to the same period in 2020, primarily due to Veklury [®] (remdesivir), higher demand for Biktarvy (bictegravir 50 mg/FTC/tenofovir alafenamide 25 mg (“TAF”)) and our hepatitis C virus (“HCV”) products, as well as continued uptake in the United States of Trodelvy [®] (sacituzumab govitecan-hziy) and Tecartus [®] (brexucabtagene autoleucel).

  • Diluted Earnings Per Share (“EPS”) increased to $1.21 for the second quarter 2021 compared to net loss per share of $2.66 for the same period in 2020. This was primarily driven by the impact of higher in-process research and development (“IPR&D”) expenses in the second quarter 2020 related to the Forty Seven, Inc. acquisition and revenue growth in the second quarter 2021, offset by fair value loss adjustments on Gilead’s equity investment in Galapagos NV.

  • Non-GAAP diluted EPS increased 68% to $1.87 for the second quarter 2021 compared to the same period in 2020, primarily due to higher operating income partially offset by lower interest income.

  • As of June 30, 2021, Gilead had $7.4 billion of cash, cash equivalents and marketable debt securities compared to $7.9 billion as of December 31, 2020.

  • During the second quarter 2021, Gilead generated $2.3 billion in operating cash flow.

  • During the second quarter 2021, Gilead paid cash dividends of $894 million and utilized $43 million to repurchase common stock.

Product Sales Performance

Total second quarter 2021 product sales increased 21% to $6.2 billion compared to the same period in 2020. Total product sales excluding Veklury increased 5% to $5.3 billion for the second quarter 2021 compared to the same period in 2020, reflecting continued uptake of Trodelvy and Tecartus in the United States as well as improving trends in HIV and HCV, offset, as expected, by loss of exclusivity of Truvada [®] (emtricitabine 200mg (“FTC”)/tenofovir disoproxil fumarate 300mg (“TDF”)) and Atripla [®] (efavirenz 600mg/FTC/TDF) in the United States.

HIV product sales decreased 2% to $3.9 billion for the second quarter 2021 compared to the same period in 2020, reflecting the expected loss of exclusivity of Truvada and Atripla in the United States, offset in part by increased demand.

  • Biktarvy® sales increased 24% year-over-year in the second quarter 2021, reflecting higher demand in all geographies.

  • Descovy® (FTC/TAF) sales increased 4% year-over-year in the second quarter 2021, driven by increased pre-exposure prophylaxis (“PrEP”) demand in the United States and the impact in the same period last year of the COVID-related channel inventory drawdown, offset by lower average net selling price.

  • Truvada and Atripla sales decreased 72% year-over-year to $108 million and 42% year-over-year to $60 million, respectively, in the second quarter 2021 due to generic entrants in the United States following loss of exclusivity in late 2020.

HCV product sales increased 23% to $549 million for the second quarter 2021 compared to the same period in 2020, driven primarily by improved market starts in the United States and Europe as well as an unfavorable change in estimate of government rebates in the second quarter 2020.

Hepatitis B virus (“HBV”) and hepatitis delta virus (“HDV”) product sales increased 8% to $237 million for the second quarter 2021 compared to the same period in 2020. Vemlidy® (tenofovir alafenamide 25 mg) sales increased 32% in the second quarter 2021 compared to the same period in 2020 driven by increased demand primarily in geographies outside the United States and Europe. Hepcludex® (bulevirtide) contributed $7 million in the second quarter 2021 reflecting the first full quarter of sales for Gilead.

Cell Therapy product sales increased 39% to $219 million for the second quarter 2021 compared to the same period in 2020.

  • Yescarta® (axicabtagene ciloleucel) sales increased to $178 million in the second quarter 2021, reflecting continued uptake in relapsed or refractory indolent follicular lymphoma (“FL”) in the United States following its approval by the U.S. Food and Drug Administration (“FDA”) in the first quarter 2021 and expansion in Europe.

  • Tecartus sales were $41 million for the second quarter 2021, driven by the launch in mantle cell lymphoma in the United States and Europe.

Trodelvy sales for the second quarter 2021 were $89 million. Launch activities continue following the full FDA approval for second-line metastatic triple-negative breast cancer (“mTNBC”) and accelerated approval for metastatic urothelial cancer.

Veklury sales were $829 million for the second quarter 2021. Sales of Veklury are generally affected by COVID-19 related rates of infections, hospitalizations and vaccinations.

Other product sales increased 20% to $291 million for the second quarter 2021 compared to the same period in 2020.

  • AmBisome® (amphotericin B) sales increased in the second quarter 2021 compared to the same period in 2020 driven by an increase in shipments outside the United States, primarily in India and Europe.

Second Quarter 2021 Product Gross Margin, Operating Expenses and Tax

  • Product gross margin was 77.4% for the second quarter 2021 compared to 79.0% in the same period in 2020, reflecting additional amortization of intangibles acquired from Immunomedics, Inc. and MYR GmbH. Non-GAAP product gross margin was 86.4% for the second quarter 2021 compared to 84.3% in the same period in 2020, driven by lower royalty expense.

  • Research and Development (“R&D”) expenses for the second quarter 2021 were $1.1 billion compared to $1.3 billion in the same period in 2020. Non-GAAP R&D expenses for the second quarter 2021 were $1.1 billion compared to $1.2 billion in the same period in 2020. Lower R&D expenses reflect completion or wind-down of remdesivir-related programs, partly offset by increases in Trodelvy and magrolimab clinical activities.

  • Sales, General and Administrative (“SG&A”) expenses for the second quarter 2021 were $1.4 billion compared to $1.2 billion in the same period in 2020. The increase in SG&A expenses was driven primarily by a significant donation of equity securities to the Gilead Foundation. Non-GAAP SG&A expenses for the second quarter 2021 were $1.1 billion compared to $1.2 billion in the same period in 2020. The decrease in non-GAAP SG&A expenses was driven by lower legal expenses primarily due to a prior year settlement associated with a Department of Justice investigation, offset by increases in promotional and commercialization activities in geographies outside the United States.

  • The GAAP effective tax rate (“ETR”) and non-GAAP ETR for the second quarter 2021 were 16.5% and 19.6%, respectively, compared to (12.5)% and 22.8%, respectively, for the same periods in 2020.

Key Updates Since Our Last Quarterly Release

Viral Diseases

  • Gilead presented additional lenacapavir clinical development program data at the International AIDS Society (“IAS”) 2021 Conference on HIV Science. Phase 2 data from CALIBRATE, an ongoing, open-label, active-controlled trial in treatment-naïve people with HIV-1 infection showed lenacapavir, given subcutaneously or orally, in combination with oral daily emtricitabine/tenofovir alafenamide (“F/TAF”) led to high rates of viral suppression by Week 28. These results support the ongoing evaluation and further development of lenacapavir in combination with other long-acting partner agents for the treatment of HIV-1 infection and will support Gilead’s long-acting oral and injectable development program.

  • Gilead also announced at IAS 2021 new results from the ongoing Phase 2/3 CAPELLA trial evaluating lenacapavir in heavily treatment-experienced people living with multi-drug resistant HIV. The findings demonstrate that lenacapavir administered subcutaneously every six months in combination with other antiretrovirals achieved high rates of virologic suppression at Week 26.

  • Gilead filed a New Drug Application to FDA seeking approval of lenacapavir for the treatment of HIV-1 infection in heavily treatment-experienced people with multi-drug resistant infection.

  • Gilead announced interim results from the Phase 3 study (MYR301) of bulevirtide for the treatment of HDV at the International Liver Congress (“ILC”) 2021 annual meeting. After 24 weeks, 36.7% of patients receiving a 2mg dose of bulevirtide and 28% of patients receiving a 10mg dose of bulevirtide showed a combined virological and biological response compared to 0% in the no treatment group.

  • Gilead also announced at ILC 2021 the interim results from the Phase 2b study (MYR204) of bulevirtide for the treatment of HDV. At week 24, results showed that bulevirtide alone or in combination with peginterferon alfa-2a, is associated with a significant HDV RNA decline and improvements in biochemical disease activity.

  • Gilead received FDA approval for a new formulation of Epclusa, expanding the pediatric indication for the treatment of HCV to now include children as young as 3 years of age.

Oncology

  • Kite announced top-line results from the primary analysis of ZUMA-7 trial of Yescarta in second-line relapsed or refractory large B-cell lymphoma (“LBCL”). At a median follow-up of two years, Yescarta improved event free survival by 60% over the standard of care chemotherapy plus stem cell transplant. The study also met the key secondary endpoint of objective response rate. Full data will be presented later this year and discussions are underway with global regulatory authorities.

  • Kite announced that Fosun Kite Biotechnology Co., Ltd., a joint venture between Kite and Shanghai Fosun Pharmaceutical (Group) Co., Ltd., received approval from the China National Medical Products Administration for axicabtagene ciloleucel (FKC876) for the treatment of adult patients with relapsed or refractory LBCL after two or more lines of systemic therapy. Yescarta is the first and only commercially available chimeric antigen receptor (“CAR”) T-cell therapy approved in China.

  • Kite announced a partnership with Shoreline Biosciences, Inc. to develop allogeneic candidates for a range of hematologic malignancies. The collaboration will focus initially on CAR NK targets, with Kite having an option to expand the collaboration to include an induced pluripotent stem cell CAR Macrophage program.

  • Kite announced follow-up results from the pivotal ZUMA-5 trial of Yescarta in relapsed or refractory FL at the American Society of Clinical Oncology (“ASCO”) 2021 annual meeting. At a minimum follow-up of 18 months, 94% of patients had achieved a response, and secondary endpoints of median progression-free survival and overall survival were not yet reached.

  • Kite announced at ASCO 2021, with a publication in The Lancet, primary analysis of ZUMA-3 evaluating Tecartus in adult patients with relapsed or refractory B-cell precursor acute lymphoblastic leukemia. In the pivotal Phase 2 portion of the trial, 71 patients with relapsed or refractory disease were enrolled and Kite observed a response rate of 71%. Importantly, the majority of these responses were associated with undetectable minimal residual disease. The findings have been designated for Priority Review by FDA with a Prescription Drug User Fee Act (“PDUFA”) date of October 1, 2021.

  • Gilead announced analyses from Phase 3 ASCENT study at ASCO 2021 in patients with relapsed or refractory mTNBC. Treatment with Trodelvy demonstrated significantly greater survival benefit over chemotherapy in patients treated in the second-line setting and in patients greater than 65 years old.

Corporate

  • Kite announced a purchase agreement with BioNTech SE to acquire Kite’s solid tumor neoantigen T cell receptor R&D platform and clinical manufacturing facility in Gaithersburg, Maryland.

  • Gilead welcomed William Grossman, MD, PhD, as Senior Vice President, Oncology Clinical Research. Dr. Grossman brings extensive experience as a clinician and a veteran biopharmaceutical executive.

  • Gilead announced that the company’s Board of Directors has declared a quarterly dividend of $0.71 per share of common stock for the third quarter of 2021. The dividend is payable on September 29, 2021, to stockholders of record at the close of business on September 15, 2021. Future dividends will be subject to Board approval.

Guidance and Outlook

Gilead has updated its full-year guidance, and now expects:

  • Total product sales between $24.4 billion and $25.0 billion, compared to $23.7 billion and $25.1 billion previously, reflecting solid results in the first half of the year and our updated expectations for the second half of 2021.

  • Total product sales, excluding Veklury, between $21.7 billion and $21.9 billion, compared to $21.7 billion to $22.1 billion previously, primarily reflecting the longer than expected pandemic impact on our HIV business, including the latest increase in COVID-19 cases.

  • Total Veklury sales between $2.7 billion and $3.1 billion, compared to $2.0 billion to $3.0 billion previously, reflecting the ongoing role of Veklury in the pandemic, in addition to the continued uncertainties around the path of the pandemic since Veklury revenue tends to track hospitalization rates.

  • GAAP earnings per share between $4.70 and $5.05, compared to $4.75 to $5.45 previously.

  • Non-GAAP earnings per share between $6.90 and $7.25, compared to $6.75 to $7.45 previously.

A reconciliation between GAAP and non-GAAP financial information for the 2021 guidance is provided in the accompanying tables. Also see the Forward-Looking Statements described below. The financial guidance is subject to a number of risks and uncertainties, including uncertainty around the duration and magnitude of the COVID-19 pandemic. While the pandemic can be expected to continue to impact Gilead’s business and broader market dynamics, the rate and degree of these impacts as well as the corresponding recovery from the pandemic may vary across Gilead’s business.

Non-GAAP Financial Information

The information presented in this document has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), unless otherwise noted as non-GAAP. Management believes non-GAAP information is useful for investors, when considered in conjunction with Gilead’s GAAP financial information, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Gilead’s operating results as reported under GAAP. Non-GAAP financial information excludes acquisition-related expenses including amortization of acquired intangible assets and inventory step-up charges in cost of goods sold, acquired IPR&D expenses, and other items that are considered unusual or not representative of underlying trends of Gilead’s business, fair value adjustments of equity securities and discrete and related tax charges or benefits associated with changes in tax related laws and guidelines. Acquired IPR&D expenses reflect IPR&D impairments as well as the initial costs of externally developed IPR&D projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use, including upfront and other payments related to various collaborations and the initial costs of rights to IPR&D projects. Although Gilead consistently excludes the amortization of acquired intangible assets from the non-GAAP financial information, management believes that it is important for investors to understand that such intangible assets were recorded as part of acquisitions and contribute to ongoing revenue generation. Non-GAAP measures may be defined and calculated differently by other companies in the same industry. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the accompanying tables.

Conference Call

At 1:30 p.m. Pacific Time today, Gilead will host a conference call to discuss Gilead’s results. A live webcast will be available on http://investors.gilead.com and will be archived on www.gilead.com for one year.

About Gilead Sciences

Gilead Sciences, Inc. is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades, with the goal of creating a healthier world for all people. The company is committed to advancing innovative medicines to prevent and treat life-threatening diseases, including HIV, viral hepatitis and cancer. Gilead operates in more than 35 countries worldwide, with headquarters in Foster City, California.

Forward-Looking Statements

Statements included in this press release that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Gilead cautions readers that forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include those relating to: the impact of the COVID-19 pandemic on Gilead’s business, financial condition and results of operations; the development, manufacturing and distribution of Veklury as a treatment for COVID-19, including the uncertainty of the amount and timing of future Veklury sales, Gilead’s ability to recoup the expenses incurred to date and future expenses related to the development and production of Veklury, and Gilead’s ability to effectively manage the global supply and distribution of Veklury; Gilead’s ability to achieve its anticipated full year 2021 financial results, including as a result of potential adverse revenue impacts from COVID-19, increases in R&D expenses and potential revenues from Veklury; Gilead’s ability to make progress on any of its long-term ambitions or strategic priorities laid out in its corporate strategy; Gilead’s ability to accelerate or sustain revenues for its antiviral and other programs; Gilead’s ability to realize the potential benefits of acquisitions, collaborations or licensing arrangements, including those involving Shoreline Biosciences, Inc.; Gilead’s ability to initiate, progress or complete clinical trials within currently anticipated timeframes or at all; the possibility of unfavorable results from ongoing and additional clinical trials, including those involving Hepcludex (bulevirtide), Tecartus, Trodelvy and Yescarta; the risk that safety and efficacy data from clinical studies may not warrant further development of Gilead’s product candidates, including those involving lenacapavir, or the product candidates of Gilead’s strategic partners; Gilead’s ability to submit new drug applications for new product candidates in the currently anticipated timelines, including those involving Hepcludex (bulevirtide) for treatment of HDV, Tecartus for treatment of relapsed or refractory B-cell precursor acute lymphoblastic leukemia and Yescarta for treatment of second-line relapsed or refractory LBCL; Gilead’s ability to receive regulatory approvals in a timely manner or at all, including FDA approval of lenacapavir for treatment of HIV-1 infection in heavily treatment-experienced people with multi-drug resistant infection, and the risk that any such approvals may be subject to significant limitations on use; Gilead’s ability to successfully commercialize its products; the risk of potential disruptions to the manufacturing and supply chain of Gilead’s products; pricing and reimbursement pressures from government agencies and other third parties, including required rebates and other discounts; a larger than anticipated shift in payer mix to more highly discounted payer segments; market share and price erosion caused by the introduction of generic versions of Gilead products; the risk that physicians and patients may not see advantages of these products over other therapies and may therefore be reluctant to prescribe the products; and other risks identified from time to time in Gilead’s reports filed with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, Gilead makes estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. Gilead bases its estimates on historical experience and on various other market specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There may be other factors of which Gilead is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ significantly from these estimates. Further, results for the quarter ended June 30, 2021 are not necessarily indicative of operating results for any future periods. Gilead directs readers to its press releases, annual reports on Form 10-K, quarterly reports on Form 10-Q and other subsequent disclosure documents filed with the SEC. Gilead claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements.

The reader is cautioned that forward-looking statements are not guarantees of future performance and is cautioned not to place undue reliance on these forward-looking statements. All forward-looking statements are based on information currently available to Gilead and Gilead assumes no obligation to update or supplement any such forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements.

Gilead owns or has rights to various trademarks, copyrights and trade names used in its business, including the following: GILEAD [®] , GILEAD SCIENCES [®] , AMBISOME [®] , ATRIPLA [®] , BIKTARVY [®] , CAYSTON [®] , COMPLERA [®] , DESCOVY [®] , DESCOVY FOR PREP [®] , EMTRIVA [®] , EPCLUSA [®] , EVIPLERA [®] , GENVOYA [®] , HARVONI [®] , HEPCLUDEX [®] (BULEVIRTIDE), HEPSERA [®] , JYSELECA [®] , LETAIRIS [®] , ODEFSEY [®] , RANEXA [®] , SOVALDI [®] , STRIBILD [®] , TECARTUS [®] , TRODELVY [®] , TRUVADA [®] , TRUVADA FOR PREP [®] , TYBOST [®] , VEKLURY [®] , VEMLIDY [®] , VIREAD [®] , VOSEVI [®] , YESCARTA [®] and ZYDELIG [®] . This report may also refer to trademarks, service marks and trade names of other companies.

For more information on Gilead Sciences, Inc., please visit www.gilead.com or call the Gilead Public Affairs Department at 1-800-GILEAD-5 (1-800-445-3235).

GILEAD SCIENCES, INC.
 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
(in millions, except per share amounts)   2021   2020     2021   2020
Revenues:                
Product sales   $ 6,152       $ 5,067       $ 12,492       $ 10,534    
Royalty, contract and other revenues   65       76       148       157    
Total revenues   6,217       5,143       12,640       10,691    
Costs and expenses:                
Cost of goods sold   1,390       1,064       2,751       2,033    
Research and development expenses   1,134       1,299       2,189       2,303    
Acquired in-process research and development expenses   96       4,524       158       4,621    
Selling, general and administrative expenses   1,351       1,239       2,406       2,315    
Total costs and expenses   3,971       8,126       7,504       11,272    
Income (loss) from operations   2,246       (2,983 )     5,136       (581 )  
Interest expense   (256 )     (240 )     (513 )     (481 )  
Other income (expense), net   (173 )     250       (542 )     92    
Income (loss) before income taxes   1,817       (2,973 )     4,081       (970 )  
Income tax expense   (300 )     (373 )     (842 )     (838 )  
Net income (loss)   1,517       (3,346 )     3,239       (1,808 )  
Net loss attributable to noncontrolling interest   5       7       12       20    
Net income (loss) attributable to Gilead   $ 1,522       $ (3,339 )     $ 3,251       $ (1,788 )  
Net income (loss) per share attributable to Gilead common stockholders - basic   $ 1.21       $ (2.66 )     $ 2.59       $ (1.42 )  
Shares used in per share calculation - basic   1,255       1,255       1,256       1,258    
Net income (loss) per share attributable to Gilead common stockholders - diluted   $ 1.21       $ (2.66 )     $ 2.58       $ (1.42 )  
Shares used in per share calculation - diluted   1,260       1,255       1,261       1,258    
Cash dividends declared per share   $ 0.71       $ 0.68       $ 1.42       $ 1.36    
 
GILEAD SCIENCES, INC.
 
    Three Months Ended       Six Months Ended    
    June 30,       June 30,    
(In millions, except percentages)   2021   2020   Change   2021   2020   Change
Product sales:                        
HIV   $ 3,938     $ 4,000     (2 )%   $ 7,588     $ 8,134     (7 )%
HCV   549     448     23 %   1,059     1,177     (10 )%
HBV/HDV [(1)]   237     219     8 %   457     405     13 %
Cell Therapy   219     157     39 %   410     297     38 %
Trodelvy   89         NM     161         NM  
Other   291     243     20 %   532     521     2 %
Total product sales excluding Veklury   5,323     5,067     5 %   10,207     10,534     (3 )%
Veklury   829         NM     2,285         NM  
Total product sales   6,152     5,067     21 %   12,492     10,534     19 %
Royalty, contract and other revenues   65     76     (14 )%   148     157     (6 )%
Total revenues   $ 6,217     $ 5,143     21 %   $ 12,640     $ 10,691     18 %
 
NM - Not Meaningful
[(1)] The six months ended June 30, 2021 includes $13 million of Hepcludex sales recorded subsequent to Gilead’s acquisition of MYR GmbH (“MYR”). The six months ended June 30, 2021 of Hepcludex sales, including the period prior to the completion of Gilead’s acquisition of MYR, were $20 million.
 
GILEAD SCIENCES, INC.
 
    Three Months Ended       Six Months Ended    
    June 30,       June 30,    
(In millions, except percentages)   2021   2020   Change   2021   2020   Change
Non-GAAP:                        
Cost of goods sold   $ 836     $ 798     5 %   $ 1,691       $ 1,501     13 %
Research and development expenses   $ 1,084     $ 1,186     (9 )%   $ 2,133       $ 2,190     (3 )%
Selling, general and administrative expenses   $ 1,121     $ 1,164     (4 )%   $ 2,154       $ 2,240     (4 )%
Other income (expense), net   $ 1     $ 49     (98 )%   $ (17 )     $ 174     (110 )%
Diluted EPS   $ 1.87     $ 1.11     68 %   $ 3.95       $ 2.80     41 %
                         
Product gross margin   86.4 %   84.3 %   210 bps   86.5 %   85.8 %   70 bps
Research and development expenses as a % of revenues   17.4 %   23.1 %   (6 )%   16.9 %   20.5 %   (4 )%
Selling, general and administrative expenses as a % of revenues   18.0 %   22.6 %   (5 )%   17.0 %   21.0 %   (4 )%
Operating expenses as a % of revenues   35.5 %   45.7 %   (10 )%   33.9 %   41.4 %   (8 )%
Operating margin   51.1 %   38.8 %   1230 bps   52.7 %   44.5 %   820 bps
Effective tax rate   19.6 %   22.8 %   (3 )%   19.0 %   21.0 %   (2 )%
 
NM - Not Meaningful
[(1)] A reconciliation between GAAP and non-GAAP financial information is provided in the accompanying tables.
 
GILEAD SCIENCES, INC.
 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
(in millions, except percentages and per share amounts)   2021   2020   2021   2020
Cost of goods sold reconciliation:                
GAAP cost of goods sold   $ 1,390       $ 1,064       $ 2,751       $ 2,033    
Acquisition-related – amortization of acquired intangibles and inventory step-up charges   (554 )     (266 )     (1,060 )     (532 )  
Non-GAAP cost of goods sold   $ 836       $ 798       $ 1,691       $ 1,501    
                 
Product gross margin reconciliation:                
GAAP product gross margin   77.4   %   79.0   %   78.0   %   80.7   %
Acquisition-related – amortization of acquired intangibles and inventory step-up charges   9.0   %   5.2   %   8.5   %   5.1   %
Non-GAAP product gross margin [(1)]   86.4   %   84.3   %   86.5   %   85.8   %
                 
Research and development expenses reconciliation:                
GAAP research and development expenses   $ 1,134       $ 1,299       $ 2,189       $ 2,303    
Acquisition-related – other costs [(2)]   (6 )     (113 )     (12 )     (113 )  
Other   (44 )           (44 )        
Non-GAAP research and development expenses   $ 1,084       $ 1,186       $ 2,133       $ 2,190    
                 
Acquired IPR&D expenses reconciliation:                
GAAP acquired IPR&D expenses   $ 96       $ 4,524       $ 158       $ 4,621    
Acquired IPR&D expenses   (96 )     (4,524 )     (158 )     (4,621 )  
Non-GAAP acquired IPR&D expenses   $       $       $       $    
                 
Selling, general and administrative expenses reconciliation:                
GAAP selling, general and administrative expenses   $ 1,351       $ 1,239       $ 2,406       $ 2,315    
Acquisition-related – other costs [(2)]   (10 )     (77 )     (32 )     (77 )  
Other [(3)]   (220 )     2       (220 )     2    
Non-GAAP selling, general and administrative expenses   $ 1,121       $ 1,164       $ 2,154       $ 2,240    
                 
Operating income reconciliation:                
GAAP operating income (loss)   $ 2,246       $ (2,983 )     $ 5,136       $ (581 )  
Acquired IPR&D expenses   96       4,524       158       4,621    
Acquisition-related – amortization of acquired intangibles and inventory step-up charges   554       266       1,060       532    
Acquisition-related – other costs [(2)]   16       190       44       190    
Other [(3)]   264       (2 )     264       (2 )  
Non-GAAP operating income   $ 3,176       $ 1,995       $ 6,662       $ 4,760    
                 
Operating margin reconciliation:                
GAAP operating margin   36.1   %   (58.0 ) %   40.6   %   (5.4 ) %
Acquired IPR&D expenses   1.5   %   88.0   %   1.2   %   43.2   %
Acquisition-related – amortization of acquired intangibles and inventory step-up charges   8.9   %   5.2   %   8.4   %   5.0   %
Acquisition-related – other costs [(2)]   0.3   %   3.7   %   0.3   %   1.8   %
Other [(3)]   4.2   %     %   2.1   %     %
Non-GAAP operating margin [(1)]   51.1   %   38.8   %   52.7   %   44.5   %
                 
Other income (expense), net reconciliation:                
GAAP other income (expense), net   $ (173 )     $ 250       $ (542 )     $ 92    
Losses (gains) from equity securities, net   174       (201 )     525       82    
Non-GAAP other income (expense), net   $ 1       $ 49       $ (17 )     $ 174    
 
GILEAD SCIENCES, INC.
 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
(in millions, except percentages and per share amounts)   2021   2020   2021   2020
Effective tax rate reconciliation:                
GAAP effective tax rate   16.5   %   (12.5 ) %   20.6   %   (86.4 ) %
Income tax effect of above non-GAAP adjustments and discrete and related tax adjustments   3.1   %   35.3   %   (1.6 ) %   107.4   %
Non-GAAP effective tax rate [(1)]   19.6   %   22.8   %   19.0   %   21.0   %
                 
Net income attributable to Gilead reconciliation:                
GAAP net income (loss) attributable to Gilead   $ 1,522       $ (3,339 )     $ 3,251       $ (1,788 )  
Acquired IPR&D expenses (after tax)   75       4,514       125       4,589    
Acquisition-related – amortization of acquired intangibles and inventory step-up charges (after tax)   446       224       855       448    
Acquisition-related – other costs (after tax) [(2)]   15       148       37       148    
Losses (gains) from equity securities, net (after tax)   169       (149 )     533       107    
Discrete and related tax charges (benefits) [(4)]   (40 )     4       14       37    
Other (after tax) [(3)]   166       (2 )     166       (2 )  
Non-GAAP net income attributable to Gilead   $ 2,353       $ 1,400       $ 4,981       $ 3,539    
                 
Diluted EPS reconciliation:                
GAAP diluted earnings (loss) per share   $ 1.21       $ (2.66 )     $ 2.58       $ (1.42 )  
Acquired IPR&D expenses   0.06       3.58       0.10       3.62    
Acquisition-related – amortization of acquired intangibles and inventory step-up charges   0.35       0.18       0.68       0.35    
Acquisition-related – other costs [(2)]   0.01       0.12       0.03       0.12    
Losses (gains) from equity securities, net   0.13       (0.12 )     0.42       0.08    
Discrete and related tax charges (benefits) [(4)]   (0.03 )           0.01       0.03    
Other [(3)]   0.13             0.13          
Non-GAAP diluted EPS [(1)]   $ 1.87       $ 1.11       $ 3.95       $ 2.80    
                 
Non-GAAP adjustment summary:                
Cost of goods sold adjustments   $ 554       $ 266       $ 1,060       $ 532    
Research and development expenses adjustments   50       113       56       113    
Acquired IPR&D expenses adjustments   96       4,524       158       4,621    
Selling, general and administrative expenses adjustments   230       75       252       75    
Total non-GAAP adjustments before other income (expense), net, and income taxes   930       4,978       1,526       5,341    
Other income (expense), net, adjustments   174       (201 )     525       82    
Total non-GAAP adjustments before income taxes   1,104       4,777       2,051       5,423    
Income tax effect of non-GAAP adjustments above   (233 )     (42 )     (335 )     (133 )  
Discrete and related tax charges (benefits) [(4)]   (40 )     4       14       37    
Total non-GAAP adjustments after tax   $ 831       $ 4,739       $ 1,730       $ 5,327    
 
[(1)] Amounts may not sum due to rounding.
[(2)] Includes primarily employee-related expenses and contingent consideration, as well as other expenses associated with Gilead’s acquisitions of Immunomedics, Inc., Forty Seven, Inc. and MYR GmbH.
[(3)] Includes primarily a significant donation of equity securities to the Gilead Foundation, a California nonprofit public benefit corporation.
[(4)] Primarily represents discrete and related deferred tax charges or benefits associated with a transfer of intangible assets from a foreign subsidiary to Ireland and the United States.
 
GILEAD SCIENCES, INC.
 
(in millions, except percentages and per share amounts)   Provided   Updated   Updated
Projected product sales GAAP to non-GAAP reconciliation:            
GAAP projected product sales   $23,700 - $25,100   Unchanged   $24,400 - $25,000
Less: Veklury sales   2,000 - 3,000     2,700 - 3,100
Non-GAAP projected product sales excluding Veklury sales   $21,700 - $22,100     $21,700 - $21,900
             
Projected product gross margin GAAP to non-GAAP reconciliation:            
GAAP projected product gross margin   78% - 79%   Unchanged   77% - 78%
Acquisition-related expenses   9%     9%
Non-GAAP projected product gross margin   87% - 88%     86% - 87%
             
Projected operating income GAAP to non-GAAP reconciliation:            
GAAP projected operating income   $9,300 - $10,700   $9,000 - $10,400   $9,200 - $9,900
Acquisition-related, acquired IPR&D and other expenses   2,200   2,500   2,700
Non-GAAP projected operating income   $11,500 - $12,900   $11,500 - $12,900   $11,900 - $12,600
             
Projected effective tax rate GAAP to non-GAAP reconciliation:            
GAAP projected effective tax rate   ~ 23%   Unchanged   Unchanged
Less: Income tax effect of non-GAAP adjustments and discrete and related tax adjustments   2%    
Non-GAAP projected effective tax rate   ~ 21%    
             
Projected diluted EPS GAAP to non-GAAP reconciliation:            
GAAP projected diluted EPS   $5.25 - $5.95   $4.75 - $5.45   $4.70 - $5.05
Acquisition-related, acquired IPR&D and other expenses, historical fair value adjustments of equity securities, related tax effects as well as discrete and related tax adjustments   1.50   2.00   2.20
Non-GAAP projected diluted EPS   $6.75 - $7.45   $6.75 - $7.45   $6.90 - $7.25
             
(1) The 2021 guidance non-GAAP financial information excludes the impact of any potential future acquisition-related, acquired IPR&D and other expenses, fair value adjustments of equity securities and discrete tax and related charges or benefits associated with changes in tax related laws and guidelines as Gilead is unable to project such amounts.
 
GILEAD SCIENCES, INC.
 
    June 30,   December 31,
(in millions)   2021   2020
Assets        
Cash, cash equivalents and marketable securities   $ 7,361     $ 7,910  
Accounts receivable, net   4,149     4,892  
Inventories   2,988     3,014  
Property, plant and equipment, net   4,996     4,967  
Intangible assets, net   34,341     33,126  
Goodwill   8,334     8,108  
Other assets   5,815     6,390  
Total assets   $ 67,984     $ 68,407  
Liabilities and Stockholders’ Equity        
Current liabilities   $ 10,214     $ 11,397  
Long-term liabilities   38,060     38,789  
Stockholders’ equity [(1)]   19,710     18,221  
Total liabilities and stockholders’ equity   $ 67,984     $ 68,407  
 
[(1)] As of June 30, 2021 and December 31, 2020, there were 1,254 shares of common stock issued and outstanding.
GILEAD SCIENCES, INC.
 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
(in millions)   2021   2020   2021   2020
Net cash provided by operating activities   $ 2,316       $ 2,566       $ 4,926       $ 4,002    
Net cash used in investing activities   (577 )     (5,023 )     (2,619 )     (5,367 )  
Net cash used in financing activities   (931 )     (874 )     (3,408 )     (3,485 )  
Effect of exchange rate changes on cash and cash equivalents   20       26       (3 )     (35 )  
Net change in cash and cash equivalents   828       (3,305 )     (1,104 )     (4,885 )  
Cash and cash equivalents at beginning of period   4,065       10,051       5,997       11,631    
Cash and cash equivalents at end of period   $ 4,893       $ 6,746       $ 4,893       $ 6,746    
    Three Months Ended   Six Months Ended
    June 30,   June 30,
(in millions)   2021   2020   2021   2020
Net cash provided by operating activities   $ 2,316       $ 2,566       $ 4,926       $ 4,002    
Capital expenditures   (119 )     (143 )     (284 )     (314 )  
Free cash flow   $ 2,197       $ 2,423       $ 4,642       $ 3,688    
 
GILEAD SCIENCES, INC.
 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
(in millions)   2021   2020   2021   2020
                 
HIV Products                
Descovy (FTC/TAF) Based Products                
Biktarvy – U.S.   $ 1,586     $ 1,350     $ 3,051     $ 2,762  
Biktarvy – Europe   237     153     453     334  
Biktarvy – Other International   171     101     314     201  
    1,994     1,604     3,818     3,297  
                 
Descovy – U.S.   357     337     639     700  
Descovy – Europe   44     46     86     107  
Descovy – Other International   34     34     69     68  
    435     417     794     875  
                 
Genvoya – U.S.   551     646     1,057     1,258  
Genvoya – Europe   100     109     206     260  
Genvoya – Other International   55     61     116     122  
    706     816     1,379     1,640  
                 
Odefsey – U.S.   258     273     498     542  
Odefsey – Europe   111     98     224     225  
Odefsey – Other International   13     11     27     24  
    382     382     749     791  
                 
Revenue share – Symtuza [(1)] – U.S.   86     90     175     162  
Revenue share – Symtuza [(1)] – Europe   40     40     84     78  
Revenue share – Symtuza [(1)] – Other International   3     2     5     4  
    129     132     264     244  
                 
Total Descovy (FTC/TAF) Based Products – U.S.   2,838     2,696     5,420     5,424  
Total Descovy (FTC/TAF) Based Products – Europe   532     446     1,053     1,004  
Total Descovy (FTC/TAF) Based Products – Other International   276     209     531     419  
    3,646     3,351     7,004     6,847  
                 
Truvada (FTC/TDF) Based Products                
Atripla – U.S.   52     95     75     176  
Atripla – Europe   4     5     8     12  
Atripla – Other International   4     3     8     10  
    60     103     91     198  
                 
Complera / Eviplera – U.S.   20     27     45     51  
Complera / Eviplera – Europe   39     42     73     89  
Complera / Eviplera – Other International   3     3     7     8  
    62     72     125     148  
                 
Stribild – U.S.   35     39     66     73  
Stribild – Europe   11     12     22     29  
Stribild – Other International   5     8     9     10  
    51     59     97     112  
                 
Truvada – U.S.   94     370     213     753  
Truvada – Europe   6     6     13     14  
Truvada – Other International   8     11     17     26  
    108     387     243     793  
                 
Total Truvada (FTC/TDF) Based Products – U.S.   201     531     399     1,053  
Total Truvada (FTC/TDF) Based Products – Europe   60     65     116     144  
Total Truvada (FTC/TDF) Based Products – Other International   20     25     41     54  
    281     621     556     1,251  
                 
GILEAD SCIENCES, INC.
 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
(in millions)   2021   2020   2021   2020
                 
Other HIV [(2)] – U.S.   5     11     11     14  
Other HIV [(2)] – Europe   4     1     5     3  
Other HIV [(2) ] – Other International   2     16     12     19  
    11     28     28     36  
                 
Total HIV – U.S.   3,044     3,238     5,830     6,491  
Total HIV – Europe   596     512     1,174     1,151  
Total HIV – Other International   298     250     584     492  
    3,938     4,000     7,588     8,134  
                 
HCV Products                
Ledipasvir / Sofosbuvir [(3)] – U.S.   30     24     49     77  
Ledipasvir / Sofosbuvir [(3)] – Europe   3     4     19     15  
Ledipasvir / Sofosbuvir [(3)] – Other International   29     39     50     87  
    62     67     118     179  
                 
Sofosbuvir / Velpatasvir [(4)] – U.S.   262     165     476     476  
Sofosbuvir / Velpatasvir [(4)] – Europe   82     57     157     179  
Sofosbuvir / Velpatasvir [(4)] – Other International   98     113     190     244  
    442     335     823     899  
                 
Other HCV [(5)] – U.S.   35     31     60     65  
Other HCV [(5)] – Europe   8     9     52     24  
Other HCV [(5)] – Other International   2     6     6     10  
    45     46     118     99  
                 
Total HCV – U.S.   327     220     585     618  
Total HCV – Europe   93     70     228     218  
Total HCV – Other International   129     158     246     341  
    549     448     1,059     1,177  
                 
HBV/HDV Products                
Vemlidy – U.S.   86     76     163     149  
Vemlidy – Europe   8     7     16     14  
Vemlidy – Other International   106     68     202     124  
    200     151     381     287  
                 
Viread – U.S.   3     3     7     7  
Viread – Europe   8     8     15     19  
Viread – Other International   17     54     37     79  
    28     65     59     105  
                 
Other HBV/HDV [(6)] – U.S.   1     1     1     9  
Other HBV/HDV [(6)] – Europe   8     2     16     4  
    9     3     17     13  
                 
Total HBV/HDV – U.S.   90     80     171     165  
Total HBV/HDV – Europe   24     17     47     37  
Total HBV/HDV – Other International   123     122     239     203  
    237     219     457     405  
                 
Veklury                
Veklury – U.S.   416         1,236      
Veklury – Europe   264         652      
Veklury – Other International   149         397      
    829         2,285      
                 
GILEAD SCIENCES, INC.
 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
(in millions)   2021   2020   2021   2020
                 
Cell Therapy Products                
Tecartus – U.S.   32         59      
Tecartus – Europe   9     1     13     1  
    41     1     72     1  
                 
Yescarta – U.S.   108     95     200     198  
Yescarta – Europe   61     56     122     93  
Yescarta – Other International   9     5     16     5  
    178     156     338     296  
                 
Total Cell Therapy – U.S.   140     95     259     198  
Total Cell Therapy – Europe   70     57     135     94  
Total Cell Therapy – Other International   9     5     16     5  
    219     157     410     297  
                 
Trodelvy - U.S.   89         161      
                 
Other Products                
AmBisome – U.S.   13     10     25     28  
AmBisome – Europe   69     49     135     108  
AmBisome – Other International   74     36     117     78  
    156     95     277     214  
                 
Letairis – U.S.   57     80     111     163  
                 
Ranexa – U.S.   2     1     5     9  
                 
Zydelig – U.S.   8     8     16     16  
Zydelig – Europe   13     9     20     21  
Zydelig – Other International   1     1     1     1  
    22     18     37     38  
                 
Other [(7)] – U.S.   27     38     54     71  
Other [(7) ] – Europe   18     10     31     22  
Other [(7)] – Other International   9     1     17     4  
    54     49     102     97  
                 
Total Other – U.S.   107     137     211     287  
Total Other – Europe   100     68     186     151  
Total Other – Other International   84     38     135     83  
    291     243     532     521  
                 
Total product sales – U.S.   4,213     3,770     8,453     7,759  
Total product sales – Europe   1,147     724     2,422     1,651  
Total product sales – Other International   792     573     1,617     1,124  
    $ 6,152     $ 5,067     $ 12,492     $ 10,534  
 
[(1)]   Represents Gilead’s revenue from cobicistat (C), emtricitabine (FTC) and tenofovir alafenamide (TAF) in Symtuza (darunavir/C/FTC/TAF), a fixed dose combination product commercialized by Janssen Sciences Ireland UC.
[(2)]   Includes Emtriva and Tybost.
[(3)]   Amounts consist of sales of Harvoni and the authorized generic version of Harvoni sold by Gilead’s separate subsidiary, Asegua Therapeutics LLC.
[(4)]   Amounts consist of sales of Epclusa and the authorized generic version of Epclusa sold by Gilead’s separate subsidiary, Asegua Therapeutics LLC.
[(5)]   Includes Vosevi and Sovaldi.
[(6)]   The six months ended June 30, 2021 includes $13 million of Hepcludex sales recorded subsequent to Gilead’s acquisition of MYR. The six months ended June 30, 2021 of Hepcludex sales, including the period prior to the completion of Gilead’s acquisition of MYR, were $20 million.
[(7)]   Includes Cayston and Jyseleca.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210729005981/en/

SOURCE: Gilead Sciences, Inc.

Investors:
Jacquie Ross, CFA
(650) 358-1054 Media:
Sonia Choi
(650) 425-5483

COMTEX_390627125/2456/2021-07-29T16:01:23

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