Gilead Sciences Announces First Quarter 2022 Financial Results

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Biktarvy Sales Increased 18% Year-Over-Year to $2.2 billion

Oncology Sales Increased 60% Year-Over-Year to $420 million

FOSTER CITY, Calif.Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the first quarter of 2022.

“Gilead’s performance in the first quarter reflects the strength and diversity of our business with both our HIV and oncology therapies contributing to year-over-year growth,” said Daniel O’Day, Chairman and Chief Executive Officer, Gilead Sciences. “Biktarvy delivered strong 18% year-over-year revenue growth, and oncology sales increased by 60% year-over-year, driven by increased demand for Trodelvy and our cell therapy products. As we continue to advance our broad oncology portfolio, we look forward to providing more new options for people living with cancer.”

First Quarter 2022 Financial Results

  • First quarter 2022 revenue increased 3% to $6.6 billion compared to the same period in 2021, primarily due to increased demand for Biktarvy® (bictegravir 50mg/emtricitabine 200mg (“FTC”)/tenofovir alafenamide 25mg (“TAF”)) and Veklury® (remdesivir 100mg for injection), partially offset by the impact of the loss of exclusivity for Truvada® (FTC/tenofovir disoproxil fumarate 300mg (“TDF”)) in the United States and unfavorable pricing dynamics for hepatitis C virus (“HCV”) products.
  • Diluted Earnings Per Share (“EPS”) decreased to $0.02 for the first quarter of 2022 compared to $1.37 for the same period in 2021. The decrease was primarily the result of a $2.7 billion in-process research and development (“IPR&D”) impairment related to assets acquired by Gilead from Immunomedics in 2020.
  • Non-GAAP diluted EPS increased 4% to $2.12 for the first quarter of 2022 compared to $2.04(1) for the same period in 2021, primarily reflecting higher product sales.
  • As of March 31, 2022, Gilead had $6.8 billion of cash, cash equivalents and marketable debt securities compared to $7.8 billion as of December 31, 2021.
  • During the first quarter of 2022, Gilead generated $1.8 billion in operating cash flow, which includes the cash outflow related to the $1.25 billion legal settlement.
  • During the first quarter of 2022, Gilead made a $725 million collaboration opt-in payment to Arcus Biosciences, Inc., repaid $500 million of debt, paid dividends of $945 million and repurchased $352 million of common stock.

________________________________

(1)

Non-GAAP diluted EPS has been recast due to an update to our non-GAAP policy in the first quarter 2022, resulting in a $0.04 reduction of previously-reported non-GAAP diluted EPS for the first quarter of 2021. Refer to Non-GAAP Financial Information section below for further information.

Product Sales Performance

First quarter 2022 product sales increased 3% to $6.5 billion compared to the same period in 2021. Total product sales, excluding Veklury, increased 2% to $5.0 billion in the first quarter of 2022 compared to the same period in 2021, primarily reflecting higher demand for Biktarvy, our cell therapy products and Trodelvy® (sacituzumab govitecan-hziy), partially offset by unfavorable pricing dynamics in HCV.

HIV product sales increased 2% to $3.7 billion in the first quarter of 2022 compared to the same period in 2021, primarily reflecting higher demand for Biktarvy and favorable pricing dynamics partially offset, as expected, by the loss of exclusivity of Truvada in the United States.

  • Biktarvy sales increased 18% year-over-year in the first quarter of 2022, primarily due to higher demand.
  • Descovy® (FTC 200mg/TAF 25mg) sales increased 4% year-over-year in the first quarter of 2022, primarily driven by increased demand and favorable pricing, partially offset by unfavorable channel inventory dynamics.
  • Truvada sales decreased 72% year-over-year in the first quarter 2022, as expected, primarily due to the loss of exclusivity in the United States in October 2020.

HCV product sales decreased 22% to $399 million in the first quarter of 2022 compared to the same period in 2021, primarily driven by lower net price and fewer patient starts.

Hepatitis B virus (“HBV”) and hepatitis delta virus (“HDV”) product sales increased 7% to $235 million in the first quarter of 2022 compared to the same period in 2021. Vemlidy® (TAF 25mg) sales increased 10% in the first quarter of 2022 compared to the same period in 2021, primarily driven by higher demand in geographies outside the United States. Hepcludex® (bulevirtide) contributed $11 million in the first quarter of 2022, as launch activities continued across Europe.

Cell therapy product sales increased 43% to $274 million in the first quarter of 2022 compared to the same period in 2021.

  • Yescarta® (axicabtagene ciloleucel) sales increased to $211 million in the first quarter of 2022, primarily driven by demand for relapsed or refractory large B-cell lymphoma (“LBCL”) in the United States and Europe and follicular lymphoma in the United States.
  • Tecartus® (brexucabtagene autoleucel) sales were $63 million in the first quarter of 2022, primarily driven by growing adoption in Europe for mantle cell lymphoma and for adult patients with relapsed or refractory B-cell precursor acute lymphoblastic leukemia in the United States.

Trodelvy sales increased 103% to $146 million in the first quarter of 2022 compared to the same period in 2021, primarily reflecting uptake in the second line setting for the treatment of metastatic triple-negative breast cancer in the United States and Europe as well as metastatic urothelial cancer in the United States.

Veklury sales increased by 5% to $1.5 billion for the first quarter of 2022 compared to the same period in 2021. Veklury revenue generally reflects COVID-19 related rates of infections, hospitalizations and vaccinations, as well as the availability, uptake and effectiveness of alternative treatments for COVID-19.

First Quarter 2022 Product Gross Margin, Operating Expenses and Effective Tax Rate

  • Product gross margin was 78.2% for the first quarter of 2022 compared to 78.5% for the same period in 2021, primarily driven by a change in product mix and restructuring costs for the closing of a New Jersey manufacturing site in 2022, partially offset by lower inventory reserve adjustments. Non-GAAP product gross margin was 87.4% for the first quarter of 2022 compared to 86.5% in the same period in 2021, primarily driven by lower inventory reserve adjustments.
  • Research and development (“R&D”) expenses for the first quarter of 2022 were $1.2 billion compared to $1.1 billion in the same period in 2021. Non-GAAP R&D expenses for the first quarter of 2022 were $1.2 billion compared to $1.0 billion in the same period in 2021. The increase in R&D and non-GAAP R&D expenses primarily reflect increased clinical activities for Trodelvy.
  • Selling, general and administrative (“SG&A”) expenses were $1.1 billion for the first quarter of 2022 and for the same period in 2021. Non-GAAP SG&A expenses for the first quarter of 2022 were $1.1 billion compared to $1.0 billion in the same period in 2021.
  • The effective tax rate (“ETR”) for the first quarter of 2022 was 107.9% compared to 23.9% for the same period in 2021, primarily driven by the $2.7 billion IPR&D impairment. Non-GAAP ETR for both the first quarter 2022 and the same period last year was 18.4%.

Guidance and Outlook

For the full-year, we have updated our EPS guidance to primarily reflect the $2.7 billion IPR&D impairment. We now expect EPS between $3.00 and $3.50, compared to $4.70 and $5.20 previously. There is no change to other guidance shared on February 1, 2022:

  • Total product sales between $23.8 billion and $24.3 billion.
  • Total product sales, excluding Veklury, between $21.8 billion and $22.3 billion.
  • Total Veklury sales of approximately $2.0 billion.
  • Non-GAAP earnings per share between $6.20 and $6.70.

This financial guidance excludes the impact of any expenses related to potential acquisitions or business development transactions that have not been executed, fair value adjustments of equity securities and discrete tax charges or benefits associated with changes in tax related laws and guidelines as Gilead is unable to project such amounts. A reconciliation between GAAP and non-GAAP financial information for the 2022 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.

Key Updates Since Our Last Quarterly Release

Viral Diseases

  • Received a Complete Response Letter from FDA related to vial compatibility issues for the New Drug Application of investigational lenacapavir for the treatment of HIV-1 infection in heavily treatment-experienced (“HTE”) people with multi-drug resistant HIV-1 infection.
  • Presented one-year data from studies of investigational lenacapavir at the 29th Conference on Retroviruses and Opportunistic Infections (“CROI”) with results from each of the Phase 2/3 CAPELLA trial in HTE people living with multi-drug resistant HIV and Phase 2 CALIBRATE trial in treatment-naive people living with HIV demonstrating high rates of virologic suppression at one-year.
  • Presented five-year results from two Phase 3 studies of Biktarvy at CROI which reinforced Biktarvy’s sustained efficacy and durable viral suppression with zero cases of treatment failure due to emergent resistance observed.
  • Announced data demonstrating in vitro activity of Veklury against ten SARS-CoV-2 variants, including Omicron. Additionally, interim results from the Phase 2/3 CARAVAN trial of Veklury in pediatric patients aged 28 days to less than 18 years hospitalized with COVID-19 were presented at CROI.

Oncology

  • Announced results from the Phase 3 TROPiCS-02 study of Trodelvy in patients with HR+/HER2- metastatic breast cancer who had been heavily pre-treated. The study met its primary endpoint, demonstrating a statistically significant improvement in progression-free survival compared to physician’s choice of chemotherapy. Additionally, at the first interim analysis, a trend in improvement for overall survival (“OS”) was observed, a key secondary endpoint. No new safety concerns were noted. The company will discuss the study data with regulators and the study will continue to follow patients for OS and detailed results will be presented at an upcoming medical conference. Trodelvy has not been approved by any regulatory agency for the treatment of HR+/HER2- metastatic breast cancer, and its safety and efficacy have not been established for this indication.
  • Received FDA approval for Yescarta for the treatment of adult patients with LBCL that is refractory to first-line chemoimmunotherapy or that relapse within 12 months of first-line chemoimmunotherapy. Additionally, the National Comprehensive Cancer Network updated its Clinical Practice Guidelines for B-cell Lymphomas to include Yescarta as a Category 1 recommendation for “Relapsed disease <12 mo or Primary refractory disease” under diffuse large B-cell lymphoma.
  • Announced that FDA has lifted the partial clinical hold on studies evaluating investigational magrolimab in combination with azacitidine for the treatment of myelodyspastic syndrome and acute myeloid leukemia.

Corporate

  • Announced that the company’s Board of Directors declared a quarterly dividend of $0.73 per share of common stock for the second quarter of 2022. The dividend is payable on June 29, 2022, to stockholders of record at the close of business on June 15, 2022. Future dividends will be subject to Board approval.
  • Announced $24 million in grants to support 116 organizations in 41 countries as part of Gilead’s Zeroing In™: Ending the HIV Epidemic program. Grantee organizations will focus on advancing comprehensive HIV innovation programs, digital health innovations, and/or community outreach and education.
  • Received FDA approval for commercial production at Kite’s new CAR T-cell therapy manufacturing facility in Frederick, Maryland.
  • Purchased approximately 27 acres of additional land in Oceanside, California to potentially support further manufacturing operations.

Certain amounts and percentages in this press release may not sum or recalculate due to rounding.

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 generally excludes acquisition-related expenses including amortization of acquired intangible assets and inventory step-up charges, 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. 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.

Beginning in the first quarter of 2022, consistent with recent industry communications from the U.S. Securities and Exchange Commission (“SEC”), Gilead no longer excludes acquired IPR&D expenses from its non-GAAP financial measures. Acquired IPR&D expenses reflect 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. Prior period non-GAAP financial measures are revised to conform to the new presentation.

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 and Gilead’s ability to effectively manage the global supply and distribution of Veklury; Gilead’s ability to achieve its anticipated full year 2022 financial results, including as a result of potential adverse revenue impacts from COVID-19 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 virology, oncology and other programs; Gilead’s ability to realize the potential benefits of acquisitions, collaborations or licensing arrangements; Gilead’s ability to initiate, progress or complete clinical trials within currently anticipated timeframes or at all, the risk that FDA may not remove clinical holds currently in place on any clinical trials, the possibility of unfavorable results from ongoing and additional clinical trials, including those involving Biktarvy, Trodelvy, Veklury, Yescarta, lenacapavir and magrolimab, and the risk that safety and efficacy data from clinical trials may not warrant further development of Gilead’s product candidates or the product candidates of Gilead’s strategic partners; Gilead’s ability to submit new drug applications for new product candidates or expanded indications in the currently anticipated timelines; Gilead’s ability to provide the requested documentation and address the comments in a Complete Response Letter to the satisfaction of the FDA; Gilead’s ability to receive regulatory approvals in a timely manner or at all, including FDA approval of Trodelvy for treatment of HR+/HER2- metastatic breast cancer and other indications and 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, including the risk that Kite may be unable to increase its manufacturing capacity, timely manufacture and deliver its products or produce an amount of supply sufficient to satisfy demand for such 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, including Yescarta; 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 March 31, 2022 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.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

 

 

 

Three Months Ended

 

 

March 31,

(in millions, except per share amounts)

 

2022

 

2021

Revenues:

 

 

 

 

Product sales

 

$

6,534

 

 

$

6,340

 

Royalty, contract and other revenues

 

 

56

 

 

 

83

 

Total revenues

 

 

6,590

 

 

 

6,423

 

Costs and expenses:

 

 

 

 

Cost of goods sold

 

 

1,424

 

 

 

1,361

 

Research and development expenses

 

 

1,186

 

 

 

1,055

 

In-process research and development impairment

 

 

2,700

 

 

 

 

Acquired in-process research and development expenses

 

 

 

 

 

62

 

Selling, general and administrative expenses

 

 

1,083

 

 

 

1,055

 

Total costs and expenses

 

 

6,393

 

 

 

3,533

 

Income from operations

 

 

197

 

 

 

2,890

 

Interest expense

 

 

(238

)

 

 

(257

)

Other income (expense), net

 

 

(111

)

 

 

(369

)

Income (loss) before income taxes

 

 

(152

)

 

 

2,264

 

Income tax benefit (expense)

 

 

164

 

 

 

(542

)

Net income

 

 

12

 

 

 

1,722

 

Net loss attributable to noncontrolling interest

 

 

7

 

 

 

7

 

Net income attributable to Gilead

 

$

19

 

 

$

1,729

 

Net income per share attributable to Gilead common stockholders - basic

 

$

0.02

 

 

$

1.38

 

Shares used in per share calculation - basic

 

 

1,255

 

 

 

1,256

 

Net income per share attributable to Gilead common stockholders - diluted

 

$

0.02

 

 

$

1.37

 

Shares used in per share calculation - diluted

 

 

1,262

 

 

 

1,262

 

Cash dividends declared per share

 

$

0.73

 

 

$

0.71

 

 

 

 

 

 

Research and development expenses as a % of revenues

 

 

18.0

%

 

 

16.4

%

Selling, general and administrative expenses as a % of revenues

 

 

16.4

%

 

 

16.4

%

GILEAD SCIENCES, INC.

TOTAL REVENUE SUMMARY

(unaudited)

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

(in millions, except percentages)

 

2022

 

2021

 

Change

Product sales:

 

 

 

 

 

 

HIV

 

$

3,707

 

$

3,650

 

2%

HCV

 

 

399

 

 

510

 

(22)%

HBV/HDV

 

 

235

 

 

220

 

7%

Cell therapy

 

 

274

 

 

191

 

43%

Trodelvy

 

 

146

 

 

72

 

103%

Other

 

 

236

 

 

241

 

(2)%

Total product sales excluding Veklury

 

 

4,998

 

 

4,884

 

2%

Veklury

 

 

1,535

 

 

1,456

 

5%

Total product sales

 

 

6,534

 

 

6,340

 

3%

Royalty, contract and other revenues

 

 

56

 

 

83

 

(33)%

Total revenues

 

$

6,590

 

$

6,423

 

3%

GILEAD SCIENCES, INC.

NON-GAAP FINANCIAL INFORMATION(1)

(unaudited)

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

(in millions, except percentages)

 

2022

 

2021

 

Change

Non-GAAP:

 

 

 

 

 

 

Cost of goods sold

 

$

825

 

 

$

855

 

 

(4)%

Research and development expenses

 

$

1,158

 

 

$

1,049

 

 

10%

Acquired IPR&D expenses

 

$

 

 

$

62

 

 

NM

Selling, general and administrative expenses

 

$

1,083

 

 

$

1,033

 

 

5%

Other income (expense), net

 

$

(15

)

 

$

(18

)

 

(17)%

Diluted EPS

 

$

2.12

 

 

$

2.04

 

 

4%

 

 

 

 

 

 

 

Product gross margin

 

 

87.4

%

 

 

86.5

%

 

90 bps

Research and development expenses as a % of revenues

 

 

17.6

%

 

 

16.3

%

 

130 bps

Selling, general and administrative expenses as a % of revenues

 

 

16.4

%

 

 

16.1

%

 

30 bps

Operating margin

 

 

53.5

%

 

 

53.3

%

 

20 bps

Effective tax rate

 

 

18.4

%

 

 

18.4

%

 

0 bps

________________________________

NM - Not Meaningful

(1)

Refer to Non-GAAP Financial Information section above for further disclosures on non-GAAP financial measures. A reconciliation between GAAP and non-GAAP financial information is provided in the tables on pages 10 - 11. Beginning in the first quarter of 2022, consistent with recent industry communications from the U.S. Securities and Exchange Commission, the Company no longer excludes acquired IPR&D expenses from its non-GAAP financial measures. Acquired IPR&D expenses reflect 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. Prior period non-GAAP financial measures are revised to conform to the new presentation.

GILEAD SCIENCES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(unaudited)

 

 

 

Three Months Ended

 

 

March 31,

(in millions, except percentages and per share amounts)

 

2022

 

2021

Cost of goods sold reconciliation:

 

 

 

 

GAAP cost of goods sold

 

$

1,424

 

 

$

1,361

 

Acquisition-related – amortization of acquired intangibles and inventory step-up charges

 

 

(557

)

 

 

(506

)

Other(1)

 

 

(42

)

 

 

 

Non-GAAP cost of goods sold

 

$

825

 

 

$

855

 

 

 

 

 

 

Product gross margin reconciliation:

 

 

 

 

GAAP product gross margin

 

 

78.2

%

 

 

78.5

%

Acquisition-related – amortization of acquired intangibles and inventory step-up charges

 

 

8.5

%

 

 

8.0

%

Other(1)

 

 

0.6

%

 

 

%

Non-GAAP product gross margin

 

 

87.4

%

 

 

86.5

%

 

 

 

 

 

Research and development expenses reconciliation:

 

 

 

 

GAAP research and development expenses

 

$

1,186

 

 

$

1,055

 

Acquisition-related – other costs(2)

 

 

(10

)

 

 

(6

)

Other(1)

 

 

(18

)

 

 

 

Non-GAAP research and development expenses

 

$

1,158

 

 

$

1,049

 

 

 

 

 

 

IPR&D impairment reconciliation:

 

 

 

 

GAAP IPR&D impairment

 

$

2,700

 

 

$

 

IPR&D impairment

 

 

(2,700

)

 

 

 

Non-GAAP IPR&D impairment

 

$

 

 

$

 

 

 

 

 

 

Selling, general and administrative expenses reconciliation:

 

 

 

 

GAAP selling, general and administrative expenses

 

$

1,083

 

 

$

1,055

 

Acquisition-related – other costs(2)

 

 

 

 

 

(22

)

Non-GAAP selling, general and administrative expenses

 

$

1,083

 

 

$

1,033

 

 

 

 

 

 

Income from operations reconciliation:

 

 

 

 

GAAP income from operations

 

$

197

 

 

$

2,890

 

Acquisition-related – amortization of acquired intangibles and inventory step-up charges

 

 

557

 

 

 

506

 

Acquisition-related – other costs(2)

 

 

10

 

 

 

28

 

IPR&D impairment

 

 

2,700

 

 

 

 

Other(1)

 

 

60

 

 

 

 

Non-GAAP income from operations

 

$

3,524

 

 

$

3,424

 

 

 

 

 

 

Operating margin reconciliation:

 

 

 

 

GAAP operating margin

 

 

3.0

%

 

 

45.0

%

Acquisition-related – amortization of acquired intangibles and inventory step-up charges

 

 

8.5

%

 

 

7.9

%

Acquisition-related – other costs(2)

 

 

0.2

%

 

 

0.4

%

IPR&D impairment

 

 

41.0

%

 

 

%

Other(1)

 

 

0.9

%

 

 

%

Non-GAAP operating margin

 

 

53.5

%

 

 

53.3

%

 

 

 

 

 

Other income (expense), net reconciliation:

 

 

 

 

GAAP other income (expense), net

 

$

(111

)

 

$

(369

)

Loss from equity securities, net

 

 

96

 

 

 

351

 

Non-GAAP other income (expense), net

 

$

(15

)

 

$

(18

)

 

 

 

 

 

GILEAD SCIENCES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION - (Continued)

(unaudited)

 

 

 

Three Months Ended

 

 

March 31,

(in millions, except percentages and per share amounts)

 

2022

 

2021

Effective tax rate reconciliation:

 

 

 

 

GAAP effective tax rate

 

 

107.9

%

 

 

23.9

%

Income tax effect of above non-GAAP adjustments and discrete and related tax adjustments(3)

 

 

(89.5

)%

 

 

(5.6

)%

Non-GAAP effective tax rate

 

 

18.4

%

 

 

18.4

%

 

 

 

 

 

Net income attributable to Gilead reconciliation:

 

 

 

 

GAAP net income attributable to Gilead

 

$

19

 

 

$

1,729

 

Acquisition-related – amortization of acquired intangibles and inventory step-up charges

 

 

443

 

 

 

409

 

Acquisition-related – other costs(2)

 

 

10

 

 

 

22

 

IPR&D impairment

 

 

2,057

 

 

 

 

Other(1)

 

 

45

 

 

 

 

Loss from equity securities, net

 

 

64

 

 

 

364

 

Discrete and related tax charges(3)

 

 

38

 

 

 

54

 

Non-GAAP net income attributable to Gilead

 

$

2,676

 

 

$

2,578

 

 

 

 

 

 

Diluted EPS reconciliation:

 

 

 

 

GAAP diluted EPS

 

$

0.02

 

 

$

1.37

 

Acquisition-related – amortization of acquired intangibles and inventory step-up charges

 

 

0.35

 

 

 

0.32

 

Acquisition-related – other costs(2)

 

 

0.01

 

 

 

0.02

 

IPR&D impairment

 

 

1.63

 

 

 

 

Other(1)

 

 

0.04

 

 

 

 

Loss from equity securities, net

 

 

0.05

 

 

 

0.29

 

Discrete and related tax charges(3)

 

 

0.03

 

 

 

0.04

 

Non-GAAP diluted EPS

 

$

2.12

 

 

$

2.04

 

 

 

 

 

 

Non-GAAP adjustment summary:

 

 

 

 

Cost of goods sold adjustments

 

$

599

 

 

$

506

 

Research and development expenses adjustments

 

 

28

 

 

 

6

 

IPR&D impairment adjustments

 

 

2,700

 

 

 

 

Selling, general and administrative expenses adjustments

 

 

 

 

 

22

 

Total non-GAAP adjustments before other income (expense), net, and income taxes

 

 

3,327

 

 

 

534

 

Other income (expense), net, adjustments

 

 

96

 

 

 

351

 

Total non-GAAP adjustments before income taxes

 

 

3,423

 

 

 

885

 

Income tax effect of non-GAAP adjustments above

 

 

(803

)

 

 

(90

)

Discrete and related tax charges(3)

 

 

38

 

 

 

54

 

Total non-GAAP adjustments after tax

 

$

2,657

 

 

$

849

 

______________________________

(1)

Includes restructuring expenses associated with the closing of a manufacturing site in New Jersey.

(2)

Primarily includes employee-related expenses, contingent consideration fair value adjustments and other expenses associated with Gilead’s acquisitions of Immunomedics, Inc. and MYR GmbH.

(3)

Represents discrete and related deferred tax charges or benefits primarily associated with acquired intangible assets and transfers of intangible assets from a foreign subsidiary to Ireland and the United States.

GILEAD SCIENCES, INC.

RECONCILIATION OF GAAP TO NON-GAAP 2022 FULL-YEAR GUIDANCE(1)

(unaudited)

 

 

 

 

 

(in millions, except percentages and per share amounts)

 

Provided
February 1, 2022

 

Updated
April 28, 2022

Projected product gross margin GAAP to non-GAAP reconciliation:

 

 

 

 

GAAP projected product gross margin

 

76% - 77%

 

76% - 77%

Acquisition-related and other

 

~ 9%

 

~ 9%

Non-GAAP projected product gross margin

 

85% - 86%

 

85% - 86%

 

 

 

 

 

Projected income from operations GAAP to non-GAAP reconciliation:

 

 

 

 

GAAP projected income from operations

 

$8,600 - $9,400

 

$5,800 - $6,600

Acquisition-related, IPR&D impairment and other

 

~ 2,100

 

~ 4,900

Non-GAAP projected income from operations

 

$10,700 - $11,500

 

$10,700 - $11,500

 

 

 

 

 

Projected effective tax rate GAAP to non-GAAP reconciliation:

 

 

 

 

GAAP projected effective tax rate

 

~ 22%

 

~ 20%

Discrete and related tax adjustments, and income tax effect of adjustments above and fair value adjustments of equity securities

 

~ 2%

 

—%

Non-GAAP projected effective tax rate

 

~ 20%

 

~ 20%

 

 

 

 

 

Projected diluted EPS GAAP to non-GAAP reconciliation:

 

 

 

 

GAAP projected diluted EPS

 

$4.70 - $5.20

 

$3.00- $3.50

Acquisition-related, IPR&D impairment, fair value adjustments of equity securities, other and discrete and related tax adjustments

 

~ 1.50

 

~ 3.20

Non-GAAP projected diluted EPS

 

$6.20 - $6.70

 

$6.20 - $6.70

________________________________

(1)

The non-GAAP 2022 full-year guidance includes non-GAAP adjustments to actual current period results as well as adjustments for the known future impact associated with events that have already occurred, such as future amortization of our intangible assets and the future impact of discrete and related deferred tax charges or benefits primarily associated with acquired intangible assets and transfers of intangible assets from a foreign subsidiary to Ireland and the United States. Our full-year guidance excludes the potential impact of any (i) acquisitions or business development transactions that have not been executed, (ii) future fair value adjustments of equity securities and (iii) discrete tax charges or benefits associated with changes in tax related laws and guidelines that have not been enacted, as Gilead is unable to project such amounts.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

 

 

 

March 31,

 

December 31,

(in millions)

 

2022

 

2021

Assets

 

 

 

 

Cash, cash equivalents and marketable securities

 

$

6,752

 

$

7,829

Accounts receivable, net

 

 

3,787

 

 

4,493

Inventories

 

 

2,675

 

 

2,734

Property, plant and equipment, net

 

 

5,253

 

 

5,121

Intangible assets, net

 

 

30,331

 

 

33,455

Goodwill

 

 

8,314

 

 

8,332

Other assets

 

 

5,968

 

 

5,988

Total assets

 

$

63,080

 

$

67,952

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities

 

$

8,558

 

$

11,610

Long-term liabilities

 

 

34,607

 

 

35,278

Stockholders’ equity(1)

 

 

19,915

 

 

21,064

Total liabilities and stockholders’ equity

 

$

63,080

 

$

67,952

________________________________

(1)

As of March 31, 2022 and December 31, 2021, there were 1,255 and 1,254 shares of common stock issued and outstanding, respectively.

GILEAD SCIENCES, INC.

SELECTED CASH FLOW INFORMATION

(unaudited)

 

 

 

Three Months Ended

 

 

March 31,

(in millions)

 

2022

 

2021

Net cash provided by operating activities

 

$

1,840

 

 

$

2,610

 

Net cash used in investing activities

 

 

(1,070

)

 

 

(2,042

)

Net cash used in financing activities

 

 

(1,794

)

 

 

(2,477

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(18

)

 

 

(23

)

Net change in cash and cash equivalents

 

 

(1,042

)

 

 

(1,932

)

Cash and cash equivalents at beginning of period

 

 

5,338

 

 

 

5,997

 

Cash and cash equivalents at end of period

 

$

4,296

 

 

$

4,065

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

(in millions)

 

2022

 

2021

Net cash provided by operating activities

 

$

1,840

 

 

$

2,610

 

Capital expenditures

 

 

(247

)

 

 

(165

)

Free cash flow(1)

 

$

1,593

 

 

$

2,445

 

________________________________

(1)

Free cash flow is a non-GAAP liquidity measure. Please refer to our disclosures in the Non-GAAP Financial Information section above.

GILEAD SCIENCES, INC.

PRODUCT SALES SUMMARY

(unaudited)

 

 

 

Three Months Ended

 

 

March 31,

(in millions)

 

2022

 

2021

HIV

 

 

 

 

Biktarvy – U.S.

 

$

1,706

 

$

1,465

Biktarvy – Europe

 

 

261

 

 

216

Biktarvy – Other International

 

 

184

 

 

143

 

 

 

2,151

 

 

1,824

 

 

 

 

 

Descovy – U.S.

 

 

311

 

 

282

Descovy – Europe

 

 

32

 

 

42

Descovy – Other International

 

 

31

 

 

35

 

 

 

374

 

 

359

 

 

 

 

 

Genvoya – U.S.

 

 

457

 

 

506

Genvoya – Europe

 

 

77

 

 

106

Genvoya – Other International

 

 

48

 

 

61

 

 

 

582

 

 

673

 

 

 

 

 

Odefsey – U.S.

 

 

232

 

 

240

Odefsey – Europe

 

 

96

 

 

113

Odefsey – Other International

 

 

11

 

 

14

 

 

 

339

 

 

367

 

 

 

 

 

Revenue share – Symtuza(1)U.S.

 

 

86

 

 

89

Revenue share – Symtuza(1)Europe

 

 

44

 

 

44

Revenue share – Symtuza(1) – Other International

 

 

3

 

 

2

 

 

 

132

 

 

135

 

 

 

 

 

Complera / Eviplera – U.S.

 

 

17

 

 

25

Complera / Eviplera – Europe

 

 

24

 

 

34

Complera / Eviplera – Other International

 

 

4

 

 

4

 

 

 

44

 

 

63

 

 

 

 

 

Stribild – U.S.

 

 

22

 

 

31

Stribild – Europe

 

 

8

 

 

11

Stribild – Other International

 

 

3

 

 

4

 

 

 

32

 

 

46

 

 

 

 

 

Truvada – U.S.

 

 

28

 

 

119

Truvada – Europe

 

 

4

 

 

7

Truvada – Other International

 

 

6

 

 

9

 

 

 

38

 

 

135

 

 

 

 

 

Other HIV(2)U.S.

 

 

5

 

 

29

Other HIV(2)Europe

 

 

4

 

 

5

Other HIV(2) – Other International

 

 

5

 

 

14

 

 

 

14

 

 

48

 

 

 

 

 

Total HIV – U.S.

 

 

2,862

 

 

2,786

Total HIV – Europe

 

 

550

 

 

578

Total HIV – Other International

 

 

295

 

 

286

 

 

 

3,707

 

 

3,650

GILEAD SCIENCES, INC.

PRODUCT SALES SUMMARY - (Continued)

(unaudited)

 

 

 

Three Months Ended

 

 

March 31,

(in millions)

 

2022

 

2021

HCV

 

 

 

 

Ledipasvir / Sofosbuvir(3)U.S.

 

13

 

19

Ledipasvir / Sofosbuvir(3)Europe

 

4

 

16

Ledipasvir / Sofosbuvir(3) – Other International

 

18

 

21

 

 

35

 

56

 

 

 

 

 

Sofosbuvir / Velpatasvir(4)U.S.

 

162

 

214

Sofosbuvir / Velpatasvir(4)Europe

 

83

 

75

Sofosbuvir / Velpatasvir(4) – Other International

 

85

 

92

 

 

330

 

381

 

 

 

 

 

Other HCV(5)U.S.

 

24

 

25

Other HCV(5)Europe

 

8

 

44

Other HCV(5) – Other International

 

2

 

4

 

 

34

 

73

 

 

 

 

 

Total HCV – U.S.

 

199

 

258

Total HCV – Europe

 

95

 

135

Total HCV – Other International

 

105

 

117

 

 

399

 

510

HBV/HDV

 

 

 

 

Vemlidy – U.S.

 

80

 

77

Vemlidy – Europe

 

9

 

8

Vemlidy – Other International

 

111

 

96

 

 

200

 

181

 

 

 

 

 

Viread – U.S.

 

 

4

Viread – Europe

 

6

 

7

Viread – Other International

 

17

 

20

 

 

23

 

31

 

 

 

 

 

Other HBV/HDV(6)Europe

 

13

 

8

 

 

 

 

 

Total HBV/HDV – U.S.

 

80

 

81

Total HBV/HDV – Europe

 

28

 

23

Total HBV/HDV – Other International

 

128

 

116

 

 

235

 

220

Veklury

 

 

 

 

Veklury – U.S.

 

801

 

820

Veklury – Europe

 

304

 

388

Veklury – Other International

 

430

 

248

 

 

1,535

 

1,456

Cell therapy

 

 

 

 

Tecartus – U.S.

 

47

 

27

Tecartus – Europe

 

15

 

4

Tecartus – Other International

 

1

 

 

 

63

 

31

 

 

 

 

 

Yescarta – U.S.

 

125

 

92

Yescarta – Europe

 

77

 

61

Yescarta – Other International

 

9

 

7

 

 

211

 

160

 

 

 

 

 

Total cell therapy – U.S.

 

172

 

119

Total cell therapy – Europe

 

92

 

65

Total cell therapy – Other International

 

10

 

7

 

 

274

 

191

GILEAD SCIENCES, INC.

PRODUCT SALES SUMMARY - (Continued)

(unaudited)

 

 

 

Three Months Ended

 

 

March 31,

(in millions)

 

2022

 

2021

Trodelvy

 

 

 

 

Trodelvy – U.S.

 

 

119

 

 

72

Trodelvy – Europe

 

 

25

 

 

Trodelvy – Other International

 

 

2

 

 

 

 

 

146

 

 

72

Other

 

 

 

 

AmBisome – U.S.

 

 

25

 

 

12

AmBisome – Europe

 

 

66

 

 

66

AmBisome – Other International

 

 

53

 

 

43

 

 

 

144

 

 

121

 

 

 

 

 

Letairis – U.S.

 

 

43

 

 

54

 

 

 

 

 

Other(7)U.S.

 

 

26

 

 

38

Other(7) Europe

 

 

15

 

 

20

Other(7) – Other International

 

 

9

 

 

8

 

 

 

50

 

 

66

 

 

 

 

 

Total other – U.S.

 

 

94

 

 

104

Total other – Europe

 

 

81

 

 

86

Total other – Other International

 

 

62

 

 

51

 

 

 

236

 

 

241

 

 

 

 

 

Total product sales – U.S.

 

 

4,329

 

 

4,240

Total product sales – Europe

 

 

1,174

 

 

1,275

Total product sales – Other International

 

 

1,031

 

 

825

 

 

$

6,534

 

$

6,340

_______________________________

(1)

Represents Gilead’s revenue from cobicistat (“C”), FTC and TAF in Symtuza (darunavir/C/FTC/TAF), a fixed dose combination product commercialized by Janssen Sciences Ireland Unlimited Company.

(2)

Includes Atripla, 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)

Includes Hepcludex and Hepsera.

(7)

Includes Cayston, Jyseleca, Ranexa and Zydelig.

 

Investors:
Jacquie Ross, CFA
investor_relations@gilead.com

Media:
Chris Ridley
Public_affairs@gilead.com

Source: Gilead Sciences, Inc.