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Empresas y finanzas

Gilead Sciences Announces First Quarter 2014 Financial Results


    Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the quarter ended March 31, 2014. Total revenues for the first quarter of 2014 increased to $5.00 billion from $2.53 billion for the first quarter of 2013. Product sales increased to $4.87 billion for the first quarter of 2014 compared to $2.39 billion for the first quarter of 2013. Net income for the first quarter of 2014 was $2.23 billion, or $1.33 per diluted share compared to $722.2 million, or $0.43 per diluted share for the first quarter of 2013. Non-GAAP net income for the first quarter of 2014, which excludes acquisition-related, restructuring and stock-based compensation expenses, was $2.49 billion, or $1.48 per diluted share compared to $801.9 million, or $0.48 per diluted share for the first quarter of 2013.

              Three Months Ended     March 31, (In thousands, except per share amounts)   2014   2013 Product sales   $   4,870,974     $   2,393,568 Royalty, contract and other revenues   127,982     138,067 Total revenues   $   4,998,956     $   2,531,635           Net income attributable to Gilead   $   2,227,410     $   722,186 Non-GAAP net income attributable to Gilead   $   2,487,809     $   801,943           Diluted EPS   $   1.33     $   0.43 Non-GAAP diluted EPS   $   1.48     $   0.48                    

    Product Sales

    Compared to the first quarter of 2013, U.S. product sales for the first quarter of 2014 increased to $3.63 billion from $1.40 billion and Europe product sales increased to $1.02 billion from $818.3 million.

    Antiviral Product Sales

    Antiviral product sales increased to $4.51 billion for the first quarter of 2014, up from $2.06 billion for the first quarter of 2013 largely due to sales of Sovaldi® (sofosbuvir 400 mg), which launched in December 2013, and increases in sales of Stribild® (elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg) and Complera/Eviplera® (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir disoproxil fumarate 300 mg). This increase was partially offset by a decrease in wholesaler and sub-wholesaler inventories in the United States associated primarily with our HIV products, which also impacted antiviral product sales in the first quarter of 2014 compared to the fourth quarter of 2013.

                  Three Months Ended         March 31,     (In thousands, except percentages)   2014   2013   % Change Antiviral product sales   $   4,508,497     $   2,061,078     119   % Sovaldi   2,274,349     —     —   % Atripla   779,594     877,073     (11

    )

    %

    Truvada   759,700     700,242     8   % Complera/Eviplera   250,733     148,189     69   % Stribild   215,271     92,148     134   % Viread   210,625     210,332     —   %                      

    Cardiovascular Product Sales

    Cardiovascular product sales increased to $234.5 million for the first quarter of 2014, up from $214.4 million for the first quarter of 2013 primarily driven by strong Ranexa® (ranolazine) sales.

                  Three Months Ended         March 31,     (In thousands, except percentages)   2014   2013   % Change Cardiovascular product sales   $ 234,503     $ 214,393     9 % Letairis   122,885     118,107     4 % Ranexa   111,618     96,286     16 %                    

    Operating Expenses and Other

    During the first quarter of 2014, compared to the same period in 2013:

    • Non-GAAP research and development (R&D) expenses increased due to the progression of Gilead´s clinical studies, particularly in oncology and HIV.
    • Non-GAAP selling, general and administrative (SG&A) expenses increased to support the expansion of Gilead´s business, particularly in hepatitis C virus (HCV) and in preparation for the anticipated launch of idelalisib.
              Three Months Ended     March 31, (In thousands)   2014   2013 Non-GAAP research and development expenses   $ 557,805     $ 459,976 Non-GAAP selling, general and administrative expenses   $ 500,105     $ 333,064

    Note: Non-GAAP R&D and SG&A expenses exclude the impact of acquisition-related, restructuring and stock-based compensation expenses.

    Cash, Cash Equivalents and Marketable Securities

    As of March 31, 2014, Gilead had $6.86 billion of cash, cash equivalents and marketable securities compared to $2.57 billion as of December 31, 2013. This increase was primarily due to the issuance of senior unsecured notes in March 2014 for a total aggregate principal amount of $4.00 billion. These proceeds will be for general corporate purposes, which may include the repayment of debt and related payments, working capital and the repurchase of outstanding common stock under the authorized share repurchase program. During the first three months of 2013, Gilead generated $1.57 billion in operating cash flow.

    Full Year 2014 Guidance

    Gilead reiterates its full year 2014 guidance, initially provided on February 4, 2014, which excludes the impact of Sovaldi product sales:

          (In millions, except percentages and per share amounts)   Provided

    February 4, 2014

    Net Product Sales   $11,300 - $11,500 Non-GAAP*     Product Gross Margin   75% - 77% R&D   $2,200 - $2,300 SG&A   $2,100 - $2,200 Effective Tax Rate   28% - 29%       Diluted EPS Impact of Acquisition-Related, Restructuring and Stock-Based Compensation Expenses   $0.63 - $0.66

    * Non-GAAP product gross margin, expenses and effective tax rate exclude the impact of acquisition-related, restructuring and stock-based compensation expenses, where applicable.

    Product & Pipeline Updates Announced by Gilead During the First Quarter of 2014 Include:

    Antiviral Program

    • The European Commission granted marketing authorization for Sovaldi in combination with other antiviral agents ribavirin and pegylated interferon alpha in all 28 countries of the European Union.
    • Submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for a once-daily fixed-dose combination of the NS5A inhibitor ledipasvir (LDV) 90 mg and the nucleotide analog polymerase inhibitor sofosbuvir (SOF) 400 mg for the treatment of chronic hepatitis C genotype 1 infection in adults for eight or 12 weeks, depending on prior treatment history and whether they have cirrhosis. The FDA has assigned LDV/SOF a Breakthrough Therapy designation, which is granted to investigational medicines that may offer major advances in treatment over existing options. The FDA has set a target review date under the Prescription Drug User Fee Act (PDUFA) of October 10, 2014.
    • Announced that the company’s Marketing Authorisation Application for LDV/SOF has been fully validated and is now under assessment by the European Medicines Agency. The application was submitted on February 27, 2014.

    Oncology Program

    • Announced FDA acceptance for review of the company’s NDA for idelalisib, a targeted, oral inhibitor of PI3K delta, for the treatment of relapsed chronic lymphocytic leukemia with priority review and a target review date under PDUFA of August 6, 2014 and for the treatment of refractory indolent non-Hodgkin’s lymphoma with a standard review and a target review date under PDUFA of September 11, 2014.

    Conference Call

    At 4:15 p.m. Eastern Time today, Gilead´s management will host a conference call and a simultaneous webcast to discuss results from its first quarter 2014 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 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 1-844-795-1482 (U.S.) or 1-931-229-4695 (international) and dial the conference ID 17493454 to access the call.

    A replay of the webcast will be archived on the company´s website for one year, and a phone replay will be available approximately two hours following the call through April 24, 2014. To access the phone replay, please call 1-855-859-2056 (U.S.) or 1-404-537-3406 (international) and dial the conference ID 17493454.

    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 transform and simplify care for people with life-threatening illnesses around the word. Headquartered in Foster City, California, Gilead has operations in North and South America, Europe and Asia-Pacific.

    Non-GAAP Financial Information

    Gilead has presented certain financial information in accordance with U.S. generally accepted accounting principles (GAAP) and also on a non-GAAP basis. Management believes this non-GAAP information is useful for investors, when considered in conjunction with Gilead´s GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Gilead´s operating results as reported under GAAP. A reconciliation between GAAP and non-GAAP financial information is provided in the table on pages 7 and 8.

    Forward-looking Statements

    Statements included in this press release that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Gilead cautions readers that forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: Gilead´s ability to achieve its anticipated full year 2014 financial results; Gilead´s ability to sustain growth in revenues for its antiviral, cardiovascular and respiratory programs; availability of funding for state AIDS Drug Assistance Programs (ADAPs); continued fluctuations in ADAP purchases driven by federal and state grant cycles which may not mirror patient demand and may cause fluctuations in Gilead´s earnings; the possibility of unfavorable results from clinical trials involving sofosbuvir, including in combination with other product candidates such as LDV; the levels of inventory held by wholesalers and retailers which may cause fluctuations in Gilead´s earnings; Gilead´s ability to submit NDAs for new product candidates in the timelines currently anticipated; Gilead´s ability to receive regulatory approvals in a timely manner or at all, for new and current products, including the fixed-dose combination of LDV/SOF and idelalisib; Gilead´s ability to successfully commercialize its products, including Sovaldi, Stribild, Vitekta and Tybost; the risk that estimates of patients with HCV or anticipated patient demand may not be accurate; Gilead´s ability to successfully develop its respiratory, cardiovascular and oncology/inflammation programs; safety and efficacy data from clinical studies may not warrant further development of Gilead´s product candidates; the potential for additional austerity measures in European countries that may increase the amount of discount required on Gilead´s products; 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, Annual Report on Form 10-K for the year ended December 31, 2013 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®, SOVALDI®, STRIBILD®, COMPLERA®, EVIPLERA®, TRUVADA®, VIREAD®, EMTRIVA®, TYBOST®, HEPSERA®, VITEKTA®, LETAIRIS®, RANEXA®, CAYSTON®, AMBISOME®, VISTIDE®, VOLIBRIS®, and RAPISCAN®.

    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.

    CONSOLIDATED STATEMENTS OF INCOME

    (unaudited)

    (in thousands, except per share amounts)

         

     

      Three Months Ended     March 31,     2014   2013 Revenues:         Product sales   $ 4,870,974     $ 2,393,568   Royalty, contract and other revenues   127,982     138,067   Total revenues   4,998,956     2,531,635   Costs and expenses:         Cost of goods sold   813,205     634,448   Research and development   594,978     497,632   Selling, general and administrative   548,123     374,296   Total costs and expenses   1,956,306     1,506,376   Income from operations   3,042,650     1,025,259   Interest expense   (76,269 )   (81,787 ) Other income (expense), net   (17,912 )   (3,324 ) Income before provision for income taxes   2,948,469     940,148   Provision for income taxes   725,882     222,438   Net income   2,222,587     717,710   Net loss attributable to noncontrolling interest   4,823     4,476   Net income attributable to Gilead   $ 2,227,410     $ 722,186   Net income per share attributable to Gilead common stockholders - basic   $ 1.45     $ 0.47   Net income per share attributable to Gilead common stockholders - diluted   $ 1.33     $ 0.43   Shares used in per share calculation - basic   1,536,525     1,521,372   Shares used in per share calculation - diluted   1,679,871     1,665,060                

    GILEAD SCIENCES, INC.

    RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

    (unaudited)

    (in thousands, except percentages and per share amounts)

              Three Months Ended     March 31,     2014   2013 Cost of goods sold reconciliation:         GAAP cost of goods sold   $ 813,205     $ 634,448   Stock-based compensation expenses   (2,642 )   (1,841 ) Acquisition related-amortization of purchased intangibles   (199,230 )   (21,264 ) Non-GAAP cost of goods sold   $ 611,333     $ 611,343             Product gross margin reconciliation:         GAAP product gross margin   83.3 %   73.5 % Stock-based compensation expenses   0.1 %   0.1 % Acquisition related-amortization of purchased intangibles   4.1 %   0.9 % Non-GAAP product gross margin(1)   87.4 %   74.5 %           Research and development expenses reconciliation:         GAAP research and development expenses   $ 594,978     $ 497,632   Stock-based compensation expenses   (34,350 )   (26,875 ) Restructuring expenses   (145 )   (4,757 ) Acquisition related-contingent consideration remeasurement   (2,678 )   (6,024 ) Non-GAAP research and development expenses   $ 557,805     $ 459,976             Selling, general and administrative expenses reconciliation:         GAAP selling, general and administrative expenses   $ 548,123     $ 374,296   Stock-based compensation expenses   (45,233 )   (33,051 ) Restructuring expenses   (3 )   (744 ) Acquisition related-transaction costs   (448 )   (7,156 ) Acquisition related-amortization of purchased intangibles   (2,334 )   (281 ) Non-GAAP selling, general and administrative expenses   $ 500,105     $ 333,064             Operating margin reconciliation:         GAAP operating margin   60.9 %   40.5 % Stock-based compensation expenses   1.6 %   2.4 % Restructuring expenses   0.0 %   0.2 % Acquisition related-transaction costs   0.0 %   0.3 % Acquisition related-amortization of purchased intangibles   4.0 %   0.9 % Acquisition related-contingent consideration remeasurement   0.1 %   0.2 % Non-GAAP operating margin(1)   66.6 %   44.5 %           Other income (expense) reconciliation:         GAAP other income (expense), net   $ (17,912 )   $ (3,324 ) Acquisition related-transaction costs   (1,853 )   —   Non-GAAP other income (expense), net   $ (19,765 )   $ (3,324 )                  

    GILEAD SCIENCES, INC.

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

    (unaudited)

    (in thousands, except percentages and per share amounts)

              Three Months Ended     March 31,     2014   2013 Effective tax rate reconciliation:         GAAP effective tax rate   24.6 %   23.7 % Restructuring expenses   — %   (0.1 )% Acquisition related-amortization of purchased intangibles   (1.4 )%   — % Acquisition related-contingent consideration remeasurement   — %   (0.1 )% Non-GAAP effective tax rate(1)   23.2 %   23.5 %           Net income attributable to Gilead reconciliation:         GAAP net income attributable to Gilead, net of tax   $ 2,227,410     $ 722,186   Stock-based compensation expenses   63,136     45,380   Restructuring expenses   148     5,368   Acquisition related-transaction costs   (975 )   7,156   Acquisition related-amortization of purchased intangibles   195,412     15,829   Acquisition related-contingent consideration remeasurement   2,678     6,024   Non-GAAP net income attributable to Gilead, net of tax   $ 2,487,809     $ 801,943             Diluted earnings per share reconciliation:         GAAP diluted earnings per share   $ 1.33     $ 0.43   Stock-based compensation expenses   0.04     0.03   Restructuring expenses   0.00     0.00   Acquisition related-transaction costs   (0.00 )   0.00   Acquisition related-amortization of purchased intangibles   0.12     0.01   Acquisition related-contingent consideration remeasurement   0.00     0.00   Non-GAAP diluted earnings per share(1)   $ 1.48     $ 0.48             Shares used in per share calculation (diluted) reconciliation: