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Gilead Sciences Announces Second Quarter 2016 Financial Results

Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the second quarter ended June 30, 2016. The financial results that follow represent a year-over-year comparison of second quarter 2016 to the second quarter 2015. Total revenues were $7.8 billion in 2016 compared to $8.2 billion in 2015. Net income was $3.5 billion or $2.58 per diluted share in 2016 compared to $4.5 billion or $2.92 per diluted share in 2015. Non-GAAP net income, which excludes amounts related to acquisition-related, up-front collaboration, stock-based compensation and other expenses, was $4.2 billion or $3.08 per diluted share in 2016 compared to $4.8 billion or $3.15 per diluted share in 2015.

   

Three Months Ended

Six Months Ended

 

June 30,

June 30,

(In millions, except per share amounts)

2016

 

2015

2016

 

2015

Product sales $ 7,651 $ 8,126 $ 15,332 $ 15,531
Royalty, contract and other revenues   125   118   238   307
Total revenues $ 7,776 $ 8,244 $ 15,570 $ 15,838
Net income attributable to Gilead $ 3,497 $ 4,492 $ 7,063 $ 8,825
Non-GAAP net income* $ 4,177 $ 4,845 $ 8,451 $ 9,449
Diluted earnings per share $ 2.58 $ 2.92 $ 5.11 $ 5.68
Non-GAAP diluted earnings per share* $ 3.08 $ 3.15 $ 6.11 $ 6.08

* Non-GAAP net income and non-GAAP diluted earnings per share exclude acquisition-related, up-front collaboration, stock-based compensation and other expenses. A reconciliation between GAAP and non-GAAP financial information is provided in the tables on pages 8 and 9.

Product Sales

Total product sales for the second quarter of 2016 were $7.7 billion compared to $8.1 billion for the same period in 2015. Product sales for the second quarter of 2016 were $4.9 billion in the U.S., $1.6 billion in Europe, $619 million in Japan and $531 million in other locations. Product sales for the second quarter of 2015 were $5.6 billion in the U.S., $2.0 billion in Europe, $62 million in Japan and $515 million in other locations.

Antiviral Product Sales

Antiviral product sales, which include products in Gilead's HIV and liver disease areas, were $7.1 billion for the second quarter of 2016 compared to $7.6 billion for the same period in 2015.

  • HIV and other antiviral product sales were $3.1 billion compared to $2.7 billion for the same period in 2015 primarily due to increases in sales of our tenofovir alafenamide (TAF) based products, Genvoya® (elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir alafenamide 10 mg), Descovy® (emtricitabine 200 mg/tenofovir alafenamide 25 mg) and Odefsey® (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir alafenamide 25 mg).
  • HCV product sales, which consist of Harvoni® (ledipasvir 90 mg/sofosbuvir 400 mg), Sovaldi® (sofosbuvir 400 mg) and Epclusa® (sofosbuvir 400 mg/velpatasvir 100 mg), were $4.0 billion compared to $4.9 billion for the same period in 2015 primarily due to a decline in sales of Harvoni.

Other Product Sales

Other product sales, which include Letairis® (ambrisentan), Ranexa® (ranolazine) and AmBisome® (amphotericin B liposome for injection), were $525 million for the second quarter of 2016 compared to $495 million for the same period in 2015.

Cost of Goods Sold

During the second quarter of 2016, compared to the same period in 2015, cost of goods sold decreased to $864 million from $998 million and non-GAAP cost of goods sold* decreased to $653 million from $788 million, reflecting the reversal of the $200 million litigation reserve recorded in the first quarter of 2016 following a favorable court decision.

Operating Expenses

 

Three Months Ended

 

Six Months Ended

 

June 30,

June 30,

(In millions)

2016

 

2015

2016

 

2015

 
Research and development expenses (R&D) $ 1,484 $ 818 $ 2,749 $ 1,514
Non-GAAP research and development expenses* $ 1,040 $ 702 $ 1,809 $ 1,353
Selling, general and administrative expenses (SG&A) $ 890 $ 812 $ 1,575 $ 1,457
Non-GAAP selling, general and administrative expenses* $ 838 $ 761 $ 1,476 $ 1,361

* Non-GAAP Cost of Goods Sold, R&D and SG&A expenses exclude acquisition-related, up-front collaboration, stock-based compensation and other expenses. A reconciliation between GAAP and non-GAAP financial information is provided in the tables on pages 8 and 9.

During the second quarter of 2016, compared to the same period in 2015:

  • Research and development expenses and non-GAAP research and development expenses* increased primarily due to Gilead's purchase of a U.S. Food and Drug Administration (FDA) priority review voucher and the overall progression of Gilead's clinical studies. Research and development expenses for the second quarter of 2016 also include Gilead’s purchase of Nimbus Apollo, Inc. (Nimbus).
  • Selling, general and administrative expenses and non-GAAP selling, general and administrative expenses* increased primarily due to higher costs to support Gilead's new product launches and geographic expansion of its business.

Cash, Cash Equivalents and Marketable Securities

As of June 30, 2016, Gilead had $24.6 billion of cash, cash equivalents and marketable securities compared to $21.3 billion as of March 31, 2016. Cash flow from operating activities was $4.9 billion for the quarter. During the second quarter and the first six months of 2016, Gilead utilized $1.0 billion and $9.0 billion on stock repurchases, respectively.

Revised 2016 Full Year Guidance

Gilead revised its full year 2016 guidance, which it initially provided on February 2, 2016:

(In millions, except percentages and per share amounts)

 

Initially Provided
February 2, 2016
Reiterated
April 28, 2016

 

Updated
July 25, 2016

Net Product Sales

 

Non-GAAP*

$30,000 - $31,000

$29,500 - $30,500

Product Gross Margin 88% - 90% 88% - 90%
R&D Expenses $3,200 - $3,500 $3,600 - $3,800
SG&A Expenses $3,300 - $3,600 $3,100 - $3,300
Effective Tax Rate 18.0% - 20.0% 18.0% - 20.0%

Diluted EPS Impact of Acquisition-related, Up-front Collaboration, Stock-based Compensation and Other Expenses

$1.10 - $1.16 $1.47 - $1.53

* Non-GAAP Product Gross Margin, R&D and SG&A expenses and effective tax rate exclude acquisition-related, up-front collaboration, stock-based compensation and other expenses. A reconciliation between GAAP and non-GAAP full year 2016 guidance is provided in the tables on page 10.

Corporate Highlights

  • Announced that Kevin Young CBE was appointed Chief Operating Officer, and Martin Silverstein, MD was appointed Executive Vice President, Strategy. Both Mr. Young and Dr. Silverstein will report to John F. Milligan, PhD, President and Chief Executive Officer.
  • Announced that Gilead acquired Nimbus, a wholly-owned subsidiary of Nimbus Therapeutics, and its Acetyl- CoA Carboxylase (ACC) inhibitor program. The Nimbus program includes the lead candidate NDI-010976, an ACC inhibitor, and other pre-clinical ACC inhibitors for the potential treatment of non-alcoholic steatohepatitis, hepatocellular carcinoma and other diseases. NDI-010976 was granted Fast Track designation by FDA in February 2016.

Product & Pipeline Updates announced by Gilead during the Second Quarter of 2016 include:

  • Announced that FDA approved Epclusa (sofosbuvir 400 mg/velpatasvir 100 mg; SOF/VEL), the first all-oral, pan-genotypic, single tablet regimen (STR) for the treatment of adults with genotype 1-6 chronic hepatitis C virus (HCV) infection. Epclusa is also the first STR approved for the treatment of patients with HCV genotype 2 and 3, without the need for ribavirin (RBV). Epclusa for 12 weeks was approved in patients without cirrhosis or with compensated cirrhosis (Child-Pugh A), and in combination with RBV for patients with decompensated cirrhosis (Child-Pugh B or C). FDA granted Epclusa a Priority Review and Breakthrough Therapy designation, which is given to investigational medicines that may offer major advances in treatment over existing options. Additionally, the Committee for Medicinal Products for Human Use, the scientific committee of the European Medicines Agency, adopted a positive opinion on the company’s Marketing Authorization Application and in July 2016, the European Commission granted marketing authorization for Epclusa.
  • Announced that the European Commission granted marketing authorization for the once-daily STR Odefsey (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir alafenamide 25 mg) for the treatment of HIV-1 infection. Odefsey combines Gilead's emtricitabine and tenofovir alafenamide (marketed as Descovy) with rilpivirine, marketed by Janssen Sciences Ireland UC, one of the Janssen Pharmaceutical Companies of Johnson & Johnson. Odefsey is Gilead's second STR based on the Descovy backbone to receive marketing authorization in the European Union and is currently the smallest STR for the treatment of HIV.
  • Announced positive data from four pre-clinical and Phase 1 studies evaluating bictegravir (GS-9883), a novel, unboosted, investigational once-daily integrase inhibitor. The studies, which examined the antiviral potency, resistance profile, pharmacokinetics and safety of bictegravir, were presented at the American Society of Microbiology Microbe 2016 Conference.
  • Presented data at the 51st Annual Meeting of the European Association for the Study of the Liver, which included the announcement of:
    • Positive results from the open-label, Phase 3 ASTRAL-5 study evaluating once-daily SOF/VEL for 12 weeks among patients with HCV genotype 1-6 who are co-infected with HIV demonstrated that SOF/ VEL was well-tolerated and resulted in high SVR12 rates.
    • Positive results from three Phase 2 trials evaluating SOF/VEL plus voxilaprevir (VOX), a pan-genotypic protease inhibitor (Studies 1168 and 1169 and TRILOGY-3). Studies 1168 and 1169 evaluated 6 weeks of SOF/VEL plus VOX among treatment-naïve patients, 8 weeks of SOF/VEL plus VOX, with or without RBV, among treatment-naïve patients, and 12 weeks of SOF/VEL plus VOX among patients who failed prior treatment including those previously exposed to a direct acting antiviral (DAA) regimen. Study 1168 evaluated genotype 1 patients and Study 1169 evaluated genotype 2-6 patients. TRILOGY-3 featured data from the Phase 2 trial evaluating 12 weeks of a fixed-dose combination of SOF/VEL/ VOX, with or without RBV, among genotype 1, DAA-experienced, HCV-infected patients, including patients with cirrhosis.
  • Announced that the European Commission granted marketing authorization for two doses of Descovy (200/10 mg and 200/25 mg), a fixed-dose combination for the treatment of HIV-1 infection. Descovy is Gilead's second TAF-based therapy to receive marketing authorization in the European Union. Descovy was approved by FDA and is indicated in combination with other antiretroviral agents for the treatment of HIV-1 infection in adults and pediatric patients 12 years of age and older.

Non-GAAP Financial Information

The information presented in this document has been prepared by Gilead in accordance with U.S. generally accepted accounting principles (GAAP), unless otherwise noted as non-GAAP. Management believes non-GAAP information is useful for investors, when considered in conjunction with Gilead's GAAP financial information, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Gilead's operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in the same industry. A reconciliation between GAAP and Non-GAAP financial information is provided in the tables on pages 8, 9, and 10.

Conference Call

At 4:30 p.m. Eastern Time today, Gilead's management will host a conference call and a simultaneous webcast to discuss results from its second quarter 2016 as well as provide a general business update. To access the webcast live via the internet, please connect to the company's website at www.gilead.com/investors 15 minutes prior to the conference call to ensure adequate time for any software download that may be needed to hear the webcast. Alternatively, please call 1-877-359-9508 (U.S.) or 1-224-357-2393 (international) and dial the conference ID 34263799 to access the call.

A replay of the webcast will be archived on the company's website for one year, and a phone replay will be available approximately two hours following the call through July 27, 2016. To access the phone replay, please call 1-855-859-2056 (U.S.) or 1-404-537-3406 (international) and dial the conference ID 34263799.

About Gilead

Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes innovative therapeutics in areas of unmet medical need. The company's mission is to advance the care of patients suffering from life-threatening diseases. Gilead has operations in more than 30 countries worldwide, with headquarters in Foster City, California.

Forward-looking Statements

Statements included in this press release that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Gilead cautions readers that forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: Gilead's ability to achieve its anticipated full year 2016 financial results; Gilead's ability to sustain growth in revenues for its antiviral and other programs; the risk that estimates of patients with HCV or anticipated patient demand may not be accurate; the risk that private and public payers may be reluctant to provide, or continue to provide, coverage or reimbursement for new products, including Epclusa, Genvoya, Sovaldi and Harvoni; the potential for increased pricing pressure and contracting pressure as well as decreased volume and market share from additional competitive HCV launches, austerity measures in European countries and Japan that may increase the amount of discount required on Gilead's products, additional negotiated discounts for patient access, shifts in payer mix to more deeply discounted government payer segments and geographic regions and decreases in treatment duration; availability of funding for state AIDS Drug Assistance Programs (ADAPs); continued fluctuations in ADAP purchases driven by federal and state grant cycles which may not mirror patient demand and may cause fluctuations in Gilead's earnings; the possibility of unfavorable results from clinical trials involving investigational compounds, including bictegravir and SOF/VEL/VOX; Gilead's ability to initiate clinical trials in its currently anticipated timeframes; the levels of inventory held by wholesalers and retailers which may cause fluctuations in Gilead's earnings; Gilead's ability to submit new drug applications for new product candidates in the timelines currently anticipated; Gilead's ability to receive regulatory approvals in a timely manner or at all, for new and current products; Gilead's ability to successfully commercialize its products, including Epclusa, Genvoya, Odefsey and Descovy; the risk that physicians and patients may not see advantages of these products over other therapies and may therefore be reluctant to prescribe the products; Gilead's ability to successfully develop its oncology, inflammation, cardiovascular and respiratory programs; safety and efficacy data from clinical studies may not warrant further development of Gilead's product candidates; Gilead's ability to complete its share repurchase program due to changes in its stock price, corporate or other market conditions; fluctuations in the foreign exchange rate of the U.S. dollar that may cause an unfavorable foreign currency exchange impact on Gilead's future revenues and pre-tax earnings; and other risks identified from time to time in Gilead's reports filed with the U.S. Securities and Exchange Commission (SEC). In addition, Gilead makes estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. Gilead bases its estimates on historical experience and on various other market specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates. You are urged to consider statements that include the words may, will, would, could, should, might, believes, estimates, projects, potential, expects, plans, anticipates, intends, continues, forecast, designed, goal, or the negative of those words or other comparable words to be uncertain and forward-looking. Gilead directs readers to its press releases, Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 and other subsequent disclosure documents filed with the SEC. Gilead claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements.

All forward-looking statements are based on information currently available to Gilead, and Gilead assumes no obligation to update any such forward-looking statements.

Gilead owns or has rights to various trademarks, copyrights and trade names used in our business, including the following: GILEAD® , GILEAD SCIENCES® , AMBISOME® , CAYSTON® , COMPLERA® , DESCOVY® , EMTRIVA® , EPCLUSA® , EVIPLERA® , GENVOYA® , HARVONI® , HEPSERA® , LETAIRIS® , ODEFSEY® , RANEXA® , RAPISCAN® , SOVALDI® , STRIBILD® , TRUVADA® , TYBOST® , VIREAD® , VITEKTA® , VOLIBRIS® , and ZYDELIG® .

ATRIPLA® is a registered trademark belonging to Bristol-Myers Squibb & Gilead Sciences, LLC. LEXISCAN® is a registered trademark belonging to Astellas U.S. LLC. MACUGEN® is a registered trademark belonging to Eyetech, Inc. SUSTIVA® is a registered trademark of Bristol-Myers Squibb Pharma Company. TAMIFLU® is a registered trademark belonging to Hoffmann-La Roche Inc.

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

 
GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in millions, except per share amounts)
       
Three Months Ended Six Months Ended
June 30, June 30,
  2016     2015     2016     2015  
Revenues:
Product sales $ 7,651 $ 8,126 $ 15,332 $ 15,531
Royalty, contract and other revenues   125     118     238     307  
Total revenues   7,776     8,244     15,570     15,838  
Costs and expenses:
Cost of goods sold 864 998 2,057 1,880
Research and development expenses 1,484 818 2,749 1,514
Selling, general and administrative expenses   890     812     1,575     1,457  
Total costs and expenses   3,238     2,628     6,381     4,851  
Income from operations 4,538 5,616 9,189 10,987
Interest expense (227 ) (140 ) (457 ) (293 )
Other income (expense), net   88     35     169     56  
Income before provision for income taxes 4,399 5,511 8,901 10,750
Provision for income taxes   902     1,014     1,837     1,921  
Net income 3,497 4,497 7,064 8,829
Net income attributable to noncontrolling interest       5     1     4  
Net income attributable to Gilead $ 3,497   $ 4,492   $ 7,063   $ 8,825  
Net income per share attributable to Gilead common stockholders - basic $ 2.62 $ 3.05 $ 5.20 $ 5.96
Shares used in per share calculation - basic 1,335 1,472 1,359 1,480
Net income per share attributable to Gilead common stockholders - diluted $ 2.58 $ 2.92 $ 5.11 $ 5.68
Shares used in per share calculation - diluted 1,355 1,540 1,383 1,555
Cash dividends declared per share $ 0.47 0.43 $ 0.90 0.43
 
 
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(unaudited)
(in millions, except percentages and per share amounts)
       
Three Months Ended Six Months Ended
June 30, June 30,
  2016     2015     2016     2015  
Cost of goods sold reconciliation:
GAAP cost of goods sold $ 864 $ 998 $ 2,057 $ 1,880
Acquisition related-amortization of purchased intangibles (210 ) (207 ) (420 ) (413 )
Stock-based compensation expenses (4 ) (3 ) (7 ) (6 )
Other (1)   3         6     1  
Non-GAAP cost of goods sold $ 653   $ 788   $ 1,636   $ 1,462  
 
Product gross margin reconciliation:
GAAP product gross margin 88.7 % 87.7 % 86.6 % 87.9 %
Acquisition related-amortization of purchased intangibles   2.7 %   2.5 %   2.7 %   2.7 %
Non-GAAP product gross margin(2)   91.5 %   90.3 %   89.3 %   90.6 %
 
Research and development expenses reconciliation:
GAAP research and development expenses $ 1,484 $ 818 $ 2,749 $ 1,514
Up-front collaboration expenses (368 )
Acquisition related expenses-acquired IPR&D (400 ) (66 ) (400 ) (66 )
Acquisition related-IPR&D impairment (114 )
Stock-based compensation expenses (44 ) (42 ) (85 ) (84 )
Other (1)       (8 )   27     (11 )
Non-GAAP research and development expenses $ 1,040   $ 702   $ 1,809   $ 1,353  
 
Selling, general and administrative expenses reconciliation:
GAAP selling, general and administrative expenses $ 890 $ 812 $ 1,575 $ 1,457
Stock-based compensation expenses (47 ) (51 ) (91 ) (98 )
Other (1)   (5 )       (8 )   2  
Non-GAAP selling, general and administrative expenses $ 838   $ 761   $ 1,476   $ 1,361  
 
Operating margin reconciliation:
GAAP operating margin 58.4 % 68.1 % 59.0 % 69.4 %
Up-front collaboration expenses % % 2.4 % %
Acquisition related-amortization of purchased intangibles 2.7 % 2.5 % 2.7 % 2.6 %
Acquisition related expenses-acquired IPR&D 5.1 % 0.8 % 2.6 % 0.4 %
Acquisition related-IPR&D impairment % % 0.7 % %
Stock-based compensation expenses 1.2 % 1.2 % 1.2 % 1.2 %
Other (1)   %   0.1 %   (0.2 )%   0.1 %
Non-GAAP operating margin(2)   67.5 %   72.7 %   68.4 %   73.6 %

(1) Amounts related to consolidation of a contract manufacturer, contingent consideration and/or other individually insignificant amounts
(2) Amounts may not sum due to rounding

 
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION - (Continued)
(unaudited)
(in millions, except percentages and per share amounts)
       
Three Months Ended Six Months Ended

June 30,

June 30,
  2016       2015       2016       2015  
Effective tax rate reconciliation:
GAAP effective tax rate 20.5 % 18.4 % 20.6 % 17.9 %
Up-front collaboration expenses % % (0.7 )% %
Acquisition related-amortization of purchased intangibles (0.7 )% (0.5 )% (0.7 )% (0.5 )%
Acquisition related expenses-acquired IPR&D (1.5 )% (0.2 )% (0.8 )% (0.1 )%
Other (1)   %   %   0.1 %   %
Non-GAAP effective tax rate (2)   18.3 %     17.7 %     18.5 %     17.3 %
 
Net income attributable to Gilead reconciliation:
GAAP net income attributable to Gilead $ 3,497 $ 4,492 $ 7,063 $ 8,825
Up-front collaboration expenses 368
Acquisition related-amortization of purchased intangibles 204 202 408 403
Acquisition related expenses-acquired IPR&D 400 66 400 66
Acquisition related-IPR&D Impairment 99
Stock-based compensation expenses 69 71 133 140
Other (1)   7       14       (20 )     15  
Non-GAAP net income $ 4,177     $ 4,845     $ 8,451     $ 9,449  
 
Diluted earnings per share reconciliation:
GAAP diluted earnings per share $ 2.58 $ 2.92 $ 5.11 $ 5.68
Up-front collaboration expenses 0.27
Acquisition related-amortization of purchased intangibles 0.15 0.13 0.30 0.26
Acquisition related expenses-acquired IPR&D 0.30 0.04 0.29 0.04
Acquisition related-IPR&D Impairment 0.07
Stock-based compensation expenses 0.05 0.05 0.10 0.09
Other (1)   0.01         (0.01 )   0.01  
Non-GAAP diluted earnings per share(2) $ 3.08     $ 3.15     $ 6.11     $ 6.08  
 
Shares used in per share calculation (diluted) reconciliation:
GAAP shares used in per share calculation (diluted) 1,355 1,540 1,383 1,555
Share impact of current stock-based compensation rules   (1 )                  
Non-GAAP shares used in per share calculation (diluted)   1,354       1,540       1,383       1,555  
 
Non-GAAP adjustment summary:
Cost of goods sold adjustments $ 211 $ 210 $ 421 $ 418
Research and development expenses adjustments 444 116 940 161
Selling, general and administrative expenses adjustments   52       51       99       96  
Total non-GAAP adjustments before tax 707 377 1,460 675
Income tax effect (32 ) (30 ) (77 ) (58 )
Other(1)   5       6       5       7  
Total non-GAAP adjustments after tax $ 680     $ 353     $ 1,388     $ 624  

Notes:
(1) Amounts related to consolidation of a contract manufacturer, contingent consideration and/or other individually insignificant amounts
(2) Amounts may not sum due to rounding

 
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP 2016 FULL YEAR GUIDANCE
(unaudited)
(in millions, except percentages and per share amounts)
   

Initially Provided
February 2, 2016
Reiterated
April 28, 2016

Updated

July 25, 2016

Projected product gross margin GAAP to non-GAAP reconciliation:
GAAP projected product gross margin 85% - 87% 85% - 87%
Acquisition-related expenses 3% - 3% 3% - 3%
Non-GAAP projected product gross margin * 88% - 90% 88% - 90%
 
Projected research and development expenses GAAP to non-GAAP reconciliation:
GAAP projected research and development expenses $3,837 - $4,182 $4,700 - $4,945
Acquisition-related expenses / up-front collaboration expenses (447) - (477) (915) - (945)
Stock-based compensation expenses (190) - (205) (185) - (200)
Non-GAAP projected research and development expenses $3,200 - $3,500 $3,600 - $3,800
 

Projected selling, general and administrative expenses GAAP to non-GAAP reconciliation:

GAAP projected selling, general and administrative expenses $3,530 - $3,840 $3,305 - $3,515
Stock-based compensation expenses (230) - (240) (205) - (215)
Non-GAAP projected selling, general and administrative expenses $3,300 - $3,600 $3,100 - $3,300
 
Projected diluted EPS impact of acquisition-related, up-front collaboration, stock-based compensation and other expenses:
Acquisition-related expenses / up-front collaboration expenses $0.88 - $0.92 $1.26 - $1.30
Stock-based compensation expenses $0.22 - $0.24 $0.21 - $0.23
Projected diluted EPS impact of acquisition-related, up-front collaboration, stock-based compensation and other expenses $1.10 - $1.16 $1.47 - $1.53

Notes:
* Stock-based compensation expenses have a less than one percent impact on non-GAAP projected product gross margin.

GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions)
   
June 30, December 31,
2016

2015 (1)

 
Cash, cash equivalents and marketable securities $ 24,616 $ 26,208
Accounts receivable, net 5,752 5,854
Inventories 1,862 1,955
Property, plant and equipment, net 2,599 2,276
Intangible assets, net 9,713 10,247
Goodwill 1,172 1,172
Other assets   4,266   4,004  
Total assets $ 49,980 $ 51,716  
 
Current liabilities $ 10,444 $ 9,890
Long-term liabilities 23,421 22,711
Equity component of currently redeemable convertible notes 2
Stockholders’ equity(2)   16,115   19,113  
Total liabilities and stockholders’ equity $ 49,980 $ 51,716  

Notes:
(1) Derived from the audited consolidated financial statements as of December 31, 2015. Certain amounts have been reclassified to conform to current year presentation.
(2) As of June 30, 2016, there were 1,331 million shares of common stock issued and outstanding.

 
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY
(unaudited)
(in millions)
       
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
Antiviral products:
Harvoni – U.S. $ 1,474 $ 2,826 $ 2,881 $ 5,842
Harvoni – Europe 512 623 1,067 1,100
Harvoni – Japan 448 1,335
Harvoni – Other International   130   159   298   245
  2,564   3,608   5,581   7,187
 
Sovaldi – U.S. 775 615 1,420 1,036
Sovaldi – Europe 263 522 543 1,005
Sovaldi – Japan 171 62 373 62
Sovaldi – Other International   149   92   299   160
  1,358   1,291   2,635   2,263
 
Truvada – U.S. 631 500 1,207 909
Truvada – Europe 245 277 496 578
Truvada – Other International   66   72   137   133
  942   849   1,840   1,620
 
Atripla – U.S. 479 549 968 1,043
Atripla – Europe 140 178 283 372
Atripla – Other International   54   55   97   101
  673   782   1,348   1,516
 
Stribild – U.S. 326 364 702 646
Stribild – Europe 84 65 165 126
Stribild – Other International   19   18   39   31
  429   447   906   803
 
Complera / Eviplera – U.S. 199 207 421 370
Complera / Eviplera – Europe 156 145 302 290
Complera / Eviplera – Other International   13   15   26   27
  368   367   749   687
 
Genvoya – U.S. 268 409
Genvoya – Europe 30 46
Genvoya – Other International   4     5  
  302     460  
 
Viread – U.S. 142 134 265 234
Viread – Europe 81 77 157 157
Viread – Other International   64   60   137   114
  287   271   559   505
 
Epclusa – U.S.   64     64  
 
Descovy – U.S. 49 49
Descovy – Europe   12     12  
  61     61  
 
Odefsey – U.S.   58     69  
 
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY - (Continued)
(unaudited)
(in millions)
       
Three Months Ended Six Months Ended
June 30, June 30,
2016   2015   2016   2015
 
Other Antiviral - US $ 12 $ 8 $ 22 $ 22
Other Antiviral - Europe 7 7 13 14
Other Antiviral - Other International   1     1     2     2
  20     16     37     38
 
Total antiviral products – U.S. 4,477 5,203 8,477 10,102
Total antiviral products – Europe 1,530 1,894 3,084 3,642
Total antiviral products – Japan 619 62 1,708 62
Total antiviral products – Other International   500     472     1,040     813
  7,126     7,631     14,309     14,619
Other products:
Letairis 203 176 378 327
Ranexa 153 141 297 258
AmBisome 85 103 171 188
Zydelig 41 30 90 56
Other   43     45     87     83
  525     495     1,023     912
 
Total product sales $ 7,651   $ 8,126   $ 15,332   $ 15,531

Contact:

Gilead Sciences, Inc.
Investors
Robin Washington, 650-522-5688
Sung Lee, 650-524-7792
or
Media
Amy Flood, 650-522-5643

Link:

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