EX-99.1 2 exhibit991earningspressrel.htm EXHIBIT Exhibit 99.1 Earnings Press Release Q2'14

CONTACTS:
Investors
 
 
Media
 
Robin Washington
 
 
Amy Flood
 
(650) 522-5688
 
 
(650) 522-5643
 
 
 
 
 
 
Patrick O'Brien
 
 
 
 
(650) 522-1936    
 
 
 
 
 
 
 
 
For Immediate Release

GILEAD SCIENCES ANNOUNCES SECOND QUARTER 2014 FINANCIAL RESULTS

- Product Sales of $6.41 billion -
- Sovaldi Sales of $3.48 billion -
- Non-GAAP EPS of $2.36 per share -


Foster City, CA, July 23, 2014 - Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the quarter ended June 30, 2014. Total revenues for the second quarter of 2014 increased to $6.53 billion compared to $2.77 billion for the second quarter of 2013. Product sales for the second quarter of 2014 increased to $6.41 billion compared to $2.66 billion for the second quarter of 2013. Net income for the second quarter of 2014 was $3.66 billion, or $2.20 per diluted share compared to $772.6 million or $0.46 per diluted share for the second quarter of 2013. Non-GAAP net income for the second quarter of 2014, which excludes acquisition-related, restructuring and stock-based compensation expenses, was $3.93 billion, or $2.36 per diluted share compared to $839.7 million or $0.50 per diluted share for the second quarter of 2013.

“During the second quarter, Gilead continued to make significant progress led by strong Sovaldi sales. Since December’s launch, Sovaldi has been prescribed for more than 80,000 patients in the U.S. and Europe, underscoring the medical community’s recognition of the benefits of this product,” said John C. Martin, PhD, Gilead’s Chairman and Chief Executive Officer. “We look forward to making Sovaldi available in additional countries.”

 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
(In thousands, except per share amounts)
 
2014
 
2013
 
2014
 
2013
Product sales
 
$
6,412,937

 
$
2,657,285

 
$
11,283,911

 
$
5,050,853

Royalty, contract and other revenues
 
122,006

 
110,109

 
249,988

 
248,176

Total revenues
 
$
6,534,943

 
$
2,767,394

 
$
11,533,899

 
$
5,299,029

 
 
 
 
 
 
 
 
 
Net income attributable to Gilead
 
$
3,655,593

 
$
772,605

 
$
5,883,003

 
$
1,494,791

Non-GAAP net income attributable to Gilead
 
$
3,929,533

 
$
839,725

 
$
6,417,342

 
$
1,641,668

 
 
 
 
 
 
 
 
 
Diluted EPS
 
$
2.20

 
$
0.46

 
$
3.52

 
$
0.89

Non-GAAP diluted EPS
 
$
2.36

 
$
0.50

 
$
3.84

 
$
0.98



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Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA
www.gilead.com
phone (650) 574-3000 facsimile (650) 578-9264
 


July 23, 2014
 
2

Product Sales
Compared to the second quarter of 2013, U.S. product sales for the second quarter of 2014 increased to $4.82 billion from $1.64 billion and Europe product sales increased to $1.31 billion from $818.2 million.

Antiviral Product Sales
Antiviral product sales increased to $6.01 billion for the second quarter of 2014, up from $2.31 billion for the second quarter of 2013 primarily due to sales of Sovaldi® (sofosbuvir 400 mg), which launched in December 2013.
 
 
Three Months Ended
 
 
 
Six Months Ended
 
 
 
 
June 30,
 
 
 
June 30,
 
 
(In thousands, except percentages)
 
2014
 
2013
 
% Change
 
2014
 
2013
 
% Change
Antiviral product sales
 
$
6,012,144

 
$
2,313,539

 
160
 %
 
$
10,520,641

 
$
4,374,617

 
140
 %
Sovaldi
 
3,480,326

 
—

 
—
 %
 
5,754,675

 
—

 
—
 %
Atripla
 
870,708

 
938,108

 
(7
)%
 
1,650,302

 
1,815,181

 
(9
)%
Truvada
 
806,610

 
807,779

 
—
 %
 
1,566,310

 
1,508,021

 
4
 %
Complera/Eviplera
 
299,464

 
188,683

 
59
 %
 
550,197

 
336,872

 
63
 %
Stribild
 
269,520

 
99,394

 
171
 %
 
484,791

 
191,542

 
153
 %
Viread
 
260,734

 
250,188

 
4
 %
 
471,359

 
460,520

 
2
 %

Cardiovascular Product Sales
Cardiovascular product sales increased to $266.7 million for the second quarter of 2014, compared to $234.9 million for the second quarter of 2013.
 
 
Three Months Ended
 
 
 
Six Months Ended
 
 
 
 
June 30,
 
 
 
June 30,
 
 
(In thousands, except percentages)
 
2014
 
2013
 
% Change
 
2014
 
2013
 
% Change
Cardiovascular product sales
 
$
266,672

 
$
234,854

 
14
%
 
$
501,175

 
$
449,247

 
12
%
Letairis
 
144,716

 
128,257

 
13
%
 
267,601

 
246,364

 
9
%
Ranexa
 
121,956

 
106,597

 
14
%
 
233,574

 
202,883

 
15
%

Operating Expenses
During the second quarter of 2014, compared to the same period in 2013:
•
Non-GAAP research and development (R&D) expenses increased primarily due to increases in headcount and other costs to support expansion of our R&D activities.
•
Non-GAAP selling, general and administrative (SG&A) expenses increased primarily due to headcount and marketing expense increases to support our business expansion related to Sovaldi and pre-launch expenses for Zydelig® (idelalisib 150 mg).
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
(In thousands)
 
2014
 
2013
 
2014
 
2013
Non-GAAP research and development expenses
 
$
541,974

 
$
487,771

 
$
1,099,779

 
$
947,747

Non-GAAP selling, general and administrative expenses
 
$
569,230

 
$
376,336

 
$
1,069,335

 
$
709,400

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


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July 23, 2014
 
3

Tax Rate
Our non-GAAP effective tax rate for the three and six months ended June 30, 2014 was 14.6% and 18.2%, respectively.  The non-GAAP effective tax rate for the three months ended June 30, 2014 includes a cumulative catch up adjustment of 3.6 percentage points to the first quarter tax rate to reduce the year to date non-GAAP effective tax rate to 18.2%. 

Cash, Cash Equivalents and Marketable Securities
As of June 30, 2014, Gilead had $9.58 billion of cash, cash equivalents and marketable securities compared to $6.86 billion as of March 31, 2014. During the second quarter of 2014, Gilead generated $4.19 billion in operating cash flow. Gilead utilized $1.2 billion to repurchase 15.2 million shares during the quarter and has approximately $1.7 billion remaining in the current repurchase plan which is expected to be completed by September 2014. In May, the company announced that its Board of Directors authorized an additional repurchase of up to $5 billion of the company’s common stock following completion of the current authorization.

Updated Full Year 2014 Guidance
Gilead updated its full year 2014 guidance, which it initially provided on February 4, 2014 and reiterated on April 22, 2014, to include the impact of Sovaldi product sales:
(In millions, except percentages and per share amounts)
 
Initially Provided
February 4, 2014; Reiterated April 22, 2014
Updated
July 23, 2014
Net Product Sales
 
$11,300 - $11,500
$21,000 - $23,000
Non-GAAP*
 
 
 
Product Gross Margin
 
75% - 77%
85% - 88%
R&D
 
$2,200 - $2,300
$2,300 - $2,400
SG&A
 
$2,100 - $2,200
$2,300 - $2,400
Effective Tax Rate
 
28% - 29%
17.5% - 20.5%
 
 
 
 
Diluted EPS Impact of Acquisition-Related, Restructuring and Stock-Based Compensation Expenses
 
$0.63 - $0.66
$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 Second Quarter of 2014 Include:
Antiviral Program
•
Submission of a New Drug Application (NDA) to Japan’s Pharmaceutical and Medical Devices Agency (PMDA) for approval of sofosbuvir (SOF), a once-daily nucleotide analog polymerase inhibitor for the treatment of chronic HCV infection. The NDA is based primarily on data from a Phase 3 clinical trial conducted in Japan among 153 treatment-naïve and treatment-experienced genotype 2 patients. In the study, 97 percent of HCV-infected patients receiving 12 weeks of an all-oral regimen of SOF plus ribavirin (RBV) 600-1,000 mg/day achieved a sustained virologic response 12 weeks after completing therapy (SVR12). If approved, SOF would form the basis of the first all-oral, interferon-free treatment regimen for genotype 2 patients in Japan.
•
Positive results from a Phase 3 clinical trial in Japan evaluating the investigational once-daily fixed-dose combination of the NS5A inhibitor ledipasvir (LDV) 90 mg and SOF 400 mg, with and without RBV, for the treatment of genotype 1 chronic HCV infection. In the arm that utilized LDV/SOF without RBV, 100 percent of patients treated achieved SVR12, including the subset of patients with cirrhosis. Based on these data, Gilead plans to submit an NDA for the LDV/SOF fixed-dose combination with the Japanese PMDA by the end of 2014.

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July 23, 2014
 
4

•
U.S. Food and Drug Administration (FDA) acceptance of the company’s refiling of two NDAs for cobicistat and elvitegravir. FDA set target review dates under the Prescription Drug User Fee Act (PDUFA) of October 3, 2014 for cobicistat and October 4, 2014 for elvitegravir.
•
Presentations of data on SOF-based regimens in chronic HCV patients at the 49th Annual Meeting of the European Association for the Study of the Liver included:
◦
Positive data from two Phase 2 studies and a compassionate access study in which a regimen containing once-daily Sovaldi was administered for the treatment of chronic HCV infection in patients with advanced liver disease.
◦
Positive data from two Phase 2 studies, evaluating investigational all-oral regimens containing SOF for the treatment of chronic HCV infection.
◦
Positive results from an open-label clinical trial, evaluating once-daily Sovaldi for the retreatment of chronic HCV infection among patients who failed prior therapy.
•
Priority review granted by the FDA of the NDA for a once-daily fixed-dose combination of LDV/SOF for the treatment of chronic HCV genotype 1 infection in adults. The FDA set a target action date under PDUFA of October 10, 2014.

Oncology Program
•
Updated interim results of a Phase 2 study evaluating GS-9973, Gilead's investigational oral inhibitor of spleen tyrosine kinase (Syk), for the treatment of patients with relapsed chronic lymphocytic leukemia (CLL) at the 50th Annual Meeting of the American Society of Clinical Oncology. Based on these data, Gilead plans to initiate new CLL study cohorts to include patients who have relapsed following treatment with other inhibitors of the B-cell receptor signaling pathway.

Other
•
Positive results from a placebo-controlled, Phase 2a challenge study in healthy adult patients intranasally infected with respiratory syncytial virus (RSV) at the American Thoracic Society 2014 International Conference. The study of GS-5806, an investigational oral RSV fusion inhibitor, achieved its primary and secondary endpoints of lower viral load (the amount of virus detected in the nasal wash), improvements in total mucus weight (the amount of mucus produced) and also symptom score compared to placebo.
•
Positive results from HARMONY, a randomized, double-blind, placebo-controlled Phase 2 study evaluating the effect of ranolazine and low-dose dronedarone, each given alone and in combination, on atrial fibrillation burden (AFB) in patients with paroxysmal atrial fibrillation at the annual meeting of the Heart Rhythm Society. In HARMONY, the combination of ranolazine and low-dose dronedarone provided greater reductions in AFB from baseline than either therapy used alone.
•
Positive results from a Phase 1 clinical trial of GS-6615, an investigational, selective late sodium current inhibitor, showing a shortening of the QTc interval (the time interval between the start of the Q-wave and end of the T-wave in the heart’s electrical cycle) in patients with long QT-3 (LQT3) syndrome at the annual meeting of the Heart Rhythm Society. Based on these results, Gilead plans to initiate a Phase 2 study of GS-6615 in LQT3 patients later this year. Additionally, based on pre-clinical data for GS-6615 and clinical data involving the role of late sodium current inhibition in other cardiovascular diseases, Gilead plans to initiate Phase 2 clinical trials in patients with hypertrophic cardiomyopathy and ventricular tachycardia/ventricular fibrillation.

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 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
1-877-359-9508 (U.S.) or 1-224-357-2393 (international) and dial the conference ID 65785151 to access the call.

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July 23, 2014
 
5


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 25, 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 65785151.

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 8 and 9.

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 GS-9973, GS-5806, GS-6615, sofosbuvir, including in combination with other product candidates such as LDV; 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 NDAs for new product candidates in the timelines currently anticipated, including the fixed dose combination of LDV/SOF with the PDMA; Gilead's ability to receive regulatory approvals in a timely manner or at all, for new and current products, including sofosbuvir in Japan; the fixed-dose combination of LDV/SOF in the United States and elvitegravir and cobicistat as single agents in the United States; Gilead's ability to successfully commercialize its products, including Sovaldi, Stribild, Vitekta, Tybost and Zydelig; 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, oncology and 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; Gilead's ability to complete its share repurchase programs 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

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July 23, 2014
 
6

quarter ended March 31, 2014 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®, ZYDELIG®, 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).

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July 23, 2014
 
7

GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)

 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2014
 
2013
 
2014
 
2013
 Revenues:
 
 
 
 
 
 
 
 
 Product sales
 
$
6,412,937

 
$
2,657,285

 
$
11,283,911

 
$
5,050,853

 Royalty, contract and other revenues
 
122,006

 
110,109

 
249,988

 
248,176

 Total revenues
 
6,534,943

 
2,767,394

 
11,533,899

 
5,299,029

 Costs and expenses:
 
 
 
 
 
 
 
 
 Cost of goods sold
 
924,709

 
684,663

 
1,737,914

 
1,319,111

 Research and development
 
583,924

 
523,902

 
1,178,902

 
1,021,534

 Selling, general and administrative
 
613,555

 
404,991

 
1,161,678

 
779,287

 Total costs and expenses
 
2,122,188

 
1,613,556

 
4,078,494

 
3,119,932

 Income from operations
 
4,412,755

 
1,153,838

 
7,455,405

 
2,179,097

 Interest expense
 
(102,004
)
 
(78,008
)
 
(178,273
)
 
(159,795
)
 Other income (expense), net
 
(3,645
)
 
(231
)
 
(21,557
)
 
(3,555
)
 Income before provision for income taxes
 
4,307,106

 
1,075,599

 
7,255,575

 
2,015,747

 Provision for income taxes
 
656,621

 
307,981

 
1,382,503

 
530,419

 Net income
 
3,650,485

 
767,618

 
5,873,072

 
1,485,328

 Net loss attributable to noncontrolling interest
 
5,108

 
4,987

 
9,931

 
9,463

 Net income attributable to Gilead
 
$
3,655,593

 
$
772,605

 
$
5,883,003

 
$
1,494,791

 Net income per share attributable to Gilead common stockholders - basic
 
$
2.39

 
$
0.51

 
$
3.83

 
$
0.98

 Net income per share attributable to Gilead common stockholders - diluted
 
$
2.20

 
$
0.46

 
$
3.52

 
$
0.89

 Shares used in per share calculation - basic
 
1,532,723

 
1,526,945

 
1,534,614

 
1,524,174

 Shares used in per share calculation - diluted
 
1,664,415

 
1,694,577

 
1,672,435

 
1,683,269





July 23, 2014
 
8

GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(unaudited)
(in thousands, except percentages and per share amounts)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2014
 
2013
 
2014
 
2013
Cost of goods sold reconciliation:
 
 
 
 
 
 
 
 
GAAP cost of goods sold
 
$
924,709

 
$
684,663

 
$
1,737,914

 
$
1,319,111

Stock-based compensation expenses
 
(2,565
)
 
(2,632
)
 
(5,207
)
 
(4,473
)
Acquisition related-amortization of purchased intangibles
 
(199,230
)
 
(21,264
)
 
(398,460
)
 
(42,528
)
Non-GAAP cost of goods sold
 
$
722,914

 
$
660,767

 
$
1,334,247

 
$
1,272,110

 
 
 
 
 
 
 
 
 
Product gross margin reconciliation:
 
 
 
 
 
 
 
 
GAAP product gross margin
 
85.6
%
 
74.2
 %
 
84.6
%
 
73.9
%
Stock-based compensation expenses
 
0.0
%
 
0.1
 %
 
0.0
%
 
0.1
%
Acquisition related-amortization of purchased intangibles
 
3.1
%
 
0.8
 %
 
3.5
%
 
0.8
%
Non-GAAP product gross margin(1)
 
88.7
%
 
75.1
 %
 
88.2
%
 
74.8
%
 
 
 
 
 
 
 
 
 
Research and development expenses reconciliation:
 
 
 
 
 
 
 
 
GAAP research and development expenses
 
$
583,924

 
$
523,902

 
$
1,178,902

 
$
1,021,534

Stock-based compensation expenses
 
(36,633
)
 
(24,646
)
 
(70,983
)
 
(51,521
)
Restructuring expenses
 
(29
)
 
(67
)
 
(174
)
 
(4,824
)
Acquisition related-contingent consideration remeasurement
 
(5,288
)
 
(11,418
)
 
(7,966
)
 
(17,442
)
Non-GAAP research and development expenses
 
$
541,974

 
$
487,771

 
$
1,099,779

 
$
947,747

 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses reconciliation:
 
 
 
 
 
 
 
 
GAAP selling, general and administrative expenses
 
$
613,555

 
$
404,991

 
$
1,161,678

 
$
779,287

Stock-based compensation expenses
 
(43,935
)
 
(28,675
)
 
(89,168
)
 
(61,726
)
Restructuring expenses
 
(2
)
 
306

 
(5
)
 
(438
)
Acquisition related-transaction costs
 
(107
)
 
(4
)
 
(555
)
 
(7,160
)
Acquisition related-amortization of purchased intangibles
 
(281
)
 
(282
)
 
(2,615
)
 
(563
)
Non-GAAP selling, general and administrative expenses
 
$
569,230

 
$
376,336

 
$
1,069,335

 
$
709,400

 
 
 
 
 
 
 
 
 
Operating margin reconciliation:
 
 
 
 
 
 
 
 
GAAP operating margin
 
67.5
%
 
41.7
 %
 
64.6
%
 
41.1
%
Stock-based compensation expenses
 
1.3
%
 
2.0
 %
 
1.4
%
 
2.2
%
Restructuring expenses
 
0.0
%
 
0.0
 %
 
0.0
%
 
0.1
%
Acquisition related-transaction costs
 
0.0
%
 
0.0
 %
 
0.0
%
 
0.1
%
Acquisition related-amortization of purchased intangibles
 
3.1
%
 
0.8
 %
 
3.5
%
 
0.8
%
Acquisition related-contingent consideration remeasurement
 
0.1
%
 
0.4
 %
 
0.1
%
 
0.3
%
Non-GAAP operating margin(1)
 
71.9
%
 
44.9
 %
 
69.6
%
 
44.7
%
 
 
 
 
 
 
 
 
 
Other income (expense) reconciliation:
 
 
 
 
 
 
 
 
GAAP other income (expense), net
 
$
(3,645
)
 
$
(231
)
 
$
(21,557
)
 
$
(3,555
)
Acquisition related-transaction costs
 
2

 
—

 
(1,851
)
 
—

Non-GAAP other income (expense), net
 
$
(3,643
)
 
$
(231
)
 
$
(23,408
)
 
$
(3,555
)
 
 
 
 
 
 
 
 
 





July 23, 2014
 
9

GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION - (Continued)
(unaudited)
(in thousands, except percentages and per share amounts)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2014
 
2013
 
2014
 
2013
Effective tax rate reconciliation:
 
 
 
 
 
 
 
 
GAAP effective tax rate
 
15.2
 %
 
28.6
 %
 
19.1
 %
 
26.3
 %
Restructuring expenses
 
0.0
 %
 
0.0
 %
 
0.0
 %
 
(0.1
)%
Acquisition related-amortization of purchased intangibles
 
(0.6
)%
 
0.0
 %
 
(0.9
)%
 
0.0
 %
Acquisition related-contingent consideration remeasurement
 
0.0
 %
 
(0.3
)%
 
0.0
 %
 
(0.2
)%
Non-GAAP effective tax rate(1)
 
14.6
 %
 
28.3
 %
 
18.2
 %
 
26.0
 %
 
 
 
 
 
 
 
 
 
Net income attributable to Gilead reconciliation:
 
 
 
 
 
 
 
 
GAAP net income attributable to Gilead, net of tax
 
$
3,655,593

 
$
772,605

 
$
5,883,003

 
$
1,494,791

Stock-based compensation expenses
 
72,199

 
40,379

 
135,335

 
85,759

Restructuring expenses
 
25

 
(244
)
 
173

 
5,124

Acquisition related-transaction costs
 
109

 
4

 
(866
)
 
7,160

Acquisition related-amortization of purchased intangibles
 
196,319

 
15,563

 
391,731

 
31,392

Acquisition related-contingent consideration remeasurement
 
5,288

 
11,418

 
7,966

 
17,442

Non-GAAP net income attributable to Gilead, net of tax
 
$
3,929,533

 
$
839,725

 
$
6,417,342

 
$
1,641,668

 
 
 
 
 
 
 
 
 
Diluted earnings per share reconciliation:
 
 
 
 
 
 
 
 
GAAP diluted earnings per share
 
$
2.20

 
$
0.46

 
$
3.52

 
$
0.89

Stock-based compensation expenses
 
0.04

 
0.02

 
0.08

 
0.05

Restructuring expenses
 
0.00

 
(0.00
)
 
0.00

 
0.00

Acquisition related-transaction costs
 
0.00

 
0.00

 
0.00

 
0.00

Acquisition related-amortization of purchased intangibles
 
0.12

 
0.01

 
0.23

 
0.02

Acquisition related-contingent consideration remeasurement
 
0.00

 
0.01

 
0.00

 
0.01

Non-GAAP diluted earnings per share(1)
 
$
2.36

 
$
0.50

 
$
3.84

 
$
0.98

 
 
 
 
 
 
 
 
 
Shares used in per share calculation (diluted) reconciliation:
 
 
 
 
 
 
 
 
GAAP shares used in per share calculation (diluted)
 
1,664,415

 
1,694,577

 
1,672,435

 
1,683,269

Share impact of current stock-based compensation rules
 
(965
)
 
(1,228
)
 
(950
)
 
(1,453
)
Non-GAAP shares used in per share calculation (diluted)
 
1,663,450

 
1,693,349

 
1,671,485

 
1,681,816

 
 
 
 
 
 
 
 
 
Non-GAAP adjustment summary:
 
 
 
 
 
 
 
 
Cost of goods sold adjustments
 
$
201,795

 
$
23,896

 
$
403,667

 
$
47,001

Research and development expenses adjustments
 
41,950

 
36,131

 
79,123

 
73,787

Selling, general and administrative expenses adjustments
 
44,325

 
28,655

 
92,343

 
69,887

Other income (expense) adjustments
 
2

 
—

 
(1,851
)
 
—

Total non-GAAP adjustments before tax
 
288,072

 
88,682

 
573,282

 
190,675

Income tax effect
 
(14,132
)
 
(21,562
)
 
(38,943
)
 
(43,798
)
Total non-GAAP adjustments after tax
 
$
273,940

 
$
67,120

 
$
534,339

 
$
146,877

 
 
 
 
 
 
 
 
 
(1) Amounts may not sum due to rounding.
 
 
 
 
 
 
 
 




July 23, 2014
 
10

GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 
June 30,
 
December 31,
 
 
2014
 
2013(1)
 
 
(unaudited)
 
 
Cash, cash equivalents and marketable securities
 
$
9,581,383

 
$
2,570,590

Accounts receivable, net
 
3,436,711

 
2,100,286

Inventories
 
2,068,753

 
2,055,788

Property, plant and equipment, net
 
1,380,776

 
1,166,181

Intangible assets, net
 
11,508,319

 
11,900,106

Goodwill
 
1,171,561

 
1,169,023

Other assets
 
2,058,661

 
1,534,811

Total assets
 
$
31,206,164

 
$
22,496,785

 
 
 
 
 
Current liabilities
 
$
6,227,997

 
$
6,325,421

Long-term liabilities
 
8,512,950

 
4,363,032

Equity component of currently redeemable convertible notes
 
35,875

 
63,831

Stockholders’ equity(2)
 
16,429,342

 
11,744,501

Total liabilities and stockholders’ equity
 
$
31,206,164

 
$
22,496,785

(1) Derived from the audited consolidated financial statements as of December 31, 2013.
(2) As of June 30, 2014, there were 1,526,043 shares of common stock issued and outstanding.





July 23, 2014
 
11

GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY
(unaudited)
(in thousands)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Antiviral products:
 
 
 
 
 
 
 
Sovaldi – U.S.
$
3,031,507

 
$
—

 
$
5,129,298

 
$
—

Sovaldi – Europe
400,218

 
—

 
563,909

 
—

Sovaldi – Other International
48,601

 
—

 
61,468

 
—

 
3,480,326

 
—

 
5,754,675

 
—

 
 
 
 
 
 
 
 
Atripla – U.S.
578,349

 
611,330

 
1,068,278

 
1,165,156

Atripla – Europe
234,328

 
270,780

 
470,836

 
548,995

Atripla – Other International
58,031

 
55,998

 
111,188

 
101,030

 
870,708

 
938,108

 
1,650,302

 
1,815,181

 
 
 
 
 
 
 
 
Truvada – U.S.
399,570

 
415,541

 
767,352

 
723,402

Truvada – Europe
337,981

 
324,992

 
661,167

 
657,019

Truvada – Other International
69,059

 
67,246

 
137,791

 
127,600

 
806,610

 
807,779

 
1,566,310

 
1,508,021

 
 
 
 
 
 
 
 
Complera / Eviplera – U.S.
153,846

 
120,187

 
284,272

 
223,484

Complera / Eviplera – Europe
132,132

 
59,301

 
241,126

 
98,263

Complera / Eviplera – Other International
13,486

 
9,195

 
24,799

 
15,125

 
299,464

 
188,683

 
550,197

 
336,872

 
 
 
 
 
 
 
 
Stribild – U.S.
229,417

 
96,961

 
416,507

 
188,939

Stribild – Europe
31,308

 
1,848

 
54,938

 
1,848

Stribild – Other International
8,795

 
585

 
13,346

 
755

 
269,520

 
99,394

 
484,791

 
191,542

 
 
 
 
 
 
 
 
Viread – U.S.
116,554

 
113,965

 
197,607

 
196,593

Viread – Europe
87,591

 
88,042

 
171,656

 
176,248

Viread – Other International
56,589

 
48,181

 
102,096

 
87,679

 
260,734

 
250,188

 
471,359

 
460,520

 
 
 
 
 
 
 
 
LDV/SOF – Europe
439

 
—

 
439

 
—

 
439

 
—

 
439

 
—

 
 
 
 
 
 
 
 
Other Antiviral – U.S.
13,445

 
15,931

 
20,491

 
33,410

Other Antiviral – Europe
9,027

 
10,852

 
18,306

 
23,826

Other Antiviral – Other International
1,871

 
2,604

 
3,771

 
5,245

 
24,343

 
29,387

 
42,568

 
62,481

 
 
 
 
 
 
 
 
 Total antiviral products – U.S.
4,522,688

 
1,373,915

 
7,883,805

 
2,530,984

 Total antiviral products – Europe
1,233,024

 
755,815

 
2,182,377

 
1,506,199

 Total antiviral products – Other International
256,432

 
183,809

 
454,459

 
337,434

 
6,012,144

 
2,313,539

 
10,520,641

 
4,374,617

 
 
 
 
 
 
 
 
 Letairis
144,716

 
128,257

 
267,601

 
246,364

 Ranexa
121,956

 
106,597

 
233,574

 
202,883

 AmBisome
94,794

 
75,137

 
186,887

 
160,412

 Other products
39,327

 
33,755

 
75,208

 
66,577

 
400,793

 
343,746

 
763,270

 
676,236

 
 
 
 
 
 
 
 
 Total product sales
$
6,412,937

 
$
2,657,285

 
$
11,283,911

 
$
5,050,853