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Gilead Sciences Announces Third Quarter 2019 Financial Results

FOSTER CITY, Calif.--(BUSINESS WIRE)--

- Product Sales of $5.5 billion -

- GAAP Loss of $0.92 per share -

- Non-GAAP Diluted EPS of $1.75 per share -

- Revised Full Year 2019 Guidance -

Gilead Sciences, Inc. (GILD) announced today its results of operations for the third quarter ended September 30, 2019. The financial results that follow represent a year-over-year comparison of the third quarter of 2019 to the third quarter of 2018. Total revenues were $5.6 billion for the third quarter of 2019 compared to $5.6 billion for the same period in 2018. Net loss for the third quarter of 2019 was $1.2 billion, or $0.92 per diluted share, compared to net income of $2.1 billion or $1.60 per diluted share for the same period in 2018. The net loss for the third quarter of 2019 includes up-front collaboration and licensing expenses of $3.92 billion, or $2.40 per share, related to Gilead’s global research and development collaboration agreement with Galapagos NV (Galapagos). Non-GAAP net income was $2.2 billion or $1.75 per diluted share for the third quarter of 2019 compared to $2.4 billion or $1.84 per diluted share for the same period in 2018.

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

(In millions, except per share amounts)

 

2019

 

2018

 

2019

 

2018

Product sales

 

$

5,516

 

 

$

5,455

 

 

$

16,323

 

 

$

15,996

 

Royalty, contract and other revenues

 

88

 

 

141

 

 

247

 

 

336

 

Total revenues

 

$

5,604

 

 

$

5,596

 

 

$

16,570

 

 

$

16,332

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Gilead

 

$

(1,165

)

 

$

2,097

 

 

$

2,690

 

 

$

5,452

 

Non-GAAP net income

 

$

2,224

 

 

$

2,403

 

 

$

6,813

 

 

$

6,855

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

 

$

(0.92

)

 

$

1.60

 

 

$

2.10

 

 

$

4.15

 

Non-GAAP diluted earnings per share

 

$

1.75

 

 

$

1.84

 

 

$

5.33

 

 

$

5.22

 

___________________________________

Note: Non-GAAP financial information excludes acquisition-related, up-front collaboration and licensing, stock-based compensation and other expenses, fair value adjustments of equity securities and discrete tax charges or benefits associated with changes in tax related laws and guidelines. A reconciliation between GAAP and non-GAAP financial information is provided in the tables on pages 7 through 9.

Product Sales

Total product sales for the third quarter of 2019 were $5.5 billion compared to $5.5 billion for the same period in 2018. For the third quarter of 2019, product sales in the United States, Europe and other locations were $4.2 billion, $804 million and $513 million, respectively. For the third quarter of 2018, product sales in the United States, Europe and other locations were $4.1 billion, $873 million and $451 million, respectively.

  • HIV product sales were $4.2 billion for the third quarter of 2019 compared to $3.7 billion for the same period in 2018. The increase was primarily driven by higher sales volume as a result of the continued uptake of Biktarvy® (bictegravir 50 mg/emtricitabine 200 mg/tenofovir alafenamide 25 mg).
  • Chronic hepatitis C virus (HCV) product sales were $674 million for the third quarter of 2019 compared to $902 million for the same period in 2018. The decline was primarily due to competitive dynamics.
  • Yescarta®(axicabtagene ciloleucel) generated $118 million in sales during the third quarter of 2019 compared to $75 million for the same period in 2018. The increase was driven by a higher number of therapies provided to patients and the continued expansion in Europe.
  • Other product sales, which include products from chronic hepatitis B virus (HBV), cardiovascular, oncology and other categories inclusive of Vemlidy® (tenofovir alafenamide 25 mg), Viread® (tenofovir disoproxil fumarate 300 mg), Letairis® (ambrisentan 5 mg and 10 mg), Ranexa® (ranolazine 500 mg and 1000 mg), Zydelig® (idelalisib 150 mg), AmBisome® (amphotericin B liposome for injection 50 mg/vial) and Cayston® (aztreonam for inhalation solution 75 mg/vial), were $522 million for the third quarter of 2019 compared to $751 million for the same period in 2018. The decrease was primarily due to the expected declines in Ranexa and Letairis sales after generic entries in 2019.

Operating Expenses

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

(In millions)

 

2019

 

2018

 

2019

 

2018

Research and development expenses (R&D)

 

$

4,990

 

 

$

939

 

 

$

7,207

 

 

$

3,068

 

Non-GAAP R&D expenses

 

$

954

 

 

$

844

 

 

$

2,741

 

 

$

2,579

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses (SG&A)

 

$

1,052

 

 

$

948

 

 

$

3,177

 

 

$

2,925

 

Non-GAAP SG&A expenses

 

$

967

 

 

$

852

 

 

$

2,944

 

 

$

2,576

 

During the third quarter of 2019, compared to the same period in 2018:

  • R&D expenses increased primarily due to up-front collaboration and licensing expenses of $3.92 billion related to Gilead’s global research and development collaboration agreement with Galapagos. Furthermore, R&D expenses and non-GAAP R&D expenses increased primarily due to increased investment in Gilead’s oncology programs, HIV programs and research projects.
  • SG&A expenses and non-GAAP SG&A expenses increased primarily due to higher promotional expenses in the United States and expenses associated with the expansion of Gilead’s business in Japan and China.

Cash, Cash Equivalents and Marketable Debt Securities

As of September 30, 2019, Gilead had $25.1 billion of cash, cash equivalents and marketable debt securities, compared to $31.5 billion as of December 31, 2018. During the third quarter of 2019, Gilead generated $2.6 billion in operating cash flow, paid $5.05 billion in connection with the global research and development collaboration agreement and stock purchase agreement with Galapagos, repaid $1.5 billion of debt, paid cash dividends of $804 million and utilized $223 million on stock repurchases. The $5.05 billion paid to Galapagos was classified as cash flows from investing activities and included a $1.1 billion equity investment.

Revised Full Year 2019 Guidance

Gilead revised its full year 2019 guidance, initially provided on February 4, 2019 and revised on July 30, 2019.

(In millions, except percentages and per share amounts)

 

Initially Provided
February 4, 2019
Reiterated
May 2, 2019

 

Updated
July 30, 2019

 

Updated
October 24, 2019

Product Sales

 

$21,300 - $21,800

 

$21,600 - $22,100

 

$21,800 - $22,100

Non-GAAP

 

 

 

 

 

 

Product Gross Margin

 

85% - 87%

 

85% - 87%

 

85% - 87%

R&D Expenses

 

$3,600 - $3,800

 

$3,600 - $3,800

 

$3,700 - $3,800

SG&A Expenses

 

$3,900 - $4,100

 

$3,900 - $4,100

 

$4,000 - $4,100

Effective Tax Rate

 

20.0% - 21.0%

 

20.0% - 21.0%

 

20.0% - 21.0%

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

 

$1.40 - $1.50

 

$3.90 - $4.00

 

$3.90 - $4.00

Corporate Highlights, Including the Announcement of:

  • Appointment of Andrew Dickinson as Chief Financial Officer, effective November 1, 2019.
  • Appointment of Merdad Parsey as Chief Medical Officer, effective November 1, 2019.
  • Launch of RADIAN Initiative to meaningfully address new HIV infections and deaths from AIDS-related illnesses in Eastern Europe and Central Asia, in collaboration with the Elton John AIDS Foundation.
  • Closing of the global research and development collaboration agreement with Galapagos announced in July 2019.
  • Collaboration with Renown Institute for Health Innovation (Renown) to collect and analyze genetic and electronic health data to enhance the understanding of nonalcoholic steatohepatitis (NASH) and potentially inform development of treatment options for the disease.

Product and Pipeline Updates, Including the Announcement of:

  • Presentation of Week 52 data from the Phase 3 FINCH 1 and FINCH 3 trials of filgotinib, an investigational, oral, selective JAK1 inhibitor, for the treatment of moderately-to-severely active rheumatoid arthritis (RA), which are consistent with and support the efficacy, safety and tolerability profiles demonstrated in the week 12 and 24 analyses presented earlier this year.
  • Submission of the new drug application for filgotinib for the treatment of adults with RA to the Japanese Ministry of Health, Labor and Welfare (MHLW).
  • Presentation of data at the IDWeek 2019 conference, which included:
    • Results from the DISCOVER trial evaluating Descovy® (emtricitabine 200 mg/tenofovir alafenamide 25 mg) for HIV pre-exposure prophylaxis (PrEP), which showed significant improvements in key measures of bone and renal safety parameters in a subset of study participants who switched from Truvada for PrEP® (emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg) to Descovy for PrEP.
    • A release of the latest data demonstrating that major metropolitan areas in the United States with the highest use of PrEP experienced the greatest decreases in new HIV diagnoses.
  • Approval of a PrEP indication for Descovy by the U.S. Food and Drug Administration (FDA). Descovy for PrEP is indicated to reduce the risk of sexually acquired HIV-1 infection in adults and adolescents weighing at least 35 kg who are HIV-negative and at-risk for sexually acquired HIV, excluding individuals at-risk from receptive vaginal sex.
  • European Medicines Agency’s (EMA) validation of the marketing authorization application for filgotinib for the treatment of adults with RA; the application is now under evaluation by the agency.
  • Approval of Biktarvy by the China National Medical Products Administration for the treatment of HIV-1 infection in adults without present or past evidence of viral resistance to the integrase inhibitor class, emtricitabine or tenofovir.
  • Plans to bolster cell therapy manufacturing capabilities with a new 67,000-square-foot viral vector facility in Oceanside, California. The new site builds on existing state-of-the-art manufacturing capabilities to deliver innovative cell therapies for people with cancer, including Yescarta, and investigational T-cell receptor and tumor neoantigen targeting cell therapies.

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 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 7 through 9.

Conference Call

The live webcast of the call can be accessed at Gilead’s Investors page at http://investors.gilead.com/. Please connect to the website at least 15 minutes prior to the start of the call to allow adequate time for any software download that may be required to listen to the webcast. Alternatively, please call 877-359-9508 (U.S.) or 224-357-2393 (international) and dial the conference ID 6094972 to access the call. Telephone replay will be available approximately two hours after the call through 8:00 p.m. Eastern Time, October 26, 2019. To access the replay, please call 855-859-2056 (U.S.) or 404-537-3406 (international) and dial the conference ID 6094972. The webcast will be archived on www.gilead.com for one year.

About Gilead Sciences

Gilead Sciences, Inc. is a research-based biopharmaceutical company that discovers, develops and commercializes innovative medicines in areas of unmet medical need. The company strives to transform and simplify care for people with life-threatening illnesses around the world. Gilead has operations 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: Gilead’s ability to achieve its anticipated full year 2019 financial results; Gilead’s ability to sustain growth in revenues for its antiviral and other programs; the risk that private and public payers may be reluctant to provide, or continue to provide, coverage or reimbursement for new products; austerity measures in European countries that may increase the amount of discount required on Gilead’s products; an increase in discounts, chargebacks and rebates due to ongoing contracts and future negotiations with commercial and government payers; a larger than anticipated shift in payer mix to more highly discounted 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 as well as purchases by retail pharmacies and other non-wholesaler locations with whom Gilead has no inventory management agreements may not mirror patient demand and may cause fluctuations in Gilead’s earnings; market share and price erosion caused by the introduction of generic versions of our products; an uncertain global macroeconomic environment; potential amendments to the Affordable Care Act or other government action that could have the effect of lowering prices or reducing the number of insured patients; 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 realize the potential benefits of collaborations or licensing arrangements, including with Galapagos and Renown; Gilead’s ability to submit new drug applications for new product candidates in the timelines currently anticipated, including a new drug application to FDA for filgotinib for the treatment of RA; Gilead’s ability to receive regulatory approvals in a timely manner or at all, for new and current products, including EMA and MHLW approvals for filgotinib; Gilead’s ability to successfully commercialize its products, including Yescarta and Biktarvy in China; 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; safety and efficacy data from clinical studies may not warrant further development of Gilead’s product candidates, including filgotinib; Gilead’s ability to pay dividends or 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 (the 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. 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 September 30, 2019 are not necessarily indicative of operating results for any future periods. 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 June 30, 2019 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 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®, HEPSERA®, LETAIRIS®, ODEFSEY®, RANEXA®, SOVALDI®, STRIBILD®, TRUVADA®, TRUVADA FOR PREP®, TYBOST®, VEMLIDY®, VIREAD®, VOSEVI®, YESCARTA® and ZYDELIG®.

LEXISCAN® is a registered trademark of Astellas U.S. LLC. MACUGEN® is a registered trademark of Eyetech, Inc. SYMTUZA® is a registered trademark of Janssen Sciences Ireland UC. TAMIFLU® is a registered trademark of 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 OPERATIONS

(unaudited)

(in millions, except per share amounts)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

 

Product sales

 

$

5,516

 

 

$

5,455

 

 

$

16,323

 

 

$

15,996

 

Royalty, contract and other revenues

 

88

 

 

141

 

 

247

 

 

336

 

Total revenues

 

5,604

 

 

5,596

 

 

16,570

 

 

16,332

 

Costs and expenses:

 

 

 

 

 

 

 

 

Cost of goods sold

 

1,035

 

 

1,086

 

 

2,992

 

 

3,283

 

Research and development expenses

 

4,990

 

 

939

 

 

7,207

 

 

3,068

 

Selling, general and administrative expenses

 

1,052

 

 

948

 

 

3,177

 

 

2,925

 

Total costs and expenses

 

7,077

 

 

2,973

 

 

13,376

 

 

9,276

 

Income (loss) from operations

 

(1,473

)

 

2,623

 

 

3,194

 

 

7,056

 

Interest expense

 

(250

)

 

(264

)

 

(752

)

 

(820

)

Other income (expense), net

 

222

 

 

305

 

 

817

 

 

547

 

Income (loss) before provision (benefit) for income taxes

 

(1,501

)

 

2,664

 

 

3,259

 

 

6,783

 

Provision (benefit) for income taxes

 

(333

)

 

565

 

 

584

 

 

1,326

 

Net income (loss)

 

(1,168

)

 

2,099

 

 

2,675

 

 

5,457

 

Net income (loss) attributable to noncontrolling interest

 

(3

)

 

2

 

 

(15

)

 

5

 

Net income (loss) attributable to Gilead

 

$

(1,165

)

 

$

2,097

 

 

$

2,690

 

 

$

5,452

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to Gilead common stockholders - basic

 

$

(0.92

)

 

$

1.62

 

 

$

2.12

 

 

$

4.19

 

Shares used in per share calculation - basic

 

1,267

 

 

1,296

 

 

1,271

 

 

1,302

 

Net income (loss) per share attributable to Gilead common stockholders - diluted

 

$

(0.92

)

 

$

1.60

 

 

$

2.10

 

 

$

4.15

 

Shares used in per share calculation - diluted

 

1,267

 

 

1,307

 

 

1,278

 

 

1,313

 

Cash dividends declared per share

 

$

0.63

 

 

$

0.57

 

 

$

1.89

 

 

$

1.71

 

 

GILEAD SCIENCES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(unaudited)

(in millions, except percentages and per share amounts)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Cost of goods sold reconciliation:

 

 

 

 

 

 

 

 

GAAP cost of goods sold

 

$

1,035

 

 

$

1,086

 

 

$

2,992

 

 

$

3,283

 

Acquisition-related – amortization of purchased intangibles

 

(266

)

 

(301

)

 

(822

)

 

(902

)

Stock-based compensation expenses(1)

 

(10

)

 

(15

)

 

(37

)

 

(49

)

Other(2)

 

 

 

1

 

 

 

 

1

 

Non-GAAP cost of goods sold

 

$

759

 

 

$

771

 

 

$

2,133

 

 

$

2,333

 

 

 

 

 

 

 

 

 

 

Product gross margin reconciliation:

 

 

 

 

 

 

 

 

GAAP product gross margin

 

81.2

 %

 

80.1

 %

 

81.7

 %

 

79.5

 %

Acquisition-related – amortization of purchased intangibles

 

4.8

 %

 

5.5

 %

 

5.0

 %

 

5.6

 %

Stock-based compensation expenses

 

0.2

 %

 

0.3

 %

 

0.2

 %

 

0.3

 %

Non-GAAP product gross margin(5)

 

86.2

 %

 

85.9

 %

 

86.9

 %

 

85.4

 %

 

 

 

 

 

 

 

 

 

Research and development expenses reconciliation:

 

 

 

 

 

 

 

 

GAAP research and development expenses

 

$

4,990

 

 

$

939

 

 

$

7,207

 

 

$

3,068

 

Up-front collaboration and licensing expenses

 

(3,960

)

 

 

 

(4,251

)

 

(160

)

Acquisition-related – other costs

 

 

 

3

 

 

 

 

(22

)

Stock-based compensation expenses(1)

 

(74

)

 

(99

)

 

(215

)

 

(304

)

Other(2)

 

(2

)

 

1

 

 

 

 

(3

)

Non-GAAP research and development expenses

 

$

954

 

 

$

844

 

 

$

2,741

 

 

$

2,579

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses reconciliation:

 

 

 

 

 

 

 

 

GAAP selling, general and administrative expenses

 

$

1,052

 

 

$

948

 

 

$

3,177

 

 

$

2,925

 

Acquisition-related – other costs

 

 

 

(8

)

 

 

 

(23

)

Stock-based compensation expenses(1)

 

(78

)

 

(84

)

 

(227

)

 

(317

)

Other(2)

 

(7

)

 

(4

)

 

(6

)

 

(9

)

Non-GAAP selling, general and administrative expenses

 

$

967

 

 

$

852

 

 

$

2,944

 

 

$

2,576

 

 

 

 

 

 

 

 

 

 

Operating margin reconciliation:

 

 

 

 

 

 

 

 

GAAP operating margin

 

(26.3

)%

 

46.9

 %

 

19.3

 %

 

43.2

 %

Up-front collaboration and licensing expenses

 

70.7

 %

 

 %

 

25.7

 %

 

1.0

 %

Acquisition-related – amortization of purchased intangibles

 

4.7

 %

 

5.4

 %

 

5.0

 %

 

5.5

 %

Acquisition-related – other costs

 

 %

 

0.1

 %

 

 %

 

0.3

 %

Stock-based compensation expenses

 

2.9

 %

 

3.5

 %

 

2.9

 %

 

4.1

 %

Other(2)

 

0.2

 %

 

 %

 

 %

 

0.1

 %

Non-GAAP operating margin(5)

 

52.2

 %

 

55.9

 %

 

52.8

 %

 

54.2

 %

 

 

 

 

 

 

 

 

 

Other income (expense), net reconciliation:

 

 

 

 

 

 

 

 

GAAP other income (expense), net

 

$

222

 

 

$

305

 

 

$

817

 

 

$

547

 

Unrealized gains from equity securities, net

 

(58

)

 

(168

)

 

(312

)

 

(149

)

Non-GAAP other income (expense), net

 

$

164

 

 

$

137

 

 

$

505

 

 

$

398

 

null
 

GILEAD SCIENCES, INC.

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

(unaudited)

(in millions, except percentages and per share amounts)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Effective tax rate reconciliation:

 

 

 

 

 

 

 

 

GAAP effective tax rate

 

22.2

 %

 

21.2

 %

 

17.9

 %

 

19.5

 %

Up-front collaboration and licensing expenses

 

0.6

 %

 

 %

 

2.6

 %

 

0.1

 %

Acquisition-related – amortization of purchased intangibles

 

(1.6

)%

 

(1.5

)%

 

(1.3

)%

 

(1.5

)%

Stock-based compensation expenses(1)

 

(0.4

)%

 

(1.0

)%

 

(0.2

)%

 

(0.1

)%

Unrealized gains from equity securities, net

 

0.9

 %

 

1.3

 %

 

1.0

 %

 

0.4

 %

Tax Reform adjustments(3)

 

 %

 

 %

 

 %

 

0.1

 %

Non-GAAP effective tax rate(5)

 

21.7

 %

 

19.9

 %

 

20.1

 %

 

18.5

 %

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Gilead reconciliation:

 

 

 

 

 

 

 

 

GAAP net income (loss) attributable to Gilead

 

$

(1,165

)

 

$

2,097

 

 

$

2,690

 

 

$

5,452

 

Up-front collaboration and licensing expenses

 

3,068

 

 

 

 

3,294

 

 

125

 

Acquisition-related – amortization of purchased intangibles

 

247

 

 

281

 

 

759

 

 

843

 

Acquisition-related – other costs

 

 

 

4

 

 

 

 

36

 

Stock-based compensation expenses(1)

 

133

 

 

184

 

 

385

 

 

546

 

Unrealized gains from equity securities, net

 

(66

)

 

(164

)

 

(320

)

 

(146

)

Tax Reform adjustments(3)

 

 

 

 

 

 

 

(10

)

Other(2)

 

7

 

 

1

 

 

5

 

 

9

 

Non-GAAP net income attributable to Gilead

 

$

2,224

 

 

$

2,403

 

 

$

6,813

 

 

$

6,855

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share reconciliation:

 

 

 

 

 

 

 

 

GAAP diluted earnings (loss) per share(4)

 

$

(0.92

)

 

$

1.60

 

 

$

2.10

 

 

$

4.15

 

Up-front collaboration and licensing expenses

 

2.41

 

 

 

 

2.58

 

 

0.10

 

Acquisition-related – amortization of purchased intangibles

 

0.19

 

 

0.21

 

 

0.59

 

 

0.64

 

Acquisition-related – other costs

 

 

 

 

 

 

 

0.03

 

Stock-based compensation expenses(1)

 

0.10

 

 

0.14

 

 

0.30

 

 

0.42

 

Unrealized gains from equity securities, net

 

(0.05

)

 

(0.13

)

 

(0.25

)

 

(0.11

)

Tax Reform adjustments(3)

 

 

 

 

 

 

 

(0.01

)

Other(2)

 

0.01

 

 

 

 

 

 

0.01

 

Non-GAAP diluted earnings per share(5)

 

$

1.75

 

 

$

1.84

 

 

$

5.33

 

 

$

5.22

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustment summary:

 

 

 

 

 

 

 

 

Cost of goods sold adjustments

 

$

276

 

 

$

315

 

 

$

859

 

 

$

950

 

Research and development expenses adjustments

 

4,036

 

 

95

 

 

4,466

 

 

489

 

Selling, general and administrative expenses adjustments

 

85

 

 

96

 

 

233

 

 

349

 

Other income (expense), net adjustments

 

(58

)

 

(168

)

 

(312

)

 

(149