10-KPeriod: FY2009

GILEAD SCIENCES, INC. Annual Report, Year Ended Dec 31, 2009

Filed March 1, 2010For Securities:GILD

Summary

Gilead Sciences, Inc. (GILD) reported strong revenue growth in its 2009 10-K filing, reaching $7.01 billion, a significant increase driven primarily by its antiviral products, notably Truvada and Atripla, which together represented 69% of total revenues. The company's strategic acquisition of CV Therapeutics in April 2009 expanded its presence in the cardiovascular therapeutic area, adding Ranexa to its portfolio. Gilead also demonstrated a commitment to global health through its Access Program, providing HIV medications at reduced prices in developing countries. Despite robust sales, the company faced challenges including increased R&D expenses, competition in its key markets, and potential impacts from foreign currency fluctuations and healthcare reforms. The company highlighted its strong pipeline progress, particularly in HIV with the evaluation of new combination therapies. Gilead's financial position remained solid, with substantial cash reserves and a continued focus on stock repurchases. The company's outlook for 2010 anticipated continued growth, supported by updated product labels, evolving treatment guidelines, and expanded commercial efforts, while acknowledging the uncertainties presented by the macroeconomic environment.

Financial Highlights

52 data points
Beta

Revenue

$7.01B

77.2% Gross Margin

Net Income

$2.64B

37.6% Net Margin

EPS (Diluted)

$1.41

Total Assets

$9.70B

Cash & Equivalents

$1.27B

Free Cash Flow

$3.08B

Financial Statements
Beta
Revenue$7.01B
Cost of Revenue$1.60B
Gross Profit$5.42B
SG&A Expenses$946.69M
Operating Expenses$3.48B
Operating Income$3.53B
Interest Expense$69.66M
Net Income$2.64B
EPS (Basic)$1.46
EPS (Diluted)$1.41
Shares Outstanding (Basic)1.81B
Shares Outstanding (Diluted)1.87B

Key Highlights

  • 1Record total revenues of $7.01 billion in 2009, a 27% increase from 2008, primarily driven by strong sales of antiviral products Truvada and Atripla.
  • 2Acquisition of CV Therapeutics in April 2009 significantly expanded Gilead's presence in the cardiovascular market with the addition of Ranexa.
  • 3Antiviral products accounted for 90% of total product sales ($5.84 billion), with Truvada and Atripla being the key drivers.
  • 4Royalty revenues increased significantly by 125% to $491.8 million, mainly due to increased Tamiflu sales by Roche.
  • 5Research and Development expenses increased by 30% to $939.9 million, reflecting continued investment in pipeline development.
  • 6The company maintained a strong liquidity position, with cash, cash equivalents, and marketable securities totaling $3.90 billion at year-end 2009.
  • 7Gilead is facing ongoing patent litigation with Teva Pharmaceuticals regarding generic versions of its key HIV products, Truvada, Atripla, and Viread.

Frequently Asked Questions

Gilead's primary revenue drivers in 2009 were its antiviral products, specifically Truvada and Atripla, which accounted for a significant portion of total product sales and overall revenue. These drugs are crucial for treating HIV infection.

The acquisition of CV Therapeutics in April 2009 expanded Gilead's portfolio into the cardiovascular therapeutic area by adding marketed products like Ranexa and Lexiscan, along with product candidates in development. This strategic move aimed to diversify Gilead's revenue streams and strengthen its overall market position.

Key risks highlighted include the substantial reliance on HIV products (Truvada and Atripla) for revenue, potential decreases in Tamiflu royalty revenue, fluctuations in earnings due to inventory levels, the need to successfully commercialize new products, foreign currency exchange rate fluctuations, significant competition, potential safety issues with products, regulatory compliance, and patent litigation. Investors should pay close attention to the patent challenges from Teva Pharmaceuticals regarding Gilead's core HIV medications.

Gilead actively supports global health through its Gilead Access Program, established in 2003. This program provides certain HIV products at substantially reduced prices in numerous developing countries, utilizing a tiered pricing system based on economic status and disease prevalence. The company also collaborates with organizations to provide access to its medicines in resource-limited settings for diseases like leishmaniasis.