01—Abstract
Summary
Summary of the 10-K filed March 1, 2010. Cited figures are marked; the original filing is the authoritative source.
Gilead Sciences, Inc. (GILD) reported strong revenue growth in its 2009 10-K filing, reaching $7.01 billiona, 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.
02—Key points
Key Highlights
- Record total revenues of $7.01 billion in 2009, a 27% increase from 2008, primarily driven by strong sales of antiviral products Truvada and Atripla.
- Acquisition of CV Therapeutics in April 2009 significantly expanded Gilead's presence in the cardiovascular market with the addition of Ranexa.
- Antiviral products accounted for 90% of total product sales ($5.84 billion), with Truvada and Atripla being the key drivers.
- Royalty revenues increased significantly by 125% to $491.8 million, mainly due to increased Tamiflu sales by Roche.
- Research and Development expenses increased by 30% to $939.9 million, reflecting continued investment in pipeline development.
- The company maintained a strong liquidity position, with cash, cash equivalents, and marketable securities totaling $3.90 billion at year-end 2009.
- Gilead is facing ongoing patent litigation with Teva Pharmaceuticals regarding generic versions of its key HIV products, Truvada, Atripla, and Viread.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, Gilead Sciences, Inc. kept $0.38.
- Revenue$7.01B100.0%
- Cost of revenue−$1.60B22.8%
- Gross profit$5.42B77.2%
- Operating costs−$1.89B26.9%
- Operating income$3.53B50.3%
- Interest, other & tax−$893.5M12.7%
- Net income$2.64B37.6%
Where FY2009 revenue went
$7.01B- Net income: $2.64B, 38% of revenue
- Cost of revenue: $1.60B, 23% of revenue
- SG&A: $946.7M, 14% of revenue
- Other operating costs: $939.9M, 13% of revenue
- Interest, other & tax: $893.5M, 13% of revenue
Kept 38% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed March 1, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $7.01B$5.34B | +31.4% |
| Cost of Revenue | $1.60B$1.13B | +41.5% |
| Gross Profit | $5.42B$4.21B | +28.7% |
| SG&A Expenses | $946.69M$797.34M | +18.7% |
| Operating Expenses | $3.48B$2.66B | +31.0% |
| Operating Income | $3.53B$2.68B | +31.8% |
| Interest Expense | $69.66M$65.24M | +6.8% |
| Net Income | $2.64B$1.98B | +33.2% |
| EPS (Basic) | $1.46$1.07 | +35.3% |
| EPS (Diluted) | $1.41$1.03 | +36.9% |
| Shares Outstanding (Basic) | 1.81B1.84B | −1.7% |
| Shares Outstanding (Diluted) | 1.87B1.92B | −2.6% |
05—Questions
Frequently Asked Questions
What were Gilead's main revenue drivers in 2009?
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.
How did the acquisition of CV Therapeutics impact Gilead's business?
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.
What are the key risks highlighted in the 10-K filing for investors?
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.
What is Gilead's approach to global health and access to medicines?
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.
06—Continue