01—Abstract
Summary
Summary of the 10-K filed February 28, 2011. Cited figures are marked; the original filing is the authoritative source.
Gilead Sciences, Inc. reported strong financial performance for the fiscal year ending December 31, 2010, with total revenues reaching $7.95 billiona, a 14% increase year-over-year.
This growth was primarily driven by its antiviral franchise, particularly Atripla and Truvada, which together accounted for 70%b of total revenues. The company also saw significant contributions from its cardiovascular products, Letairis and Ranexa, and its newest respiratory product, Cayston, which demonstrated continued revenue growth. Gilead Sciences is actively managing its product pipeline through internal development and strategic acquisitions, with a notable focus on advancing its HIV and Hepatitis C drug candidates.
The company's financial health is robust, supported by substantial operating cash flow and a significant cash balance. Gilead is also committed to returning value to shareholders through ongoing stock repurchase programs.
However, investors should be aware of the company's reliance on its HIV products and the increasing competition in the HIV market, including the potential impact of generic drug introductions. Furthermore, changes in healthcare reform legislation in the U.S., potential pricing and reimbursement pressures in international markets, and ongoing patent litigation represent key risk factors that could impact future financial results.
02—Key points
Key Highlights
- Total revenues increased by 14% to $7.95 billion in 2010, driven by strong performance in antiviral products, particularly Atripla and Truvada.
- Atripla and Truvada sales combined represented 70% of total revenues, underscoring the company's reliance on its HIV franchise.
- Significant growth was observed in cardiovascular products (Letairis and Ranexa) and the newly launched Cayston.
- Research and development expenses increased by 14% to $1.07 billion, reflecting continued investment in pipeline development, especially in HIV and Hepatitis C.
- The company completed several strategic acquisitions in 2010 and early 2011 to bolster its product pipeline in inflammatory diseases, fibrotic diseases, and cancer.
- Gilead's financial position remains strong, with cash, cash equivalents, and marketable securities totaling $5.32 billion at year-end 2010.
- The company continued its substantial share repurchase program, repurchasing $4.02 billion of common stock in 2010 and authorizing an additional $5 billion program.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Gilead Sciences, Inc. kept $0.36.
- Revenue$7.95B100.0%
- Cost of revenue−$1.87B23.5%
- Gross profit$6.08B76.5%
- Operating costs−$2.12B26.6%
- Operating income$3.96B49.8%
- Interest, other & tax−$1.06B13.3%
- Net income$2.90B36.5%
Where FY2010 revenue went
$7.95B- Net income: $2.90B, 36% of revenue
- Cost of revenue: $1.87B, 24% of revenue
- Other operating costs: $1.07B, 13% of revenue
- Interest, other & tax: $1.06B, 13% of revenue
- SG&A: $1.04B, 13% of revenue
Kept 36% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed February 28, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $7.95B$7.01B | +13.4% |
| Cost of Revenue | $1.87B$1.60B | +17.2% |
| Gross Profit | $6.08B$5.42B | +12.3% |
| SG&A Expenses | $1.04B$946.69M | +10.3% |
| Operating Expenses | $3.99B$3.48B | +14.5% |
| Operating Income | $3.96B$3.53B | +12.3% |
| Interest Expense | $108.96M$69.66M | +56.4% |
| Net Income | $2.90B$2.64B | +10.1% |
| EPS (Basic) | $1.69$1.46 | +16.2% |
| EPS (Diluted) | $1.66$1.41 | +17.7% |
| Shares Outstanding (Basic) | 1.71B1.81B | −5.4% |
| Shares Outstanding (Diluted) | 1.75B1.87B | −6.5% |
05—Questions
Frequently Asked Questions
What were Gilead's main revenue drivers in 2010?
Gilead's primary revenue drivers in 2010 were its antiviral products, particularly Atripla and Truvada, which are used for the treatment of HIV infection. These two products alone accounted for 70% of the company's total revenues. Growth from cardiovascular products like Letairis and Ranexa, as well as the newer respiratory drug Cayston, also contributed to the company's revenue.
What are the key risks facing Gilead Sciences, as highlighted in the 2010 10-K?
Key risks include the substantial reliance on its HIV products (Atripla and Truvada), the increasing competition in the HIV market, and the potential impact of generic drug introductions. Additionally, Gilead faces risks related to healthcare reforms in the United States, pricing and reimbursement pressures in international markets, potential safety issues with its products, patent litigation, and manufacturing disruptions.
How is Gilead Sciences investing in its future growth?
Gilead Sciences is investing in future growth through continuous pipeline development, focusing on innovative HIV single-tablet regimens and advancing its Hepatitis C virus (HCV) pipeline. The company also actively pursues strategic acquisitions and licensing opportunities to expand its portfolio. R&D expenses increased by 14% in 2010, reflecting this commitment to innovation and pipeline advancement.
What is the status of Gilead's new HIV single-tablet regimen (STR)?
Gilead submitted marketing authorization applications for its single-tablet regimen of Truvada and Tibotec's TMC278 to European and U.S. regulatory authorities. While the European application was progressing, the U.S. FDA initially issued a 'refuse to file' notification, requesting additional information on Chemistry, Manufacturing, and Controls. Gilead refiled the application in February 2011 and was awaiting the FDA's response regarding its completeness for review.
06—Continue