01—Abstract
Summary
Summary of the 10-K filed February 27, 2013. Cited figures are marked; the original filing is the authoritative source.
Gilead Sciences, Inc. (GILD) reported strong performance in its 2012 10-K filing, with total revenues reaching $9.7 billiona, a 16% increase year-over-year, primarily driven by its antiviral franchise.
The company highlighted significant strategic moves, including the $11.05 billionb acquisition of Pharmasset to bolster its Hepatitis C (HCV) pipeline with sofosbuvir and the acquisition of YM Biosciences to expand its oncology/inflammation focus. Gilead also advanced its HIV portfolio with the U.S. launch of Stribild, a novel single tablet regimen, and the FDA approval of Truvada for pre-exposure prophylaxis (PrEP).
The company demonstrated a commitment to expanding global access to its treatments, particularly for HIV and HBV in developing countries. Despite facing ongoing litigation with generic manufacturers and increasing competition, Gilead's robust R&D investment and strategic acquisitions positioned it for continued growth in key therapeutic areas.
02—Key points
Key Highlights
- Total revenues grew 16% to $9.70 billion in 2012, driven by a 15% increase in antiviral product sales, reaching $8.14 billion.
- Completed the $11.05 billion acquisition of Pharmasset, gaining access to sofosbuvir, a key investigational drug for HCV, and accelerated its all-oral HCV regimen development timeline.
- Launched Stribild, Gilead's third single-tablet regimen for HIV treatment in the U.S., and expanded worldwide access to Complera/Eviplera.
- Received FDA approval for Truvada as the first antiretroviral indicated for HIV pre-exposure prophylaxis (PrEP).
- Invested heavily in R&D, with expenses increasing 43% to $1.76 billion, focusing on advancing its pipeline in liver disease, oncology, and HIV.
- Gilead faces significant litigation with generic manufacturers challenging patents for key HIV drugs like Viread, Truvada, and Atripla.
- The company's financial health remains strong, with $2.58 billion in cash, cash equivalents, and marketable securities at year-end 2012, though this decreased significantly due to the Pharmasset acquisition.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Gilead Sciences, Inc. kept $0.27.
- Revenue$9.70B100.0%
- Cost of revenue−$2.47B25.5%
- Gross profit$7.23B74.5%
- Operating costs−$3.22B33.2%
- Operating income$4.01B41.3%
- Interest, other & tax−$1.42B14.6%
- Net income$2.59B26.7%
Where FY2012 revenue went
$9.70B- Net income: $2.59B, 27% of revenue
- Cost of revenue: $2.47B, 25% of revenue
- R&D: $1.76B, 18% of revenue
- SG&A: $1.46B, 15% of revenue
- Interest, other & tax: $1.42B, 15% of revenue
Kept 27% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 27, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $9.70B$8.39B | +15.7% |
| Cost of Revenue | $2.47B$2.12B | +16.3% |
| Gross Profit | $7.23B$6.26B | +15.5% |
| R&D Expenses | $1.76B$1.23B | +43.2% |
| SG&A Expenses | $1.46B$1.24B | +17.6% |
| Operating Expenses | $5.69B$4.60B | +23.9% |
| Operating Income | $4.01B$3.79B | +5.8% |
| Interest Expense | $361.00M$205.42M | +75.7% |
| Net Income | $2.59B$2.80B | −7.5% |
| EPS (Basic) | $1.71$1.81 | −5.5% |
| EPS (Diluted) | $1.64$1.77 | −7.3% |
| Shares Outstanding (Basic) | 1.51B1.55B | −2.2% |
| Shares Outstanding (Diluted) | 1.58B1.58B | +0.2% |
05—Questions
Frequently Asked Questions
What were Gilead's key strategic accomplishments in 2012?
In 2012, Gilead's key strategic accomplishments included the significant $11.05 billion acquisition of Pharmasset, which greatly advanced its Hepatitis C (HCV) pipeline with the addition of sofosbuvir. The company also launched Stribild, its third single-tablet regimen for HIV treatment in the United States, and obtained FDA approval for Truvada for pre-exposure prophylaxis (PrEP). Additionally, Gilead expanded its oncology/inflammation pipeline through the acquisition of YM Biosciences, which closed in February 2013.
How did Gilead's financial performance fare in 2012?
Gilead demonstrated strong financial performance in 2012, with total revenues increasing 16% to $9.70 billion. This growth was largely propelled by its antiviral franchise, which saw a 15% increase in sales to $8.14 billion. The company also reported that sales of its cardiovascular products (Letairis, Ranexa, and AmBisome) exceeded $1 billion. R&D expenses increased significantly by 43% to $1.76 billion, reflecting substantial investments in pipeline development. Net income for 2012 was $2.59 billion, a slight decrease from 2011, attributed to increased R&D spending and acquisition-related expenses.
What are the main risks and challenges Gilead highlighted in its 2012 filing?
Gilead highlighted several key risks. A major concern is the potential for significant stock price volatility related to the announcement of clinical trial data for sofosbuvir and its fixed-dose combination with ledipasvir. The company also faces substantial competition in the HIV market from both branded and generic drugs, with the potential expiration of key patents. Furthermore, Gilead is involved in ongoing litigation with generic manufacturers concerning its core HIV products, and faces evolving healthcare reforms and pricing pressures, particularly in Europe. Dependence on a few key products, like Atripla and Truvada, also presents a risk if their sales growth falters.
06—Continue