01—Abstract
Summary
Summary of the 10-K filed February 25, 2014. Cited figures are marked; the original filing is the authoritative source.
Gilead Sciences, Inc.'s (GILD) 2013 10-K filing highlights a year of significant progress, particularly in its liver diseases and HIV segments.
The company achieved FDA approval for Sovaldi (sofosbuvir), a groundbreaking treatment for Hepatitis C (HCV) that offers shorter treatment durations and improved efficacy compared to existing therapies. In HIV, Gilead expanded its single-tablet regimen (STR) offerings with the European launch of Stribild and approvals for its components, Tybost and Vitekta. The company also advanced its pipeline, with over 200 active clinical studies, including more than 60 Phase 3 trials.
Financially, total revenues grew 15% to $11.20 billiona, driven primarily by a 15% increase in product sales, reaching $10.80 billion. This growth was largely fueled by their antiviral products, especially the single-tablet regimens for HIV, such as Stribild and Complera/Eviplera. R&D expenses increased by 20% to $2.12 billion, reflecting continued investment in pipeline development.
While SG&A expenses also rose, net income increased to $3.07 billionb, or $1.81 per diluted share, up from $2.59 billion, or $1.64 per diluted share, in the prior year. Gilead also continued its commitment to shareholder returns through its stock repurchase program.
02—Key points
Key Highlights
- Received FDA approval for Sovaldi (sofosbuvir), a significant advancement in HCV treatment.
- Expanded HIV treatment options with the European launch of Stribild and approvals for Tybost and Vitekta.
- Total revenues increased by 15% to $11.20 billion, driven by strong antiviral product sales.
- Product sales grew by 15% to $10.80 billion, primarily due to robust HIV STR performance.
- R&D expenses increased by 20% to $2.12 billion, underscoring continued pipeline investment.
- Net income rose to $3.07 billion ($1.81 per diluted share) from $2.59 billion ($1.64 per diluted share) in the prior year.
- Active clinical development pipeline expanded to over 200 studies, with more than 60 in Phase 3.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Gilead Sciences, Inc. kept $0.27.
- Revenue$11.20B100.0%
- Cost of revenue−$2.86B25.5%
- Gross profit$8.34B74.5%
- Operating costs−$3.82B34.1%
- Operating income$4.52B40.4%
- Interest, other & tax−$1.45B12.9%
- Net income$3.08B27.5%
Where FY2013 revenue went
$11.20B- Net income: $3.08B, 27% of revenue
- Cost of revenue: $2.86B, 26% of revenue
- R&D: $2.12B, 19% of revenue
- SG&A: $1.70B, 15% of revenue
- Interest, other & tax: $1.45B, 13% of revenue
Kept 27% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 25, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $11.20B$9.70B | +15.5% |
| Cost of Revenue | $2.86B$2.47B | +15.7% |
| Gross Profit | $8.34B$7.23B | +15.4% |
| R&D Expenses | $2.12B$1.76B | +20.5% |
| SG&A Expenses | $1.70B$1.46B | +16.3% |
| Operating Expenses | $6.68B$5.69B | +17.3% |
| Operating Income | $4.52B$4.01B | +12.8% |
| Interest Expense | $307.00M$361.00M | −15.0% |
| Net Income | $3.08B$2.59B | +18.6% |
| EPS (Basic) | $2.01$1.71 | +17.5% |
| EPS (Diluted) | $1.81$1.64 | +10.4% |
| Shares Outstanding (Basic) | 1.53B1.51B | +0.9% |
| Shares Outstanding (Diluted) | 1.70B1.58B | +7.1% |
05—Questions
Frequently Asked Questions
What were the key drivers of Gilead's revenue growth in 2013?
Gilead's revenue growth in 2013 was primarily driven by its antiviral products, particularly its single-tablet regimens (STRs) for HIV, such as Stribild and Complera/Eviplera. The company also saw contributions from its cardiovascular products, Letairis and Ranexa. The recent approval and initial sales of Sovaldi in December 2013 also contributed to revenue.
What is the significance of the Sovaldi approval?
The FDA approval of Sovaldi (sofosbuvir) in December 2013 marked a significant milestone for Gilead and a major advancement in the treatment of Hepatitis C (HCV). Sovaldi offers a shorter treatment duration (as little as 12 weeks) and reduced or eliminated the need for pegylated interferon injections in certain patient populations, representing a substantial improvement over previous standards of care.
How did Gilead manage its research and development (R&D) investments?
Gilead significantly increased its R&D investment in 2013, with expenses rising 20% to $2.12 billion. This increase reflects the company's ongoing commitment to advancing its robust pipeline, which included over 200 active clinical studies, with more than 60 in Phase 3 trials across key therapeutic areas like oncology, liver diseases, and HIV.
What is the company's outlook for 2014?
Gilead expects continued product sales growth in 2014, driven by the full-year impact of Sovaldi sales and the ongoing uptake of its HIV products. The company plans to expand its commercial infrastructure, particularly in Europe and Asia, to support Sovaldi launches and the anticipated launch of its oncology product, idelalisib. However, Gilead also anticipates potential headwinds from pricing pressures in Europe, generic competition (e.g., generic efavirenz), foreign currency volatility, and changes in the reimbursement landscape.
06—Continue