01—Abstract
Summary
Summary of the 10-K filed February 24, 2016. Cited figures are marked; the original filing is the authoritative source.
Gilead Sciences, Inc. (GILD) reported a strong financial performance for the fiscal year ending December 31, 2015, with total revenues reaching $32.6 billiona, a significant increase of 31% year-over-year.
This growth was primarily driven by its antiviral products, particularly the Hepatitis C treatments Harvoni and Sovaldi, which accounted for a substantial portion of the revenue. The company also saw continued strength in its HIV franchise, supported by newer single-tablet regimens like Genvoya. While the company demonstrated robust revenue growth and profitability, it also highlighted ongoing investments in research and development, with R&D expenses increasing to $3.0 billionb.
Gilead's balance sheet remained strong, with cash, cash equivalents, and marketable securities totaling $26.2 billionc. The company also returned significant capital to shareholders through share repurchases and initiated a quarterly dividend.
Gilead faces a competitive market and ongoing pricing pressures, especially in the HCV segment, and is actively managing legal and patent challenges. The company provided an outlook for 2016, anticipating continued focus on pipeline progression and commercial uptake of its key products.
02—Key points
Key Highlights
- Total revenues increased by 31% to $32.6 billion in 2015, driven by strong antiviral product sales.
- Antiviral products, including HCV and HIV treatments, generated $30.2 billion in sales, representing 93% of total revenues.
- Harvoni and Sovaldi sales were substantial, although Sovaldi sales declined due to patient uptake of Harvoni.
- HIV product sales grew, boosted by newer single-tablet regimens like Genvoya.
- Research and Development (R&D) expenses increased by 6% to $3.0 billion, reflecting continued investment in pipeline development.
- The company ended the year with a strong cash position of $26.2 billion.
- Gilead initiated a quarterly dividend of $0.43 per share and continued its aggressive share repurchase program.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Gilead Sciences, Inc. kept $0.55.
- Revenue$32.64B100.0%
- Cost of revenue−$4.01B12.3%
- Gross profit$28.63B87.7%
- Operating costs−$6.44B19.7%
- Operating income$22.19B68.0%
- Interest, other & tax−$4.08B12.5%
- Net income$18.11B55.5%
Where FY2015 revenue went
$32.64B- Net income: $18.11B, 55% of revenue
- Interest, other & tax: $4.08B, 13% of revenue
- Cost of revenue: $4.01B, 12% of revenue
- R&D: $3.01B, 9.2% of revenue
- SG&A: $3.43B, 10% of revenue
Kept 55% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 24, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $32.64B$24.89B | +31.1% |
| Cost of Revenue | $4.01B$3.79B | +5.8% |
| Gross Profit | $28.63B$21.10B | +35.7% |
| R&D Expenses | $3.01B$2.85B | +5.6% |
| SG&A Expenses | $3.43B$2.98B | +14.9% |
| Operating Expenses | $10.45B$9.63B | +8.5% |
| Operating Income | $22.19B$15.27B | +45.4% |
| Interest Expense | $688.00M$412.00M | +67.0% |
| Net Income | $18.11B$12.10B | +49.6% |
| EPS (Basic) | $12.37$7.95 | +55.6% |
| EPS (Diluted) | $11.91$7.35 | +62.0% |
| Shares Outstanding (Basic) | 1.46B1.52B | −3.8% |
| Shares Outstanding (Diluted) | 1.52B1.65B | −7.7% |
05—Questions
Frequently Asked Questions
What were Gilead's primary revenue drivers in 2015?
Gilead's primary revenue drivers in 2015 were its antiviral products, specifically treatments for Hepatitis C (HCV) like Harvoni and Sovaldi, and treatments for Human Immunodeficiency Virus (HIV). These segments collectively represented 93% of the company's total revenue.
How did Gilead manage its R&D investments in 2015?
Gilead continued to invest heavily in research and development, with R&D expenses increasing by 6% to $3.0 billion in 2015. This investment supported the progression of its product pipeline across key therapeutic areas, including liver disease and HIV.
What is Gilead's financial position and capital allocation strategy?
Gilead maintained a strong financial position, ending 2015 with $26.2 billion in cash, cash equivalents, and marketable securities. The company demonstrated a commitment to returning capital to shareholders by repurchasing $10.0 billion in common stock and initiating a quarterly dividend of $0.43 per share.
What are the key risks and challenges Gilead highlighted in its 2015 10-K filing?
Gilead highlighted significant risks including substantial revenue dependence on HCV and HIV products, potential for increased competition and pricing pressure in these markets, challenges in accurately forecasting demand, and numerous ongoing litigation and patent challenges related to its key products, particularly Sovaldi and Harvoni.
06—Continue