Summary
Gilead Sciences, Inc. (GILD) reported significant financial and operational developments for the fiscal year ending December 30, 2017. The company experienced a notable decline in total revenues, primarily driven by a decrease in sales of its Hepatitis C Virus (HCV) products due to increased market competition. However, this was partially offset by strong performance in its HIV products, bolstered by the uptake of TAF-based regimens. A key strategic move was the acquisition of Kite Pharma, Inc. in October 2017, significantly expanding Gilead's presence in the promising field of cellular therapy, with the subsequent FDA approval of Yescarta™ for specific B-cell lymphomas. The company also made progress in its inflammation and respiratory pipeline, notably with filgotinib. Financially, Gilead reported a substantial increase in provision for income taxes, largely due to the Tax Cuts and Jobs Act enacted in late 2017. Despite the revenue dip, the company maintained a strong cash position, demonstrating robust operating cash flow and continuing its commitment to returning capital to shareholders through dividends and share repurchases.
Financial Highlights
55 data points| Revenue | $26.11B |
| Cost of Revenue | $4.37B |
| Gross Profit | $21.74B |
| R&D Expenses | $3.73B |
| SG&A Expenses | $3.88B |
| Operating Expenses | $11.98B |
| Operating Income | $14.12B |
| Interest Expense | $1.12B |
| Net Income | $4.63B |
| EPS (Basic) | $3.54 |
| EPS (Diluted) | $3.51 |
| Shares Outstanding (Basic) | 1.31B |
| Shares Outstanding (Diluted) | 1.32B |
Key Highlights
- 1Total revenues decreased by 14% to $26.1 billion in 2017 compared to $30.4 billion in 2016, primarily due to a 16% decline in antiviral product sales, driven by the competitive HCV market.
- 2The acquisition of Kite Pharma, Inc. for approximately $11.2 billion in October 2017 significantly bolstered Gilead's position in the hematology/oncology segment, particularly in cellular therapy with the subsequent approval of Yescarta™.
- 3HIV and HBV product sales increased by 10% to $14.2 billion, driven by the strong uptake of TAF-based products (Genvoya, Descovy, Odefsey).
- 4HCV product sales declined by 37% to $9.1 billion, primarily due to increased competition and fewer new patient starts for Harvoni and Sovaldi.
- 5Research and development expenses decreased by 27% to $3.7 billion, impacted by lower business development activities compared to the prior year, but continued investment in pipeline advancement, including selonsertib for NASH and filgotinib for inflammatory diseases.
- 6Selling, general, and administrative expenses increased by 14% to $3.9 billion, largely due to costs associated with the Kite acquisition and higher branded drug prescription (BPD) fees.
- 7Net income attributable to Gilead decreased significantly to $4.6 billion ($3.51 per diluted share) in 2017, compared to $13.5 billion ($9.94 per diluted share) in 2016, heavily influenced by lower product sales and a substantial charge related to the Tax Cuts and Jobs Act.