01—Abstract
Summary
Summary of the 10-K filed February 25, 2021. Cited figures are marked; the original filing is the authoritative source.
Gilead Sciences, Inc. (GILD) reported total revenues of $24.7 billiona for the year ended December 31, 2020, representing a 10% increase year-over-year, primarily driven by strong sales of Veklury (remdesivir) for COVID-19 and continued growth in its HIV franchise, particularly Biktarvy and Descovy for PrEP.
Despite the revenue growth, net income attributable to Gilead saw a significant decrease to $123 millionb ($0.10 per diluted share) from $5.4 billion ($4.22 per diluted share) in 2019. This decline was largely attributed to substantial R&D expenses related to acquisitions (Forty Seven and Immunomedics), unfavorable changes in equity investment valuations (Galapagos), and a significant discrete tax benefit recorded in the prior year. The company continued its strategic expansion into oncology with the acquisition of Immunomedics, adding Trodelvy to its portfolio, and also made progress in its pipeline across various therapeutic areas.
Looking ahead, Gilead expects continued growth from key products like Biktarvy and Trodelvy, which are expected to offset the impact of patent expirations for Truvada and Atripla. The company anticipates continued volatility in Veklury sales due to the dynamic COVID-19 landscape.
Gilead remains focused on investing in its pipeline and expanding its therapeutic reach, particularly in oncology and inflammation, while prioritizing disciplined expense management and shareholder value. Investors should monitor the company's patent litigation outcomes, especially concerning Biktarvy, and the ongoing integration of its recent acquisitions.
02—Key points
Key Highlights
- Total revenues increased by 10% to $24.7 billion in 2020, driven by Veklury sales and strong HIV franchise performance.
- Net income attributable to Gilead decreased significantly to $123 million ($0.10 EPS) in 2020 from $5.4 billion ($4.22 EPS) in 2019, primarily due to high R&D expenses from acquisitions and valuation changes in equity investments.
- Acquired Immunomedics for approximately $20.6 billion, adding Trodelvy to its oncology portfolio.
- Acquired Forty Seven, Inc. for approximately $4.7 billion, gaining the investigational immuno-oncology drug magrolimab.
- Entered into an agreement to acquire MYR GmbH for approximately €1.2 billion to gain access to Hepcludex (bulevirtide) for Hepatitis Delta Virus.
- HIV products sales increased 3% to $16.9 billion, with Biktarvy and Descovy for PrEP showing strong growth, partially offset by the loss of exclusivity for Truvada and Atripla.
- Veklury (remdesivir) generated $2.8 billion in sales in 2020, primarily in the US and Europe, reflecting demand due to COVID-19 hospitalizations.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Gilead Sciences, Inc. kept $0.00.
- Revenue$24.69B100.0%
- Cost of revenue−$4.57B18.5%
- Gross profit$20.12B81.5%
- Operating costs−$16.05B65.0%
- Operating income$4.07B16.5%
- Interest, other & tax−$3.95B16.0%
- Net income$123.0M0.5%
Where FY2020 revenue went
$24.69B- Other operating costs: $10.89B, 44% of revenue
- SG&A: $5.15B, 21% of revenue
- Cost of revenue: $4.57B, 19% of revenue
- Interest, other & tax: $3.95B, 16% of revenue
- Net income: $123.0M, 0.5% of revenue
Kept 0.5% as net incomeNet income $123.0M · 0.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 25, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $24.69B$22.45B | +10.0% |
| Cost of Revenue | $4.57B$4.67B | −2.2% |
| Gross Profit | $20.12B$17.77B | +13.2% |
| SG&A Expenses | $5.15B$4.38B | +17.6% |
| Operating Expenses | $20.62B$18.16B | +13.5% |
| Operating Income | $4.07B$4.29B | −5.0% |
| Interest Expense | $984.00M$995.00M | −1.1% |
| Net Income | $123.00M$5.39B | −97.7% |
| EPS (Basic) | $0.10$4.24 | −97.6% |
| EPS (Diluted) | $0.10$4.22 | −97.6% |
| Shares Outstanding (Basic) | 1.26B1.27B | −1.0% |
| Shares Outstanding (Diluted) | 1.26B1.28B | −1.1% |
05—Questions
Frequently Asked Questions
What were Gilead's key financial drivers in 2020?
Gilead's financial performance in 2020 was primarily driven by strong sales of Veklury (remdesivir), its treatment for COVID-19, and the continued growth of its HIV franchise, particularly Biktarvy and Descovy for PrEP. These contributed to a 10% increase in total revenues to $24.7 billion. However, net income was significantly impacted by large R&D expenses from acquisitions (Forty Seven and Immunomedics) and a decrease in the valuation of its equity investment in Galapagos.
How did Gilead's major therapeutic areas perform in 2020?
The HIV franchise showed resilience with a 3% increase in sales to $16.9 billion, led by Biktarvy and Descovy for PrEP. The Hepatitis C (HCV) franchise experienced a significant 30% decline in sales to $2.1 billion, largely due to the impact of COVID-19 on patient starts and market dynamics. Cell therapy product sales grew 33% to $607 million, driven by Yescarta and the launch of Tecartus in the US. Veklury, a new product, generated $2.8 billion in sales in its first year.
What significant strategic moves did Gilead make in 2020?
Gilead made substantial strategic acquisitions in 2020, most notably acquiring Immunomedics for approximately $20.6 billion to add Trodelvy to its oncology pipeline, and Forty Seven, Inc. for approximately $4.7 billion, bringing in magrolimab. The company also entered into an agreement to acquire MYR GmbH to bolster its liver disease portfolio with Hepcludex (bulevirtide).
What is Gilead's outlook for 2021 and beyond?
Gilead anticipates continued growth in 2021 from key products like Biktarvy and Trodelvy, which are expected to offset declines in Truvada and Atripla due to patent expirations. The company expects ongoing volatility in Veklury sales due to the uncertain COVID-19 pandemic situation. Gilead's strategy remains focused on expanding its portfolio and pipeline through internal innovation and external collaborations, with a particular emphasis on oncology and inflammation, while maintaining disciplined expense management.
Are there any major litigation risks for Gilead?
Yes, Gilead is involved in significant patent litigation concerning its key products, particularly Biktarvy (ViiV Healthcare alleging patent infringement) and Yescarta (Juno Therapeutics alleging patent infringement). The company also faces litigation related to its PrEP products and product liability claims concerning kidney, bone, and tooth injuries linked to certain HIV medications. Investors should monitor the progress and potential outcomes of these legal disputes, as adverse judgments could result in substantial financial liabilities.
06—Continue