01—Abstract
Summary
Summary of the 10-K filed February 23, 2024. Cited figures are marked; the original filing is the authoritative source.
Gilead Sciences, Inc. reported total revenues of $27.1 billiona for the fiscal year 2023, a slight decrease of 1% compared to 2022.
This was primarily driven by a significant drop in Veklury (remdesivir) sales due to lower COVID-19 related hospitalizations, which was largely offset by robust growth in HIV and Oncology product sales. Net income attributable to Gilead increased by 23% to $5.7 billionb, with diluted earnings per share rising 24% to $4.50. This improvement was largely due to lower impairment charges related to in-process research and development, reduced net unrealized losses on equity investments, and increased interest income.
The company continues to strategically invest in its R&D pipeline through acquisitions and collaborations, particularly in oncology and inflammation. Key developments include expanded collaborations and the acquisition of smaller biotech firms to bolster its pipeline. Patent expirations for some key products are on the horizon, with major HIV products like Descovy and Vemlidy having U.S. patent expirations in 2031, and Biktarvy in 2033.
The company also faces ongoing litigation, including challenges related to its HIV products and the sale of its PrEP medications, though recent legal outcomes have been favorable in some instances. Gilead maintains a strong liquidity position and continues to return capital to shareholders through dividends and share repurchases.
02—Key points
Key Highlights
- Total revenues for 2023 were $27.1 billion, a 1% decrease year-over-year, primarily due to a 44% decline in Veklury sales, though this was offset by a 6% increase in HIV sales and a significant 37% increase in Oncology sales.
- Net income attributable to Gilead increased 23% to $5.7 billion, and diluted EPS grew 24% to $4.50, benefiting from lower R&D impairment charges and improved investment performance.
- The HIV franchise remains Gilead's largest revenue contributor, with Biktarvy showing strong growth of 14% to $11.9 billion. Oncology products, including Yescarta and Trodelvy, also demonstrated substantial growth.
- Gilead continued its strategic expansion through acquisitions and collaborations, notably in the oncology and inflammation spaces, indicating a focus on diversifying its portfolio and pipeline.
- The company faces upcoming patent expirations for key products, with significant patents for HIV treatments like Descovy and Vemlidy expiring in the U.S. in 2031, and Biktarvy in 2033.
- Gilead's gross-to-net deductions increased to 38% of gross product sales in 2023, up from 35% in 2022, primarily due to changes in product mix and payer mix.
- The company is subject to ongoing legal proceedings, including antitrust litigation related to HIV drugs and patent disputes with generic manufacturers, although recent developments have seen favorable outcomes in some cases.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Gilead Sciences, Inc. kept $0.21.
- Revenue$27.12B100.0%
- Cost of revenue−$6.50B24.0%
- Gross profit$20.62B76.0%
- Operating costs−$13.01B48.0%
- Operating income$7.61B28.0%
- Interest, other & tax−$1.94B7.2%
- Net income$5.67B20.9%
Where FY2023 revenue went
$27.12B- Other operating costs: $6.92B, 26% of revenue
- Cost of revenue: $6.50B, 24% of revenue
- SG&A: $6.09B, 22% of revenue
- Net income: $5.67B, 21% of revenue
- Interest, other & tax: $1.94B, 7.2% of revenue
Kept 21% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 23, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $27.12B$27.28B | −0.6% |
| Cost of Revenue | $6.50B$5.66B | +14.9% |
| Gross Profit | $20.62B$21.62B | −4.7% |
| SG&A Expenses | $6.09B$5.67B | +7.4% |
| Operating Expenses | $19.51B$19.95B | −2.2% |
| Operating Income | $7.61B$7.33B | +3.8% |
| Interest Expense | $944.00M$935.00M | +1.0% |
| Net Income | $5.67B$4.59B | +23.4% |
| EPS (Basic) | $4.54$3.66 | +24.0% |
| EPS (Diluted) | $4.50$3.64 | +23.6% |
| Shares Outstanding (Basic) | 1.25B1.25B | −0.6% |
| Shares Outstanding (Diluted) | 1.26B1.26B | −0.3% |
05—Questions
Frequently Asked Questions
What was Gilead's financial performance in 2023?
Gilead Sciences reported total revenues of $27.1 billion in 2023, a slight decrease of 1% from the previous year, largely due to a significant decline in Veklury sales. However, net income attributable to Gilead increased by 23% to $5.7 billion, and diluted earnings per share grew 24% to $4.50, driven by strategic investments and reduced impairment charges.
Which product categories drove Gilead's revenue in 2023?
The HIV franchise remained Gilead's largest revenue driver, with sales increasing by 6% to $18.2 billion, led by strong performance from Biktarvy. The Oncology segment also showed significant growth, with total sales rising 37% to $2.9 billion, driven by cell therapies (Yescarta and Tecartus) and Trodelvy.
What are the key risks or challenges facing Gilead in the near future?
Gilead faces several risks, including the impact of lower COVID-19 related sales from Veklury, potential competition and pricing pressures, upcoming patent expirations for key products, and ongoing litigation. The company is actively managing these by investing in its R&D pipeline and pursuing strategic acquisitions and collaborations.
How is Gilead managing its R&D and pipeline?
Gilead is actively investing in its R&D pipeline, particularly in oncology and inflammation, through strategic acquisitions and collaborations with other biotechnology companies. This includes the acquisition of XinThera and Tmunity Therapeutics, and collaborations with Arcellx and Assembly Biosciences, aimed at developing innovative therapies for unmet medical needs.
06—Continue