10-QPeriod: Q1 FY2008

GILEAD SCIENCES, INC. Quarterly Report for Q1 Ended Mar 31, 2008

Filed May 2, 2008For Securities:GILD

Summary

Gilead Sciences, Inc. (GILD) reported strong top-line growth in its first quarter ended March 31, 2008, with total revenues increasing by 22% year-over-year to $1.26 billion. This growth was primarily driven by a significant 36% increase in product sales, reaching $1.14 billion, largely due to robust performance in its HIV product portfolio, particularly Truvada and Atripla. Despite a decline in royalty revenues from Tamiflu, the company demonstrated solid operational execution and continued investment in its R&D pipeline. The company's financial position remains strong, although cash and cash equivalents decreased due to substantial share repurchases under its stock repurchase program. Gilead's management expressed confidence in its ability to fund future growth initiatives and meet ongoing operational needs, supported by its existing cash reserves and market securities. The focus remains on advancing key drug candidates in areas like HIV, hepatitis B, and cardiovascular diseases, positioning the company for continued long-term value creation.

Key Highlights

  • 1Total revenues grew by 22% to $1.26 billion for the first quarter of 2008.
  • 2Product sales increased by 36% to $1.14 billion, driven by strong performance in HIV therapies (Truvada and Atripla).
  • 3Net income rose by 22% to $496.1 million, with diluted EPS at $0.51.
  • 4The company repurchased approximately $815.8 million of its common stock during the quarter.
  • 5Gilead reported progress in its R&D pipeline, including advancing elvitegravir for HIV into Phase 3 trials.
  • 6Royalty revenues decreased by 39% due to lower Tamiflu sales by Roche.
  • 7Cash and cash equivalents decreased by $245.2 million to $722.9 million, primarily due to share repurchases.

Frequently Asked Questions

Gilead's revenue growth was primarily driven by a 36% increase in product sales, reaching $1.14 billion. This surge was largely attributed to strong performance in its HIV product portfolio, with Truvada and Atripla sales increasing significantly by 39% and 70% respectively, compared to the same period in the prior year.

Gilead significantly increased its share repurchase activity during the quarter, repurchasing approximately $815.8 million of its common stock. This led to a decrease in cash and cash equivalents by $245.2 million, bringing the total to $722.9 million at the end of the quarter. Despite this reduction, the company maintained a strong liquidity position.

Royalty revenues decreased by 39% year-over-year, primarily due to a significant decline in Tamiflu royalties received from Roche. Roche anticipates further decreases in Tamiflu sales for 2008, suggesting that Gilead's royalty revenues are likely to remain lower compared to 2007.

Gilead is making notable progress in its R&D pipeline. In the HIV area, the company is nearing completion of the Phase 3 program design for its novel integrase inhibitor, elvitegravir (GS 9137), and anticipates dosing patients in the third quarter of 2008. Additionally, Gilead has submitted marketing authorization applications for Viread for Hepatitis B and aztreonam lysine for inhalation for cystic fibrosis in various regions, and received positive opinions for Viread's use in treating chronic hepatitis B in Europe.