10-QPeriod: Q1 FY2009

GILEAD SCIENCES, INC. Quarterly Report for Q1 Ended Mar 31, 2009

Filed May 7, 2009For Securities:GILD

Summary

Gilead Sciences, Inc. reported strong first-quarter 2009 results, demonstrating significant growth in product sales, primarily driven by its antiviral portfolio. Total revenues increased by 27% year-over-year to $1.53 billion, with product sales reaching $1.45 billion. Antiviral product sales saw a robust 28% increase, propelled by substantial growth in Truvada and Atripla sales. The company also announced the closing of its acquisition of CV Therapeutics in April 2009, valued at approximately $1.4 billion, expanding its presence in the cardiovascular therapeutic area. Gilead maintained a strong liquidity position with over $3.6 billion in cash, cash equivalents, and marketable securities at the end of the quarter. The company's financial performance reflects continued product demand and strategic growth initiatives. Despite a decrease in royalty revenues, largely due to lower Tamiflu royalties, the overall revenue growth was substantial. Gilead also continued its share repurchase program, demonstrating a commitment to returning value to shareholders. The company's strategic investments in research and development and its ongoing acquisition activities indicate a focus on long-term growth and pipeline expansion.

Financial Highlights

26 data points
Beta

Revenue

$1.53B

73.1% Gross Margin

Net Income

$589.11M

38.5% Net Margin

EPS (Diluted)

$0.32

Cash & Equivalents

$1.66B

Free Cash Flow

$641.33M

Financial Statements
Beta
Revenue$1.53B
Cost of Revenue$329.41M
Gross Profit$1.12B
SG&A Expenses$203.95M
Operating Expenses$722.14M
Operating Income$808.32M
Interest Expense$16.67M
Net Income$589.11M
EPS (Basic)$0.33
EPS (Diluted)$0.32
Shares Outstanding (Basic)1.82B
Shares Outstanding (Diluted)1.88B

Key Highlights

  • 1Total revenues increased by 27% to $1.53 billion in Q1 2009 compared to Q1 2008.
  • 2Product sales grew by 27% to $1.45 billion, driven by a 28% increase in antiviral product sales.
  • 3Truvada sales increased by 23% and Atripla sales by 57% year-over-year.
  • 4The company completed the $1.4 billion acquisition of CV Therapeutics in April 2009.
  • 5Cash, cash equivalents, and marketable securities increased to $3.61 billion as of March 31, 2009.
  • 6Operating income increased to $808.3 million, reflecting strong sales performance.
  • 7Net income attributable to Gilead increased by 20.6% to $589.1 million.

Frequently Asked Questions

The primary drivers of Gilead's revenue growth were strong product sales, particularly from its antiviral portfolio. Antiviral product sales increased by 28%, led by significant growth in sales of Truvada (up 23%) and Atripla (up 57%). These two products accounted for a substantial portion of the company's total product sales.

The acquisition of CV Therapeutics, which closed in April 2009 for approximately $1.4 billion, is significant as it allows Gilead to expand its therapeutic focus into the cardiovascular area. CV Therapeutics brought two marketed products, Ranexa and Lexiscan, along with a pipeline of product candidates in cardiovascular diseases, providing Gilead with new growth opportunities.

Gilead maintained a strong liquidity position, with cash, cash equivalents, and marketable securities increasing by $369.3 million to $3.61 billion by the end of the first quarter. This increase was primarily driven by operating cash flows of $641.3 million, partially offset by stock repurchases and capital expenditures. The company also continued to actively manage its marketable securities portfolio.

Yes, Gilead faces ongoing legal proceedings, including patent litigation concerning generic versions of Truvada and Atripla. Additionally, the company faces risks related to the potential for safety issues with its products, competition from other pharmaceutical companies, regulatory compliance, and the uncertainties inherent in clinical trial outcomes and product commercialization. The company also disclosed risks related to foreign currency fluctuations and potential impacts from healthcare reforms.