What drove the significant increase in net income?

The substantial increase in net income was driven by several factors: strong overall revenue growth from product sales and royalties, a notable decrease in Selling, General, and Administrative (SG&A) expenses primarily due to the prior year's significant stock-based compensation related to the Pharmasset acquisition, and a reduction in the effective tax rate, partly due to the retroactive reinstatement of the federal research tax credit.

How did the acquisition of YM BioSciences impact the company's financial position?

The acquisition of YM BioSciences for $487.6 million on February 8, 2013, added $362.7 million to in-process R&D and $127.2 million to goodwill. It was funded by operating cash flow and resulted in a significant use of cash in investing activities ($378.6 million for the acquisition, net of cash acquired) during the quarter. While the purchase accounting is preliminary, it strengthens Gilead's oncology pipeline with momelotinib.

What is the outlook for Gilead's HIV and HCV product portfolios?

Gilead's HIV franchise remains a significant revenue driver, with products like Atripla and Truvada contributing substantially, although facing some inventory adjustments and potential generic competition. The company is advancing its pipeline, including initiating Phase 3 trials for TAF in HIV treatment. For Hepatitis C (HCV), Gilead is making significant progress with its sofosbuvir-based therapies, having filed an NDA for sofosbuvir and advancing combination therapies like sofosbuvir/ledipasvir through Phase 3 trials, indicating a strong future outlook for this segment.

How is the company managing its debt and liquidity?

Gilead maintained a strong liquidity position with $2.63 billion in cash, cash equivalents, and marketable securities at the end of the quarter. Operating cash flow of $672.1 million was robust. The company repaid $247.1 million in debt during the quarter, net of proceeds from convertible note hedges, and has a substantial amount of its cash generated from foreign operations ($1.25 billion) intended for use internationally. The company's long-term debt remained relatively stable, with some debt repayments and convertible note conversions occurring.

GILD 10-Q Quarterly Report Q1 FY2013 — Revenue, Net Income, EPS

Summary

Gilead Sciences, Inc. reported strong financial performance for the first quarter of 2013, with total revenues increasing 11% year-over-year to $2.53 billion, driven by robust product sales and a significant rise in royalty revenues. Product sales grew 8% to $2.39 billion, primarily fueled by the antiviral franchise and cardiovascular products, despite a slight sequential decline due to inventory adjustments. Net income attributable to Gilead saw a substantial increase of 63% to $722.2 million, resulting in diluted earnings per share of $0.43. This growth was propelled by increased revenues, a significant decrease in Selling, General, and Administrative (SG&A) expenses (largely due to lower stock-based compensation post-acquisition), and a favorable adjustment to the effective tax rate. The company also completed the acquisition of YM BioSciences Inc. for $487.6 million, bolstering its oncology pipeline, and generated a healthy $672.1 million in operating cash flow.

Financial Highlights

53 data points

Beta

Revenue

$2.53B

0.7% Gross Margin

Net Income

$722.00M

0.3% Net Margin

EPS (Diluted)

$0.43

Total Assets

$22.21B

Cash & Equivalents

$1.86B

Free Cash Flow

$672.10M

Financial Statements

Beta

Revenue	$2.53B
Cost of Revenue	$634.45M
Gross Profit	$1.76B
R&D Expenses	$497.63M
SG&A Expenses	$374.30M
Operating Expenses	$1.51B
Operating Income	$1.03B
Interest Expense	$81.79M
Net Income	$722.00M
EPS (Basic)	$0.47
EPS (Diluted)	$0.43
Shares Outstanding (Basic)	1.52B
Shares Outstanding (Diluted)	1.67B

Key Highlights

1Total revenues increased 11% to $2.53 billion in Q1 2013 compared to Q1 2012.
2Net income attributable to Gilead increased 63% to $722.2 million, with diluted EPS of $0.43.
3Product sales grew 8% to $2.39 billion, driven by antivirals and cardiovascular products.
4Royalty revenues more than doubled, increasing 89% to $134.4 million, largely due to Tamiflu royalties.
5SG&A expenses decreased by 16% due to lower stock-based compensation following the Pharmasset acquisition's prior year impact.
6Acquired YM BioSciences Inc. for $487.6 million to strengthen the oncology portfolio.
7Generated $672.1 million in cash flow from operations.

GILEAD SCIENCES, INC. Quarterly Report for Q1 Ended Mar 31, 2013

Summary

Financial Highlights

Key Highlights

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