10-QPeriod: Q3 FY2013

GILEAD SCIENCES, INC. Quarterly Report for Q3 Ended Sep 30, 2013

Filed October 31, 2013For Securities:GILD

Summary

Gilead Sciences, Inc. reported strong financial performance for the third quarter and first nine months of 2013, with total revenues increasing by 15% and 14% year-over-year, respectively. This growth was primarily driven by a 15% increase in product sales, largely attributable to the antiviral franchise, which saw a 14% rise. The company also highlighted significant revenue growth in its cardiovascular products. Net income increased by 17% year-over-year for the third quarter, reflecting robust sales and effective cost management. Financially, Gilead Sciences maintained a healthy liquidity position with $2.76 billion in cash, cash equivalents, and marketable securities as of September 30, 2013. The company actively managed its debt, repaying a significant portion of its long-term obligations. Key strategic developments include the completion of the YM BioSciences acquisition, aimed at advancing its oncology pipeline with momelotinib. Furthermore, Gilead is progressing with its Hepatitis C (HCV) pipeline, with a New Drug Application (NDA) filed for sofosbuvir and positive outlooks from FDA advisory committees. Investors should note the ongoing patent litigation related to key antiviral products, which presents potential risks, although the company has settled some cases and is actively defending others.

Financial Highlights

53 data points
Beta

Revenue

$2.78B

72.9% Gross Margin

Net Income

$789.00M

28.4% Net Margin

EPS (Diluted)

$0.47

Total Assets

$22.47B

Cash & Equivalents

$2.01B

Free Cash Flow

$753.10M

Financial Statements
Beta
Revenue$2.78B
Cost of Revenue$681.87M
Gross Profit$2.03B
R&D Expenses$546.24M
SG&A Expenses$406.86M
Operating Expenses$1.63B
Operating Income$1.15B
Interest Expense$73.95M
Net Income$789.00M
EPS (Basic)$0.51
EPS (Diluted)$0.47
Shares Outstanding (Basic)1.53B
Shares Outstanding (Diluted)1.69B

Key Highlights

  • 1Total revenues increased 15% year-over-year to $2.78 billion in Q3 2013, driven by strong product sales.
  • 2Product sales grew 15% to $2.71 billion in Q3 2013, with the antiviral franchise showing a 14% increase.
  • 3Net income attributable to Gilead increased 17% to $788.6 million in Q3 2013, resulting in diluted EPS of $0.47.
  • 4The company completed the acquisition of YM BioSciences for $487.6 million, strengthening its oncology pipeline with momelotinib.
  • 5Gilead filed an NDA for sofosbuvir for Hepatitis C treatment, with FDA advisory committees providing positive recommendations.
  • 6Cash, cash equivalents, and marketable securities stood at $2.76 billion as of September 30, 2013, indicating a strong liquidity position.
  • 7The company continued to manage its debt, with total long-term debt, net decreasing to $5.86 billion from $7.05 billion at the end of 2012.

Frequently Asked Questions

The primary driver of Gilead Sciences' revenue growth is its product sales, particularly within the antiviral franchise. Strong demand for its HIV treatments, such as Stribild and Complera/Eviplera, and progress in its Hepatitis C pipeline, notably with sofosbuvir, are key contributors.

Gilead Sciences is actively managing its debt, having repaid significant portions of its long-term obligations, including convertible senior notes and revolving credit facilities. The company maintains a strong liquidity position with substantial cash, cash equivalents, and marketable securities, and generates significant cash flow from operations.

Key strategic developments include the acquisition of YM BioSciences to bolster its oncology pipeline, the advancement of its HCV treatment candidates like sofosbuvir towards potential approval, and ongoing patent litigation defense to protect its core product franchises, particularly in the antiviral space.

Gilead Sciences highlights several risks, including ongoing patent litigation with generic manufacturers that could impact revenues, potential delays or failures in regulatory approvals for key pipeline drugs like sofosbuvir, competition from existing and new therapies in HIV and HCV markets, and the impact of healthcare reforms and pricing pressures on its revenue streams.