GILEAD SCIENCES, INC. Quarterly Report for Q1 Ended Mar 31, 2014

Summary

Gilead Sciences, Inc. reported a significant increase in revenue and net income for the first quarter of 2014, primarily driven by the launch of its new hepatitis C treatment, Sovaldi. Total revenues nearly doubled year-over-year to $5.00 billion, with Sovaldi generating an impressive $2.27 billion in sales in its first full quarter post-launch. This strong performance in the antiviral segment, coupled with continued growth in HIV products like Stribild and Complera/Eviplera, led to a substantial rise in profitability, with net income attributable to Gilead soaring by 208% to $2.23 billion. The company also strengthened its financial position by issuing $4.00 billion in senior unsecured notes and increasing its cash reserves to $6.86 billion. While R&D and SG&A expenses increased to support pipeline progression and market expansion, the overwhelming success of Sovaldi has positioned Gilead for continued growth. Investors should monitor the ongoing patent litigations, particularly concerning sofosbuvir, and the market uptake of new HCV combination therapies.

Key Highlights

• 1Total revenues increased by 97% to $5.00 billion for the first quarter of 2014, driven by the successful launch of Sovaldi.
• 2Sovaldi sales reached $2.27 billion in its first full quarter, becoming a major revenue driver.
• 3Net income attributable to Gilead increased by 208% to $2.23 billion ($1.33 per diluted share).
• 4Cash, cash equivalents, and marketable securities increased significantly to $6.86 billion.
• 5The company issued $4.00 billion in senior unsecured notes in March 2014.
• 6R&D expenses increased by 20% to $595.0 million, and SG&A expenses increased by 46% to $548.1 million to support growth.
• 7The company is facing multiple patent litigations related to sofosbuvir and other key products.

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