GILEAD SCIENCES, INC. Quarterly Report for Q2 Ended Jun 30, 2014

Summary

Gilead Sciences, Inc. reported a significant surge in revenue for the second quarter of 2014, primarily driven by the successful launch of its Hepatitis C drug, Sovaldi. Total revenues reached $6.53 billion, a substantial increase from $2.77 billion in the same period of the prior year, with Sovaldi alone generating $3.48 billion in sales. This performance led to a net income attributable to Gilead of $3.66 billion, or $2.20 per diluted share, a marked improvement from the previous year's quarter. The company also demonstrated strong cash generation, with cash, cash equivalents, and marketable securities increasing to $9.58 billion. Gilead continued its commitment to returning value to shareholders through significant stock repurchases, authorized a new $5 billion repurchase program, and managed its debt effectively by repaying outstanding balances. Despite increased R&D and SG&A expenses to support its growing business, Gilead's financial health appears robust, positioning it for continued growth and investment in its pipeline.

Key Highlights

• 1Total revenues for Q2 2014 surged to $6.53 billion, a 141% increase year-over-year, largely due to the launch of Sovaldi.
• 2Sovaldi generated impressive sales of $3.48 billion in its second full quarter on the market.
• 3Net income attributable to Gilead more than quadrupled to $3.66 billion ($2.20 per diluted share) compared to Q2 2013.
• 4The company's cash, cash equivalents, and marketable securities grew significantly to $9.58 billion.
• 5Operating cash flow was strong at $5.75 billion for the first six months of 2014.
• 6Gilead repurchased $1.20 billion of common stock in Q2 2014 and announced a new $5 billion share repurchase program.
• 7Product gross margins improved substantially to 86% in Q2 2014 from 74% in Q2 2013, driven by Sovaldi's sales mix.

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