GILEAD SCIENCES, INC. Quarterly Report for Q1 Ended Mar 31, 2019

Summary

Gilead Sciences, Inc. reported solid first-quarter 2019 results, with total revenues increasing by 4% year-over-year to $5.3 billion. This growth was primarily driven by a 14% increase in HIV product sales, reaching $3.6 billion, largely due to the strong uptake of Biktarvy. While HIV remains the dominant revenue driver, Hepatitis C (HCV) product sales saw a 24% decline to $790 million, attributed to competitive pressures and declining patient starts. The company's financial position remains strong, with $30.1 billion in cash, cash equivalents, and marketable debt securities as of March 31, 2019. Despite generating $1.4 billion in operating cash flow, the company utilized cash for debt repayment, dividends, and significant share repurchases totaling $834 million. Research and development expenses increased by 13%, partly due to collaboration expenses and investments in cell therapy. Investors should note ongoing legal proceedings related to key products and the continued importance of pipeline development to offset declining HCV sales and maintain growth.

Key Highlights

• 1Total revenues increased 4% to $5.3 billion in Q1 2019 compared to Q1 2018.
• 2HIV product sales grew 14% to $3.6 billion, driven by Biktarvy's strong performance.
• 3HCV product sales decreased 24% to $790 million due to market dynamics and competition.
• 4Net income attributable to Gilead was $2.0 billion, or $1.54 per diluted share, up from $1.5 billion, or $1.17 per diluted share in the prior year.
• 5The company maintained a strong liquidity position with $30.1 billion in cash, cash equivalents, and marketable debt securities.
• 6R&D expenses increased 13% to $1.1 billion, reflecting collaboration expenses and cell therapy investments.
• 7Gilead returned significant capital to shareholders through $817 million in dividend payments and $834 million in share repurchases.

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