10-QPeriod: Q2 FY2021

GILEAD SCIENCES, INC. Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 5, 2021For Securities:GILD

Summary

Gilead Sciences, Inc. reported robust financial results for the second quarter and first half of 2021, demonstrating significant revenue growth and a return to profitability compared to the prior year. Total revenues increased by 21% year-over-year for the quarter and 18% for the first half, primarily driven by strong sales of Veklury (remdesivir) for COVID-19 treatment, alongside continued growth in Biktarvy for HIV, and solid performance in Cell Therapy and other product categories. The company has shown a substantial improvement in profitability, with net income attributable to Gilead reaching $1.5 billion for the quarter and $3.3 billion for the first half, a significant turnaround from the net losses reported in the same periods of 2020. This improvement is largely due to strong revenue growth and the absence of significant one-time charges, such as the large acquired IPR&D expense recorded in Q2 2020. Gilead continues to manage its debt effectively and maintain a strong liquidity position, supported by consistent operating cash flow.

Financial Highlights

57 data points
Beta

Revenue

$6.22B

77.6% Gross Margin

Net Income

$1.52B

24.5% Net Margin

EPS (Diluted)

$1.21

Total Assets

$67.98B

Cash & Equivalents

$4.89B

Free Cash Flow

$2.20B

Financial Statements
Beta
Revenue$6.22B
Cost of Revenue$1.39B
Gross Profit$4.83B
SG&A Expenses$1.35B
Operating Expenses$3.97B
Operating Income$2.25B
Interest Expense$256.00M
Net Income$1.52B
EPS (Basic)$1.21
EPS (Diluted)$1.21
Shares Outstanding (Basic)1.25B
Shares Outstanding (Diluted)1.26B

Key Highlights

  • 1Total revenues increased by 21% to $6.2 billion in Q2 2021 and by 18% to $12.6 billion in the first half of 2021, primarily driven by Veklury sales.
  • 2Net income attributable to Gilead was $1.5 billion ($1.21 EPS) in Q2 2021, a significant improvement from a net loss of $3.3 billion ($2.66 loss EPS) in Q2 2020.
  • 3HIV product sales saw a slight decrease of 2% to $3.9 billion in Q2 2021, impacted by expected generic competition for Truvada and Atripla, but Biktarvy demonstrated strong growth.
  • 4Veklury (remdesivir) sales were $829 million in Q2 2021 and $2.3 billion in the first half, with no comparable sales in the prior year.
  • 5Cell Therapy product sales increased by 39% to $219 million in Q2 2021, driven by Yescarta and the launch of Tecartus.
  • 6The company repurchased approximately 0.7 million shares for $43 million in Q2 2021, with $6.5 billion remaining authorization for stock repurchases.
  • 7Cash flow from operations remained strong, totaling $4.9 billion for the first half of 2021.

Frequently Asked Questions

The primary driver of revenue growth was the sales of Veklury (remdesivir), Gilead's treatment for hospitalized patients with COVID-19. Veklury generated $829 million in sales during the second quarter of 2021.

HIV product sales experienced a slight decrease of 2% to $3.9 billion in Q2 2021 compared to the prior year. This was primarily due to the expected impact of generic competition following the loss of exclusivity for Truvada and Atripla in the U.S. in October 2020. However, Biktarvy, another key HIV medication, continued to show strong growth across all geographies.

Gilead maintains a strong liquidity position. Cash, cash equivalents, and marketable debt securities totaled $7.4 billion as of June 30, 2021. The company generated $4.9 billion in operating cash flow in the first half of 2021 and believes its current capital resources and operating cash flow will be adequate to meet its foreseeable needs.

Gilead is involved in several legal proceedings, including patent litigation related to key products like Yescarta and Biktarvy, and product liability claims. While the company believes these matters are without merit, adverse outcomes could potentially result in significant monetary damages. The company continues to defend itself vigorously.