10-QPeriod: Q3 FY2022

GILEAD SCIENCES, INC. Quarterly Report for Q3 Ended Sep 30, 2022

Filed November 2, 2022For Securities:GILD

Summary

Gilead Sciences, Inc. reported total revenues of $7.04 billion for the third quarter of 2022, a 5% decrease from the prior year's $7.42 billion. This decline was primarily driven by a significant drop in Veklury sales, down 52%, as COVID-19 hospitalizations decreased. However, growth in HIV products, cell therapy, and Trodelvy partially offset this decline. Net income attributable to Gilead stockholders was $1.79 billion, or $1.42 per diluted share, compared to $2.59 billion, or $2.05 per diluted share, in the same period last year. The decrease in net income was largely due to a $389 million charge related to the acquisition of MiroBio and a substantial $2.7 billion impairment charge on acquired in-process R&D assets recognized in the second quarter related to Trodelvy. Despite these charges, Gilead continues to invest in R&D and returned capital to shareholders through share repurchases and dividends.

Financial Highlights

58 data points
Beta

Revenue

$7.04B

80.2% Gross Margin

Net Income

$1.79B

25.4% Net Margin

EPS (Diluted)

$1.42

Total Assets

$62.56B

Cash & Equivalents

$4.70B

Free Cash Flow

$2.71B

Financial Statements
Beta
Revenue$7.04B
Cost of Revenue$1.40B
Gross Profit$5.65B
SG&A Expenses$1.21B
Operating Expenses$4.21B
Operating Income$2.84B
Interest Expense$229.00M
Net Income$1.79B
EPS (Basic)$1.43
EPS (Diluted)$1.42
Shares Outstanding (Basic)1.25B
Shares Outstanding (Diluted)1.26B

Key Highlights

  • 1Total revenues for Q3 2022 decreased 5% year-over-year to $7.04 billion, primarily due to a 52% decline in Veklury sales.
  • 2Net income attributable to Gilead stockholders decreased 31% year-over-year to $1.79 billion ($1.42 diluted EPS) due to charges and lower sales.
  • 3HIV product sales increased 7% driven by strong demand for Biktarvy.
  • 4Cell therapy sales surged 79%, reflecting continued uptake of Yescarta and Tecartus.
  • 5Trodelvy sales increased 78%, driven by its expanding use in metastatic breast and urothelial cancers.
  • 6The company incurred a $389 million charge related to the acquisition of MiroBio Ltd. in Q3 2022.
  • 7A significant $2.7 billion impairment charge on IPR&D assets related to Trodelvy was recorded in Q1 2022, impacting year-to-date profitability.

Frequently Asked Questions

The primary driver for the decrease in revenue for the third quarter of 2022 was the significant decline in Veklury (remdesivir) sales, which were down 52% year-over-year. This decrease is attributed to lower demand resulting from reduced COVID-19 hospitalization rates.

The decrease in net income was primarily caused by two major factors: a $389 million charge related to the acquisition of MiroBio in the third quarter of 2022, and a substantial $2.7 billion impairment charge on in-process research and development (IPR&D) assets related to Trodelvy, recognized in the first quarter of 2022. Lower product sales, particularly Veklury, also contributed to the decline.

HIV product sales showed strong growth, increasing by 7% year-over-year, driven by Biktarvy. Cell therapy sales experienced a significant increase of 79%, indicating strong market adoption of Yescarta and Tecartus. Trodelvy sales also grew substantially by 78%, reflecting expanded usage in oncology indications. However, Veklury sales declined significantly due to lower COVID-19 hospitalizations.

As of September 30, 2022, Gilead reported total assets of $62.6 billion and total liabilities of $41.5 billion. The company's long-term debt, net of current portion, was approximately $23 billion. Net cash provided by operating activities for the nine months ended September 30, 2022 was $6.5 billion, demonstrating strong operational cash generation. Financing activities primarily involved debt repayments ($1.5 billion), dividend payments ($2.8 billion), and stock repurchases ($604 million).