01—Abstract
Summary
Summary of the 10-Q filed May 8, 2024. Cited figures are marked; the original filing is the authoritative source.
Gilead Sciences, Inc. reported a net loss of $4.17 billiona for the first quarter of 2024, a significant decrease from a net income of $1.01 billion in the prior year period.
This loss was largely attributed to a substantial acquired in-process research and development (IPR&D) charge of $3.9 billionb related to the acquisition of CymaBay Therapeutics and a $2.4 billion impairment charge for certain IPR&D assets connected to Trodelvy. Despite the net loss, total revenues saw a 5% increase year-over-year, reaching $6.69 billion. This growth was driven by strong performance in HIV and Oncology segments, with notable increases in Biktarvy and Trodelvy sales.
However, Veklury sales experienced a decline, reflecting decreased COVID-19 related hospitalizations. Financial activities during the quarter included significant investments in acquisitions, notably the CymaBay purchase, and ongoing share repurchases and dividend payments, contributing to a decrease in cash and cash equivalents.
02—Key points
Key Highlights
- Total revenues increased by 5% to $6.69 billion for Q1 2024, driven by growth in HIV and Oncology product sales.
- Reported a net loss of $4.17 billion for Q1 2024, compared to a net income of $1.01 billion in Q1 2023, primarily due to significant IPR&D charges and impairments.
- Acquisition of CymaBay Therapeutics for $3.9 billion (net cash) was completed in March 2024, adding seladelpar to the pipeline.
- A $2.4 billion impairment charge was recognized for IPR&D assets related to Trodelvy for metastatic NSCLC, following a Phase 3 study that did not meet its primary endpoint.
- HIV product sales grew 4% to $4.34 billion, led by strong demand for Biktarvy.
- Trodelvy sales increased by 39% to $309 million, reflecting higher demand.
- Net cash provided by operating activities was $2.22 billion, while net cash used in investing activities was $2.21 billion, largely due to the CymaBay acquisition.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2024, Gilead Sciences, Inc. lost $0.62.
- Revenue$6.69B100.0%
- Cost of revenue−$1.55B23.2%
- Gross profit$5.13B76.8%
- Operating costs−$9.46B141.4%
- Operating income−$4.32B64.6%
- Interest, other & tax$152.0M2.3%
- Net income−$4.17B62.4%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 8, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $6.69B$6.35B | +5.3% |
| Cost of Revenue | $1.55B$1.40B | +10.8% |
| Gross Profit | $5.13B$4.95B | +3.7% |
| SG&A Expenses | $1.38B$1.32B | +4.2% |
| Operating Expenses | $11.01B$4.65B | +136.9% |
| Operating Income | -$4.32B$1.71B | −353.5% |
| Interest Expense | $254.00M$230.00M | +10.4% |
| Net Income | -$4.17B$1.01B | −512.9% |
| EPS (Basic) | $-3.34$0.81 | −512.3% |
| EPS (Diluted) | $-3.34$0.80 | −517.5% |
| Shares Outstanding (Basic) | 1.25B1.25B | −0.1% |
| Shares Outstanding (Diluted) | 1.25B1.26B | −1.1% |
05—Questions
Frequently Asked Questions
What caused the significant net loss in the first quarter of 2024?
The net loss of $4.17 billion was primarily driven by a $3.9 billion acquired in-process research and development (IPR&D) charge related to the acquisition of CymaBay Therapeutics and a $2.4 billion impairment charge for certain IPR&D assets associated with Trodelvy. These are non-cash charges related to strategic investments and asset revaluations.
How did Gilead's key therapeutic areas perform in terms of revenue?
Total revenues increased by 5% to $6.69 billion. The HIV segment grew 4% to $4.34 billion, largely due to Biktarvy. Oncology product sales increased significantly, with Trodelvy up 39% to $309 million and Cell Therapy up 7% to $480 million. Liver Disease product sales also rose 9% to $737 million. Veklury (COVID-19 treatment) sales decreased by 3% to $555 million.
What were the main investing activities during the quarter?
The primary investing activity was the completion of the acquisition of CymaBay Therapeutics for $3.9 billion (net cash). The company also made investments in equity securities and capital expenditures, while proceeds were generated from the sale and maturity of marketable debt securities, which were used to help fund the CymaBay acquisition.
How is Gilead managing its debt and liquidity?
Gilead maintained a strong operating cash flow of $2.22 billion. As of March 31, 2024, cash and cash equivalents were $4.72 billion. The company continued to return capital to shareholders through $990 million in dividend payments and $400 million in stock repurchases during the quarter. A $1.75 billion senior unsecured note was repaid in April 2024.
06—Continue