Gilead Sciences Announces Fourth Quarter and Full Year 2011 Financial Results

Gilead Sciences Announces Fourth Quarter and Full Year 2011 Financial Results

 


- Fourth Quarter Product Sales of $2.13 Billion, up 11% Year over Year -
 
- Full Year 2011 Product Sales of $8.10 Billion, up 10% over 2010 -
 
- Full Year 2011 Non-GAAP EPS of $3.86, up 5% over 2010 -
 
- Full Year 2011 Operating Cash Flows of $3.64 Billion -
 
FOSTER CITY, Calif.--(BUSINESS WIRE)--Feb. 2, 2012-- Gilead Sciences, Inc. (Nasdaq:GILD) announced today its results of operations for the fourth quarter and full year 2011. Total revenues for the fourth quarter of 2011 increased 10 percent to $2.20 billion, from $2.00 billion for the fourth quarter of 2010. Net income for the fourth quarter of 2011 was $665.1 million, or $0.87 per diluted share, compared to $629.4 million, or $0.76 per diluted share for the fourth quarter of 2010. Non-GAAP net income for the fourth quarter of 2011, which excludes after-tax acquisition-related, restructuring and stock-based compensation expenses, was $743.1 million, or $0.97 per diluted share, compared to $779.3 million, or $0.95 per diluted share for the fourth quarter of 2010.

Full year 2011 total revenues were $8.39 billion, up 5 percent compared to $7.95 billion for 2010. Net income for 2011 was $2.80 billion, or $3.55 per diluted share, compared to $2.90 billion, or $3.32 per diluted share for 2010. Non-GAAP net income for 2011, which excludes after-tax acquisition-related, restructuring and stock-based compensation expenses, was $3.04 billion, or $3.86 per diluted share, compared to $3.21 billion, or $3.69 per diluted share for 2010.

Product Sales
 
Product sales increased 11 percent to $2.13 billion for the fourth quarter of 2011, compared to $1.93 billion in the fourth quarter of 2010. For 2011, product sales increased 10 percent to $8.10 billion compared to $7.39 billion in 2010. This increase in product sales was driven primarily by Gilead's antiviral franchise, resulting from continued growth in sales of Atripla® (efavirenz 600 mg/emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg) and Truvada®(emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg).

Antiviral Franchise
 
Antiviral product sales increased 9 percent to $1.86 billion in the fourth quarter of 2011, up from $1.70 billion for the same quarter of 2010, reflecting sales growth of 12 percent in the U.S. and 5 percent in Europe. For 2011, antiviral product sales increased 8 percent to $7.05 billion from $6.54 billion in 2010, reflecting sales growth of 9 percent in Europe and 6 percent in the U.S.
Atripla
 
Sales of Atripla increased 11 percent to $863.3 million for the fourth quarter of 2011, up from $775.2 million in the fourth quarter of 2010, reflecting sales growth of 11 percent in the U.S. and 10 percent in Europe. For 2011, Atripla sales increased 10 percent to $3.22 billion from $2.93 billion in 2010.
Truvada
 
Sales of Truvada increased 9 percent to $746.0 million for the fourth quarter of 2011, up from $681.7 million in the fourth quarter of 2010, reflecting sales growth of 10 percent in the U.S. and 5 percent in Europe. For 2011, Truvada sales increased 8 percent to $2.88 billion from $2.65 billion in 2010.
Viread
 
Sales of Viread® (tenofovir disoproxil fumarate) were consistent at $190.9 million for the fourth quarter of 2011, compared to $191.1 million in the fourth quarter of 2010. For 2011, Viread sales increased 1 percent to $737.9 million from $732.2 million in 2010.
Complera
 
Sales of Complera® (emtricitabine 200 mg/ rilpilvirine 25 mg/ tenofovir disoproxil fumarate 300 mg) were $19.7 million for the fourth quarter of 2011 and $38.7 million for 2011. The U.S. Food and Drug Administration (FDA) approved Complera, a new once-daily, single-tablet complete HIV treatment regimen for patients new to therapy in August 2011. In November 2011, the European Commission granted marketing authorization for the product to be marketed in Europe with the trade name Eviplera®.

Letairis
 
Sales of Letairis® (ambrisentan) increased 23 percent to $78.7 million for the fourth quarter of 2011, up from $64.0 million for the fourth quarter of 2010. For 2011, Letairis sales increased 22 percent to $293.4 million from $240.3 million in 2010.

Ranexa
 
Sales of Ranexa® (ranolazine) increased 23 percent to $83.7 million for the fourth quarter of 2011, up from $67.8 million for the fourth quarter of 2010. For 2011, Ranexa sales increased 33 percent to $320.0 million from $239.8 million in 2010.

Other Products
 
Sales of other products were $151.1 million for the fourth quarter of 2011 compared to $150.4 million for the fourth quarter of 2010 and included AmBisome® (amphotericin B) liposome for injection, Hepsera® (adefovir dipivoxil), Emtriva® (emtricitabine) and Cayston® (aztreonam for inhalation solution). For 2011, sales of other products increased 2 percent to $612.7 million from $601.1 million in 2010.

Royalty, Contract and Other Revenues
 
Royalty, contract and other revenues from collaborations were $67.0 million in the fourth quarter of 2011, down 2 percent from $68.4 million in the fourth quarter of 2010. For 2011, royalty, contract and other revenues were $283.0 million, down 49 percent from $559.5 million in 2010, primarily due to lower Tamiflu royalties from F. Hoffmann-La Roche Ltd as pandemic planning initiatives worldwide have declined.

Research and Development
 
Research and development (R&D) expenses in the fourth quarter of 2011 were $402.2 million, compared to $392.8 million for the fourth quarter of 2010. Non-GAAP R&D expenses for the fourth quarter of 2011, which exclude acquisition-related, restructuring and stock-based compensation expenses, were $349.3 million, compared to $231.8 million for the fourth quarter of 2010. For 2011, R&D expenses were $1.23 billion compared to $1.07 billion in 2010. Non-GAAP R&D expenses for 2011 were $1.12 billion compared to $838.8 million in 2010. The increase in non-GAAP R&D expenses was due primarily to increased clinical activities and expenses associated with acquisitions, collaborations and continued advancements of our clinical pipeline.

Selling, General and Administrative
 
Selling, general and administrative (SG&A) expenses in the fourth quarter of 2011 were $346.2 million, compared to $280.2 million for the fourth quarter of 2010. Non-GAAP SG&A expenses for the fourth quarter of 2011, which exclude acquisition-related, restructuring and stock-based compensation expenses, were $289.9 million, compared to $239.3 million for the fourth quarter of 2010. For 2011, SG&A expenses were $1.24 billion compared to $1.04 billion in 2010. Non-GAAP SG&A expenses for 2011 were $1.09 billion compared to $912.6 million in 2010. The increase in non-GAAP SG&A expenses was driven primarily by the impact of the pharmaceutical excise tax resulting from the U.S. healthcare reform, increased expenses associated with the ongoing growth of Gilead's business, and increased bad debt expense due to slower collections in certain Southern European countries.

Income Taxes
 
The effective tax rate for 2011 was 23.6 percent compared to 26.2 percent for 2010. The decrease was primarily due to lower state taxes and the geographic mix of product sales, partially offset by the impact of the U.S. pharmaceutical excise tax.

Net Foreign Currency Exchange Impact
 
The net foreign currency exchange impact on fourth quarter 2011 revenues and pre-tax earnings was an unfavorable $21.2 million and $22.1 million, respectively, compared to the fourth quarter of 2010. The net foreign currency exchange impact on full year 2011 revenues and pre-tax earnings was a favorable $21.4 million and an unfavorable $18.6 million, respectively, compared to 2010.

Cash, Cash Equivalents and Marketable Securities
 
As of December 31, 2011, Gilead had cash, cash equivalents and marketable securities of $9.96 billion compared to $5.32 billion as of December 31, 2010, which included the proceeds from $3.70 billion of investment grade bonds raised to partially fund the Pharmasset, Inc. (Pharmasset) acquisition. Gilead generated $3.64 billion of operating cash flow in 2011 of which $978.1 million was generated in the fourth quarter of 2011.

Acquisition of Pharmasset, Inc.
 
In November, Gilead and Pharmasset announced that the companies had signed a definitive agreement under which Gilead would acquire Pharmasset for $137 per share in cash, or approximately $11.1 billion. In December, Gilead commenced a tender offer to purchase all outstanding common stock of Pharmasset. The acquisition was completed on January 17, 2012 at which time Pharmasset became a wholly-owned subsidiary of Gilead.

Other Corporate Highlights
 
In October, Gilead announced that it had entered into a licensing agreement with Boehringer Ingelheim (BI), under which BI granted Gilead exclusive worldwide rights for the research, development and commercialization of its novel non-catalytic site integrase inhibitors for HIV. This included the lead compound BI 224436, which has been evaluated in a Phase 1a dose-escalation study to assess bioavailability and pharmacokinetics in healthy volunteers.

Also in October, Gilead announced that it had entered into an exclusive worldwide licensing and collaboration agreement with GlobeImmune, Inc. for the development and commercialization of therapeutic vaccine products for use in conjunction with Viread and other oral therapies for the treatment of chronic hepatitis B.

Lastly, in October, Gilead announced a licensing agreement with Bristol-Myers Squibb (BMS) for BMS to develop and commercialize a fixed-dose combination containing BMS's protease inhibitor atazanavir and Gilead's cobicistat, a pharmacoenhancing or "boosting" agent that increases blood levels of certain HIV medicines to potentially allow for one-pill, once-daily dosing.

In November, Gilead announced that it had entered into a license agreement with Tibotec Pharmaceuticals (Tibotec) for the development and commercialization of a single-tablet regimen combining Tibotec's darunavir with Gilead's emtricitabine; the investigational agent GS 7340, a novel prodrug of tenofovir; and cobicistat.

In December, Gilead announced that it will donate 445,000 vials of AmBisome over five years to help the World Health Organization treat more than 50,000 patients with visceral leishmaniasis, a parasitic disease that is prevalent in developing world countries.

Product and Pipeline Update
 
Antiviral Franchise
 
In October, Gilead announced that it submitted a New Drug Application (NDA) to the FDA for marketing approval of the "Quad", a complete single-tablet regimen of elvitegravir, cobicistat, emtricitabine and tenofovir disoproxil fumarate for the treatment of HIV-1 infection in adults. Subsequently, the FDA accepted the NDA and has set a target review date of August 27, 2012 under the Prescription Drug User Fee Act. Gilead submitted the Marketing Authorisation Application (MAA) for the Quad for the treatment of HIV-1 infection in adults by the European Medicines Agency (EMA) on November 24, 2011. The application was successfully validated by EMEA on December 20, 2011.

In November, Gilead announced positive five-year data from the open-label phase of two pivotal Phase 3 clinical trials (Studies 102 and 103) evaluating the efficacy of Viread for the treatment of chronic hepatitis B virus infection among primarily treatment-naïve patients. The findings were presented at the 62nd annual meeting of the American Association for the Study of Liver Diseases in San Francisco.

Also in November, the European Commission granted marketing authorization for Eviplera, a complete once-daily single-tablet regimen for the treatment of HIV-1 infection in antiretroviral treatment-naïve adults with a viral load less than or equal to 100,000 HIV-1 RNA copies/mL. The authorization allowed for the commercialization of Eviplera in all 27 countries of the European Union.

In December, Gilead announced Phase 3 clinical trial results showing that cobicistat, which increases blood levels of certain HIV medicines to allow for one-pill, once-daily dosing, met its 48-week primary objective of non-inferiority to ritonavir. These data have been submitted for presentation at a scientific conference in 2012.

Also in December, Phase 3 clinical trial results showing that elvitegravir, an integrase inhibitor being evaluated for the treatment of HIV-1 infection, was non-inferior to the integrase inhibitor raltegravir after two years (96 weeks) of therapy in treatment-experienced patients. Gilead plans to file for U.S. regulatory approval of elvitegravir in the second quarter of 2012.

Gilead also announced in December that the submission of a supplemental NDA (sNDA) to the FDA for the approval of once-daily Truvada for pre-exposure prophylaxis (PrEP) to reduce the risk of HIV-1 infection among uninfected adults. If the sNDA is approved, Truvada would be the first agent indicated for uninfected individuals to reduce the risk of acquiring HIV through sex, a prevention approach called PrEP.

Cardiovascular Franchise
 
In November, Gilead and the Cardiovascular Research Foundation announced the initiation of RIVER-PCI (ranolazine for incomplete vessel revascularization post-percutaneous coronary intervention (PCI)), a Phase 3 clinical trial evaluating the utility of ranolazine to prevent major adverse cardiovascular events in patients with a history of chronic angina who have incomplete revascularization following PCI.

Conference Call
 
At 5:00 p.m. Eastern Time today, Gilead's management will host a conference call and a simultaneous webcast to discuss results from its fourth quarter and full year 2011 as well as provide 2012 guidance and a general business update. To access the webcast live via the internet, please connect to the company's website at www.gilead.com 15 minutes prior to the conference call to ensure adequate time for any software download that may be needed to hear the webcast. Alternatively, please call 1-800-260-8140 (U.S.) or 1-617-614-3672 (international) and dial the participant passcode 15171649 to access the call.

A replay of the webcast will be archived on the company's website for one year, and a phone replay will be available approximately two hours following the call through February 6, 2012. To access the phone replay, please call 1-888-286-8010 (U.S.) or 1-617-801-6888 (international) and dial the participant passcode 32699245.

About Gilead
 
Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes innovative therapeutics in areas of unmet medical need. Gilead's mission is to advance the care of patients suffering from life-threatening diseases worldwide. Headquartered in Foster City, California, Gilead has operations in North America, Europe and Asia Pacific.

Non-GAAP Financial Information
 
Gilead has presented certain financial information in accordance with GAAP and also on a non-GAAP basis for the fourth quarter and full year of 2011 and 2010. Management believes this non-GAAP information is useful for investors, taken in conjunction with Gilead's GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Gilead's operating results as reported under U.S. GAAP. A reconciliation between GAAP and non-GAAP financial information is provided in the table on page 8.

Forward-looking Statements
 
Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Gilead cautions readers that forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: Gilead's ability to achieve its anticipated full year 2012 financial results, including the possibility that its full year 2012 guidance may be revised at a later date; Gilead's ability to sustain growth in revenues for its antiviral, cardiovascular and respiratory franchises; unpredictable variability of Tamiflu royalties and the strong relationship between this royalty revenue and global pandemic planning and supply; the availability of funding for state AIDS Drug Assistance Programs (ADAPs) and their ability to purchase at levels to support the number of patients that rely on ADAPs; the levels of inventory held by wholesalers and retailers which may cause fluctuations in Gilead's earnings; Gilead's ability to submit NDAs for new product candidates in the timelines currently anticipated, including for cobicistat and elvitegravir; Gilead's ability to receive regulatory approvals in a timely manner or at all, for new and current products, including the Quad or Truvada for PrEP to reduce the risk of HIV infection; Gilead's ability to successfully commercialize its products, including Complera and Eviplera; Gilead's ability to successfully develop its respiratory, cardiovascular and oncology franchises; safety and efficacy data from clinical studies may not warrant further development of Gilead's product candidates, including the RIVER-PCI clinical trial evaluating ranolazine; the potential for additional austerity measures in European countries that may increase the amount of discount required on Gilead's products; fluctuations in the foreign exchange rate of the U.S. dollar that may cause an unfavorable foreign currency exchange impact on Gilead's future revenues and pre-tax earnings; Gilead's ability advance Pharmasset's product pipeline or develop an all-oral antiviral regimen for HCV; the effects of the Pharmasset acquisition on relationships with employees and the risk that anticipated synergies and benefits will not be realized; risks that Gilead will not commercialize any novel non-catalytic site integrase inhibitors for HIV, including BI 224436, under its licensing agreement with BI; risks that Gilead's collaboration with GlobeImmune, Inc. will not lead to the commercialization of therapeutic vaccine products for use in conjunction with Viread and other oral therapies for the treatment of chronic hepatitis B; risks that the collaboration with BMS will not lead to the commercialization of a fixed-dose combination containing atazanavir and cobicistat; risks that the collaboration with Tibotec will not lead to the commercialization of a single-tablet regimen containing darunavir, emtricitabine, GS 7340 and cobicistat; and other risks identified from time to time in Gilead's reports filed with the U.S. Securities and Exchange Commission. In addition, Gilead makes estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. Gilead bases its estimates on historical experience and on various other market-specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates. You are urged to consider statements that include the words "may," "will," "would," "could," "should," "might," "believes," "estimates," "projects," "potential," "expects," "plans," "anticipates," "intends," "continues," "forecast," "designed," "goal," or the negative of those words or other comparable words to be uncertain and forward-looking. Gilead directs readers to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 and other subsequent disclosure documents filed with the Securities and Exchange Commission and press releases. Gilead claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. All forward-looking statements are based on information currently available to Gilead, and Gilead assumes no obligation to update any such forward-looking statements.

Truvada, Viread, Hepsera, Complera, Eviplera, Emtriva, AmBisome, Letairis, Cayston and Ranexa are registered trademarks of Gilead Sciences, Inc.
 
Atripla is a registered trademark of Bristol-Myers Squibb & Gilead Sciences, LLC.
 
Tamiflu is a registered trademark of F. Hoffmann-La Roche Ltd.
 
For more information on Gilead Sciences, Inc., please visit www.gilead.com or call the Gilead Public Affairs Department at 1-800-GILEAD-5 (1-800-445-3235).
 


GILEAD SCIENCES, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 (unaudited)

 

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

2011

 

 

2010

 

 

 

2011

 

2010

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

$

2,133,334

 

 

$

1,930,238

 

 

 

$

8,102,359

 

 

$

7,389,921

 

 

 

Royalty, contract and other revenues

 

 

67,044

 

 

 

68,449

 

 

 

 

283,026

 

 

 

559,499

 

 

Total revenues

 

 

2,200,378

 

 

 

1,998,687

 

 

 

 

8,385,385

 

 

 

7,949,420

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

584,447

 

 

 

496,337

 

 

 

 

2,124,410

 

 

 

1,869,876

 

 

 

Research and development

 

 

402,236

 

 

 

392,760

 

 

 

 

1,229,151

 

 

 

1,072,930

 

 

 

Selling, general and administrative

 

 

346,219

 

 

 

280,209

 

 

 

 

1,241,983

 

 

 

1,044,392

 

 

Total costs and expenses

 

 

1,332,902

 

 

 

1,169,306

 

 

 

 

4,595,544

 

 

 

3,987,198

 

 

Income from operations

 

 

867,476

 

 

 

829,381

 

 

 

 

3,789,841

 

 

 

3,962,222

 

 

Interest and other income, net

 

 

26,365

 

 

 

10,764

 

 

 

 

66,581

 

 

 

60,287

 

 

Interest expense

 

 

(74,998

)

 

 

(40,622

)

 

 

 

(205,418

)

 

 

(108,961

)

 

Income before provision for income taxes

 

 

818,843

 

 

 

799,523

 

 

 

 

3,651,004

 

 

 

3,913,548

 

 

Provision for income taxes

 

 

157,084

 

 

 

173,158

 

 

 

 

861,945

 

 

 

1,023,799

 

 

Net income

 

 

661,759

 

 

 

626,365

 

 

 

 

2,789,059

 

 

 

2,889,749

 

 

Net loss attributable to noncontrolling interest

 

 

3,386

 

 

 

3,054

 

 

 

 

14,578

 

 

 

11,508

 

 

Net income attributable to Gilead

 

$

665,145

 

 

$

629,419

 

 

 

$

2,803,637

 

 

$

2,901,257

 

 


Net income per share attributable to Gilead common stockholders - basic

 

$

0.88

 

 

$

0.78

 

 

 

$

3.62

 

 

$

3.39

 

 


Net income per share attributable to Gilead common stockholders - diluted

 

$

0.87

 

 

$

0.76

 

 

 

$

3.55

 

 

$

3.32

 

 

Shares used in per share calculation - basic

 

 

752,224

 

 

 

809,097

 

 

 

 

774,903

 

 

 

856,060

 

 

Shares used in per share calculation - diluted

 

 

766,326

 

 

 

824,076

 

 

 

 

790,118

 

 

 

873,396

 

 


GILEAD SCIENCES, INC.

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

 

(unaudited)

 

(in thousands, except percentages and per share amounts)

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

2011

 

 

 

2010

 

 

 

2011

 

 

 

2010

 

 

Cost of goods sold reconciliation:

 

 

 

 

 

 

 

 

 

 

 GAAP cost of goods sold

 

 

$

584,447

 

 

$

496,337

 

 

$

2,124,410

 

 

$

1,869,876

 

 

 

Acquisition-related amortization of inventory mark-up

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(7,020

)

 

 

Acquisition-related amortization of purchased intangibles

 

 

 

(17,407

)

 

 

(14,981

)

 

 

(69,629

)

 

 

(59,927

)

 

 

Stock-based compensation expenses

 

 

 

(668

)

 

 

(1,632

)

 

 

(8,433

)

 

 

(10,180

)

 

Non-GAAP cost of goods sold

 

 

$

566,372

 

 

$

479,724

 

 

$

2,046,348

 

 

$

1,792,749

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product gross margin reconciliation:

 

 

 

 

 

 

 

 

 

 

 GAAP product gross margin

 

 

 

72.6

%


 

 

74.4

%

 

 

73.8

%

 

 

74.8

%

 

 

Acquisition-related amortization of inventory mark-up

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

0.1

%

 

 

Acquisition-related amortization of purchased intangibles

 

 

 

0.8

%

 

 

0.8

%

 

 

0.9

%

 

 

0.8

%

 

 

Stock-based compensation expenses

 

 

 

0.0

%

 

 

0.1

%

 

 

0.1

%

 

 

0.1

%

 

Non-GAAP product gross margin (1)

 

 

 

73.4

%


 

 

75.3

%

 

 

74.8

%

 

 

75.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses reconciliation:

 

 

 

 

 

 

 

 

 

 

 GAAP research and development expenses

 

 

$

402,236

 

 

$

392,760

 

 

$

1,229,151

 

 

$

1,072,930

 

 

 

Acquisition-related IPR&D impairment

 

 

 

(26,630

)

 

 

(136,000

)

 

 

(26,630

)

 

 

(136,000

)

 

 

Acquisition-related transaction costs

 

 

 

-

 

 

 

-

 

 

 

(446

)

 

 

-

 

 

 

Acquisition-related remeasurement of contingent consideration

 

 

 

(7,286

)

 

 

-

 

 

 

(8,484

)

 

 

-

 

 

 

Restructuring expenses

 

 

 

(78

)

 

 

(3,493

)

 

 

(1,438

)

 

 

(14,038

)

 

 

Stock-based compensation expenses

 

 

 

(18,961

)

 

 

(21,512

)

 

 

(73,490

)

 

 

(84,048

)

 

Non-GAAP research and development expenses

 

 

$

349,281

 

 

$

231,755

 

 

$

1,118,663

 

 

$

838,844

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses reconciliation:

 

 

 

 

 

 

 

 

 

 

 GAAP selling, general and administrative expenses

 

 

$

346,219

 

 

$

280,209

 

 

$

1,241,983

 

 

$

1,044,392

 

 

 

Acquisition-related transaction costs

 

 

 

(28,466

)

 

 

-

 

 

 

(29,744

)

 

 

(387

)

 

 

Restructuring expenses

 

 

 

(1,233

)

 

 

(10,697

)

 

 

(7,287

)

 

 

(25,600

)

 

 

Stock-based compensation expenses

 

 

 

(26,634

)

 

 

(30,207

)

 

 

(110,455

)

 

 

(105,813

)

 

Non-GAAP selling, general and administrative expenses

 

 

$

289,886

 

 

$

239,305

 

 

$

1,094,497

 

 

$

912,592

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin reconciliation:

 

 

 

 

 

 

 

 

 

 

 GAAP operating margin

 

 

 

39.4

%

 

 

41.5

%

 

 

45.2

%

 

 

49.8

%

 

 

Acquisition-related transaction costs

 

 

 

1.3

%

 

 

-

 

 

 

0.4

%

 

 

0.0

%

 

 

Acquisition-related amortization of inventory mark-up

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

0.1

%

 

 

Acquisition-related amortization of purchased intangibles

 

 

 

0.8

%

 

 

0.7

%

 

 

0.8

%

 

 

0.8

%

 

 

Acquisition-related IPR&D impairment

 

 

 

1.2

%

 

 

6.8

%

 

 

0.3

%

 

 

1.7

%

 

 

Acquisition-related remeasurement of contingent consideration

 

 

 

0.3

%

 

 

-

 

 

 

0.1

%

 

 

-

 

 

 

Restructuring expenses

 

 

 

0.1

%

 

 

0.7

%

 

 

0.1

%

 

 

0.5

%

 

 

Stock-based compensation expenses

 

 

 

2.1

%

 

 

2.7

%

 

 

2.3

%

 

 

2.5

%

 

Non-GAAP operating margin (1)

 

 

 

45.2

%

 

 

52.4

%

 

 

49.2

%

 

 

55.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense reconciliation:

 

 

 

 

 

 

 

 

 

 

 GAAP interest expense

 

 

 

(74,998

)

 

 

(40,622

)

 

 

(205,418

)

 

 

(108,961

)

 

 

Acquisition-related transaction costs

 

 

 

23,817

 

 

 

-

 

 

 

23,817

 

 

 

-

 

 

Non-GAAP Interest Expense

 

 

 

(51,181

)

 

 

(40,622

)

 

 

(181,601

)

 

 

(108,961

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Gilead reconciliation:

 

 

 

 

 

 

 

 

 

 

 GAAP net income attributable to Gilead, net of tax

 

 

$

665,145

 

 

$

629,419

 

 

$

2,803,637

 

 

$

2,901,257

 

 

 

Acquisition-related transaction costs

 

 

 

12,798

 

 

 

-

 

 

 

14,522

 

 

 

388

 

 

 

Acquisition-related amortization of inventory mark-up

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,090

 

 

 

Acquisition-related amortization of purchased intangibles

 

 

 

13,275

 

 

 

11,663

 

 

 

52,500

 

 

 

44,343

 

 

 

Acquisition-related IPR&D impairment

 

 

 

7,989

 

 

 

86,328

 

 

 

7,989

 

 

 

86,328

 

 

 

Acquisition-related remeasurement of contingent consideration

 

 

 

7,584

 

 

 

-

 

 

 

8,484

 

 

 

-

 

 

 

Restructuring expenses

 

 

 

1,010

 

 

 

10,781

 

 

 

6,579

 

 

 

29,269

 

 

 

Stock-based compensation expenses

 

 

 

35,303

 

 

 

41,090

 

 

 

145,053

 

 

 

147,710

 

 

Non-GAAP net income attributable to Gilead, net of tax

 

 

$

743,104

 

 

$

779,281

 

 

$

3,038,764

 

 

$

3,214,385

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share reconciliation:

 

 

 

 

 

 

 

 

 

 

 GAAP diluted earnings per share

 

 

$

0.87

 

 

$

0.76

 

 

$

3.55

 

 

$

3.32

 

 

 

Acquisition-related transaction costs

 

 

 

0.02

 

 

 

-

 

 

 

0.02

 

 

 

0.00

 

 

 

Acquisition-related amortization of inventory mark-up

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

0.01

 

 

 

Acquisition-related amortization of purchased intangibles

 

 

 

0.02

 

 

 

0.01

 

 

 

0.07

 

 

 

0.05

 

 

 

Acquisition-related IPR&D impairment

 

 

 

0.01

 

 

 

0.10

 

 

 

0.01

 

 

 

0.10

 

 

 

Acquisition-related remeasurement of contingent consideration

 

 

 

0.01

 

 

 

-

 

 

 

0.01

 

 

 

-

 

 

 

Restructuring expenses

 

 

 

0.00

 

 

 

0.01

 

 

 

0.01

 

 

 

0.03

 

 

 

Stock-based compensation expenses

 

 

 

0.05

 

 

 

0.05

 

 

 

0.18

 

 

 

0.17

 

 

Non-GAAP diluted earnings per share (1)

 

 

$

0.97

 

 

$

0.95

 

 

$

3.86

 

 

$

3.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculation (diluted) reconciliation:

 

 

 

 

 

 

 

 

 

 

 GAAP shares used in per share calculation (diluted)

 

 

 

766,326

 

 

 

824,076

 

 

 

790,118

 

 

 

873,396

 

 

 

Share impact of current stock-based compensation rules

 

 

 

(2,133

)

 

 

(2,185

)

 

 

(2,016

)

 

 

(1,741

)

 

Non-GAAP shares used in per share calculation (diluted)

 

 

 

764,193

 

 

 

821,891

 

 

 

788,102

 

 

 

871,655

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustment summary:

 

 

 

 

 

 

 

 

 

 

 

 Cost of goods sold adjustments

 

 

$

18,075

 

 

$

16,613

 

 

$

78,062

 

 

$

77,127

 

 

 

Research and development expenses adjustments

 

 

 

52,955

 

 

 

161,005

 

 

 

110,488

 

 

 

234,086

 

 

 

Selling, general and administrative expenses adjustments

 

 

 

56,333

 

 

 

40,904

 

 

 

147,486

 

 

 

131,800

 

 

 

Interest Expense

 

 

 

23,817

 

 

 

-

 

 

 

23,817

 

 

 

-

 

 

Total non-GAAP adjustments before tax

 

 

 

151,180

 

 

 

218,522

 

 

 

359,853

 

 

 

443,013

 

 

Income tax effect

 

 

 

(73,221

)

 

 

(68,660

)

 

 

(124,726

)

 

 

(129,885

)

 

Total non-GAAP adjustments after tax

 

 

$

77,959

 

 

$

149,862

 

 

$

235,127

 

 

$

313,128

 

 


GILEAD SCIENCES, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

 

 

2011

 

2010

 

 

 

 

(unaudited)

 

(Note 1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and marketable securities

 

$

9,963,972

 

$

5,318,071

 

Accounts receivable, net

 

 

1,951,167

 

 

1,621,966

 

Inventories

 

 

1,389,983

 

 

1,203,809

 

Property, plant and equipment, net

 

 

774,406

 

 

701,235

 

Intangible assets

 

 

2,066,966

 

 

1,425,592

 

Other assets

 

 

1,156,640

 

 

1,321,957

 

 

Total assets

 

$

17,303,134

 

$

11,592,630

 

 

 

 

 

 

 

 

Current liabilities

 

$

2,514,790

 

$

2,464,950

 

Long-term liabilities

 

 

7,920,995

 

 

3,005,843

 

Stockholders' equity (Note 2)

 

 

6,867,349

 

 

6,121,837

 

 

Total liabilities and stockholders' equity

 

$

17,303,134

 

$

11,592,630

 

 

 

 

 

 

 

 

Notes:

 

 

 

 

 

 

 

 

 

 

 

 

 


(1)


 

Derived from audited consolidated financial statements at that date.

 


(2)


 

As of December 31, 2011, there were 753,106 shares of common stock issued and outstanding.

 


GILEAD SCIENCES, INC.

 

PRODUCT SALES SUMMARY

 

 (unaudited)

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

 

 

December 31,

 

December 31,

 

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

Antiviral products:

 

 

 

 

 

 

 

 

 

 

Atripla - U.S.

 

$

547,469

 

$

494,516

 

$

2,022,049

 

$

1,908,881

 

 

Atripla - Europe

 

 

267,501

 

 

248,762

 

 

1,042,668

 

 

910,186

 

 

Atripla - Other International

 

 

48,345

 

 

31,933

 

 

159,801

 

 

107,512

 

 

 

 

 

863,315

 

 

775,211

 

 

3,224,518

 

 

2,926,579

 

 

 

 

 

 

 

 

 

 

 

 

 

Truvada - U.S.

 

 

373,574

 

 

339,047

 

 

1,385,411

 

 

1,308,931

 

 

Truvada - Europe

 

 

316,953

 

 

303,422

 

 

1,257,265

 

 

1,171,351

 

 

Truvada - Other International

 

 

55,475

 

 

39,217

 

 

232,465

 

 

169,626

 

 

 

 

 

746,002

 

 

681,686

 

 

2,875,141

 

 

2,649,908

 

 

 

 

 

 

 

 

 

 

 

 

 

Viread - U.S.

 

 

84,321

 

 

80,567

 

 

324,741

 

 

319,792

 

 

Viread - Europe

 

 

83,250

 

 

76,422

 

 

328,312

 

 

293,058

 

 

Viread - Other International

 

 

23,297

 

 

34,130

 

 

84,814

 

 

119,390

 

 

 

 

 

190,868

 

 

191,119

 

 

737,867

 

 

732,240

 

 

 

 

 

 

 

 

 

 

 

 

 

Hepsera - U.S.

 

 

14,450

 

 

16,458

 

 

57,259

 

 

76,548

 

 

Hepsera - Europe

 

 

14,845

 

 

23,651

 

 

75,138

 

 

110,672

 

 

Hepsera - Other International

 

 

3,001

 

 

3,506

 

 

12,282

 

 

13,372

 

 

 

 

 

32,296

 

 

43,615

 

 

144,679

 

 

200,592

 

 

 

 

 

 

 

 

 

 

 

 

 

Complera / Eviplera - U.S.

 

 

19,463

 

 

-

 

 

38,507

 

 

-

 

 

Complera / Eviplera - Europe

 

 

85

 

 

-

 

 

85

 

 

-

 

 

Complera / Eviplera - Other

 

 

155

 

 

-

 

 

155

 

 

-

 

 

 

 

 

19,703

 

 

-

 

 

38,747

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Emtriva - U.S.

 

 

4,734

 

 

4,397

 

 

17,216

 

 

16,742

 

 

Emtriva - Europe

 

 

1,698

 

 

1,659

 

 

6,860

 

 

6,875

 

 

Emtriva - Other International

 

 

1,357

 

 

1,026

 

 

4,688

 

 

4,062

 

 

 

 

 

7,789

 

 

7,082

 

 

28,764

 

 

27,679

 

 

 

 

 

 

 

 

 

 

 

 

Total Antiviral products - U.S.

 

 

1,044,011

 

 

934,985

 

 

3,845,183

 

 

3,630,894

 

Total Antiviral products - Europe

 

 

684,332

 

 

653,916

 

 

2,710,328

 

 

2,492,142

 

Total Antiviral products - Other International

 

 

131,630

 

 

109,812

 

 

494,205

 

 

413,962

 

 

 

 

 

1,859,973

 

 

1,698,713

 

 

7,049,716

 

 

6,536,998

 

 

 

 

 

 

 

 

 

 

 

 

AmBisome

 

 

80,784

 

 

75,501

 

 

330,156

 

 

305,856

 

Letairis

 

 

78,661

 

 

63,986

 

 

293,426

 

 

240,279

 

Ranexa

 

 

83,651

 

 

67,817

 

 

320,004

 

 

239,832

 

Other products

 

 

30,265

 

 

24,221

 

 

109,057

 

 

66,956

 

 

 

 

 

273,361

 

 

231,525

 

 

1,052,643

 

 

852,923

 

 

 

 

 

 

 

 

 

 

 

 

Total product sales

 

$

2,133,334

 

$

1,930,238

 

$

8,102,359

 

$

7,389,921

 

 


Source: Gilead Sciences, Inc.
 
Gilead Sciences, Inc.
Investors
Robin Washington, 650-522-5688
Susan Hubbard, 650-522-5715
Media
Amy Flood, 650-522-5643

 

 

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