Gilead Sciences Announces Third Quarter 2013 Financial Results
Gilead Sciences, Inc.Robin Washington, 650-522-5688Patrick O'Brien, 650-522-1936orCara Miller, 650-522-1616
Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the quarter ended September 30, 2013. Total revenues for the third quarter of 2013 increased 15 percent to $2.78 billion, from $2.43 billion for the third quarter of 2012. Product sales increased 15 percent to $2.71 billion for the third quarter of 2013 compared to $2.36 billion for the third quarter of 2012. Net income for the third quarter of 2013 was $788.6 million, or $0.47 per diluted share compared to $675.5 million, or $0.43 per diluted share for the third quarter of 2012. Non-GAAP net income for the third quarter of 2013, which excludes acquisition-related, restructuring and stock-based compensation expenses, was $879.1 million, or $0.52 per diluted share compared to $788.9 million, or $0.50 per diluted share for the third quarter of 2012.
Product sales were driven primarily by growth in Gilead's antiviral franchise during the third quarter of 2013. Significantly contributing to the increase were sales of Stribild(elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg) which launched in the third quarter of 2012 and sales of Complera/Eviplera (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir disoproxil fumarate 300 mg). Product sales for the third quarter increased 20 percent in the U.S. and 5 percent in Europe compared to the third quarter of 2012.
Antiviral product sales increased 14 percent to $2.33 billion for the third quarter of 2013, up from $2.04 billion for the third quarter of 2012, reflecting sales growth of 19 percent in the U.S. and 6 percent in Europe. The increase reflects strong underlying demand for our new single tablet regimen products, specifically Stribild and Complera/Eviplera.
Cardiovascular product sales increased 25 percent to $250.9 million for the third quarter of 2013.
Non-GAAP research and development (R&D) expenses increased due to the progression of Gilead's clinical studies, particularly in oncology and HIV. Non-GAAP selling, general and administrative (SG&A) expenses increased primarily due to the ongoing growth and expansion of Gilead's business in preparation for the anticipated launch of sofosbuvir.
Interest expense decreased primarily due to the maturity of the May 2013 convertible senior notes and the repayment of $850.0 million in bank debt issued in connection with the acquisition of Pharmasset Inc.
The net foreign currency exchange impact on third quarter 2013 product sales and pre-tax earnings was an unfavorable $17.5 million and $15.9 million, respectively, compared to the third quarter of 2012.
As of September 30, 2013, Gilead had $2.76 billion of cash, cash equivalents and marketable securities compared to $2.58 billion as of December 31, 2012. During the first nine months of 2013, Gilead generated $2.38 billion in operating cash flow.
Gilead revised its full year 2013 guidance, which it initially provided on February 4, 2013 and reiterated on July 25, 2013:
* Non-GAAP product gross margin, expense and effective tax rate exclude the impact of acquisition-related, restructuring and stock-based compensation expenses, where applicable.
At 4:30 p.m. Eastern Time today, Gilead's management will host a conference call and a simultaneous webcast to discuss results from its third quarter 2013 as well as provide a general business update. To access the webcast live via the internet, please connect to the company's website at 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 1-866-825-3209 (U.S.) or 1-617-213-8061 (international) and dial the participant passcode 95755257 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 November 1, 2013. To access the phone replay, please call 1-888-286-8010 (U.S.) or 1-617-801-6888 (international) and dial the participant passcode 81078378.
Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes innovative therapeutics in areas of unmet medical need. The company'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.
Gilead has presented certain financial information in accordance with U.S. generally accepted accounting principles (GAAP) and also on a non-GAAP basis. Management believes this non-GAAP information is useful for investors, when considered 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 GAAP. A reconciliation between GAAP and non-GAAP financial information is provided in the table on pages 7 and 8.
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 2013 financial results; Gilead's ability to sustain growth in revenues for its antiviral, cardiovascular and respiratory programs; availability of funding for state AIDS Drug Assistance Programs (ADAPs); continued fluctuations in ADAP purchases driven by federal and state grant cycles which may not mirror patient demand and may cause fluctuations in Gilead's earnings; the possibility of unfavorable results from clinical trials involving sofosbuvir, the fixed-dose combination of sofosbuvir/ledipasvir, TAF and idelalisib; 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 the fixed-dose combination of sofosbuvir/ledipasvir for the treatment of HCV; Gilead's ability to receive regulatory approvals in a timely manner or at all, for new and current products, including sofosbuvir for the treatment of HCV and idelalisib for iNHL; Gilead's ability to successfully commercialize its products, including Stribild and Tybost; Gilead's ability to successfully develop its respiratory, cardiovascular and oncology/inflammation programs; safety and efficacy data from clinical studies may not warrant further development of Gilead's product candidates, including sofosbuvir, the fixed-dose combination of sofosbuvir/ledipasvir, TAF and idelalisib; 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; and other risks identified from time to time in Gilead's reports filed with the U.S. Securities and Exchange Commission (SEC). 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 press releases, Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 and other subsequent disclosure documents filed with the SEC. 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.
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