GILEAD SCIENCES, INC. [GILD] Filings

10-Q 1 gild-20240630.htm FORM 10-Q gild-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File No. 0-19731

GILEAD SCIENCES, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware			94-3047598
(State or Other Jurisdiction of Incorporation or Organization)			(IRS Employer Identification No.)

333 Lakeside Drive, Foster City, California 94404

(Address of principal executive offices) (Zip Code)

650-574-3000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value, $0.001 per share

GILD

The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No x

Number of shares outstanding of the issuer’s common stock, par value $0.001 per share, as of July 31, 2024: 1,244,992,081

GILEAD SCIENCES, INC.

INDEX

PART I.

FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023

Notes to Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

We own or have rights to various trademarks, copyrights and trade names used in our business, including the following: GILEAD®, GILEAD SCIENCES®, KITE™, AMBISOME®, ATRIPLA®, BIKTARVY®, CAYSTON®, COMPLERA®, DESCOVY®, DESCOVY FOR PREP®, EMTRIVA®, EPCLUSA®, EVIPLERA®, GENVOYA®, HARVONI®, HEPCLUDEX®, HEPSERA®, JYSELECA®, LETAIRIS®, ODEFSEY®, SOVALDI®, STRIBILD®, SUNLENCA®, TECARTUS®, TRODELVY®, TRUVADA®, TRUVADA FOR PREP®, TYBOST®, VEKLURY®, VEMLIDY®, VIREAD®, VOSEVI®, YESCARTA® and ZYDELIG®. Other trademarks and trade names are the property of their respective owners.

Certain amounts and percentages in this Quarterly Report on Form 10-Q may not sum or recalculate due to rounding.

This Quarterly Report on Form 10-Q, including Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors, contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “hope,” “intend,” “may,” “might,” “plan,” “project,” “seek,” “should,” “target” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements other than statements of historical fact are forward-looking statements, including statements regarding overall trends; operating cost and revenue trends; liquidity and capital needs; plans and expectations with respect to products, product candidates, corporate strategy, business and operations, financial projections and the use of capital; collaboration and licensing arrangements; patent protection and estimated loss of exclusivity for our products and product candidates; ongoing litigation and investigation matters; and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions.

We have based these forward-looking statements on our current expectations about future events. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Our actual results may differ materially from those suggested by these forward-looking statements for various reasons, including those identified in Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements included in this report are made only as of the date hereof unless otherwise specified. Except as required under federal securities laws and the rules and regulations of U.S. Securities and Exchange Commission, we do not undertake, and specifically decline, any obligation to update any of these statements or to publicly announce the results of any revisions to any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise. In evaluating our business, you should carefully consider the risks described in Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q. Any of the risks contained herein could materially and adversely affect our business, results of operations and financial condition.

PART I. FINANCIAL INFORMATION

Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


(in millions, except per share amounts)	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	2,772	$	6,085
Short-term marketable debt securities	—		1,179
Accounts receivable, net	4,663		4,660
Inventories	2,026		1,787
Prepaid and other current assets	2,856		2,374
Total current assets	12,317		16,085
Property, plant and equipment, net	5,346		5,317
Long-term marketable debt securities	—		1,163
Intangible assets, net	22,832		26,454
Goodwill	8,314		8,314
Other long-term assets	4,770		4,792
Total assets	$	53,579	$	62,125
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	537	$	550
Accrued rebates	3,923		3,802
Other current liabilities	4,510		5,130
Current portion of long-term debt and other obligations, net	1,810		1,798
Total current liabilities	10,781		11,280
Long-term debt, net	21,540		23,189
Long-term income taxes payable	738		2,039
Deferred tax liability	907		1,588
Other long-term obligations	1,418		1,280
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, par value $0.001 per share; 5 shares authorized; none outstanding	—		—
Common stock, par value $0.001 per share; 5,600 shares authorized; 1,246 shares issued and outstanding	1		1
Additional paid-in capital	7,022		6,500
Accumulated other comprehensive income	93		28
Retained earnings	11,165		16,304
Total Gilead stockholders’ equity	18,281		22,833
Noncontrolling interest	(84)		(84)
Total stockholders’ equity	18,197		22,749
Total liabilities and stockholders’ equity	$	53,579	$	62,125

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions, except per share amounts)	2024		2023		2024		2023
Revenues:
Product sales	$	6,912	$	6,564	$	13,559	$	12,870
Royalty, contract and other revenues	41		35		81		81
Total revenues	6,954		6,599		13,640		12,951
Costs and expenses:
Cost of goods sold	1,544		1,442		3,096		2,843
Research and development expenses	1,351		1,407		2,871		2,854
Acquired in-process research and development expenses	38		236		4,169		717
In-process research and development impairment	—		—		2,430		—
Selling, general and administrative expenses	1,377		1,849		2,752		3,168
Total costs and expenses	4,309		4,934		15,317		9,581
Operating income (loss)	2,644		1,665		(1,678)		3,370
Interest expense	237		230		491		459
Other (income) expense, net	355		(152)		265		22
Income (loss) before income taxes	2,053		1,588		(2,433)		2,888
Income tax expense	438		549		123		865
Net income (loss)	1,614		1,039		(2,556)		2,024
Net loss attributable to noncontrolling interest	—		(6)		—		(32)
Net income (loss) attributable to Gilead	$	1,614	$	1,045	$	(2,556)	$	2,055
Basic earnings (loss) per share attributable to Gilead	$	1.29	$	0.84	$	(2.05)	$	1.65
Shares used in basic earnings (loss) per share attributable to Gilead calculation	1,247		1,249		1,247		1,249
Diluted earnings (loss) per share attributable to Gilead	$	1.29	$	0.83	$	(2.05)	$	1.63
Shares used in diluted earnings (loss) per share attributable to Gilead calculation	1,251		1,258		1,247		1,260

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2024		2023		2024		2023
Net income (loss)	$	1,614	$	1,039	$	(2,556)	$	2,024
Other comprehensive income, net:
Net foreign currency translation gain (loss)	1		37		(16)		32
Available-for-sale debt securities:
Net unrealized (loss) gain, net of tax impact of $0, $0, $0 and $0, respectively	—		(3)		—		6
Reclassifications to net income (loss), net of tax impact of $0, $0, $0 and $0, respectively	—		1		5		1
Net change	—		(2)		5		7
Cash flow hedges:
Net unrealized gain (loss), net of tax impact of $4, $1, $11 and $0, respectively	28		5		81		(1)
Reclassifications to net income (loss), net of tax impact of $1, $1, $1 and $4, respectively	(5)		(9)		(5)		(29)
Net change	23		(4)		77		(30)
Other comprehensive income, net	24		31		65		9
Comprehensive income (loss), net	1,639		1,070		(2,491)		2,032
Comprehensive loss attributable to noncontrolling interest, net	—		(6)		—		(32)
Comprehensive income (loss) attributable to Gilead, net	$	1,639	$	1,076	$	(2,491)	$	2,064

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)


	Three Months Ended June 30, 2024
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings
	Shares	Amount
Balance as of March 31, 2024	1,246	$	1	$	6,813	$	69	$	10,656	$	(84)	$	17,455
Net income	—	—		—		—		1,614		—		1,614
Other comprehensive income, net	—	—		—		24		—		—		24
Issuances under equity incentive plans	2	—		5		—		—		—		5
Stock-based compensation	—	—		209		—		—		—		209
Repurchases of common stock under repurchase programs ($66.67 average price per share)	(2)	—		(6)		—		(94)		—		(100)
Repurchases of common stock for employee tax withholding under equity incentive plans and other	(1)	—		—		—		(33)		—		(33)
Dividends declared ($0.77)	—	—		—		—		(978)		—		(978)
Balance as of June 30, 2024	1,246	$	1	$	7,022	$	93	$	11,165	$	(84)	$	18,197


	Six Months Ended June 30, 2024
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings
	Shares	Amount
Balance as of December 31, 2023	1,246	$	1	$	6,500	$	28	$	16,304	$	(84)	$	22,749
Net loss	—	—		—		—		(2,556)		—		(2,556)
Other comprehensive income, net	—	—		—		65		—		—		65
Issuances under employee stock purchase plan	1	—		80		—		—		—		80
Issuances under equity incentive plans	7	—		70		—		—		—		70
Stock-based compensation	—	—		397		—		—		—		397
Repurchases of common stock under repurchase programs ($74.59 average price per share)	(7)	—		(25)		—		(475)		—		(500)
Repurchases of common stock for employee tax withholding under equity incentive plans and other	(2)	—		—		—		(150)		—		(150)
Dividends declared ($1.54 per share)	—	—		—		—		(1,958)		—		(1,958)
Balance as of June 30, 2024	1,246	$	1	$	7,022	$	93	$	11,165	$	(84)	$	18,197

See accompanying notes.


	Three Months Ended June 30, 2023
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings
	Shares	Amount
Balance as of March 31, 2023	1,248	$	1	$	5,793	$	(20)	$	15,223	$	(58)	$	20,939
Net income (loss)	—	—		—		—		1,045		(6)		1,039
Other comprehensive income, net	—	—		—		31		—		—		31
Issuances under equity incentive plans	2	—		23		—		—		—		23
Stock-based compensation	—	—		198		—		—		—		198
Repurchases of common stock under repurchase programs ($79.68 average price per share)	(2)	—		(7)		—		(143)		—		(150)
Repurchases of common stock for employee tax withholding under equity incentive plans and other	—	—		—		—		(33)		—		(33)
Dividends declared ($0.75 per share)	—	—		—		—		(954)		—		(954)
Balance as of June 30, 2023	1,247	$	1	$	6,008	$	10	$	15,138	$	(64)	$	21,094


	Six Months Ended June 30, 2023
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings
	Shares	Amount
Balance as of December 31, 2022	1,247	$	1	$	5,550	$	2	$	15,687	$	(31)	$	21,209
Net income (loss)	—	—		—		—		2,055		(32)		2,024
Other comprehensive income, net	—	—		—		9		—		—		9
Issuances under employee stock purchase plan	1	—		67		—		—		—		67
Issuances under equity incentive plans	7	—		50		—		—		—		50
Stock-based compensation	—	—		363		—		—		—		363
Repurchases of common stock under repurchase programs ($81.56 average price per share)	(7)	—		(24)		—		(526)		—		(550)
Repurchases of common stock for employee tax withholding under equity incentive plans	(2)	—		—		—		(168)		—		(168)
Dividends declared ($1.50 per share)	—	—		—		—		(1,911)		—		(1,911)
Balance as of June 30, 2023	1,247	$	1	$	6,008	$	10	$	15,138	$	(64)	$	21,094

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Six Months Ended
	June 30,
(in millions)	2024		2023
Operating Activities:
Net (loss) income	$	(2,556)	$	2,024
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation expense	192		177
Amortization expense	1,192		1,144
Stock-based compensation expense	397		363
Deferred income taxes	(889)		(524)
Net loss from equity securities	405		187
Acquired in-process research and development expenses	4,169		717
In-process research and development impairment	2,430		—
Other	208		205
Changes in operating assets and liabilities:
Accounts receivable, net	(95)		549
Inventories	(115)		(453)
Prepaid expenses and other	(56)		66
Accounts payable	(11)		(275)
Income tax assets and liabilities, net	(1,379)		(189)
Accrued and other liabilities	(349)		91
Net cash provided by operating activities	3,544		4,082
Investing Activities:
Purchases of marketable debt securities	(244)		(1,105)
Proceeds from sales of marketable debt securities	2,265		317
Proceeds from maturities of marketable debt securities	327		719
Acquisitions, including in-process research and development, net of cash acquired	(4,195)		(794)
Purchases of equity securities	(444)		(192)
Capital expenditures	(235)		(248)
Other	12		(6)
Net cash used in investing activities	(2,514)		(1,309)
Financing Activities:
Proceeds from issuances of common stock	151		123
Repurchases of common stock under repurchase programs	(500)		(550)
Repayments of debt and other obligations	(1,851)		—
Payments of dividends	(1,962)		(1,913)
Other	(152)		(167)
Net cash used in financing activities	(4,314)		(2,507)
Effect of exchange rate changes on cash and cash equivalents	(29)		26
Net change in cash and cash equivalents	(3,313)		292
Cash and cash equivalents at beginning of period	6,085		5,412
Cash and cash equivalents at end of period	$	2,772	$	5,704

See accompanying notes.

GILEAD SCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying Condensed Consolidated Financial Statements and related Notes to Condensed Consolidated Financial Statements of Gilead Sciences, Inc. (“Gilead,” “we,” “our” or “us”) should be read in conjunction with the audited Consolidated Financial Statements and the related notes thereto for the year ended December 31, 2023, included in our Annual Report on Form 10-K filed with U.S. Securities and Exchange Commission. There have been no material changes to our organization or summary of significant accounting policies as disclosed in that filing.

These interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and include all adjustments consisting of normal recurring adjustments that the management of Gilead believes are necessary for a fair presentation of the periods presented and are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period.

Certain amounts and percentages in these Condensed Consolidated Financial Statements and accompanying notes may not sum or recalculate due to rounding.

2. REVENUES

Disaggregation of Revenues

The following table summarizes our Total revenues:


	Three Months Ended June 30, 2024								Three Months Ended June 30, 2023
(in millions)	U.S.		Europe		Rest of World		Total		U.S.		Europe		Rest of World		Total
Product sales:
HIV
Biktarvy	$	2,585	$	370	$	277	$	3,232	$	2,439	$	302	$	237	$	2,979
Descovy	434		25		26		485		460		25		31		516
Genvoya	372		45		23		440		455		56		29		540
Odefsey	233		72		10		315		267		74		11		351
Symtuza - Revenue share(1)	131		34		3		168		84		33		3		120
Other HIV(2)	65		25		15		105		74		31		15		120
Total HIV	3,821		571		353		4,745		3,778		521		326		4,626

Liver Disease
Sofosbuvir/Velpatasvir(3)	267		84		126		476		223		84		90		397
Vemlidy	117		11		115		243		96		10		113		219
Other Liver Disease(4)	47		47		19		113		37		37		21		95
Total Liver Disease	431		142		259		832		356		131		225		711

Veklury	76		53		85		214		97		52		107		256

Oncology
Cell Therapy
Tecartus	63		37		7		107		56		29		4		88
Yescarta	186		169		58		414		217		133		30		380
Total Cell Therapy	250		206		66		521		272		162		34		469

Trodelvy	224		69		26		320		189		53		17		260
Total Oncology	474		275		92		841		462		215		51		728

Other
AmBisome	17		69		65		151		20		69		61		151
Other(5)	98		8		24		130		64		10		17		92
Total Other	115		77		88		280		85		80		78		243
Total product sales	4,916		1,118		878		6,912		4,777		999		788		6,564
Royalty, contract and other revenues	25		15		1		41		6		28		1		35
Total revenues	$	4,941	$	1,133	$	879	$	6,954	$	4,784	$	1,027	$	789	$	6,599


	Six Months Ended June 30, 2024								Six Months Ended June 30, 2023
(in millions)	U.S.		Europe		Rest of World		Total		U.S.		Europe		Rest of World		Total
Product sales:
HIV
Biktarvy	$	4,900	$	735	$	542	$	6,177	$	4,600	$	606	$	449	$	5,656
Descovy	805		51		55		911		855		50		60		965
Genvoya	704		95		44		843		872		111		58		1,041
Odefsey	457		148		21		626		497		149		22		668
Symtuza - Revenue share(1)	236		67		6		309		182		70		7		259
Other HIV(2)	125		70		27		222		136		63		28		228
Total HIV	7,226		1,167		695		9,088		7,142		1,049		624		8,816

Liver Disease
Sofosbuvir/Velpatasvir(3)	515		163		203		881		427		174		181