GILEAD SCIENCES, INC. [GILD] Filings

10-Q 1 gild-20240930.htm FORM 10-Q gild-20240930

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 September 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 October 31, 2024: 1,246,265,857

GILEAD SCIENCES, INC.

INDEX

PART I.

FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements

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

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

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

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

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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®, LIVDELZI®, 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)	September 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	5,037	$	6,085
Short-term marketable debt securities	—		1,179
Accounts receivable, net	4,587		4,660
Inventories	1,869		1,787
Prepaid and other current assets	3,287		2,374
Total current assets	14,779		16,085
Property, plant and equipment, net	5,391		5,317
Long-term marketable debt securities	—		1,163
Intangible assets, net	20,546		26,454
Goodwill	8,314		8,314
Other long-term assets	5,494		4,792
Total assets	$	54,525	$	62,125
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	903	$	550
Accrued rebates	4,113		3,802
Current portion of long-term debt and other obligations, net	1,812		1,798
Other current liabilities	4,896		5,130
Total current liabilities	11,725		11,280
Long-term debt, net	21,437		23,189
Long-term income taxes payable	782		2,039
Deferred tax liability	794		1,588
Other long-term obligations	1,396		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	7,327		6,500
Accumulated other comprehensive income	73		28
Retained earnings	11,073		16,304
Total Gilead stockholders’ equity	18,475		22,833
Noncontrolling interest	(84)		(84)
Total stockholders’ equity	18,390		22,749
Total liabilities and stockholders’ equity	$	54,525	$	62,125

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions, except per share amounts)	2024		2023		2024		2023
Revenues:
Product sales	$	7,515	$	6,994	$	21,074	$	19,864
Royalty, contract and other revenues	30		56		111		138
Total revenues	7,545		7,051		21,185		20,002
Costs and expenses:
Cost of goods sold	1,574		1,565		4,670		4,408
Research and development expenses	1,395		1,457		4,266		4,310
Acquired in-process research and development expenses	505		91		4,674		808
In-process research and development impairment	1,750		—		4,180		—
Selling, general and administrative expenses	1,433		1,315		4,184		4,482
Total costs and expenses	6,657		4,428		21,975		14,009
Operating income (loss)	888		2,623		(790)		5,993
Interest expense	238		232		728		692
Other (income) expense, net	(306)		72		(41)		95
Income (loss) before income taxes	956		2,318		(1,477)		5,206
Income tax (benefit) expense	(297)		146		(174)		1,010
Net income (loss)	1,253		2,172		(1,303)		4,196
Net loss attributable to noncontrolling interest	—		(8)		—		(40)
Net income (loss) attributable to Gilead	$	1,253	$	2,180	$	(1,303)	$	4,236
Basic earnings (loss) per share attributable to Gilead	$	1.00	$	1.75	$	(1.04)	$	3.39
Shares used in basic earnings (loss) per share attributable to Gilead calculation	1,247		1,248		1,247		1,249
Diluted earnings (loss) per share attributable to Gilead	$	1.00	$	1.73	$	(1.04)	$	3.37
Shares used in diluted earnings (loss) per share attributable to Gilead calculation	1,254		1,257		1,247		1,259

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2024		2023		2024		2023
Net income (loss)	$	1,253	$	2,172	$	(1,303)	$	4,196
Other comprehensive (loss) income, net:
Net foreign currency translation gain (loss)	54		(35)		38		(3)
Available-for-sale debt securities:
Net unrealized gain, net of tax impact of $0, $0, $0 and $0, respectively	—		4		—		10
Reclassifications to net income (loss), net of tax impact of $0, $0, $0 and $0, respectively	—		—		5		2
Net change	—		5		5		11
Cash flow hedges:
Net unrealized (loss) gain, net of tax impact of $(9), $9, $3 and $9, respectively	(61)		66		20		65
Reclassifications to net income (loss), net of tax impact of $2, $2, $2 and $6, respectively	(12)		(14)		(17)		(44)
Net change	(74)		51		3		21
Other comprehensive (loss) income, net	(20)		21		45		30
Comprehensive income (loss), net	1,233		2,193		(1,258)		4,226
Comprehensive loss attributable to noncontrolling interest, net	—		(8)		—		(40)
Comprehensive income (loss) attributable to Gilead, net	$	1,233	$	2,201	$	(1,258)	$	4,265

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)


	Three Months Ended September 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 June 30, 2024	1,246	$	1	$	7,022	$	93	$	11,165	$	(84)	$	18,197
Net income	—	—		—		—		1,253		—		1,253
Other comprehensive loss, net	—	—		—		(20)		—		—		(20)
Issuances under employee stock purchase plan	1	—		58		—		—		—		58
Issuances under equity incentive plans	4	—		45		—		—		—		45
Stock-based compensation	—	—		216		—		—		—		216
Repurchases of common stock under repurchase programs ($76.30 average price per share)	(4)	—		(15)		—		(285)		—		(300)
Repurchases of common stock for employee tax withholding under equity incentive plans and other	(1)	—		—		—		(82)		—		(82)
Dividends declared ($0.77)	—	—		—		—		(977)		—		(977)
Balance as of September 30, 2024	1,246	$	1	$	7,327	$	73	$	11,073	$	(84)	$	18,390


	Nine Months Ended September 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	—	—		—		—		(1,303)		—		(1,303)
Other comprehensive income, net	—	—		—		45		—		—		45
Issuances under employee stock purchase plan	2	—		139		—		—		—		139
Issuances under equity incentive plans	12	—		115		—		—		—		115
Stock-based compensation	—	—		613		—		—		—		613
Repurchases of common stock under repurchase programs ($75.23 average price per share)	(11)	—		(40)		—		(760)		—		(800)
Repurchases of common stock for employee tax withholding under equity incentive plans and other	(3)	—		—		—		(232)		—		(232)
Dividends declared ($2.31 per share)	—	—		—		—		(2,935)		—		(2,935)
Balance as of September 30, 2024	1,246	$	1	$	7,327	$	73	$	11,073	$	(84)	$	18,390

See accompanying notes.


	Three Months Ended September 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 June 30, 2023	1,247	$	1	$	6,008	$	10	$	15,138	$	(64)	$	21,094
Net income (loss)	—	—		—		—		2,180		(8)		2,172
Other comprehensive income, net	—	—		—		21		—		—		21
Issuances under employee stock purchase plan	1	—		62		—		—		—		62
Issuances under equity incentive plans	4	—		21		—		—		—		21
Stock-based compensation	—	—		202		—		—		—		202
Repurchases of common stock under repurchase programs ($77.08 average price per share)	(4)	—		(14)		—		(286)		—		(300)
Repurchases of common stock for employee tax withholding under equity incentive plans and other	(1)	—		—		—		(77)		—		(77)
Dividends declared ($0.75 per share)	—	—		—		—		(953)		—		(953)
Balance as of September 30, 2023	1,247	$	1	$	6,279	$	31	$	16,002	$	(72)	$	22,242


	Nine Months Ended September 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)	—	—		—		—		4,236		(40)		4,196
Other comprehensive income, net	—	—		—		30		—		—		30
Issuances under employee stock purchase plan	2	—		129		—		—		—		129
Issuances under equity incentive plans	11	—		71		—		—		—		71
Stock-based compensation	—	—		566		—		—		—		566
Repurchases of common stock under repurchase programs ($79.92 average price per share)	(11)	—		(38)		—		(812)		—		(850)
Repurchases of common stock for employee tax withholding under equity incentive plans	(3)	—		—		—		(245)		—		(245)
Dividends declared ($2.25 per share)	—	—		—		—		(2,864)		—		(2,864)
Balance as of September 30, 2023	1,247	$	1	$	6,279	$	31	$	16,002	$	(72)	$	22,242

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Nine Months Ended
	September 30,
(in millions)	2024		2023
Operating Activities:
Net (loss) income	$	(1,303)	$	4,196
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation expense	286		263
Amortization expense	1,788		1,742
Stock-based compensation expense	613		565
Deferred income taxes	(1,465)		(592)
Net loss from equity securities	148		356
Acquired in-process research and development expenses	4,674		808
In-process research and development impairment	4,180		—
Other	294		260
Changes in operating assets and liabilities:
Accounts receivable, net	67		(63)
Inventories	(200)		(535)
Prepaid expenses and other	(113)		71
Accounts payable	348		(304)
Income tax assets and liabilities, net	(1,268)		(1,070)
Accrued and other liabilities	(197)		141
Net cash provided by operating activities	7,853		5,837
Investing Activities:
Purchases of marketable debt securities	(244)		(1,474)
Proceeds from sales of marketable debt securities	2,265		412
Proceeds from maturities of marketable debt securities	327		985
Acquisitions, including in-process research and development, net of cash acquired	(4,765)		(873)
Purchases of equity securities	(453)		(218)
Capital expenditures	(376)		(370)
Other	23		—
Net cash used in investing activities	(3,224)		(1,538)
Financing Activities:
Proceeds from debt financing, net of issuance costs	—		1,979
Proceeds from issuances of common stock	249		206
Repurchases of common stock under repurchase programs	(800)		(850)
Repayments of debt and other obligations	(1,963)		(2,250)
Payments of dividends	(2,945)		(2,866)
Other	(234)		(245)
Net cash used in financing activities	(5,693)		(4,026)
Effect of exchange rate changes on cash and cash equivalents	15		20
Net change in cash and cash equivalents	(1,049)		293
Cash and cash equivalents at beginning of period	6,085		5,412
Cash and cash equivalents at end of period	$	5,037	$	5,705

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.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03 “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. We plan to adopt this guidance beginning with our 2027 annual report to be filed in early 2028 and all quarterly and annual reports thereafter. We expect the adoption of this standard to result in increased disclosures in our Notes to Consolidated Financial Statements.

2. REVENUES

Disaggregation of Revenues

The following table summarizes our Total revenues:


	Three Months Ended September 30, 2024								Three Months Ended September 30, 2023
(in millions)	U.S.		Europe		Rest of World		Total		U.S.		Europe		Rest of World		Total
Product sales:
HIV
Biktarvy	$	2,826	$	375	$	272	$	3,472	$	2,504	$	313	$	268	$	3,085
Descovy	534		24		28		586		460		25		26		511
Genvoya	384		44		21		449		433		47		23		503
Odefsey	248		69		9		326		257		74		11		343
Symtuza - Revenue share(1)	103		33		3		139		96		32		3		131
Other HIV(2)	65		26		9		100		56		28		9		94
Total HIV	4,161		570		342		5,073		3,807		519		341		4,667

Liver Disease
Sofosbuvir/Velpatasvir(3)	222		67		96		385		215		76		85		377
Vemlidy	126		11		95		232		112		9		106		228
Other Liver Disease(4)	45		54		17		116		49		33		20		102
Total Liver Disease	393		132		207		733		376		119		211		706

Veklury	393		81		219		692		258		65		313		636

Oncology
Cell Therapy
Tecartus	63		29		6		98		64		27		4		96
Yescarta	145		182		60		387		197		154		40		391
Total Cell Therapy	208		211		66		485		261		181		45		486

Trodelvy	226		80		26		332		201		62		21		283
Total Oncology	433		291		92		816		462		243		65		769

Other
AmBisome	6		71		52		130		12		63		39		115
Other(5)	47		8		16		71		69		9		23		101
Total Other	53		80		68		201		82		72		62		216
Total product sales	5,433		1,154		928		7,515		4,985		1,017		992		6,994
Royalty, contract and other revenues	17		13		1		30		32		23		1		56
Total revenues	$	5,450	$	1,167	$	929	$	7,545	$	5,017	$	1,040	$	993	$	7,051


	Nine Months Ended September 30, 2024								Nine Months Ended September 30, 2023
(in millions)	U.S.		Europe		Rest of World		Total		U.S.		Europe		Rest of World		Total
Product sales:
HIV
Biktarvy	$	7,726	$	1,110	$	814	$	9,649	$	7,104	$	920	$	717	$	8,741
Descovy	1,339		75		82		1,496		1,314		75		86		1,475
Genvoya	1,088		138		66		1,292		1,305		157		81		1,544
Odefsey	705		217		30		952		754		223		33		1,011
Symtuza - Revenue share(1)	338		101		9		448		278		101		10