GILEAD SCIENCES, INC. [GILD] Filings

10-Q 1 gild-20220630.htm FORM 10-Q gild-20220630

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, 2022


☐			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 29, 2022: 1,253,367,394

GILEAD SCIENCES, INC.

INDEX

PART I.

FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets at June 30, 2022 and December 31, 2021

Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2022 and 2021

Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2022 and 2021

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021

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 and trade names used in our business, including the following: GILEAD®, GILEAD SCIENCES®, AMBISOME®, ATRIPLA®, BIKTARVY®, CAYSTON®, COMPLERA®, DESCOVY®, DESCOVY FOR PREP®, EMTRIVA®, EPCLUSA®, EVIPLERA®, GENVOYA®, HARVONI®, HEPCLUDEX® (BULEVIRTIDE), HEPSERA®, JYSELECA® (FILGOTINIB), LETAIRIS®, ODEFSEY®, RANEXA®, SOVALDI®, STRIBILD®, TECARTUS®, TRODELVY®, TRUVADA®, TRUVADA FOR PREP®, TYBOST®, VEKLURY®, VEMLIDY®, VIREAD®, VOSEVI®, YESCARTA® and ZYDELIG®. This report also refers to trademarks, service marks and trade names of other companies.

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 “expect,” “anticipate,” “target,” “goal,” “project,” “hope,” “intend,” “plan,” “believe,” “seek,” “estimate,” “continue,” “may,” “could,” “should,” “might,” “forecast” 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; ongoing litigation and investigation matters; statements regarding the anticipated future impact on our business of the ongoing coronavirus disease 2019 (“COVID-19”) and related public health measures; 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. 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 the 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 in addition to the other information in 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, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	4,739	$	5,338
Short-term marketable debt securities	924		1,182
Accounts receivable, net	4,118		4,493
Inventories	1,494		1,618
Prepaid and other current assets	1,900		2,141
Total current assets	13,175		14,772
Property, plant and equipment, net	5,299		5,121
Long-term marketable debt securities	1,337		1,309
Intangible assets, net	29,885		33,455
Goodwill	8,314		8,332
Other long-term assets	4,860		4,963
Total assets	$	62,870	$	67,952
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	565	$	705
Accrued government and other rebates	3,519		3,244
Accrued and other current liabilities	4,115		6,145
Current portion of long-term debt and other obligations, net	1,021		1,516
Total current liabilities	9,220		11,610
Long-term debt, net	25,195		25,179
Long-term income taxes payable	3,888		4,767
Deferred tax liability	3,364		4,356
Other long-term obligations	988		976
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; 1,254 shares issued and outstanding	1		1
Additional paid-in capital	5,031		4,661
Accumulated other comprehensive income	87		83
Retained earnings	15,117		16,324
Total Gilead stockholders’ equity	20,236		21,069
Noncontrolling interest	(21)		(5)
Total stockholders’ equity	20,215		21,064
Total liabilities and stockholders’ equity	$	62,870	$	67,952

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions, except per share amounts)	2022		2021		2022		2021
Revenues:
Product sales	$	6,138	$	6,152	$	12,672	$	12,492
Royalty, contract and other revenues	122		65		178		148
Total revenues	6,260		6,217		12,850		12,640
Costs and expenses:
Cost of goods sold	1,442		1,390		2,866		2,751
Research and development expenses	1,102		1,092		2,280		2,142
Acquired in-process research and development expenses	330		138		338		205
In-process research and development impairment	—		—		2,700		—
Selling, general and administrative expenses	1,357		1,351		2,440		2,406
Total costs and expenses	4,231		3,971		10,624		7,504
Income from operations	2,029		2,246		2,226		5,136
Interest expense	(242)		(256)		(480)		(513)
Other income (expense), net	(284)		(173)		(395)		(542)
Income before income taxes	1,503		1,817		1,351		4,081
Income tax expense	(368)		(300)		(204)		(842)
Net income	1,135		1,517		1,147		3,239
Net loss attributable to noncontrolling interest	9		5		16		12
Net income attributable to Gilead	$	1,144	$	1,522	$	1,163	$	3,251
Net income per share attributable to Gilead common stockholders – basic	$	0.91	$	1.21	$	0.93	$	2.59
Shares used in per share calculation – basic	1,256		1,255		1,255		1,256
Net income per share attributable to Gilead common stockholders – diluted	$	0.91	$	1.21	$	0.92	$	2.58
Shares used in per share calculation – diluted	1,260		1,260		1,261		1,261

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2022		2021		2022		2021
Net income	$	1,135	$	1,517	$	1,147	$	3,239
Other comprehensive income:
Net foreign currency translation gain (loss), net of tax	(26)		(5)		(21)		5
Available-for-sale debt securities:
Net unrealized loss, net of tax	(12)		(1)		(31)		(3)
Reclassifications to net income, net of tax	1		—		1		—
Net change	(11)		(1)		(30)		(3)
Cash flow hedges:
Net unrealized gain (loss), net of tax	90		(13)		114		55
Reclassifications to net income, net of tax	(39)		20		(59)		42
Net change	51		7		55		97
Other comprehensive income	14		1		4		99
Comprehensive income	1,149		1,518		1,151		3,338
Comprehensive loss attributable to noncontrolling interest	9		5		16		12
Comprehensive income attributable to Gilead	$	1,158	$	1,523	$	1,167	$	3,350

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)


	Three Months Ended June 30, 2022
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Shares	Amount
Balance as of March 31, 2022	1,255	$	1	$	4,867	$	73	$	14,986	$	(12)	$	19,915
Net income (loss)	—	—		—		—		1,144		(9)		1,135
Other comprehensive income, net of tax	—	—		—		14		—		—		14
Issuances under equity incentive plans	—	—		3		—		—		—		3
Stock-based compensation	—	—		164		—		—		—		164
Repurchases of common stock	(1)	—		(3)		—		(81)		—		(84)
Dividends declared ($0.73 per share)	—	—		—		—		(932)		—		(932)
Balance as of June 30, 2022	1,254	$	1	$	5,031	$	87	$	15,117	$	(21)	$	20,215


	Six Months Ended June 30, 2022
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Shares	Amount
Balance as of December 31, 2021	1,254	$	1	$	4,661	$	83	$	16,324	$	(5)	$	21,064
Net income (loss)	—	—		—		—		1,163		(16)		1,147
Other comprehensive income, net of tax	—	—		—		4		—		—		4
Issuances under employee stock purchase plan	1	—		73		—		—		—		73
Issuances under equity incentive plans	7	—		24		—		—		—		24
Stock-based compensation	—	—		295		—		—		—		295
Repurchases of common stock	(8)	—		(22)		—		(506)		—		(528)
Dividends declared ($1.46 per share)	—	—		—		—		(1,864)		—		(1,864)
Balance as of June 30, 2022	1,254	$	1	$	5,031	$	87	$	15,117	$	(21)	$	20,215

See accompanying notes.


	Three Months Ended June 30, 2021
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Shares	Amount
Balance as of March 31, 2021	1,254	$	1	$	4,092	$	38	$	14,821	$	12	$	18,964
Net income (loss)	—	—		—		—		1,522		(5)		1,517
Other comprehensive income, net of tax	—	—		—		1		—		—		1
Issuances under equity incentive plans	1	—		12		—		—		—		12
Stock-based compensation	—	—		168		—		—		—		168
Repurchases of common stock	(1)	—		(1)		—		(48)		—		(49)
Dividends declared ($0.71 per share)	—	—		—		—		(903)		—		(903)
Balance as of June 30, 2021	1,254	$	1	$	4,271	$	39	$	15,392	$	7	$	19,710


	Six Months Ended June 30, 2021
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Shares	Amount
Balance as of December 31, 2020	1,254	$	1	$	3,880	$	(60)	$	14,381	$	19	$	18,221
Net income (loss)	—	—		—		—		3,251		(12)		3,239
Other comprehensive income, net of tax	—	—		—		99		—		—		99
Issuances under employee stock purchase plan	1	—		76		—		—		—		76
Issuances under equity incentive plans	6	—		24		—		—		—		24
Stock-based compensation	—	—		308		—		—		—		308
Repurchases of common stock	(7)	—		(17)		—		(431)		—		(448)
Dividends declared ($1.42 per share)	—	—		—		—		(1,809)		—		(1,809)
Balance as of June 31, 2021	1,254	$	1	$	4,271	$	39	$	15,392	$	7	$	19,710

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Six Months Ended
	June 30,
(in millions)	2022		2021
Operating Activities:
Net income	$	1,147	$	3,239
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	160		157
Amortization expense	890

GILEAD SCIENCES, INC. [GILD] Filings
10-Q	[2022-08-08]
10-Q	[2022-05-04]
10-K	[2022-02-23]
10-Q	[2021-11-03]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-02-25]
10-Q	[2020-11-04]
10-Q	[2020-08-06]
10-Q	[2020-05-06]
10-K	[2020-02-25]
10-Q	[2019-11-05]
10-Q	[2019-08-06]
10-Q	[2019-05-08]
10-K	[2019-02-26]
10-Q	[2018-11-06]
10-Q	[2018-08-06]
10-Q	[2018-05-09]
10-K	[2018-02-27]
10-Q	[2017-11-07]
10-Q	[2017-08-07]
10-Q	[2017-05-10]
10-K	[2017-02-27]
10-Q	[2016-11-07]
10-Q	[2016-08-05]
10-Q	[2016-05-06]
10-K	[2016-02-24]
10-Q	[2015-11-04]
10-Q	[2015-08-05]
10-Q	[2015-05-08]
10-K	[2015-02-25]
10-Q	[2014-11-05]
10-Q	[2014-08-04]
10-Q	[2014-05-07]
10-K	[2014-02-25]
10-Q	[2013-10-31]
10-Q	[2013-08-01]
10-Q	[2013-05-08]
10-K	[2013-02-27]
10-Q	[2012-11-06]
10-Q	[2012-08-01]
10-Q	[2012-05-04]
10-K	[2012-02-23]