Gilead Sciences Announces Second Quarter 2014 Financial Results

  Gilead Sciences Announces Second Quarter 2014 Financial Results

                      - Product Sales of $6.41 billion -

                      - Sovaldi Sales of $3.48 billion -

                     - Non-GAAP EPS of $2.36 per share -

Business Wire

FOSTER CITY, Calif. -- July 23, 2014

Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations
for the quarter ended June 30, 2014. Total revenues for the second quarter of
2014 increased to $6.53 billion compared to $2.77 billion for the second
quarter of 2013. Product sales for the second quarter of 2014 increased to
$6.41 billion compared to $2.66 billion for the second quarter of 2013. Net
income for the second quarter of 2014 was $3.66 billion, or $2.20 per diluted
share compared to $772.6 million or $0.46 per diluted share for the second
quarter of 2013. Non-GAAP net income for the second quarter of 2014, which
excludes acquisition-related, restructuring and stock-based compensation
expenses, was $3.93 billion, or $2.36 per diluted share compared to $839.7
million or $0.50 per diluted share for the second quarter of 2013.

“During the second quarter, Gilead continued to make significant progress led
by strong Sovaldi sales.Since December’s launch, Sovaldi has been prescribed
for more than 80,000 patients in the U.S. and Europe, underscoring the medical
community’s recognition of the benefits of this product,” said John C. Martin,
PhD, Gilead’s Chairman and Chief Executive Officer. “We look forward to making
Sovaldi available in additional countries.”

                                               
                  Three Months Ended              Six Months Ended
                  June 30,                        June 30,
(In thousands,
except per        2014          2013           2014           2013
share amounts)
Product sales     $ 6,412,937    $ 2,657,285     $ 11,283,911    $ 5,050,853
Royalty,
contract and      122,006        110,109        249,988         248,176
other revenues
Total revenues    $ 6,534,943    $ 2,767,394    $ 11,533,899    $ 5,299,029
                                                                   
Net income
attributable to   $ 3,655,593     $ 772,605       $ 5,883,003      $ 1,494,791
Gilead
Non-GAAP net
income            $ 3,929,533     $ 839,725       $ 6,417,342      $ 1,641,668
attributable to
Gilead
                                                                   
Diluted EPS       $ 2.20          $ 0.46          $ 3.52           $ 0.89
Non-GAAP          $ 2.36          $ 0.50          $ 3.84           $ 0.98
diluted EPS
                                                                     

Product Sales

Compared to the second quarter of 2013, U.S. product sales for the second
quarter of 2014 increased to $4.82 billion from $1.64 billion and Europe
product sales increased to $1.31 billion from $818.2 million.

Antiviral Product Sales

Antiviral product sales increased to $6.01 billion for the second quarter of
2014, up from $2.31 billion for the second quarter of 2013 primarily due to
sales of Sovaldi^® (sofosbuvir 400 mg), which launched in December 2013.

                                                                                           
                    Three Months Ended                         Six Months Ended
                    June 30,                                   June 30,
(In thousands,                                      %                                           %
except              2014          2013           Change    2014           2013           Change 
percentages)
Antiviral product   $ 6,012,144    $ 2,313,539     160    %   $ 10,520,641    $ 4,374,617     140    %
sales
Sovaldi             3,480,326       —               —      %   5,754,675        —               —      %
Atripla             870,708         938,108         (7)    %   1,650,302        1,815,181       (9)    %
Truvada             806,610         807,779         —      %   1,566,310        1,508,021       4      %
Complera/Eviplera   299,464         188,683         59     %   550,197          336,872         63     %
Stribild            269,520         99,394          171    %   484,791          191,542         153    %
Viread              260,734         250,188         4      %   471,359          460,520         2      %
                                                                                                

Cardiovascular Product Sales

Cardiovascular product sales increased to $266.7 million for the second
quarter of 2014, compared to $234.9 million for the second quarter of 2013.

                                                                             
                 Three Months Ended                   Six Months Ended
                 June 30,                             June 30,
(In thousands,                               %                                    %
except           2014        2013         Change   2014        2013         Change
percentages)
Cardiovascular   $ 266,672    $ 234,854     14%      $ 501,175    $ 449,247     12%
product sales
Letairis         144,716       128,257       13%      267,601       246,364       9%
Ranexa           121,956       106,597       14%      233,574       202,883       15%
                                                                                  

Operating Expenses

During the second quarter of 2014, compared to the same period in 2013:

  *Non-GAAP research and development (R&D) expenses increased primarily due
    to increases in headcount and other costs to support expansion of our R&D
    activities.

  *Non-GAAP selling, general and administrative (SG&A) expenses increased
    primarily due to headcount and marketing expense increases to support our
    business expansion related to Sovaldi and pre-launch expenses for
    Zydelig^® (idelalisib 150 mg).

                                                  
                         Three Months Ended          Six Months Ended
                         June 30,                    June 30,
(In thousands)           2014        2013         2014          2013
Non-GAAP research and    $ 541,974    $ 487,771     $ 1,099,779    $ 947,747
development expenses
Non-GAAP selling,
general and              $ 569,230     $ 376,336     $ 1,069,335     $ 709,400
administrative
expenses
                                                                       

      Non-GAAP R&D and SG&A expenses exclude the impact of
Note: acquisition-related, restructuring and stock-based compensation
      expenses.
      

Tax Rate

Our non-GAAP effective tax rate for the three and six months ended June 30,
2014 was 14.6% and 18.2%, respectively. The non-GAAP effective tax rate for
the three months ended June 30, 2014 includes a cumulative catch up adjustment
of 3.6 percentage points to the first quarter tax rate to reduce the year to
date non-GAAP effective tax rate to 18.2%.

Cash, Cash Equivalents and Marketable Securities

As of June 30, 2014, Gilead had $9.58 billion of cash, cash equivalents and
marketable securities compared to $6.86 billion as of March 31, 2014. During
the second quarter of 2014, Gilead generated $4.19 billion in operating cash
flow. Gilead utilized $1.2 billion to repurchase 15.2 million shares during
the quarter and has approximately $1.7 billion remaining in the current
repurchase plan which is expected to be completed by September 2014. In May,
the company announced that its Board of Directors authorized an additional
repurchase of up to $5 billion of the company’s common stock following
completion of the current authorization.

Updated Full Year 2014 Guidance

Gilead updated its full year 2014 guidance, which it initially provided on
February 4, 2014 and reiterated on April 22, 2014, to include the impact of
Sovaldi product sales:

                                          Initially Provided     Updated
(In millions, except percentages and     February 4, 2014;  
per share amounts)                        Reiterated April       July 23, 2014
                                          22, 2014
Net Product Sales                         $11,300 - $11,500     $21,000 -
                                                                 $23,000
Non-GAAP*
Product Gross Margin                      75% - 77%              85% - 88%
R&D                                       $2,200 - $2,300        $2,300 -
                                                                 $2,400
SG&A                                      $2,100 - $2,200        $2,300 -
                                                                 $2,400
Effective Tax Rate                        28% - 29%              17.5% - 20.5%
                                                                 
Diluted EPS Impact of
Acquisition-Related, Restructuring        $0.63 - $0.66          $0.63 - $0.66
and Stock-Based Compensation Expenses
                                                                 
* Non-GAAP product gross margin, expenses and effective tax rate exclude the
impact of acquisition-related, restructuring and stock-based compensation
expenses, where applicable.


Product & Pipeline Updates Announced by Gilead During the Second Quarter of
2014 Include:

Antiviral Program

  *Submission of a New Drug Application (NDA) to Japan’s Pharmaceutical and
    Medical Devices Agency (PMDA) for approval of sofosbuvir (SOF), a
    once-daily nucleotide analog polymerase inhibitor for the treatment of
    chronic HCV infection. The NDA is based primarily on data from a Phase 3
    clinical trial conducted in Japan among 153 treatment-naïve and
    treatment-experienced genotype 2 patients. In the study, 97 percent of
    HCV-infected patients receiving 12 weeks of an all-oral regimen of SOF
    plus ribavirin (RBV) 600-1,000 mg/day achieved a sustained virologic
    response 12 weeks after completing therapy (SVR12). If approved, SOF would
    form the basis of the first all-oral, interferon-free treatment regimen
    for genotype 2 patients in Japan.
  *Positive results from a Phase 3 clinical trial in Japan evaluating the
    investigational once-daily fixed-dose combination of the NS5A inhibitor
    ledipasvir (LDV) 90 mg and SOF 400 mg, with and without RBV, for the
    treatment of genotype 1 chronic HCV infection. In the arm that utilized
    LDV/SOF without RBV, 100 percent of patients treated achieved SVR12,
    including the subset of patients with cirrhosis. Based on these data,
    Gilead plans to submit an NDA for the LDV/SOF fixed-dose combination with
    the Japanese PMDA by the end of 2014.
  *U.S. Food and Drug Administration (FDA) acceptance of the company’s
    refiling of two NDAs for cobicistat and elvitegravir. FDA set target
    review dates under the Prescription Drug User Fee Act (PDUFA) of October
    3, 2014 for cobicistat and October 4, 2014 for elvitegravir.
  *Presentations of data on SOF-based regimens in chronic HCV patients at the
    49^th Annual Meeting of the European Association for the Study of the
    Liver included:

       *Positive data from two Phase 2 studies and a compassionate access
         study in which a regimen containing once-daily Sovaldi was
         administered for the treatment of chronic HCV infection in patients
         with advanced liver disease.
       *Positive data from two Phase 2 studies, evaluating investigational
         all-oral regimens containing SOF for the treatment of chronic HCV
         infection.
       *Positive results from an open-label clinical trial, evaluating
         once-daily Sovaldi for the retreatment of chronic HCV infection among
         patients who failed prior therapy.

  *Priority review granted by the FDA of the NDA for a once-daily fixed-dose
    combination of LDV/SOF for the treatment of chronic HCV genotype 1
    infection in adults. The FDA set a target action date under PDUFA of
    October 10, 2014.

Oncology Program

  *Updated interim results of a Phase 2 study evaluating GS-9973, Gilead's
    investigational oral inhibitor of spleen tyrosine kinase (Syk), for the
    treatment of patients with relapsed chronic lymphocytic leukemia (CLL) at
    the 50^th Annual Meeting of the American Society of Clinical Oncology.
    Based on these data, Gilead plans to initiate new CLL study cohorts to
    include patients who have relapsed following treatment with other
    inhibitors of the B-cell receptor signaling pathway.

Other

  *Positive results from a placebo-controlled, Phase 2a challenge study in
    healthy adult patients intranasally infected with respiratory syncytial
    virus (RSV) at the American Thoracic Society 2014 International
    Conference. The study of GS-5806, an investigational oral RSV fusion
    inhibitor, achieved its primary and secondary endpoints of lower viral
    load (the amount of virus detected in the nasal wash), improvements in
    total mucus weight (the amount of mucus produced) and also symptom score
    compared to placebo.
  *Positive results from HARMONY, a randomized, double-blind,
    placebo-controlled Phase 2 study evaluating the effect of ranolazine and
    low-dose dronedarone, each given alone and in combination, on atrial
    fibrillation burden (AFB) in patients with paroxysmal atrial fibrillation
    at the annual meeting of the Heart Rhythm Society. In HARMONY, the
    combination of ranolazine and low-dose dronedarone provided greater
    reductions in AFB from baseline than either therapy used alone.
  *Positive results from a Phase 1 clinical trial of GS-6615, an
    investigational, selective late sodium current inhibitor, showing a
    shortening of the QTc interval (the time interval between the start of the
    Q-wave and end of the T-wave in the heart’s electrical cycle) in patients
    with long QT-3 (LQT3) syndrome at the annual meeting of the Heart Rhythm
    Society. Based on these results, Gilead plans to initiate a Phase 2 study
    of GS-6615 in LQT3 patients later this year. Additionally, based on
    pre-clinical data for GS-6615 and clinical data involving the role of late
    sodium current inhibition in other cardiovascular diseases, Gilead plans
    to initiate Phase 2 clinical trials in patients with hypertrophic
    cardiomyopathy and ventricular tachycardia/ventricular fibrillation.

Conference Call

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 second quarter
2014 as well as provide 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
1-877-359-9508 (U.S.) or 1-224-357-2393 (international) and dial the
conference ID 65785151 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 July 25, 2014. To access the phone replay, please call
1-855-859-2056 (U.S.) or 1-404-537-3406 (international) and dial the
conference ID 65785151.

About Gilead

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 transform and simplify care for people with
life-threatening illnesses around the word. Headquartered in Foster City,
California, Gilead has operations in North and South America, Europe and
Asia-Pacific.

Non-GAAP Financial Information

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 8 and 9.

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 2014 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 GS-9973,
GS-5806, GS-6615, sofosbuvir, including in combination with other product
candidates such as LDV; Gilead's ability to initiate clinical trials in its
currently anticipated timeframes; 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 LDV/SOF with the PDMA;
Gilead's ability to receive regulatory approvals in a timely manner or at all,
for new and current products, including sofosbuvir in Japan; the fixed-dose
combination of LDV/SOF in the United States and elvitegravir and cobicistat as
single agents in the United States; Gilead's ability to successfully
commercialize its products, including Sovaldi, Stribild, Vitekta, Tybost and
Zydelig; the risk that estimates of patients with HCV or anticipated patient
demand may not be accurate; Gilead's ability to successfully develop its
respiratory, cardiovascular, oncology and inflammation programs; safety and
efficacy data from clinical studies may not warrant further development of
Gilead's product candidates; the potential for additional austerity measures
in European countries that may increase the amount of discount required on
Gilead's products; Gilead's ability to complete its share repurchase programs
due to changes in its stock price, corporate or other market conditions;
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 March 31, 2014
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.

 Gilead owns or has rights to various trademarks, copyrights and trade names
 used in our business, including the following: GILEAD^®, GILEAD SCIENCES^®,
SOVALDI^®, STRIBILD^®, COMPLERA^®, EVIPLERA^®, TRUVADA^®, VIREAD^®, EMTRIVA^®,
 TYBOST^®, ZYDELIG^®, HEPSERA^®, VITEKTA^®, LETAIRIS^®, RANEXA^®, CAYSTON^®,
              AMBISOME^®, VISTIDE^®, VOLIBRIS^®, and RAPISCAN^®.

ATRIPLA^® is a registered trademark belonging to Bristol-Myers Squibb& Gilead
Sciences, LLC. LEXISCAN^® is a registered trademark belonging to Astellas U.S.
LLC. MACUGEN^® is a registered trademark belonging to Eyetech, Inc. SUSTIVA^®
is a registered trademark of Bristol-Myers Squibb Pharma Company. TAMIFLU^® is
          a registered trademark belonging to Hoffmann-La Roche Inc.

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              Six Months Ended
                 June 30,                        June 30,
                 2014           2013           2014            2013        
Revenues:
Product sales    $ 6,412,937     $ 2,657,285     $ 11,283,911     $ 5,050,853
Royalty,
contract and     122,006        110,109        249,988         248,176     
other revenues
Total revenues   6,534,943      2,767,394      11,533,899      5,299,029   
Costs and
expenses:
Cost of goods    924,709         684,663         1,737,914        1,319,111
sold
Research and     583,924         523,902         1,178,902        1,021,534
development
Selling,
general and      613,555        404,991        1,161,678       779,287     
administrative
Total costs      2,122,188      1,613,556      4,078,494       3,119,932   
and expenses
Income from      4,412,755       1,153,838       7,455,405        2,179,097
operations
Interest         (102,004    )   (78,008     )   (178,273     )   (159,795    )
expense
Other income     (3,645      )   (231        )   (21,557      )   (3,555      )
(expense), net
Income before
provision for    4,307,106       1,075,599       7,255,575        2,015,747
income taxes
Provision for    656,621        307,981        1,382,503       530,419     
income taxes
Net income       3,650,485       767,618         5,873,072        1,485,328
Net loss
attributable
to               5,108          4,987          9,931           9,463       
noncontrolling
interest
Net income
attributable     $ 3,655,593    $ 772,605      $ 5,883,003     $ 1,494,791 
to Gilead
Net income per
share
attributable
to Gilead        $ 2.39         $ 0.51         $ 3.83          $ 0.98      
common
stockholders -
basic
Net income per
share
attributable
to Gilead        $ 2.20         $ 0.46         $ 3.52          $ 0.89      
common
stockholders -
diluted
Shares used in
per share        1,532,723      1,526,945      1,534,614       1,524,174   
calculation -
basic
Shares used in
per share        1,664,415      1,694,577      1,672,435       1,683,269   
calculation -
diluted
                                                                              

GILEAD SCIENCES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(unaudited)

(in thousands, except percentages and per share amounts)
                                                
                       Three Months Ended          Six Months Ended
                       June 30,                    June 30,
                       2014         2013         2014           2013        
Cost of goods sold
reconciliation:
GAAP cost of goods     $ 924,709     $ 684,663     $ 1,737,914     $ 1,319,111
sold
Stock-based
compensation           (2,565    )   (2,632    )   (5,207      )   (4,473      )
expenses
Acquisition
related-amortization   (199,230  )   (21,264   )   (398,460    )   (42,528     )
of purchased
intangibles
Non-GAAP cost of       $ 722,914    $ 660,767    $ 1,334,247    $ 1,272,110 
goods sold
                                                                               
Product gross margin
reconciliation:
GAAP product gross     85.6      %   74.2      %   84.6        %   73.9        %
margin
Stock-based
compensation           0.0       %   0.1       %   0.0         %   0.1         %
expenses
Acquisition
related-amortization   3.1       %   0.8       %   3.5         %   0.8         %
of purchased
intangibles
Non-GAAP product       88.7      %   75.1      %   88.2        %   74.8        %
gross margin^(1)
                                                                               
Research and
development expenses
reconciliation:
GAAP research and      $ 583,924     $ 523,902     $ 1,178,902     $ 1,021,534
development expenses
Stock-based
compensation           (36,633   )   (24,646   )   (70,983     )   (51,521     )
expenses
Restructuring          (29       )   (67       )   (174        )   (4,824      )
expenses
Acquisition
related-contingent     (5,288    )   (11,418   )   (7,966      )   (17,442     )
consideration
remeasurement
Non-GAAP research
and development        $ 541,974    $ 487,771    $ 1,099,779    $ 947,747   
expenses
                                                                               
Selling, general and
administrative
expenses
reconciliation:
GAAP selling,
general and            $ 613,555     $ 404,991     $ 1,161,678     $ 779,287
administrative
expenses
Stock-based
compensation           (43,935   )   (28,675   )   (89,168     )   (61,726     )
expenses
Restructuring          (2        )   306           (5          )   (438        )
expenses
Acquisition
related-transaction    (107      )   (4        )   (555        )   (7,160      )
costs
Acquisition
related-amortization   (281      )   (282      )   (2,615      )   (563        )
of purchased
intangibles
Non-GAAP selling,
general and            $ 569,230    $ 376,336    $ 1,069,335    $ 709,400   
administrative
expenses
                                                                               
Operating margin
reconciliation:
GAAP operating         67.5      %   41.7      %   64.6        %   41.1        %
margin
Stock-based
compensation           1.3       %   2.0       %   1.4         %   2.2         %
expenses
Restructuring          0.0       %   0.0       %   0.0         %   0.1         %
expenses
Acquisition
related-transaction    0.0       %   0.0       %   0.0         %   0.1         %
costs
Acquisition
related-amortization   3.1       %   0.8       %   3.5         %   0.8         %
of purchased
intangibles
Acquisition
related-contingent     0.1       %   0.4       %   0.1         %   0.3         %
consideration
remeasurement
Non-GAAP operating     71.9      %   44.9      %   69.6        %   44.7        %
margin^(1)
                                                                               
Other income
(expense)
reconciliation:
GAAP other income      $ (3,645  )   $ (231    )   $ (21,557   )   $ (3,555    )
(expense), net
Acquisition
related-transaction    2            —            (1,851      )   —           
costs
Non-GAAP other
income (expense),      $ (3,643  )   $ (231    )   $ (23,408   )   $ (3,555    )
net
                                                                               

GILEAD SCIENCES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION - (Continued)

(unaudited)

(in thousands, except percentages and per share amounts)
                                                    
                       Three Months Ended              Six Months Ended
                       June 30,                        June 30,
                       2014            2013          2014            2013        
Effective tax rate
reconciliation:
GAAP effective tax     15.2        %    28.6      %    19.1        %    26.3        %
rate
Restructuring          0.0         %    0.0       %    0.0         %    (0.1        )%
expenses
Acquisition
related-amortization   (0.6        )%   0.0       %    (0.9        )%   0.0         %
of purchased
intangibles
Acquisition
related-contingent     0.0         %    (0.3      )%   0.0         %    (0.2        )%
consideration
remeasurement
Non-GAAP effective     14.6        %    28.3      %    18.2        %    26.0        %
tax rate^(1)
                                                                                    
Net income
attributable to
Gilead
reconciliation:
GAAP net income
attributable to        $ 3,655,593      $ 772,605      $ 5,883,003      $ 1,494,791
Gilead, net of tax
Stock-based
compensation           72,199           40,379         135,335          85,759
expenses
Restructuring          25               (244      )    173              5,124
expenses
Acquisition
related-transaction    109              4              (866        )    7,160
costs
Acquisition
related-amortization   196,319          15,563         391,731          31,392
of purchased
intangibles
Acquisition
related-contingent     5,288           11,418        7,966           17,442      
consideration
remeasurement
Non-GAAP net income
attributable to        $ 3,929,533     $ 839,725     $ 6,417,342     $ 1,641,668 
Gilead, net of tax
                                                                                    
Diluted earnings per
share
reconciliation:
GAAP diluted           $ 2.20           $ 0.46         $ 3.52           $ 0.89
earnings per share
Stock-based
compensation           0.04             0.02           0.08             0.05
expenses
Restructuring          0.00             (0.00     )    0.00             0.00
expenses
Acquisition
related-transaction    0.00             0.00           0.00             0.00
costs
Acquisition
related-amortization   0.12             0.01           0.23             0.02
of purchased
intangibles
Acquisition
related-contingent     0.00            0.01          0.00            0.01        
consideration
remeasurement
Non-GAAP diluted
earnings per           $ 2.36          $ 0.50        $ 3.84          $ 0.98      
share^(1)
                                                                                    
Shares used in per
share calculation
(diluted)
reconciliation:
GAAP shares used in
per share              1,664,415        1,694,577      1,672,435        1,683,269
calculation
(diluted)
Share impact of
current stock-based    (965        )    (1,228    )    (950        )    (1,453      )
compensation rules
Non-GAAP shares used
in per share           1,663,450       1,693,349     1,671,485       1,681,816   
calculation
(diluted)
                                                                                    
Non-GAAP adjustment
summary:
Cost of goods sold     $ 201,795        $ 23,896       $ 403,667        $ 47,001
adjustments
Research and
development expenses   41,950           36,131         79,123           73,787
adjustments
Selling, general and
administrative         44,325           28,655         92,343           69,887
expenses adjustments
Other income
(expense)              2               —             (1,851      )    —           
adjustments
Total non-GAAP
adjustments before     288,072          88,682         573,282          190,675
tax
Income tax effect      (14,132     )    (21,562   )    (38,943     )    (43,798     )
Total non-GAAP
adjustments after      $ 273,940       $ 67,120      $ 534,339       $ 146,877   
tax
                                                                                    
^(1) Amounts may not sum due to rounding.


GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)
                                                               
                                                 June 30,         December 31,
                                                 2014             2013^(1)
                                                 (unaudited)
Cash, cash equivalents and marketable            $ 9,581,383      $ 2,570,590
securities
Accounts receivable, net                         3,436,711        2,100,286
Inventories                                      2,068,753        2,055,788
Property, plant and equipment, net               1,380,776        1,166,181
Intangible assets, net                           11,508,319       11,900,106
Goodwill                                         1,171,561        1,169,023
Other assets                                     2,058,661       1,534,811
Total assets                                     $ 31,206,164    $ 22,496,785
                                                                  
Current liabilities                              $ 6,227,997      $ 6,325,421
Long-term liabilities                            8,512,950        4,363,032
Equity component of currently redeemable         35,875           63,831
convertible notes
Stockholders’ equity^(2)                         16,429,342      11,744,501
Total liabilities and stockholders’ equity       $ 31,206,164    $ 22,496,785

^(1) Derived from the audited consolidated financial statements as of December
31, 2013.
^(2) As of June 30, 2014, there were 1,526,043 shares of common stock issued
and outstanding.


GILEAD SCIENCES, INC.

PRODUCT SALES SUMMARY

(unaudited)

(in thousands)
                                               
                  Three Months Ended              Six Months Ended
                  June 30,                        June 30,
                  2014           2013            2014            2013
Antiviral
products:
Sovaldi – U.S.    $ 3,031,507     $ —             $ 5,129,298      $ —
Sovaldi –         400,218         —               563,909          —
Europe
Sovaldi – Other   48,601         —              61,468          —
International
                  3,480,326      —              5,754,675       —
                                                                   
Atripla – U.S.    578,349         611,330         1,068,278        1,165,156
Atripla –         234,328         270,780         470,836          548,995
Europe
Atripla – Other   58,031         55,998         111,188         101,030
International
                  870,708        938,108        1,650,302       1,815,181
                                                                   
Truvada – U.S.    399,570         415,541         767,352          723,402
Truvada –         337,981         324,992         661,167          657,019
Europe
Truvada – Other   69,059         67,246         137,791         127,600
International
                  806,610        807,779        1,566,310       1,508,021
                                                                   
Complera /        153,846         120,187         284,272          223,484
Eviplera – U.S.
Complera /
Eviplera –        132,132         59,301          241,126          98,263
Europe
Complera /
Eviplera –        13,486         9,195          24,799          15,125
Other
International
                  299,464        188,683        550,197         336,872
                                                                   
Stribild – U.S.   229,417         96,961          416,507          188,939
Stribild –        31,308          1,848           54,938           1,848
Europe
Stribild –
Other             8,795          585            13,346          755
International
                  269,520        99,394         484,791         191,542
                                                                   
Viread – U.S.     116,554         113,965         197,607          196,593
Viread – Europe   87,591          88,042          171,656          176,248
Viread – Other    56,589         48,181         102,096         87,679
International
                  260,734        250,188        471,359         460,520
                                                                   
LDV/SOF –         439            —              439             —
Europe
                  439            —              439             —
                                                                   
Other Antiviral   13,445          15,931          20,491           33,410
– U.S.
Other Antiviral   9,027           10,852          18,306           23,826
– Europe
Other Antiviral
– Other           1,871          2,604          3,771           5,245
International
                  24,343         29,387         42,568          62,481
                                                                   
Total antiviral   4,522,688       1,373,915       7,883,805        2,530,984
products – U.S.
Total antiviral
products –        1,233,024       755,815         2,182,377        1,506,199
Europe
Total antiviral
products –        256,432        183,809        454,459         337,434
Other
International
                  6,012,144      2,313,539      10,520,641      4,374,617
                                                                   
Letairis          144,716         128,257         267,601          246,364
Ranexa            121,956         106,597         233,574          202,883
AmBisome          94,794          75,137          186,887          160,412
Other products    39,327         33,755         75,208          66,577
                  400,793        343,746        763,270         676,236
                                                                   
Total product     $ 6,412,937    $ 2,657,285    $ 11,283,911    $ 5,050,853
sales

Contact:

Gilead Sciences, Inc.
Robin Washington, 650-522-5688 (Investors)
Patrick O'Brien, 650-522-1936 (Investors)
Amy Flood, 650-522-5643 (Media)
 
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