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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