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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): August 2, 2022
GILEAD SCIENCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19731 94-3047598
(State or Other Jurisdiction of Incorporation) (Commission File No.) (IRS Employer Identification No.)

333 Lakeside Drive, Foster City, California
(Address of principal executive offices)
94404
(Zip Code)
650-574-3000
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ¨




Section 2 - FINANCIAL INFORMATION

Item 2.02     Results of Operations and Financial Condition.

On August 2, 2022, Gilead Sciences, Inc., a Delaware corporation (“Gilead”), issued a press release announcing its financial results for the quarter ended June 30, 2022. A copy of the press release is filed as Exhibit 99.1 to this report.

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. Non-GAAP measures may be defined and calculated differently by other companies in the same industry. A reconciliation between GAAP and non-GAAP financial information is provided in the tables on pages 11, 12 and 13 of the press release filed as Exhibit 99.1 to this report.

The information in Item 2.02 and Item 9.01 of this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Section 9 - FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits
Exhibit Number Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)







SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GILEAD SCIENCES, INC.
(Registrant)
/s/ ANDREW D. DICKINSON
Andrew D. Dickinson
Chief Financial Officer
Date: August 2, 2022






Exhibit Index
Exhibit Number Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)



EX-99.1 2 exhibit991earningspressrel.htm EXHIBIT 99.1 Document

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GILEAD SCIENCES ANNOUNCES SECOND QUARTER 2022 FINANCIAL RESULTS
Biktarvy Sales Increased 28% Year-Over-Year to $2.6 billion
Oncology Sales Increased 71% Year-Over-Year to $527 million
Foster City, CA, August 2, 2022 - Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the second quarter of 2022.
“This was a very strong quarter for Gilead, with solid commercial and clinical execution,” said Daniel O’Day, Chairman and Chief Executive Officer, Gilead Sciences. “Excluding Veklury, product sales grew 7% year-over-year. There was continued strong demand for our HIV portfolio with further share growth for Biktarvy, and oncology revenues reached an all-time high, driven by cell therapy and Trodelvy.”
Second Quarter 2022 Financial Results
•Total second quarter 2022 revenue increased 1% to $6.3 billion compared to the same period in 2021, primarily due to increased sales in HIV and oncology products, offset partially by decreased sales of Veklury® (remdesivir) and hepatitis C virus (“HCV”) products.
•Diluted Earnings Per Share (“EPS”) decreased to $0.91 for the second quarter of 2022 compared to $1.21 for the same period in 2021. The decrease was primarily due to higher acquired in-process research & development (“IPR&D”) expenses from an upfront payment of $300 million, or $0.18 on a post-tax per share basis, related to the Dragonfly Therapeutics, Inc. (“Dragonfly”) collaboration and higher net unrealized losses from our strategic equity investments.
•Non-GAAP diluted EPS decreased 13% to $1.58 for the second quarter of 2022 compared to $1.81(1) for the same period in 2021, primarily reflecting the Dragonfly upfront payment and Biktarvy® (bictegravir 50mg/emtricitabine 200mg (“FTC”)/tenofovir alafenamide 25mg (“TAF”))-related royalty expense that began in the first quarter of 2022, offset partially by higher revenues.
•As of June 30, 2022, Gilead had $7.0 billion of cash, cash equivalents and marketable debt securities down from $7.8 billion as of December 31, 2021 primarily due to payment associated with the settlement of the bictegravir-related litigation, paid dividends, acquired IPR&D payments related to collaborations, debt repayments, stock repurchases and capital expenditures, partially offset by net cash provided by operations.
•During the second quarter of 2022, Gilead generated $1.8 billion in operating cash flow.
•During the second quarter of 2022, Gilead made a $300 million collaboration upfront payment to Dragonfly, paid dividends of $920 million and repurchased $72 million of common stock.
Product Sales Performance
Total second quarter 2022 product sales were $6.1 billion, flat compared to the same period in 2021. Total product sales, excluding Veklury, increased 7% to $5.7 billion in the second quarter of 2022 compared to the same period in 2021, primarily due to growth in the HIV, Cell Therapy and Trodelvy® (sacituzumab govitecan-hziy) businesses, offset partially by declining revenue in HCV.
(1) Non-GAAP diluted EPS has been recast due to an update to our non-GAAP policy in the first quarter 2022, resulting in a $0.06 reduction of previously-reported non-GAAP diluted EPS for the second quarter 2021. Refer to Non-GAAP Financial Information section below for further information.



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HIV product sales increased 7% to $4.2 billion in the second quarter of 2022 compared to the same period in 2021, primarily reflecting changes in channel mix leading to higher average realized price as well as higher demand for treatment and pre-exposure prophylaxis (“PrEP”) medicines.
•Biktarvy sales increased 28% year-over-year in the second quarter of 2022, primarily due to higher demand and channel mix.
•Descovy® (FTC 200mg/TAF 25mg) sales increased 6% year-over-year in the second quarter of 2022, primarily driven by channel mix and increased demand, partially offset by inventory dynamics.
HCV product sales decreased 18% to $448 million in the second quarter of 2022 compared to the same period in 2021, primarily driven by channel mix leading to lower average realized price and fewer patient starts.
Hepatitis B virus (“HBV”) and hepatitis delta virus (“HDV”) product sales decreased 1% to $234 million in the second quarter of 2022 compared to the same period in 2021. Vemlidy® (TAF 25mg) sales decreased 3% in the second quarter of 2022 compared to the same period in 2021, primarily driven by China Volume Based Procurement update, offset in part by volume growth in all other regions.
Cell therapy product sales increased 68% to $368 million in the second quarter of 2022 compared to the same period in 2021.
•Yescarta® (axicabtagene ciloleucel) sales increased 66% to $295 million in the second quarter of 2022, primarily driven by demand for relapsed or refractory (“R/R”) large B-cell lymphoma (“LBCL”) in the United States and Europe and R/R follicular lymphoma (“FL”) in the United States.
•Tecartus® (brexucabtagene autoleucel) sales increased 78% to $73 million in the second quarter of 2022, primarily driven by demand for R/R mantle cell lymphoma (“MCL”) in the United States and Europe and for adult patients with R/R B-cell precursor acute lymphoblastic leukemia (“ALL”) in the United States.
Trodelvy sales increased by 79% to $159 million in the second quarter of 2022 compared to the same period in 2021, primarily reflecting adoption in both the second- and third-line settings for the treatment of metastatic triple-negative breast cancer (“TNBC”) in the United States and Europe as well as for metastatic urothelial cancer in the United States.
Veklury sales decreased by 46% to $445 million for the second quarter of 2022 compared to the same period in 2021. Veklury revenue generally reflects COVID-19 related rates and severity of infections and hospitalizations, as well as the availability, uptake and effectiveness of vaccinations and alternative treatments for COVID-19.
Second Quarter 2022 Product Gross Margin, Operating Expenses and Effective Tax Rate
•Product gross margin was 76.5% for the second quarter of 2022 compared to 77.4% for the same period in 2021. Non-GAAP product gross margin was 85.6% for the second quarter of 2022 compared to 86.4% in the same period in 2021. The decreases were primarily driven by Biktarvy-related royalty expense that began in the first quarter of 2022.
•Research and development (“R&D”) expenses for the second quarter of 2022 were $1.1 billion, relatively flat with the same period in 2021. Non-GAAP R&D expenses for the second quarter of 2022 were $1.1 billion compared to $1.0 billion(2) in the same period in 2021. GAAP and Non-GAAP R&D expenses primarily reflect increased investment in development activities and timing of clinical trial activities, primarily for oncology. GAAP R&D expenses were offset by lower restructuring expenses as compared to the prior year.
(2) Beginning in the second quarter of 2022, expenses related to development milestones and other collaboration payments made prior to regulatory approval of a developed product were reclassified from R&D expenses to Acquired IPR&D expenses in the Condensed Consolidated Statements of Income. We believe this presentation assists users of the financial statements to better understand the total costs incurred to acquire IPR&D projects. Prior periods have been recast for both GAAP and Non-GAAP reporting to reflect this classification, resulting in a reduction of previously-reported R&D expenses of $42 million and $47 million for the three and six months ended June 30, 2021, respectively, and $8 million for the three months ended March 31, 2022.


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•Acquired IPR&D expenses for the second quarter of 2022 were $330 million compared to $138 million(2) in the same period in 2021. The increase primarily reflects an upfront payment related to the Dragonfly collaboration.
•Selling, general and administrative (“SG&A”) expenses for the second quarter of 2022 were $1.4 billion, relatively flat with the same period in 2021. Non-GAAP SG&A expenses for the second quarter of 2022 were $1.3 billion compared to $1.1 billion in the same period in 2021. GAAP and Non-GAAP SG&A expenses primarily reflect increased promotional and marketing investment, including for Trodelvy, as well as higher corporate activities, including information technology projects and grants. GAAP SG&A expenses were offset by lower donations to Gilead Foundation as compared to the prior year.
•The effective tax rate (“ETR”) for the second quarter of 2022 was 24.5% compared to 16.5% for the same period in 2021, primarily due to a discrete tax benefit related to an intra-entity transfer of intangible assets in the three months ended June 30, 2021, and higher net unrealized losses from equity investments that are non-deductible for income tax purposes. Non-GAAP ETR for the second quarter of 2022 was 19.3% compared to 19.5% for the same period in 2021.
Guidance and Outlook
For the full-year, Gilead has updated its guidance and now expects:
•Total product sales between $24.5 billion and $25.0 billion, compared to $23.8 billion and $24.3 billion previously.
•Total product sales, excluding Veklury, between $22.0 billion to $22.5 billion, compared to $21.8 billion and $22.3 billion previously.
•Total Veklury sales of approximately $2.5 billion, compared to approximately $2.0 billion previously.
•Non-GAAP earnings per share between $6.35 and $6.75, compared to $6.20 and $6.70 previously.
•Earnings per share between $2.90 and $3.30, compared to $3.00 and $3.50 previously.
This financial guidance excludes the impact of any expenses related to potential acquisitions or business development transactions that have not been executed, fair value adjustments of equity securities and discrete tax charges or benefits associated with changes in tax related laws and guidelines as Gilead is unable to project such amounts. A reconciliation between GAAP and non-GAAP financial information for the 2022 guidance is provided in the accompanying tables. Also see the Forward-Looking Statements described below. The financial guidance is subject to a number of risks and uncertainties, including uncertainty around the duration and magnitude of the COVID-19 pandemic. While the pandemic can be expected to continue to impact Gilead’s business and broader market dynamics, the rate and degree of these impacts as well as the corresponding recovery from the pandemic may vary across Gilead’s business.
Key Updates Since Our Last Quarterly Release
Virology
•Announced FDA lifted the clinical hold placed on the Investigational New Drug Application to evaluate injectable lenacapavir for HIV treatment and pre-exposure prophylaxis following the agency’s review of the storage and compatibility data of lenacapavir injection with an alternate vial made from aluminosilicate glass.
•Announced FDA accepted for review the New Drug Application resubmission for investigational lenacapavir for the treatment of HIV-1 infection in heavily treatment-experienced people with multi-drug resistant HIV-1 infection. FDA has assigned a Prescription Drug User Fee Act date of December 27, 2022.
•Received a positive opinion from the European Medicines Agency’s (“EMA”) Committee for Medicinal Products for Human Use (“CHMP”) for investigational lenacapavir for the treatment of HIV-1 infection, in combination with other antiretroviral(s), in adults with multi-drug resistant HIV-1 infection for whom it is otherwise not possible to construct a suppressive anti-viral regimen.


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•Presented data at the International AIDS Conference, which included Week 48 data from the Phase 3 ALLIANCE trial evaluating Biktarvy in adults with HIV/HBV coinfection. Results from ALLIANCE showed that Biktarvy had superior HBV DNA suppression over the comparator dolutegravir/FTC/TDF, with both antiretroviral regimens similarly achieving high rates of HIV suppression. Additionally, five-year data from two Phase 3 trials of Biktarvy as first-line therapy in people living with HIV further demonstrated Biktarvy’s sustained efficacy, safety profile and high barrier to resistance.
•Presented Week 48 results for the pivotal Phase 3 MYR301 trial of bulevirtide for the treatment of chronic HDV at the International Liver Congress 2022. The study met its primary endpoint, achieving statistically significant combined response rates (virologic and biochemical responses) with bulevirtide. Responses increased from Week 24 to Week 48, highlighting an improved response with prolonged treatment. The safety profile is consistent with prior reports.
•Announced a new Joint Procurement Agreement for Veklury for participating member states across the European Union and the European Economic Area.
•Received a positive opinion from EMA’s CHMP for Veklury to be granted full marketing authorization for the treatment of COVID-19 in adults and adolescents with pneumonia requiring supplemental oxygen and adults who do not require supplemental oxygen and are at increased risk of developing severe COVID-19.
Oncology
•Presented results from the primary analysis of the Phase 3 TROPiCS-02 study of Trodelvy versus physicians’ choice of chemotherapy (“TPC”) in heavily pre-treated patients with HR+/HER2- metastatic breast cancer at the American Society of Clinical Oncology (“ASCO”) Annual Meeting.
•Announced final data from the Phase 3 ASCENT trial of Trodelvy in second-line and later metastatic TNBC at ASCO, reinforcing Trodelvy’s survival benefit over TPC in this patient population.
•Received updated NCCN recommendations for sacituzumab govitecan-hziy to a category 1 preferred recommendation in second-line and later metastatic TNBC and was added as a category 2A preferred recommendation in the investigational indication of HR+/HER2- advanced breast cancer by the NCCN Guidelines® for Breast Cancer. Category 1 is the highest recommendation by NCCN, indicating that based upon high-level evidence, there is uniform NCCN consensus that the intervention is appropriate. The use of Trodelvy in patients with HR+/HER2- breast cancer is investigational, and Trodelvy has not been approved by FDA for this use.
•Highlighted Yescarta and Tecartus data at ASCO that included findings from a subanalysis of ZUMA-7, real-world outcomes and long-term follow-ups. Real-world data for Yescarta showed consistent survival and safety data regardless of race and ethnicity, and in a ZUMA-7 subanalysis, demonstrated an over eight-fold greater median event-free survival and clinically meaningful improvements in quality of life as compared to standard of care. For Tecartus, long-term data suggested durable responses were induced in patients with R/R MCL and in adult patients with R/R ALL.
•Announced approval of Yescarta by the European Commission for the treatment of R/R FL.
•Received a positive opinion from EMA’s CHMP for Tecartus for the treatment of adult patients 26 years of age and above with R/R B-cell precursor ALL.
•Announced FDA lifted the remaining partial clinical hold on studies evaluating magrolimab as a potential treatment for lymphoma and multiple myeloma.
•Entered into a strategic research collaboration with Dragonfly to advance a number of novel natural killer (“NK”) cell engager-based immunotherapies for oncology and inflammation indications. Under the agreement, Gilead will receive an exclusive worldwide license to investigational DF7001 and have options to license several additional NK cell engager programs.
Corporate
•Announced that the company’s Board of Directors declared a quarterly dividend of $0.73 per share of common stock for the third quarter of 2022. The dividend is payable on September 29, 2022, to stockholders of record at the close of business on September 15, 2022. Future dividends will be subject to Board approval.


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•Appointed Stacey Ma, PhD as Executive Vice President, Pharmaceutical Development and Manufacturing effective July 2022.
•Appointed Deborah Telman as Executive Vice President, Corporate Affairs and General Counsel effective August 2022.
•Announced an $85 million contribution to the Gilead Foundation.
Certain amounts and percentages in this press release may not sum or recalculate due to rounding.
Conference Call
At 1:30 p.m. Pacific Time today, Gilead will host a conference call to discuss Gilead’s results. A live webcast will be available on http://investors.gilead.com and will be archived on www.gilead.com for one year.
Non-GAAP Financial Information
The information presented in this document has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), unless otherwise noted as non-GAAP. Management believes non-GAAP information is useful for investors, when considered in conjunction with Gilead’s GAAP financial information, 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. Non-GAAP financial information generally excludes acquisition-related expenses including amortization of acquired intangible assets and inventory step-up charges, and other items that are considered unusual or not representative of underlying trends of Gilead’s business, fair value adjustments of equity securities and discrete and related tax charges or benefits associated with changes in tax related laws and guidelines. Although Gilead consistently excludes the amortization of acquired intangible assets from the non-GAAP financial information, management believes that it is important for investors to understand that such intangible assets were recorded as part of acquisitions and contribute to ongoing revenue generation. Non-GAAP measures may be defined and calculated differently by other companies in the same industry. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the accompanying tables.
Beginning in the first quarter of 2022, consistent with recent industry communications from the U.S. Securities and Exchange Commission (“SEC”), Gilead no longer excludes the initial costs of acquired IPR&D projects from its non-GAAP financial measures. Prior period non-GAAP financial measures are revised to conform to the new presentation.
About Gilead Sciences
Gilead Sciences, Inc. is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades, with the goal of creating a healthier world for all people. The company is committed to advancing innovative medicines to prevent and treat life-threatening diseases, including HIV, viral hepatitis and cancer. Gilead operates in more than 35 countries worldwide, with headquarters in Foster City, California.
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.


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These risks and uncertainties include those relating to: the impact of the COVID-19 pandemic on Gilead’s business, financial condition and results of operations; the development, manufacturing and distribution of Veklury as a treatment for COVID-19, including the uncertainty of the amount and timing of future Veklury sales and Gilead’s ability to effectively manage the global supply and distribution of Veklury; Gilead’s ability to achieve its anticipated full year 2022 financial results, including as a result of potential adverse revenue impacts from COVID-19 and potential revenues from Veklury; Gilead’s ability to make progress on any of its long-term ambitions or strategic priorities laid out in its corporate strategy; Gilead’s ability to accelerate or sustain revenues for its virology, oncology and other programs; Gilead’s ability to realize the potential benefits of acquisitions, collaborations or licensing arrangements, including the arrangement with Dragonfly; Gilead’s ability to initiate, progress or complete clinical trials within currently anticipated timeframes or at all, the possibility of unfavorable results from ongoing and additional clinical trials, including those involving Trodelvy, Tecartus, Yescarta and bulevirtide, and the risk that safety and efficacy data from clinical trials may not warrant further development of Gilead’s product candidates or the product candidates of Gilead’s strategic partners; Gilead’s ability to submit new drug applications for new product candidates or expanded indications in the currently anticipated timelines; Gilead’s ability to receive regulatory approvals in a timely manner or at all, including FDA approval of lenacapavir for treatment of HIV-1 infection in heavily treatment-experienced people with multi-drug resistant HIV-1 infection, EC approval of lenacapavir for treatment of HIV-1 infection, in combination with other antiretroviral(s), in adults with multi-drug resistant HIV-1 infection for whom it is otherwise not possible to construct a suppressive anti-viral regimen, EC approval of Veklury for the treatment of COVID-19 in adults and adolescents with pneumonia requiring supplemental oxygen and EC approval for Tecartus for the treatment of adult patients 26 years of age and above with R/R B-cell precursor ALL, and the risk that any such approvals, if granted, may be subject to significant limitations on use; Gilead’s ability to successfully commercialize its products; the risk of potential disruptions to the manufacturing and supply chain of Gilead’s products, including the risk that Kite may be unable to increase its manufacturing capacity, timely manufacture and deliver its products or produce an amount of supply sufficient to satisfy demand for such products; pricing and reimbursement pressures from government agencies and other third parties, including required rebates and other discounts; a larger than anticipated shift in payer mix to more highly discounted payer segments; market share and price erosion caused by the introduction of generic versions of Gilead products; the risk that physicians and patients may not see advantages of these products over other therapies and may therefore be reluctant to prescribe the products, including Yescarta; and other risks identified from time to time in Gilead’s reports filed with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. 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. There may be other factors of which Gilead is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ significantly from these estimates. Further, results for the quarter ended June 30, 2022 are not necessarily indicative of operating results for any future periods. Gilead directs readers to its press releases, annual reports on Form 10-K, quarterly reports on Form 10-Q 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.
The reader is cautioned that forward-looking statements are not guarantees of future performance and is cautioned not to place undue reliance on these forward-looking statements. All forward-looking statements are based on information currently available to Gilead and Gilead assumes no obligation to update or supplement any such forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements.
# # #
Gilead owns or has rights to various trademarks, copyrights and trade names used in its 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®, LETAIRIS®, ODEFSEY®, RANEXA®, SOVALDI®, STRIBILD®, TECARTUS®, TRODELVY®, TRUVADA®, TRUVADA FOR PREP®, TYBOST®, VEKLURY®, VEMLIDY®, VIREAD®, VOSEVI®, YESCARTA® and ZYDELIG®. This report may also refer to trademarks, service marks and trade names of other companies.


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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).
CONTACTS: Investors: Jacquie Ross, CFA investor_relations@gilead.com
Media: Alex Kalomparis public_affairs@gilead.com


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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 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 
Cash dividends declared per share $ 0.73  $ 0.71  $ 1.46  $ 1.42 
Product gross margin 76.5  % 77.4  % 77.4  % 78.0  %
Research and development expenses as a % of revenues 17.6  % 17.6  % 17.7  % 16.9  %
Selling, general and administrative expenses as a % of revenues 21.7  % 21.7  % 19.0  % 19.0  %
Operating margin 32.4  % 36.1  % 17.3  % 40.6  %
Effective tax rate 24.5  % 16.5  % 15.1  % 20.6  %


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GILEAD SCIENCES, INC.
TOTAL REVENUE SUMMARY
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
(in millions, except percentages) 2022 2021 Change 2022 2021 Change
Product sales:
HIV $ 4,228  $ 3,938  7% $ 7,935  $ 7,588  5%
HCV
448  549  (18)% 847  1,059  (20)%
HBV/HDV 234  237  (1)% 470  457  3%
Cell therapy 368  219  68% 642  410  57%
Trodelvy 159  89  79% 305  161  90%
Other 256  291  (12)% 493  532  (7)%
Total product sales excluding Veklury 5,693  5,323  7% 10,692  10,207  5%
Veklury 445  829  (46)% 1,980  2,285  (13)%
Total product sales 6,138  6,152  —% 12,672  12,492  1%
Royalty, contract and other revenues 122  65  87% 178  148  20%
Total revenues $ 6,260  $ 6,217  1% $ 12,850  $ 12,640  2%




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GILEAD SCIENCES, INC.
NON-GAAP FINANCIAL INFORMATION(1)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
(in millions, except percentages) 2022 2021 Change 2022 2021 Change
Non-GAAP:
Cost of goods sold $ 886  $ 836  6% $ 1,711  $ 1,691  1%
Research and development expenses $ 1,102  $ 1,042  6% $ 2,251  $ 2,086  8%
Acquired IPR&D expenses $ 330  $ 138  139% $ 338  $ 205  65%
Selling, general and administrative expenses $ 1,272  $ 1,121  13% $ 2,355  $ 2,154  9%
Other income (expense), net $ 20  $ NM $ $ (17) NM
Diluted EPS $ 1.58  $ 1.81  (13)% $ 3.70  $ 3.85  (4)%
Product gross margin 85.6  % 86.4  % -83 bps 86.5% 86.5% -0 bps
Research and development expenses as a % of revenues 17.6  % 16.8  % 81 bps 17.5% 16.5% 102 bps
Selling, general and administrative expenses as a % of revenues 20.3  % 18.0  % 232 bps 18.3% 17.0% 132 bps
Operating margin 42.7  % 49.5  % -684 bps 48.2% 51.5% -329 bps
Effective tax rate 19.3  % 19.5  % -20 bps 18.8% 18.9% -10 bps
________________________________
NM - Not Meaningful
(1)    Refer to Non-GAAP Financial Information section above for further disclosures on non-GAAP financial measures. A reconciliation between GAAP and non-GAAP financial information is provided in the tables on pages 11 - 12. Beginning in the first quarter of 2022, consistent with recent industry communications from the U.S. Securities and Exchange Commission, the Company no longer excludes the initial costs of acquired IPR&D projects from its non-GAAP financial measures. Prior period non-GAAP financial measures are revised to conform to the new presentation.


August 2, 2022
11
    
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(in millions, except percentages and per share amounts) 2022 2021 2022 2021
Cost of goods sold reconciliation:
GAAP cost of goods sold $ 1,442  $ 1,390  $ 2,866  $ 2,751 
Acquisition-related – amortization of acquired intangibles and inventory step-up charges (556) (554) (1,113) (1,060)
Other(1)
—  —  (42) — 
Non-GAAP cost of goods sold $ 886  $ 836  $ 1,711  $ 1,691 
Product gross margin reconciliation:
GAAP product gross margin 76.5  % 77.4  % 77.4  % 78.0  %
Acquisition-related – amortization of acquired intangibles and inventory step-up charges 9.1  % 9.0  % 8.8  % 8.5  %
Other(1)
—  % —  % 0.3  % —  %
Non-GAAP product gross margin 85.6   % 86.4   % 86.5   % 86.5   %
Research and development expenses reconciliation:
GAAP research and development expenses $ 1,102  $ 1,092  $ 2,280  $ 2,142 
Acquisition-related – other costs(2)
—  (6) (11) (12)
Other(1)
—  (44) (18) (44)
Non-GAAP research and development expenses $ 1,102  $ 1,042  $ 2,251  $ 2,086 
IPR&D impairment reconciliation:
GAAP IPR&D impairment $ —  $ —  $ 2,700  $ — 
IPR&D impairment —  —  (2,700) — 
Non-GAAP IPR&D impairment $ —  $ —  $ —  $ — 
Selling, general and administrative expenses reconciliation:
GAAP selling, general and administrative expenses $ 1,357  $ 1,351  $ 2,440  $ 2,406 
Acquisition-related – other costs(2)
—  (10) —  (32)
Other(1)
(85) (220) (85) (220)
Non-GAAP selling, general and administrative expenses $ 1,272  $ 1,121  $ 2,355  $ 2,154 
Income from operations reconciliation:
GAAP income from operations $ 2,029  $ 2,246  $ 2,226  $ 5,136 
Acquisition-related – amortization of acquired intangibles and inventory step-up charges 556  554  1,113  1,060 
Acquisition-related – other costs(2)
—  16  11  44 
IPR&D impairment —  —  2,700  — 
Other(1)
85  264  145  264 
Non-GAAP income from operations $ 2,670  $ 3,080  $ 6,195  $ 6,504 
Operating margin reconciliation:
GAAP operating margin 32.4  % 36.1  % 17.3  % 40.6  %
Acquisition-related – amortization of acquired intangibles and inventory step-up charges 8.9  % 8.9  % 8.7  % 8.4  %
Acquisition-related – other costs(2)
—  % 0.3  % 0.1  % 0.3  %
IPR&D impairment —  % —  % 21.0  % —  %
Other(1)
1.4  % 4.2  % 1.1  % 2.1  %
Non-GAAP operating margin 42.7   % 49.5   % 48.2   % 51.5   %
Other income (expense), net reconciliation:
GAAP other income (expense), net $ (284) $ (173) $ (395) $ (542)
Loss from equity securities, net 303  174  399  525 
Non-GAAP other income (expense), net $ 20  $ $ $ (17)


August 2, 2022
12
    
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION - (Continued)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(in millions, except percentages and per share amounts) 2022 2021 2022 2021
Effective tax rate reconciliation:
GAAP effective tax rate 24.5  % 16.5  % 15.1  % 20.6  %
Income tax effect of above non-GAAP adjustments and discrete and related tax adjustments(3)
(5.2) % 3.0  % 3.7  % (1.7) %
Non-GAAP effective tax rate 19.3   % 19.5  % 18.8   % 18.9  %
Net income attributable to Gilead reconciliation:
GAAP net income attributable to Gilead $ 1,144  $ 1,522  $ 1,163  $ 3,251 
Acquisition-related – amortization of acquired intangibles and inventory step-up charges 442  446  885  855 
Acquisition-related – other costs(2)
—  15  11  37 
IPR&D impairment —  —  2,057  — 
Other(1)
59  166  104  166 
Loss from equity securities, net 308  169  372  533 
Discrete and related tax charges(3)
31  (40) 68  14 
Non-GAAP net income attributable to Gilead $ 1,985  $ 2,278  $ 4,661  $ 4,856 
Diluted EPS reconciliation:
GAAP diluted EPS $ 0.91  $ 1.21  $ 0.92  $ 2.58 
Acquisition-related – amortization of acquired intangibles and inventory step-up charges 0.35  0.35  0.70  0.68 
Acquisition-related – other costs(2)
—  0.01  0.01  0.03 
IPR&D impairment —  —  1.63  — 
Other(1)
0.05  0.13  0.08  0.13 
Loss from equity securities, net 0.24  0.13  0.30  0.42 
Discrete and related tax charges(3)
0.02  (0.03) 0.05  0.01 
Non-GAAP diluted EPS $ 1.58  $ 1.81  $ 3.70  $ 3.85 
Non-GAAP adjustment summary:
Cost of goods sold adjustments $ 556  $ 554  $ 1,155  $ 1,060 
Research and development expenses adjustments —  50  29  56 
IPR&D impairment adjustments —  —  2,700  — 
Selling, general and administrative expenses adjustments 85  230  85  252 
Total non-GAAP adjustments before other income (expense), net, and income taxes
641  834  3,968  1,368 
Other income (expense), net, adjustments 303  174  399  525 
Total non-GAAP adjustments before income taxes 945  1,008  4,368  1,893 
Income tax effect of non-GAAP adjustments above (135) (212) (938) (302)
Discrete and related tax charges(3)
31  (40) 68  14 
Total non-GAAP adjustments after tax $ 841  $ 756  $ 3,498  $ 1,605 
______________________________
(1)    Adjustments to Cost of goods sold and Research and development expenses include various restructuring expenses during the first quarter of 2022 and the second quarter of 2021. Adjustments to Selling, general and administrative expenses include donations to the Gilead Foundation, a California nonprofit organization, during the second quarters of 2022 and 2021.
(2)    Primarily includes employee-related expenses, contingent consideration fair value adjustments and other expenses associated with Gilead’s acquisitions of Immunomedics, Inc. and MYR GmbH.
(3)    Represents discrete and related deferred tax charges or benefits primarily associated with acquired intangible assets and transfers of intangible assets from a foreign subsidiary to Ireland and the United States.


August 2, 2022
13
    
GILEAD SCIENCES, INC.
RECONCILIATION OF GAAP TO NON-GAAP 2022 FULL-YEAR GUIDANCE(1)
(unaudited)
(in millions, except percentages and per share amounts) Provided
February 1, 2022
Updated
 April 28, 2022
Updated
 August 2, 2022
Projected product gross margin GAAP to non-GAAP reconciliation:
GAAP projected product gross margin 76% - 77% 76% - 77% 76% - 77%
Acquisition-related and other ~ 9% ~ 9% ~ 9%
Non-GAAP projected product gross margin 85% - 86% 85% - 86% 85% - $86%
Projected income from operations GAAP to non-GAAP reconciliation:
GAAP projected income from operations $8,600 - $9,400 $5,800 - $6,600 $6,050 - $6,650
Acquisition-related, IPR&D impairment and other ~ 2,100 ~ 4,900 ~ 4,950
Non-GAAP projected income from operations $10,700 - $11,500 $10,700 - $11,500 $11,000 - $11,600
Projected effective tax rate GAAP to non-GAAP reconciliation:
GAAP projected effective tax rate ~ 22% ~ 20% ~ 21%
Discrete and related tax adjustments, and income tax effect of adjustments above and fair value adjustments of equity securities ~ 2% —% ~ 1%
Non-GAAP projected effective tax rate ~ 20% ~ 20% ~ 20%
Projected diluted EPS GAAP to non-GAAP reconciliation:
GAAP projected diluted EPS $4.70 - $5.20 $3.00- $3.50 $2.90 - $3.30
Acquisition-related, IPR&D impairment, fair value adjustments of equity securities, other and discrete and related tax adjustments ~ 1.50 ~ 3.20 ~ 3.45
Non-GAAP projected diluted EPS $6.20 - $6.70 $6.20 - $6.70 $6.35 - $6.75
________________________________
(1)    The non-GAAP 2022 full-year guidance includes non-GAAP adjustments to actual current period results as well as adjustments for the known future impact associated with events that have already occurred, such as future amortization of our intangible assets and the future impact of discrete and related deferred tax charges or benefits primarily associated with acquired intangible assets and transfers of intangible assets from a foreign subsidiary to Ireland and the United States. Our full-year guidance excludes the potential impact of any (i) acquisitions or business development transactions that have not been executed, (ii) future fair value adjustments of equity securities and (iii) discrete tax charges or benefits associated with changes in tax related laws and guidelines that have not been enacted, as Gilead is unable to project such amounts.


August 2, 2022
14
    
GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30, December 31,
(in millions) 2022 2021
Assets
Cash, cash equivalents and marketable securities $ 7,000  $ 7,829 
Accounts receivable, net 4,118  4,493 
Inventories 2,587  2,734 
Property, plant and equipment, net 5,299  5,121 
Intangible assets, net 29,885  33,455 
Goodwill 8,314  8,332 
Other assets 5,667  5,988 
Total assets $ 62,870  $ 67,952 
Liabilities and Stockholders’ Equity
Current liabilities $ 9,220  $ 11,610 
Long-term liabilities 33,435  35,278 
Stockholders’ equity(1)
20,215  21,064 
Total liabilities and stockholders’ equity $ 62,870  $ 67,952 
________________________________
(1)    As of June 30, 2022 and December 31, 2021, there were 1,254 shares of common stock issued and outstanding, respectively.


August 2, 2022
15
    
GILEAD SCIENCES, INC.
SELECTED CASH FLOW INFORMATION
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
Net cash provided by operating activities $ 1,802  $ 2,316  $ 3,642  $ 4,926 
Net cash used in investing activities (308) (577) (1,378) (2,619)
Net cash used in financing activities (1,003) (931) (2,797) (3,408)
Effect of exchange rate changes on cash and cash equivalents (48) 20  (66) (3)
Net change in cash and cash equivalents 443  828  (599) (1,104)
Cash and cash equivalents at beginning of period 4,296  4,065  5,338  5,997 
Cash and cash equivalents at end of period $ 4,739  $ 4,893  $ 4,739  $ 4,893 

Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
Net cash provided by operating activities $ 1,802  $ 2,316  $ 3,642  $ 4,926 
Capital expenditures (143) (119) (390) (284)
Free cash flow(1)
$ 1,659  $ 2,197  $ 3,252  $ 4,642 
________________________________
(1)    Free cash flow is a non-GAAP liquidity measure. Please refer to our disclosures in the Non-GAAP Financial Information section above.


August 2, 2022
16
    
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
HIV
Biktarvy – U.S. $ 2,095  $ 1,586  $ 3,801  $ 3,051 
Biktarvy – Europe 268  237  529  453 
Biktarvy – Other International 193  171  376  314 
2,556  1,994  4,707  3,818 
Descovy – U.S. 397  357  708  639 
Descovy – Europe 32  44  64  86 
Descovy – Other International 32  34  63  69 
460  435  834  794 
Genvoya – U.S. 482  551  939  1,057 
Genvoya – Europe 72  100  149  206 
Genvoya – Other International 29  55  76  116 
582  706  1,164  1,379 
Odefsey – U.S. 255  258  487  498 
Odefsey – Europe 97  111  193  224 
Odefsey – Other International 12  13  23  27 
364  382  703  749 
Revenue share – Symtuza(1) – U.S.
80  86  166  175 
Revenue share – Symtuza(1) – Europe
42  40  86  84 
Revenue share – Symtuza(1) – Other International
126  129  258  264 
Complera / Eviplera – U.S. 20  20  37  45 
Complera / Eviplera – Europe 31  39  55  73 
Complera / Eviplera – Other International
54  62  99  125 
Stribild – U.S. 24  35  46  66 
Stribild – Europe 11  16  22 
Stribild – Other International
33  51  66  97 
Truvada – U.S. 24  94  52  213 
Truvada – Europe 13 
Truvada – Other International 11  17 
34  108  72  243 
Other HIV(2) – U.S.
57  10  86 
Other HIV(2) – Europe
13  13 
Other HIV(2) – Other International
20 
18  71  33  119 
Total HIV – U.S. 3,383  3,044  6,245  5,830 
Total HIV – Europe 562  596  1,112  1,174 
Total HIV – Other International 282  298  577  584 
4,228  3,938  7,935  7,588 


August 2, 2022
17
    
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY - (Continued)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
HCV
Ledipasvir / Sofosbuvir(3) – U.S.
30  19  49 
Ledipasvir / Sofosbuvir(3) – Europe
19 
Ledipasvir / Sofosbuvir(3) – Other International
13  29  31  50 
23  62  58  118 
Sofosbuvir / Velpatasvir(4) – U.S.
227  262  389  476 
Sofosbuvir / Velpatasvir(4) – Europe
75  82  157  157 
Sofosbuvir / Velpatasvir(4) – Other International
74  98  159  190 
376  442  706  823 
Other HCV(5) – U.S.
30  35  54  60 
Other HCV(5) – Europe
16  24  52 
Other HCV(5) – Other International
49  45  83  118 
Total HCV – U.S. 263  327  462  585 
Total HCV – Europe 94  93  189  228 
Total HCV – Other International 91  129  196  246 
448  549  847  1,059 
HBV/HDV
Vemlidy – U.S. 97  86  177  163 
Vemlidy – Europe 18  16 
Vemlidy – Other International 89  106  199  202 
195  200  394  381 
Viread – U.S.
Viread – Europe 12  15 
Viread – Other International 15  17  32  37 
24  28  47  59 
Other HBV/HDV(6) – U.S.
—  — 
Other HBV/HDV(6) – Europe
15  28  16 
16  28  17 
Total HBV/HDV – U.S. 100  90  180  171 
Total HBV/HDV – Europe 30  24  57  47 
Total HBV/HDV – Other International 104  123  232  239 
234  237  470  457 
Veklury
Veklury – U.S. 41  416  843  1,236 
Veklury – Europe 126  264  430  652 
Veklury – Other International 278  149  708  397 
445  829  1,980  2,285 
Cell therapy
Tecartus – U.S. 53  32  100  59 
Tecartus – Europe 20  35  13 
Tecartus – Other International —  —  — 
73  41  136  72 
Yescarta – U.S. 193  108  318  200 
Yescarta – Europe 85  61  162  122 
Yescarta – Other International 17  26  16 
295  178  506  338 
Total cell therapy – U.S. 246  140  418  259 
Total cell therapy – Europe 105  70  197  135 
Total cell therapy – Other International 17  27  16 
368  219  642  410 



August 2, 2022
18
    
GILEAD SCIENCES, INC.
PRODUCT SALES SUMMARY - (Continued)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
Trodelvy
Trodelvy – U.S. 120  89  240  161 
Trodelvy– Europe 35  —  61  — 
Trodelvy – Other International —  — 
159  89  305  161 
Other
AmBisome – U.S. 15  13  40  25 
AmBisome – Europe 63  69  129  135 
AmBisome – Other International 54  74  107  117 
132  156  275  277 
Letairis – U.S. 49  57  92  111 
Other(7) – U.S.
37  37  63  75 
Other(7) – Europe
26  31  41  51 
Other(7) – Other International
13  10  22  18 
76  78  125  144 
Total other – U.S. 101  107  195  211 
Total other – Europe 88  100  169  186 
Total other – Other International 67  84  129  135 
256  291  493  532 
Total product sales – U.S. 4,254  4,213  8,582  8,453 
Total product sales – Europe 1,042  1,147  2,216  2,422 
Total product sales – Other International 842  792  1,873  1,617 
$ 6,138  $ 6,152  $ 12,672  $ 12,492 
_______________________________
(1)    Represents Gilead’s revenue from cobicistat (“C”), FTC and TAF in Symtuza (darunavir/C/FTC/TAF), a fixed dose combination product commercialized by Janssen Sciences Ireland Unlimited Company.
(2)    Includes Atripla, Emtriva and Tybost.
(3)    Amounts consist of sales of Harvoni and the authorized generic version of Harvoni sold by Gilead’s separate subsidiary, Asegua Therapeutics LLC.
(4)    Amounts consist of sales of Epclusa and the authorized generic version of Epclusa sold by Gilead’s separate subsidiary, Asegua Therapeutics LLC.
(5)    Includes Vosevi and Sovaldi.
(6)    Includes Hepcludex and Hepsera.
(7)    Includes Cayston, Jyseleca, Ranexa and Zydelig.