The FINANCIAL — Gilead Sciences, Inc. announced on November 1 its results of operations for the third quarter ended September 30, 2016.
The financial results that follow represent a year-over-year comparison of third quarter 2016 to the third quarter 2015. Total revenues were $7.5 billion in 2016 compared to $8.3 billion in 2015. Net income was $3.3 billion or $2.49 per diluted share in 2016 compared to $4.6 billion or $3.06 per diluted share in 2015. Non-GAAP net income, which excludes amounts related to acquisition-related, up-front collaboration, stock-based compensation and other expenses, was $3.7 billion or $2.75 per diluted share in 2016 compared to $4.8 billion or $3.22 per diluted share in 2015, according to Gilead.
Product Sales
Total product sales for the third quarter of 2016 were $7.4 billion compared to $8.2 billion for the same period in 2015. Product sales for the third quarter of 2016 were $5.1 billion in the United States, $1.4 billion in Europe, $452 million in Japan and $479 million in other locations. Product sales for the third quarter of 2015 were $5.6 billion in the United States, $1.7 billion in Europe, $454 million in Japan and $504 million in other locations.
Antiviral Product Sales
Antiviral product sales, which include primarily products in Gilead’s HIV and liver disease areas, were $6.8 billion for the third quarter of 2016 compared to $7.7 billion for the same period in 2015.
HIV and other antiviral product sales were $3.5 billion compared to $2.9 billion for the same period in 2015. The increase was primarily due to the continued uptake of our tenofovir alafenamide (TAF) based products, Genvoya (elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir alafenamide 10 mg), Descovy (emtricitabine 200 mg/tenofovir alafenamide 25 mg) and Odefsey (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir alafenamide 25 mg).
HCV product sales, which consist of Harvoni (ledipasvir 90 mg/sofosbuvir 400 mg), Sovaldi (sofosbuvir 400 mg) and Epclusa (sofosbuvir 400 mg/velpatasvir 100 mg), were $3.3 billion compared to $4.8 billion for the same period in 2015. The decline was due to lower sales of Harvoni and Sovaldi, partially offset by sales of Epclusa, which was launched in the United States and Europe in June and July 2016, respectively.
Other Product Sales
Other product sales, which include Letairis (ambrisentan), Ranexa (ranolazine) and AmBisome (amphotericin B liposome for injection), were $564 million for the third quarter of 2016 compared to $509 million for the same period in 2015.
Research and development expenses and non-GAAP research and development expenses increased primarily due to the overall progression of Gilead’s clinical studies, including a $200 million milestone expense associated with Gilead’s purchase of Nimbus Apollo, Inc.
Selling, general and administrative expenses and non-GAAP selling, general and administrative expenses decreased primarily due to lower branded prescription drug fee expense.
Cash, Cash Equivalents and Marketable Securities
As of September 30, 2016, Gilead had $31.6 billion of cash, cash equivalents and marketable securities compared to $24.6 billion as of June 30, 2016. This increase was primarily due to the issuance of $5.0 billion aggregate principal amount of senior unsecured notes in September 2016. Cash flow from operating activities was $4.3 billion for the quarter. During the third quarter and the first nine months of 2016, Gilead utilized $1.0 billion and $10.0 billion on stock repurchases, respectively.
Corporate Highlights
Announced that Kelly A. Kramer was appointed to the company’s Board of Directors and Audit Committee. Ms. Kramer is currently Executive Vice President and Chief Financial Officer of Cisco Systems, Inc.
Announced that Gilead entered into a partnership with the World Health Organization (WHO) to provide $20 million in funding and drug donations over five years to expand access to diagnostic services and treatment for visceral leishmaniasis (VL). As part of this collaboration, Gilead will donate 380,000 vials of AmBisome to meet the needs of WHO to treat VL in key endemic countries, including Bangladesh, Ethiopia, India, Nepal, South Sudan and Sudan.
Product and Pipeline Updates announced by Gilead during the Third Quarter of 2016 include:
Announced that the European Commission granted marketing authorization for once-daily Truvada (emtricitabine 200 mg/tenofovir disoproxil 245 mg) in combination with safer-sex practices to reduce the risk of sexually acquired HIV-1 infection among uninfected adults at high risk, a strategy known as pre-exposure prophylaxis, or PrEP. Truvada was approved by the European Medicines Agency in 2005 for use in combination with other antiretroviral agents for the treatment of HIV-1 infection in adults aged 18 years and over, and is currently the most prescribed antiretroviral medicine in Europe as part of combination therapy.
Announced that the European Commission granted marketing authorization for Epclusa, the first pan-genotypic, single tablet regimen for the treatment of adults with genotype 1-6 chronic hepatitis C virus (HCV) infection. Epclusa for 12 weeks was authorized for use in patients without cirrhosis or with compensated cirrhosis (Child-Pugh A), and in combination with ribavirin (RBV) for patients with decompensated cirrhosis (Child-Pugh B or C). Epclusa is also the first single tablet regimen approved for the treatment of patients with HCV genotype 2 and 3, without the need for RBV. Physicians also have the flexibility to consider the addition of RBV for genotype 3 infected patients with compensated cirrhosis. The marketing authorization followed an accelerated review procedure by the European Medicines Agency, reserved for medicinal products expected to be of major public health interest.
Discussion about this post