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Gilead Sciences Announces Fourth Quarter And Full Year 2013 Financial Results

Stocks in this article: GILD

Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the fourth quarter and full year 2013. Total revenues for the fourth quarter of 2013 increased 21 percent to $3.12 billion, from $2.59 billion for the fourth quarter of 2012. Net income for the fourth quarter of 2013 was $791.4 million, or $0.47 per diluted share compared to $762.5 million, or $0.47 per diluted share for the fourth quarter of 2012. Non-GAAP net income for the fourth quarter of 2013, which excludes acquisition-related, restructuring and stock-based compensation expenses, was $929.8 million, or $0.55 per diluted share compared to $823.4 million, or $0.50 per diluted share for the fourth quarter of 2012.

Full year 2013 total revenues were $11.20 billion, up 15 percent compared to $9.70 billion for 2012. Net income for 2013 was $3.07 billion, or $1.81 per diluted share, compared to $2.59 billion, or $1.64 per diluted share for 2012. Non-GAAP net income for 2013, which excludes acquisition-related, restructuring and stock-based compensation expenses, was $3.45 billion, or $2.04 per diluted share, compared to $3.08 billion, or $1.95 per diluted share for 2012.

  Three Months Ended   Twelve Months Ended
December 31, December 31,
(In thousands, except per share amounts)   2013   2012 2013   2012
Product sales $ 3,043,190 $ 2,510,811 $ 10,803,695 $ 9,398,371
Royalty, contract and other revenues 76,636   77,474   397,993   304,146
Total revenues $ 3,119,826   $ 2,588,285   $ 11,201,688   $ 9,702,517
 
Net income attributable to Gilead $ 791,411 $ 762,541 $ 3,074,808 $ 2,591,566
Non-GAAP net income attributable to Gilead $ 929,807 $ 823,434 $ 3,450,556 $ 3,084,040
 
Diluted EPS $ 0.47 $ 0.47 $ 1.81 $ 1.64
Non-GAAP diluted EPS $ 0.55 $ 0.50 $ 2.04 $ 1.95
 

Product Sales

Product sales increased 21 percent to $3.04 billion for the fourth quarter of 2013 compared to $2.51 billion for the fourth quarter of 2012. For 2013, product sales increased 15 percent to $10.80 billion compared to $9.40 billion in 2012. Significantly contributing to the increase were sales of Stribild ® (elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg), Complera ®/Eviplera ® (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir disoproxil fumarate 300 mg) and Gilead's newest product, Sovaldi ® (sofosbuvir) 400 mg tablets, which launched in December 2013. Sales of Sovaldi were driven by initial inventory stocking, patient demand and a clinical trial order.

Antiviral Product Sales

Antiviral product sales increased 22 percent to $2.64 billion for the fourth quarter of 2013, compared to $2.17 billion for the fourth quarter of 2012, reflecting sales growth of 30 percent in the U.S. and 7 percent in Europe. For 2013, antiviral product sales increased 15 percent to $9.34 billion from $8.14 billion in 2012, reflecting sales growth of 19 percent in the U.S. and 6 percent in Europe. In December 2013, the U.S. Food and Drug Administration (FDA) approved Sovaldi in combination with other agents for the treatment of chronic hepatitis C virus (HCV).

  Three Months Ended     Twelve Months Ended  
December 31, December 31,
(In thousands, except percentages) 2013   2012 % Change 2013   2012 % Change
Antiviral product sales $ 2,639,827 $ 2,167,868 22 % $ 9,339,879 $ 8,141,790 15 %
Atripla 933,646 917,486 2 % 3,648,496 3,574,483 2 %
Truvada 814,098 832,724 (2 )% 3,135,771 3,181,110 (1 )%
Viread 266,894 226,681 18 % 958,969 848,697 13 %
Complera/Eviplera 261,844 117,814 122 % 809,452 342,200 137 %
Stribild 203,761 40,025 409 % 539,256 57,536 837 %
Sovaldi 139,435 139,435
 

Cardiovascular Product Sales

Cardiovascular product sales increased 25 percent to $268.5 million for the fourth quarter of 2013 compared to the same period in 2012. Cardiovascular product sales increased 24 percent to $968.6 million in 2013 compared to 2012.

  Three Months Ended     Twelve Months Ended  
December 31, December 31,
(In thousands, except percentages) 2013   2012 % Change 2013   2012 % Change
Cardiovascular product sales $ 268,456 $ 215,205 25 % $ 968,590 $ 783,003 24 %
Letairis 138,530 116,078 19 % 519,966 410,054 27 %
Ranexa 129,926 99,127 31 % 448,624 372,949 20 %
 

Operating Expenses and Other

During the fourth quarter and full year 2013, compared to the same periods in 2012:

  • Non-GAAP research and development (R&D) expenses increased due primarily to the progression of Gilead's clinical studies, particularly in oncology, liver diseases and HIV;
  • Non-GAAP selling, general and administrative (SG&A) expenses increased due primarily to the ongoing growth and expansion of Gilead's business, including commercial expansion related to the launch of Sovaldi; and
  • Non-GAAP interest expense decreased due to debt repayments.
  Three Months Ended   Twelve Months Ended
December 31, December 31,
(In thousands, except percentages) 2013   2012 2013   2012
Non-GAAP research and development expenses $ 511,385 $ 409,331 $ 1,947,667 $ 1,495,620
Non-GAAP selling, general and administrative expenses $ 470,965 $ 332,263 $ 1,557,206 $ 1,225,940
 
Non-GAAP interest expense $ (73,150 ) $ (85,906 ) $ (306,894 ) $ (353,583 )

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

Income Taxes

The effective tax rate for 2013 decreased to 27.3 percent from 28.7 percent for 2012 and the non-GAAP effective tax rate for 2013 decreased to 26.5 percent from 26.8 percent for 2012. The decreases were due primarily to the retroactive extension of the federal R&D tax credit for 2012 and 2013 in January 2013, partially offset by increased R&D investments.

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