Gilead Sciences, Inc. Q2 2010 Earnings Call Transcript

Gilead Sciences, Inc. (GILD)

Q2 2010 Earnings Call Transcript

July 20, 2010 5:00 pm ET

Executives

Susan Hubbard – VP, IR

John Martin – Chairman & CEO

John Milligan – President & COO

Norbert Bischofberger – EVP, R&D and Chief Scientific Officer

Robin Washington – SVP & CFO

Kevin Young – EVP, Commercial Operations

Analysts

Josh Schimmer – Leerink Swann

Geoff Meacham – JPMorgan

Yaron Werber – Citigroup

Mark Schoenebaum – ISI Group

Rachel McMinn – Bank of America/Merrill Lynch

Tom Russo – Robert W. Baird

Ian Somaiya – Piper Jaffray

Jason Kantor – RBC Capital Markets

Geoff Porges – Sanford C. Bernstein

Thomas Wei – Jefferies & Co.

Phil Nadeau – Cowen & Co.

Joel Sendek – Lazard Capital Markets

Presentation

Operator

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Ladies and gentlemen, thank you for standing by and welcome to the Gilead Sciences second quarter 2010 earnings conference call. My name is Stacey and I will be your conference operator for today.

At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded today, July 20, 2010.

I would now like to turn the call over to Susan Hubbard, Vice President of Investor Relations. Please go ahead.

Susan Hubbard

Thank you, Stacey, good afternoon. Welcome to Gilead’s second quarter 2010 earnings conference call.

We issued a press release this afternoon providing results for the second quarter 2010. This press release is available on our web site at www.gilead.com, as are the slides that provide much more detail around the topics discussed today on this call.

Based on outreach to you and feedback from our investors we’re introducing a new earnings call format today. Our prepared comments on the call will be significantly briefer to allow more time for your questions.

Kicking off this new format will John Martin, Chairman and Chief Executive Officer; and John Milligan, President and Chief Operating Officer who will provide some comments on the quarter and our view about the future and opportunities for the company; Norbert Bischofberger, Executive Vice President of R&D and Chief Scientific Officer; Kevin Young, Executive Vice President of Commercial Operations; and Robin Washington, Senior Vice President and Chief Financial Officer are here as well and will join John and John for the Q&A session.

I would first like to remind you that we will be making statements relating to future events, expectations, trends, objectives and financial results that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements are based on certain assumptions and are subject to a number of risks and uncertainties that would cause our actual results to differ materially from those expressed in any forward-looking statements.

I refer you to our Form 10-Q for the quarter ended March 31, 2010, subsequent press releases and other publicly filed SEC disclosure documents for a detailed description of risk factors and other matters related to our business.

In addition, please note that we undertake no obligation to update or revise these forward-looking statements. We will be making certain references to financial measures that are on a non-GAAP basis. We provide reconciliation between GAAP and non-GAAP numbers in the press release we just issued and on our corporate website at www.gilead.com.

I will now turn the call over to John Martin.

John Martin

Thank you, Susan, and good afternoon. I am very pleased with our solid performance and productivity in the second quarter of this year despite the economic headwinds we and our industry are facing. The fundamentals of our business remain solid.

For HIV, the U.S. business continues to perform very strongly, but the environment and the European Union has been challenging. We are confident, however, that both the U.S. and international markets will remain sources of strong growth into the future, because of the unquestionable public health benefit of HIV testing, linkage to care, and treatment.

Importantly, we continue to demonstrate that public health benefit is best provided by our fixed-dose products, the standard of the care for the treatment of HIV, and we firmly believe that this health benefit will persuade the medical community to continue to use Gilead’s combination products as generic competition becomes available.

Over the last week, two important HIV announcements were made. First, President Obama unveiled the national HIV/AIDS strategy, which acknowledges antiretroviral treatment as a proven prevention tool and strives to increase diagnosis in early treatment for people living with HIV.

The second important announcement was from the International AIDS Society, which ordered HIV treatment guidelines to now specifically state, ‘Fixed-dose combinations are recommended when possible for convenience. Tenofovir plus emtricitabine is the recommended nRTI combination in initial therapy.’

Importantly, the substitution of emtricitabine with lamivudine was removed. We recognize that the success of our Company over the long-term has depended upon continued innovation. For our HIV pipeline, our efforts are focused on providing new single tablet regimens.

I am particularly excited about the progress we have made with the TMC278, Truvada, fixed-dose regimen, and the Quad program. These are regimens that can extend our HIV product-related revenue stream into the 2020s.

I would like to thank Bill Lee, our Head of Research for leading an effort over the last six months to restructure our HCV team. We now have five oral small molecules from four different classes in human clinical studies.

I am confident that we now have both the product pipeline and the right people in place to establish Gilead as a leader within the HCV market and the future.

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