Gilead Sciences, Inc. (Nasdaq:GILD) announced today its results of operations for the quarter ended September 30, 2010. Total revenues for the third quarter of 2010 were $1.94 billion, up 8 percent compared to total revenues of $1.80 billion for the third quarter of 2009. Net income for the third quarter of 2010 was $704.9 million, or $0.83 per diluted share, compared to net income for the third quarter of 2009 of $673.0 million, or $0.72 per diluted share. Non-GAAP net income for the third quarter of 2010, which excludes after-tax acquisition-related expenses, restructuring expenses and stock-based compensation expenses, was $759.7 million, or $0.90 per diluted share. Non-GAAP net income for the third quarter of 2009, which excludes after-tax acquisition-related expenses, restructuring expenses and stock-based compensation expenses, was $730.3 million, or $0.78 per diluted share.
Product Sales
Product sales increased 13 percent to $1.87 billion for the third quarter of 2010, compared to $1.65 billion in the third quarter of 2009.
Antiviral Franchise
Antiviral product sales increased 12 percent to $1.65 billion in the third quarter of 2010, up from $1.47 billion for the same quarter of 2009.
Sales of Atripla® (efavirenz 600 mg/ emtricitabine 200 mg/ tenofovir disoproxil fumarate 300 mg) for the treatment of HIV infection increased 23 percent to $742.7 million for the third quarter of 2010, up from $605.3 million in the third quarter of 2009, driven primarily by sales volume growth in the United States and Europe.
Sales of Truvada® (emtricitabine/tenofovir disoproxil fumarate) for the treatment of HIV infection increased 8 percent to $668.7 million for the third quarter of 2010, up from $620.6 million in the third quarter of 2009, driven primarily by sales volume growth in the United States and Europe.
Sales of Viread® (tenofovir disoproxil fumarate) for the treatment of HIV infection and chronic hepatitis B increased 9 percent to $184.3 million for the third quarter of 2010, up from $169.7 million in the third quarter of 2009, driven primarily by sales volume growth in the United States, Europe and Latin America.
Letairis
Sales of Letairis® (ambrisentan) for the treatment of pulmonary arterial hypertension increased 26 percent to $60.4 million for the third quarter of 2010, up from $48.1 million for the third quarter of 2009, driven primarily by sales volume growth in the United States.
Ranexa
Sales of Ranexa® (ranolazine) for the treatment of chronic angina increased 23 percent to $60.3 million for the third quarter of 2010, up from $49.0 million for the third quarter of 2009, driven primarily by sales volume growth in the United States.
Other Products
Sales of other products were $149.1 million for the third quarter of 2010 compared to $156.3 million for the third quarter of 2009 and included AmBisome® (amphotericin B liposome for injection) for the treatment of severe fungal infections, Hepsera® (adefovir dipivoxil) for the treatment of chronic hepatitis B, Emtriva® (emtricitabine) for the treatment of HIV infection, and Cayston® (aztreonam for inhalation solution) for the improvement of respiratory symptoms in cystic fibrosis patients with Pseudomonas aeruginosa (P. aeruginosa). Sales of Cayston were $14.7 million for the third quarter of 2010.
Royalty, Contract and Other Revenues
Royalty, contract and other revenues resulting primarily from collaborations with corporate partners were $72.1 million in the third quarter of 2010, down from $152.4 million in the third quarter of 2009. This decrease was due primarily to lower Tamiflu® (oseltamivir phosphate) royalties from F. Hoffmann-La Roche Ltd of $34.5 million in the third quarter of 2010, compared to Tamiflu royalties of $113.5 million in the third quarter of 2009.
Research and Development
Research and development (R&D) expenses in the third quarter of 2010 were $230.4 million, compared to $269.9 million for the third quarter of 2009. Non-GAAP R&D expenses for the third quarter of 2010, which exclude restructuring and stock-based compensation expenses, were $203.2 million, compared to $242.2 million for the third quarter of 2009. The decrease in non-GAAP R&D expenses was due primarily to lower R&D expense reimbursement related to Gilead's collaboration with Tibotec Pharmaceuticals (Tibotec).
Selling, General and Administrative
Selling, general and administrative (SG&A) expenses in the third quarter of 2010 were $250.6 million, compared to $227.4 million for the third quarter of 2009. Non-GAAP SG&A expenses for the third quarter of 2010, which exclude acquisition-related, restructuring and stock-based compensation expenses, were $220.6 million, compared to $200.3 million for the third quarter in 2009. The increase in non-GAAP SG&A expenses was driven primarily by higher headcount and expenses to support Gilead's expanding commercial activities.
Net Foreign Currency Exchange Impact
The net foreign currency exchange impact on third quarter 2010 revenues and pre-tax earnings, which includes revenues and expenses generated from outside the United States, was an unfavorable $44.2 million and $37.4 million, respectively, compared to the third quarter of 2009, and an unfavorable $7.0 million and $1.7 million, respectively, compared to the second quarter of 2010.
Cash, Cash Equivalents and Marketable Securities
As of September 30, 2010, Gilead had cash, cash equivalents and marketable securities of $5.05 billion compared to $3.90 billion as of December 31, 2009. Gilead generated $2.11 billion of operating cash flow for the first nine months of 2010 including $739.5 million in the third quarter of 2010.
Corporate Highlights
Under the company's previously announced $5.0 billion stock repurchase program authorized by its Board of Directors in May 2010, Gilead has repurchased approximately $2.41 billion in common stock through September 30, 2010. In conjunction with the company's announcement of its convertible debt offering on July 26, 2010, Gilead has since acquired approximately $1.18 billion of shares repurchased at an average price of $33.84 per share. Total purchase activity was $1.55 billion in common stock for the third quarter of 2010. Total purchase activity for the year to date was $3.41 billion in common stock, representing 93.6 million repurchased shares or approximately 10% of Gilead's total common shares outstanding at December 31, 2009.
Product and Pipeline Update
Antiviral Franchise
In September, Gilead announced that it had submitted a Marketing Authorization Application to the European Medicines Agency for marketing approval of the fixed-dose combination of Truvada and Tibotec's investigational non-nucleoside reverse transcriptase inhibitor TMC278 (rilpivirine) for the treatment of HIV-1 infection in adults.
Also in September, Gilead released positive 48-week results from two of its ongoing Phase II clinical studies in HIV-infected patients. The first were from the study of its investigational fixed-dose, single-tablet "Quad" regimen of elvitegravir, cobicistat and Truvada versus Atripla. The second were from the study of cobicistat-boosted atazanavir plus Truvada compared to ritonavir-boosted atazanavir plus Truvada. Results from both studies were presented at the 50th Annual Interscience Conference on Antimicrobial Agents and Chemotherapy in Boston.
Researchers receive NIH grant to help develop gene therapy for HIV