Gilead Sciences Releases Q3 2024 Financial Results

Gilead Sciences, Inc., based in Foster City, California, has reported its most robust financial performance for the third quarter of 2024. The company's revenue saw a 7% increase year-over-year, reaching $7.5 billion. This growth was notably driven by a 13% year-over-year increase in sales of Biktarvy, its leading HIV treatment. Gilead's Chairman and CEO, Daniel O'Day, expressed optimism about the company's future, citing the impressive revenue growth and controlled operating expenses as reasons for raising the company's annual revenue, operating income, and earnings per share guidance. He also highlighted the excitement surrounding the U.S. launch of Livdelzi for primary biliary cholangitis and the upcoming potential launch of lenacapavir, a twice-yearly HIV prevention option.

The third quarter financial results indicated a significant increase in total revenue, mainly attributed to higher sales in the HIV segment, Veklury (remdesivir), and treatments for oncology and liver diseases. However, the third quarter saw a decline in diluted earnings per share (EPS), dropping from $1.73 in 2023 to $1.00 in 2024. This reduction was primarily due to a pre-tax in-process research and development (IPR&D) impairment charge of $1.75 billion related to assets acquired from Immunomedics in 2020, as well as increased acquired IPR&D expenses. Despite these losses, higher product sales and net unrealized gains on equity securities provided some relief.

Non-GAAP diluted EPS stood at $2.02, down from $2.29 in the same period last year, reflecting higher acquired IPR&D and tax expenses, which were partially mitigated by increased product sales. As of September 30, 2024, Gilead's cash, cash equivalents, and marketable debt securities totaled $5.0 billion, a decrease from $8.4 billion at the end of 2023, mainly due to the acquisition of CymaBay Therapeutics for $3.9 billion. The company generated $4.3 billion in operating cash flow during the quarter and returned $983 million to shareholders in dividends while repurchasing $300 million of common stock.

In terms of product sales, Gilead reported a 7% increase, reaching $7.5 billion for the third quarter of 2024, excluding Veklury sales, which also saw a 7% rise to $6.8 billion. HIV product sales experienced a 9% growth, driven by higher demand and average realized prices, with Biktarvy sales alone increasing by 13% to $3.5 billion. Descovy sales rose by 15% to $586 million. The liver disease portfolio saw a 4% increase in sales, amounting to $733 million, mainly due to higher demand for viral hepatitis treatments. Veklury sales also increased by 9% to $692 million, reflecting higher hospitalization rates due to COVID-19 in the U.S.

The cell therapy segment recorded relatively stable sales at $485 million, with Yescarta sales slightly decreasing by 1% to $387 million due to increased competition, while Tecartus sales grew by 2% to $98 million. Trodelvy sales surged by 17%, reaching $332 million, driven by demand across all regions.

Gilead's product gross margin improved to 79.1%, up from 77.6% in the same quarter the previous year, with the non-GAAP product gross margin increasing to 86.8% from 85.9%. Research and development (R&D) expenses, both GAAP and non-GAAP, decreased to $1.4 billion, primarily due to the timing of clinical activities, including the wind-down of COVID programs like magrolimab and obeldesivir. The IPR&D expenses rose to $505 million, mainly due to a $320 million charge for the buyout of global Livdelzi royalties from Janssen Pharmaceutica NV and payments related to ongoing collaborations. The IPR&D impairment was $1.75 billion, linked to assets acquired from Immunomedics.

Selling, general, and administrative (SG&A) expenses saw a rise to $1.4 billion from $1.3 billion, reflecting increased commercial activities, including the Livdelzi launch in the U.S. The effective tax rate (ETR) showed a significant decrease to (31.1)% from 6.3% in the same period last year, primarily due to a legal entity restructuring and the IPR&D impairment, partially offset by a prior year decrease in tax reserves that did not recur. Non-GAAP ETR was 17.5%, up from 7.0% in the same quarter last year.

Looking ahead, Gilead has revised its full-year 2024 guidance, reflecting its strong third-quarter performance and disciplined expense management. The company remains committed to increasing its impact on patients and communities, leveraging its solid financial foundation to drive innovation and growth in the biopharmaceutical sector.