GILEAD SCIENCES REPORTS 2ND QTR REVENUES OF $1.28 BILLION. - Free ...
Product Sales
Product sales were a record $1.22 billion for the second quarter of 2008, compared to $905.1 million in the second quarter of 2007, a 34 percent increase. This growth was driven primarily by Gilead's antiviral franchise, including the strong growth of Atripla[R] (efavirenz 600 mg/ emtricitabine 200 mg/ tenofovir disoproxil fumarate 300 mg) sales due primarily to the continued uptake of Atripla in the United States and the recent launches in certain European countries, as well as the continued growth of Truvada[R] (emtricitabine and tenofovir disoproxil fumarate) sales in the United States and Europe. Antiviral Franchise Antiviral product sales were $1.12 billion in the second quarter of 2008, a 34 percent increase from $837.4 million for the same period in 2007. The increase was driven primarily by the sales volume growth of Atripla and Truvada, as well as a favorable foreign currency exchange impact.
Truvada
Truvada sales were $516.1 million for the second quarter of 2008, an increase of 34 percent from $385.4 million in the second quarter of 2007. The increase in Truvada sales in the second quarter of 2008 compared to the same period of 2007 was driven primarily by sales volume growth in the United States and Europe, and a favorable foreign currency exchange impact.
Atripla
Atripla sales were $355.1 million for the second quarter of 2008, an increase of 67 percent from $212.4 million in the second quarter of 2007. The increase in Atripla sales in the second quarter of 2008 compared to the same period in 2007 was driven primarily by the continued uptake in the United States, as well as the recent launches in certain European countries.
Viread
Viread[R] (tenofovir disoproxil fumarate) sales were $150.7 million for the second quarter of 2008, a three percent decrease from $154.9 million in the second quarter of 2007. The decrease in Viread sales in the second quarter of 2008 compared to the same period of 2007 was driven primarily by lower sales volumes in the United States and Europe, partially offset by a favorable foreign currency exchange impact.
Hepsera
Sales of Hepsera[R] (adefovir dipivoxil) for chronic hepatitis B were $90.4 million for the second quarter of 2008, a 20 percent increase from $75.2 million in the second quarter of 2007. The increase in Hepsera sales in the second quarter of 2008 compared to the same period of 2007 was driven primarily by a favorable foreign currency exchange impact and sales volume growth in certain European markets.
AmBisome
For the second quarter of 2008, sales of AmBisome (amphotericin B) liposome for injection for severe fungal infections were $69.8 million, an increase of eight percent from $64.8 million for the second quarter of 2007. The increase in AmBisome sales in the second quarter of 2008 compared to the same period of 2007 was driven primarily by a favorable foreign currency exchange impact.
Royalty, Contract and Other Revenues
For the second quarter of 2008, royalty, contract and other revenues resulting primarily from collaborations with corporate partners were $60.9 million, a decrease of 57 percent from $143.0 million in the second quarter of 2007. The decrease in royalty, contract and other revenues during the second quarter of 2008 compared to the same period of 2007 was driven primarily by lower Tamiflu (oseltamivir phosphate) royalties from F. Hoffmann-La Roche Ltd of $37.5 million in the second quarter of 2008 compared to Tamiflu royalties of $123.1 million in the second quarter of 2007 due to decreased sales related to pandemic planning initiatives worldwide.
Research and Development
Research and development (R&D) expenses in the second quarter of 2008 were $176.5 million compared to $135.9 million for the same quarter in 2007. Non-GAAP R&D expenses, which exclude stock-based compensation expense, for the second quarter of 2008 were $161.2 million, compared to $119.3 million for the same quarter in 2007. Non-GAAP R&D expenses for the second quarter of 2008 were higher primarily as a result of increased clinical study expenses as well as higher headcount related to the growth in Gilead's business.
Selling, General and Administrative
Selling, general and administrative (SG&A) expenses in the second quarter of 2008 were $219.5 million compared to $186.2 million for the same quarter in 2007. Non-GAAP SG&A expenses, which exclude stock-based compensation expense, for the second quarter of 2008 were $200.9 million, compared to $157.7 million for the same quarter in 2007. Non-GAAP SG&A expenses for the second quarter of 2008 were higher primarily as a result of increased marketing and promotional expenses including those related to the launch of Atripla in certain European countries, higher headcount related to the growth in Gilead's business, as well as costs associated with certain termination-related disputes in our international operations.
Net Foreign Currency Exchange Impact
The net foreign currency exchange impact on second quarter 2008 revenues and pre-tax earnings, which includes revenues and expenses generated from outside the United States, was a favorable $45.2 million and $20.7 million, respectively, compared to the same period in 2007.
Cash, Cash Equivalents and Marketable Securities
As of June 30, 2008, Gilead had cash, cash equivalents and marketable securities of $2.91 billion compared to $2.72 billion as of December 31, 2007. For the first six months of 2008, Gilead generated $1.00 billion of operating cash flows, which was partially offset by Gilead's repurchases of $965.8 million of its common stock under its share repurchase program.
Corporate Highlights
In April 2008, Gilead announced that Robin L. Washington joined the company as senior vice president and chief financial officer. In May 2008, Gilead announced that John C. Martin, PhD was appointed chairman of the board of directors, and John F. Milligan, PhD was appointed president. Dr. Martin is assuming the additional role of chairman of the board from James M. Denny, who will remain a member of Gilead's board of directors, serving as lead director. Denny joined Gilead's board in 1996 and was appointed Chairman in 2001. In addition to their new roles, Dr. Martin and Dr. Milligan will continue to serve in their respective roles as CEO and COO.
Also in May 2008, Gilead and Navitas Assets, LLC (Navitas) announced that the companies had entered into an agreement under which Gilead acquired all of Navitas's assets related to its cicletanine business. Gilead plans to evaluate cicletanine as a potential treatment of pulmonary arterial hypertension (PAH). In May and June 2008, the U.S. Patent & Trademark Office (PTO) completed three of four reexamination proceedings and confirmed the patentability of U.S. Patent No. 6,043,230, which covers a method of use for Viread, and U.S. Patent Nos. 5,922,695 and 5,977,089, both of which cover the composition of matter for Viread. In July 2008, the PTO completed the final reexamination proceeding and confirmed the patentability of U.S. Patent No. 5,935,946, which also covers the composition of matter for Viread.
Product and Pipeline Highlights
Antiviral Franchise
In April 2008, Gilead announced the presentation of detailed 72-week data from two pivotal Phase III clinical trials, Studies 102 and 103, evaluating the safety and efficacy of once-daily Viread among adult patients with chronic hepatitis B. These data were presented at the 43rd Annual Meeting of the European Association for the Study of the Liver in Milan, Italy in April 2008. Also in April 2008, Gilead announced that the European Commission granted marketing authorization for Viread for the treatment of chronic hepatitis B in all 27 member states of the European Union.
Cardiovascular Franchise
In May 2008, Gilead announced the initiation of ATHENA-1, a Phase IV, randomized, double-blind, placebo-controlled study evaluating Letairis (ambrisentan 5mg and 10mg tablets) in patients with PAH demonstrating a sub-optimal response to sildenafil monotherapy. Also in May 2008, Gilead announced results of a post-hoc analysis of data collected during the ARIES-1, ARIES-2 and ARIES-E studies for Letairis in PAH (WHO Group 1) patients with primarily WHO functional class II or III symptoms. In addition, data from the pivotal Phase III ARIES-1 and ARIES-2 studies of Letairis were published in the journal Circulation.
Respiratory Franchise
In June 2008, Gilead announced results from an interim analysis of 12-month data from its open-label, Phase III AIR-CF3 study of aztreonam lysine for inhalation, an investigational therapy in development for the treatment of people with cystic fibrosis who have pulmonary Pseudomonas aeruginosa infection. These data were presented at the 31st Annual European Cystic Fibrosis Conference in Prague, Czech Republic in June 2008.
About Gilead
Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes innovative therapeutics in areas of unmet medical need. Gilead's mission is to advance the care of patients suffering from life-threatening diseases worldwide. Headquartered in Foster City, California, Gilead has operations in North America, Europe and Australia.
Non-GAAP Financial Information
Non-GAAP net income and net income per diluted share for the 2008 periods are presented excluding the after-tax impact of the IPR&D expense incurred in connection with the acquisition of all of Navitas's assets related to its cicletanine business, as well as the after-tax impact of stock-based compensation expense and the related methodology for computing dilutive securities for net income per diluted share purposes. Non-GAAP net income and net income per diluted share for the 2007 periods are presented excluding the after-tax impact of stock-based compensation expense and the related methodology for computing dilutive securities for net income per diluted share purposes. Non-GAAP R&D expenses and SG&A expenses for the 2008 and 2007 periods are presented excluding the impact of stock-based compensation expense. Management believes this non-GAAP information is useful for investors, taken in conjunction with Gilead's GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of the company's operating results as reported under United States generally accepted accounting principles.
For more information on Gilead Sciences, Inc., please visit http://www.gilead.com or call 1-800-GILEAD-5 (1-800-445-3235) or 650/522-5688.