gild-20220930

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

We own or have rights to various trademarks and trade names used in our business, including the following: GILEAD®, GILEAD SCIENCES®, AMBISOME®, ATRIPLA®, BIKTARVY®, CAYSTON®, COMPLERA®, DESCOVY®, DESCOVY FOR PREP®, EMTRIVA®, EPCLUSA®, EVIPLERA®, GENVOYA®, HARVONI®, HEPCLUDEX®, HEPSERA®, JYSELECA®, LETAIRIS®, ODEFSEY®, RANEXA®, SOVALDI®, STRIBILD®, SUNLENCA®, TECARTUS®, TRODELVY®, TRUVADA®, TRUVADA FOR PREP®, TYBOST®, VEKLURY®, VEMLIDY®, VIREAD®, VOSEVI®, YESCARTA® and ZYDELIG®. This report also refers to trademarks, service marks and trade names of other companies.

This Quarterly Report on Form 10-Q, including Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors, contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Words such as “expect,” “anticipate,” “target,” “goal,” “project,” “hope,” “intend,” “plan,” “believe,” “seek,” “estimate,” “continue,” “may,” “could,” “should,” “might,” “forecast” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements other than statements of historical fact are forward-looking statements, including statements regarding overall trends; operating cost and revenue trends; liquidity and capital needs; plans and expectations with respect to products, product candidates, corporate strategy, business and operations, financial projections and the use of capital; collaboration and licensing arrangements; patent protection and estimated loss of exclusivity for our products and product candidates; ongoing litigation and investigation matters; statements regarding the anticipated future impact on our business of the coronavirus disease 2019 (“COVID-19”) and related public health measures; and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions.

We have based these forward-looking statements on our current expectations about future events. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Our actual results may differ materially from those suggested by these forward-looking statements for various reasons, including those identified in Part II, Item 1A. Risk Factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements included in this report are made only as of the date hereof unless otherwise specified. Except as required under federal securities laws and the rules and regulations of the U.S. Securities and Exchange Commission, we do not undertake, and specifically decline, any obligation to update any of these statements or to publicly announce the results of any revisions to any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise. In evaluating our business, you should carefully consider the risks described in Part II, Item 1A. Risk Factors of this Quarterly Report in addition to the other information in this Quarterly Report on Form 10-Q. Any of the risks contained herein could materially and adversely affect our business, results of operations and financial condition.


(in millions, except per share amounts)	September 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	4,699	$	5,338
Short-term marketable debt securities	961		1,182
Accounts receivable, net	4,354		4,493
Inventories	1,463		1,618
Prepaid and other current assets	2,077		2,141
Total current assets	13,554		14,772
Property, plant and equipment, net	5,349		5,121
Long-term marketable debt securities	1,282		1,309
Intangible assets, net	29,440		33,455
Goodwill	8,314		8,332
Other long-term assets	4,618		4,963
Total assets	$	62,557	$	67,952
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	614	$	705
Accrued government and other rebates	3,674		3,244
Accrued and other current liabilities	3,865		6,145
Current portion of long-term debt and other obligations, net	2,270		1,516
Total current liabilities	10,423		11,610
Long-term debt, net	22,953		25,179
Long-term income taxes payable	3,982		4,767
Deferred tax liability	3,036		4,356
Other long-term obligations	1,106		976
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, par value $0.001 per share; 5 shares authorized; none outstanding	—		—
Common stock, par value $0.001 per share; 5,600 shares authorized; 1,254 shares issued and outstanding	1		1
Additional paid-in capital	5,226		4,661
Accumulated other comprehensive income	98		83
Retained earnings	15,756		16,324
Total Gilead stockholders’ equity	21,081		21,069
Noncontrolling interest	(24)		(5)
Total stockholders’ equity	21,057		21,064
Total liabilities and stockholders’ equity	$	62,557	$	67,952


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions, except per share amounts)	2022		2021		2022		2021
Revenues:
Product sales	$	6,978	$	7,356	$	19,650	$	19,848
Royalty, contract and other revenues	64		65		242		213
Total revenues	7,042		7,421		19,892		20,061
Costs and expenses:
Cost of goods sold	1,395		1,223		4,261		3,974
Research and development expenses	1,149		1,101		3,429		3,243
Acquired in-process research and development expenses	448		65		786		270
In-process research and development impairment	—		—		2,700		—
Selling, general and administrative expenses	1,213		1,190		3,653		3,596
Total costs and expenses	4,205		3,579		14,829		11,083
Income from operations	2,837		3,842		5,063		8,978
Interest expense	(229)		(250)		(709)		(763)
Other income (expense), net	(176)		(154)		(571)		(696)
Income before income taxes	2,432		3,438		3,783		7,519
Income tax expense	(646)		(852)		(850)		(1,694)
Net income	1,786		2,586		2,933		5,825
Net loss attributable to noncontrolling interest	3		6		19		18
Net income attributable to Gilead	$	1,789	$	2,592	$	2,952	$	5,843
Net income per share attributable to Gilead common stockholders – basic	$	1.43	$	2.06	$	2.35	$	4.65
Shares used in per share calculation – basic	1,255		1,256		1,255		1,256
Net income per share attributable to Gilead common stockholders – diluted	$	1.42	$	2.05	$	2.34	$	4.63
Shares used in per share calculation – diluted	1,261		1,262		1,261		1,262


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2022		2021		2022		2021
Net income	$	1,786	$	2,586	$	2,933	$	5,825
Other comprehensive income:
Net foreign currency translation loss, net of tax	(81)		(20)		(102)		(15)
Available-for-sale debt securities:
Net unrealized loss, net of tax	(7)		—		(38)		(3)
Reclassifications to net income, net of tax	—		—		1		—
Net change	(7)		—		(37)		(3)
Cash flow hedges:
Net unrealized gain, net of tax	140		37		254		92
Reclassifications to net income, net of tax	(41)		18		(100)		60
Net change	99		55		154		152
Other comprehensive income	11		35		15		134
Comprehensive income	1,797		2,621		2,948		5,959
Comprehensive loss attributable to noncontrolling interest	3		6		19		18
Comprehensive income attributable to Gilead	$	1,800	$	2,627	$	2,967	$	5,977


	Three Months Ended September 30, 2022
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Shares	Amount
Balance as of June 30, 2022	1,254	$	1	$	5,031	$	87	$	15,117	$	(21)	$	20,215
Net income (loss)	—	—		—		—		1,789		(3)		1,786
Other comprehensive income, net of tax	—	—		—		11		—		—		11
Issuances under employee stock purchase plan	2	—		30		—		—		—		30
Issuances under equity incentive plans	2	—		6		—		—		—		6
Stock-based compensation	—	—		170		—		—		—		170
Repurchases of common stock	(4)	—		(11)		—		(217)		—		(228)
Dividends declared ($0.73 per share)	—	—		—		—		(933)		—		(933)
Balance as of September 30, 2022	1,254	$	1	$	5,226	$	98	$	15,756	$	(24)	$	21,057


	Nine Months Ended September 30, 2022
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Shares	Amount
Balance as of December 31, 2021	1,254	$	1	$	4,661	$	83	$	16,324	$	(5)	$	21,064
Net income (loss)	—	—		—		—		2,952		(19)		2,933
Other comprehensive income, net of tax	—	—		—		15		—		—		15
Issuances under employee stock purchase plan	3	—		103		—		—		—		103
Issuances under equity incentive plans	9	—		30		—		—		—		30
Stock-based compensation	—	—		465		—		—		—		465
Repurchases of common stock	(12)	—		(33)		—		(723)		—		(756)
Dividends declared ($2.19 per share)	—	—		—		—		(2,797)		—		(2,797)
Balance as of September 30, 2022	1,254	$	1	$	5,226	$	98	$	15,756	$	(24)	$	21,057


	Three Months Ended September 30, 2021
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Shares	Amount
Balance as of June 30, 2021	1,254	$	1	$	4,271	$	39	$	15,392	$	7	$	19,710
Net income (loss)	—	—		—		—		2,592		(6)		2,586
Other comprehensive income, net of tax	—	—		—		35		—		—		35
Issuances under employee stock purchase plan	1	—		35		—		—		—		35
Issuances under equity incentive plans	3	—		22		—		—		—		22
Stock-based compensation	—	—		171		—		—		—		171
Repurchases of common stock	(3)	—		(7)		—		(176)		—		(183)
Dividends declared ($0.71 per share)	—	—		—		—		(905)		—		(905)
Balance as of September 30, 2021	1,255	$	1	$	4,492	$	74	$	16,903	$	1	$	21,471


	Nine Months Ended September 30, 2021
(in millions, except per share amounts)	Gilead Stockholders’ Equity									Noncontrolling Interest		Total Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Shares	Amount
Balance as of December 31, 2020	1,254	$	1	$	3,880	$	(60)	$	14,381	$	19	$	18,221
Net income (loss)	—	—		—		—		5,843		(18)		5,825
Other comprehensive income, net of tax	—	—		—		134		—		—		134
Issuances under employee stock purchase plan	2	—		111		—		—		—		111
Issuances under equity incentive plans	9	—		46		—		—		—		46
Stock-based compensation	—	—		479		—		—		—		479
Repurchases of common stock	(10)	—		(24)		—		(607)		—		(631)
Dividends declared ($2.13 per share)	—	—		—		—		(2,714)		—		(2,714)
Balance as of September 30, 2021	1,255	$	1	$	4,492	$	74	$	16,903	$	1	$	21,471


	Nine Months Ended
	September 30,
(in millions)	2022		2021
Operating Activities:
Net income	$	2,933	$	5,825
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	240		239
Amortization expense	1,335		1,276
Stock-based compensation expense	463		476
Acquired in-process research and development expenses	786		270
In-process research and development impairment	2,700		—
Deferred income taxes	(1,214)		243


Delaware			94-3047598
(State or Other Jurisdiction of Incorporation or Organization)			(IRS Employer Identification No.)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934