Biktarvy Sales Increased 18% Year-Over-Year to $2.2 billion

Oncology Sales Increased 60% Year-Over-Year to $420 million

FOSTER CITY, Calif.--(BUSINESS WIRE)-- Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the first quarter of 2022.

“Gilead’s performance in the first quarter reflects the strength and diversity of our business with both our HIV and oncology therapies contributing to year-over-year growth,” said Daniel O’Day, Chairman and Chief Executive Officer, Gilead Sciences. “Biktarvy delivered strong 18% year-over-year revenue growth, and oncology sales increased by 60% year-over-year, driven by increased demand for Trodelvy and our cell therapy products. As we continue to advance our broad oncology portfolio, we look forward to providing more new options for people living with cancer.”

First Quarter 2022 Financial Results

• First quarter 2022 revenue increased 3% to $6.6 billion compared to the same period in 2021, primarily due to increased demand for Biktarvy® (bictegravir 50mg/emtricitabine 200mg (“FTC”)/tenofovir alafenamide 25mg (“TAF”)) and Veklury® (remdesivir 100mg for injection), partially offset by the impact of the loss of exclusivity for Truvada® (FTC/tenofovir disoproxil fumarate 300mg (“TDF”)) in the United States and unfavorable pricing dynamics for hepatitis C virus (“HCV”) products.
• Diluted Earnings Per Share (“EPS”) decreased to $0.02 for the first quarter of 2022 compared to $1.37 for the same period in 2021. The decrease was primarily the result of a $2.7 billion in-process research and development (“IPR&D”) impairment related to assets acquired by Gilead from Immunomedics in 2020.
• Non-GAAP diluted EPS increased 4% to $2.12 for the first quarter of 2022 compared to $2.04(1) for the same period in 2021, primarily reflecting higher product sales.
• As of March 31, 2022, Gilead had $6.8 billion of cash, cash equivalents and marketable debt securities compared to $7.8 billion as of December 31, 2021.
• During the first quarter of 2022, Gilead generated $1.8 billion in operating cash flow, which includes the cash outflow related to the $1.25 billion legal settlement.
• During the first quarter of 2022, Gilead made a $725 million collaboration opt-in payment to Arcus Biosciences, Inc., repaid $500 million of debt, paid dividends of $945 million and repurchased $352 million of common stock.

Product Sales Performance

First quarter 2022 product sales increased 3% to $6.5 billion compared to the same period in 2021. Total product sales, excluding Veklury, increased 2% to $5.0 billion in the first quarter of 2022 compared to the same period in 2021, primarily reflecting higher demand for Biktarvy, our cell therapy products and Trodelvy® (sacituzumab govitecan-hziy), partially offset by unfavorable pricing dynamics in HCV.

HIV product sales increased 2% to $3.7 billion in the first quarter of 2022 compared to the same period in 2021, primarily reflecting higher demand for Biktarvy and favorable pricing dynamics partially offset, as expected, by the loss of exclusivity of Truvada in the United States.

• Biktarvy sales increased 18% year-over-year in the first quarter of 2022, primarily due to higher demand.
• Descovy® (FTC 200mg/TAF 25mg) sales increased 4% year-over-year in the first quarter of 2022, primarily driven by increased demand and favorable pricing, partially offset by unfavorable channel inventory dynamics.
• Truvada sales decreased 72% year-over-year in the first quarter 2022, as expected, primarily due to the loss of exclusivity in the United States in October 2020.

HCV product sales decreased 22% to $399 million in the first quarter of 2022 compared to the same period in 2021, primarily driven by lower net price and fewer patient starts.

Hepatitis B virus (“HBV”) and hepatitis delta virus (“HDV”) product sales increased 7% to $235 million in the first quarter of 2022 compared to the same period in 2021. Vemlidy® (TAF 25mg) sales increased 10% in the first quarter of 2022 compared to the same period in 2021, primarily driven by higher demand in geographies outside the United States. Hepcludex® (bulevirtide) contributed $11 million in the first quarter of 2022, as launch activities continued across Europe.

Cell therapy product sales increased 43% to $274 million in the first quarter of 2022 compared to the same period in 2021.

• Yescarta® (axicabtagene ciloleucel) sales increased to $211 million in the first quarter of 2022, primarily driven by demand for relapsed or refractory large B-cell lymphoma (“LBCL”) in the United States and Europe and follicular lymphoma in the United States.
• Tecartus® (brexucabtagene autoleucel) sales were $63 million in the first quarter of 2022, primarily driven by growing adoption in Europe for mantle cell lymphoma and for adult patients with relapsed or refractory B-cell precursor acute lymphoblastic leukemia in the United States.

Trodelvy sales increased 103% to $146 million in the first quarter of 2022 compared to the same period in 2021, primarily reflecting uptake in the second line setting for the treatment of metastatic triple-negative breast cancer in the United States and Europe as well as metastatic urothelial cancer in the United States.

Veklury sales increased by 5% to $1.5 billionfor the first quarter of 2022 compared to the same period in 2021. Veklury revenue generally reflects COVID-19 related rates of infections, hospitalizations and vaccinations, as well as the availability, uptake and effectiveness of alternative treatments for COVID-19.

First Quarter 2022 Product Gross Margin, Operating Expenses and Effective Tax Rate

• Product gross margin was 78.2% for the first quarter of 2022 compared to 78.5% for the same period in 2021, primarily driven by a change in product mix and restructuring costs for the closing of a New Jersey manufacturing site in 2022, partially offset by lower inventory reserve adjustments. Non-GAAP product gross margin was 87.4% for the first quarter of 2022 compared to 86.5% in the same period in 2021, primarily driven by lower inventory reserve adjustments.
• Research and development (“R&D”) expenses for the first quarter of 2022 were $1.2 billion compared to $1.1 billion in the same period in 2021. Non-GAAP R&D expenses for the first quarter of 2022 were $1.2 billion compared to $1.0 billion in the same period in 2021. The increase in R&D and non-GAAP R&D expenses primarily reflect increased clinical activities for Trodelvy.
• Selling, general and administrative (“SG&A”) expenses were $1.1 billion for the first quarter of 2022 and for the same period in 2021. Non-GAAP SG&A expenses for the first quarter of 2022 were $1.1 billion compared to $1.0 billion in the same period in 2021.
• The effective tax rate (“ETR”) for the first quarter of 2022 was 107.9% compared to 23.9% for the same period in 2021, primarily driven by the $2.7 billion IPR&D impairment. Non-GAAP ETR for both the first quarter 2022 and the same period last year was 18.4%.

Guidance and Outlook

For the full-year, we have updated our EPS guidance to primarily reflect the $2.7 billion IPR&D impairment. We now expect EPS between $3.00 and $3.50, compared to $4.70 and $5.20 previously. There is no change to other guidance shared on February 1, 2022:

• Total product sales between $23.8 billion and $24.3 billion.
• Total product sales, excluding Veklury, between $21.8 billion and $22.3 billion.
• Total Veklury sales of approximately $2.0 billion.
• Non-GAAP earnings per share between $6.20 and $6.70.

This financial guidance excludes the impact of any expenses related to potential acquisitions or business development transactions that have not been executed, fair value adjustments of equity securities and discrete tax charges or benefits associated with changes in tax related laws and guidelines as Gilead is unable to project such amounts. A reconciliation between GAAP and non-GAAP financial information for the 2022 guidance is provided in the accompanying tables. Also see the Forward-Looking Statements described below. The financial guidance is subject to a number of risks and uncertainties, including uncertainty around the duration and magnitude of the COVID-19 pandemic. While the pandemic can be expected to continue to impact Gilead’s business and broader market dynamics, the rate and degree of these impacts as well as the corresponding recovery from the pandemic may vary across Gilead’s business.

Key Updates Since Our Last Quarterly Release

Viral Diseases

• Received a Complete Response Letter from FDA related to vial compatibility issues for the New Drug Application of investigational lenacapavir for the treatment of HIV-1 infection in heavily treatment-experienced (“HTE”) people with multi-drug resistant HIV-1 infection.
• Presented one-year data from studies of investigational lenacapavir at the 29th Conference on Retroviruses and Opportunistic Infections (“CROI”) with results from each of the Phase 2/3 CAPELLA trial in HTE people living with multi-drug resistant HIV and Phase 2 CALIBRATE trial in treatment-naive people living with HIV demonstrating high rates of virologic suppression at one-year.
• Presented five-year results from two Phase 3 studies of Biktarvy at CROI which reinforced Biktarvy’s sustained efficacy and durable viral suppression with zero cases of treatment failure due to emergent resistance observed.
• Announced data demonstrating in vitro activity of Veklury against ten SARS-CoV-2 variants, including Omicron. Additionally, interim results from the Phase 2/3 CARAVAN trial of Veklury in pediatric patients aged 28 days to less than 18 years hospitalized with COVID-19 were presented at CROI.

Oncology

• Announced results from the Phase 3 TROPiCS-02 study of Trodelvy in patients with HR+/HER2- metastatic breast cancer who had been heavily pre-treated. The study met its primary endpoint, demonstrating a statistically significant improvement in progression-free survival compared to physician’s choice of chemotherapy. Additionally, at the first interim analysis, a trend in improvement for overall survival (“OS”) was observed, a key secondary endpoint. No new safety concerns were noted. The company will discuss the study data with regulators and the study will continue to follow patients for OS and detailed results will be presented at an upcoming medical conference. Trodelvy has not been approved by any regulatory agency for the treatment of HR+/HER2- metastatic breast cancer, and its safety and efficacy have not been established for this indication.
• Received FDA approval for Yescarta for the treatment of adult patients with LBCL that is refractory to first-line chemoimmunotherapy or that relapse within 12 months of first-line chemoimmunotherapy. Additionally, the National Comprehensive Cancer Network updated its Clinical Practice Guidelines for B-cell Lymphomas to include Yescarta as a Category 1 recommendation for “Relapsed disease