Idelalisib

Pictured: An arrow splitting toward pills and money, or pills and headstones/Taylor Tieden for BioSpace It’s been a little over a month since Amylyx Pharmaceuticals announced it would withdraw its amyotrophic lateral sclerosis drug Relyvrio from the market after it failed to meet the primary endpoints in a Phase III trial. Relyvrio received approval in 2022 after a positive Phase II study and the company had vowed to pull it if the second trial was not successful. Relyvrio isn’t the first drug to be withdrawn from the market after additional trials have failed to reaffirm earlier studies supporting the efficacy and safety of novel therapies. Conversely, some drugs stay on the market for years after confirmatory trials don’t deliver the expected results. For example, Jazz Pharmaceuticals and PharmaMar’s Zepzelca remains on the market for small cell lung cancer despite not meeting overall survival endpoints. Even for drugs that have yet to reach the market, companies can be faced with tough decisions when late-stage trials do not yield the expected results. BrainStorm Cell Therapeutics, for example, continues to develop its cell therapy NurOwn for ALS even after a Phase III trial failed to meet its primary endpoint and an FDA advisory committee voted against approval last year. Market withdrawal and pipeline decisions after late-stage failures depend on a number of factors, including the details of the study’s data. “The first thing that comes to mind is, why did the trial fail? Is it related to efficacy, safety, or both?” Nicolas Schmitz, a senior market analyst at KBI Biopharma, told BioSpace in an email. “The nature of the failure (statistical significance, side effects or patient recruitment challenges) will obviously play a crucial role in the future of the drug candidate and the company that owns it.” Not Cut and Dry In the last few years, there have been a handful of approved drugs withdrawn from the market. TG Therapeutics received accelerated approval for Ukoniq in February 2021 but voluntarily withdrew the lymphoma drug in 2022 after updated data showed a possible increased risk of death. Gilead Sciences’ Zydelig for lymphoma and small lymphocytic leukemia received accelerated approval in 2014 but was voluntarily withdrawn in 2022 after enrollment challenges hindered its confirmatory trial. And Genentech’s Tecentriq won accelerated approval in 2016 for urothelial carcinoma but failed to meet its overall survival endpoint in a Phase III trial the following year for patients with locally advanced or metastatic urothelial cancer who had been treated with platinum chemotherapy. It was withdrawn from the market in 2021 for this indication, with additional indications being pulled in 2022. Failed trials play a key role in earlier development decisions too. For example, a failed Phase III study can cause some companies to shutter entire development programs, while others will continue pushing forward with additional studies, perhaps with different trial designs or targeting different patient populations. In September 2023, when the FDA’s Cellular, Tissue and Gene Therapies advisory committee voted 17-1 against recommending NurOwn for approval, the company decided to continue developing the therapy. “We’re heartened and encouraged by the support of the community, but it really comes back to the evidence that we have which drives us,” Co-CEO Stacy Lindborg told BioSpace. The advisory committee had been critical of the company’s manufacturing plan and questioned the greater mortality rate in the experimental group. Moreover, the primary endpoint of BrainStorm’s Phase III trial—the proportion of participants experiencing an improvement of 1.25 points per month post-treatment on the ALSFRS-R vs. placebo—did not meet statistical significance. However, this endpoint was achieved in a subset of patients. “At face value, we took the endpoints, and our first inclination was that this is a failed trial,” Lindborg said, adding that all companies have a responsibility to trial participants to understand what they have learned. “When we started seeing that the cells had done what we expected, we started to ask additional questions.” Indeed, the team saw in the trial data improvements in neurofilament light and other markers of neurodegenerative disease, Lindborg said. BrainStorm came to an agreement with the FDA on the design of a Phase IIIb trial for NurOwn in February 2024. Lindborg is optimistic that the trial will succeed, but would not comment on what action the company would take if the new endpoints are not met. Sarepta Therapeutics is also looking to move forward with a therapy that hasn’t delivered as expected in clinical trials. The FDA accepted Sarepta’s supplemental Biologics License Application (sBLA) for full approval and to expand the label of its Duchenne muscular dystrophy gene therapy Elevidys earlier this year, despite its failing a confirmatory trial in October 2023. The company expects a decision on or before June 21. Financial Factors Finances also play a role in whether companies pursue additional trials in the face of less-than-ideal results. A larger company might have more freedom to pursue further development following a failure than a small company would. Schmitz pointed to Eli Lilly’s solanezumab, which failed to meet endpoints in multiple trials before being dropped in 2023, as an example. Lilly earned more than $34 billion in revenue in 2023, with 63% of that coming from a handful of drugs. In comparison, Amylyx earned $380 million in revenue in 2023, with Relyvrio its only marketed product. If a company is “struggling with cash” with no alternative products, a failed trial “might certainly be the end of the adventure” for that company, he said. “The key tenets of every product are cycle time, cost and value,” Lindborg said. “Is there an appropriate need, such that what you’re investing can be recouped and that you’re able to continue to do research in the future?” Companies may also sell drug programs that failed in clinical trials to companies with the resources to continue research and development, Schmitz said. Lindborg added that partnerships between companies could help cost-effectiveness and efficiency by sharing capacity and headcount across organizations. Whether or not a drug is withdrawn from the market or development is halted ultimately affects whether trial participants and other patients can access that drug. A study examining cancer drugs that failed clinical trials after receiving accelerated approval found that multiple drugs were still recommended by the National Comprehensive Cancer Network even after negative results were available. Amylyx will continue to make Relyvrio available for free to patients who believe the drug is helping them, a decision that was commended by The ALS Association, according to The Washington Post. “We try to boil every question down to, what’s best for people with the disease, what’s best for the families, what’s best for the community,” Amylyx Co-CEO Justin Klee told BioSpace last month. “We ran a large, randomized control trial. It was a very well-done trial, and the benefit was uncertain.” Nadia Bey is a freelance reporter in North Carolina. Her work and contact information can be found at nadiabey.com.

Product Sales Excluding Veklury Increased 6% Year-Over-Year to $6.1 billion Biktarvy Sales Increased 10% Year-Over-Year to $2.9 billion Oncology Sales Increased 18% Year-Over-Year to $789 million Closed CymaBay Acquisition Resulting in $3.9 billion Acquired IPR&D Charge ($3.14 Diluted EPS Impact) FOSTER CITY, Calif.--(BUSINESS WIRE)-- Gilead Sciences, Inc. (Nasdaq: GILD) announced today its first quarter 2024 results of operations. “Gilead delivered another strong quarter of revenue growth in the first quarter with 6% year-over-year growth in our base business driven by HIV, Oncology and Liver Disease,” said Daniel O’Day, Gilead’s Chairman and Chief Executive Officer. “The acquisition of CymaBay brings us another potentially transformative therapy for people with liver disease, and a regulatory decision on seladelpar is expected in August. New HIV data demonstrates the continued progress in our long-acting HIV pipeline, and we look forward to providing updates on this and our broad Oncology portfolio throughout the rest of 2024.” First Quarter 2024 Financial Results Total first quarter 2024 revenue increased 5% to $6.7 billion, compared to the same period in 2023, primarily due to higher HIV, Oncology and Liver Disease sales. Diluted (loss) earnings per share (“EPS”) was $(3.34) in the first quarter 2024, compared to $0.80 in the same period in 2023. The decrease was primarily driven by an acquired in-process research and development (“IPR&D”) charge of $3.9 billion, or $3.14 per share, related to the acquisition of CymaBay Therapeutics, Inc. (“CymaBay”), as well as a pre-tax IPR&D impairment of $2.4 billion, or $1.46 per share, related to assets acquired by Gilead from Immunomedics, Inc. (“Immunomedics”) in 2020. Non-GAAP diluted (loss) EPS was $(1.32) in the first quarter 2024, compared to $1.37 in the same period in 2023. The decrease was primarily driven by the charge related to the acquisition of CymaBay. As of March 31, 2024, Gilead had $4.7 billion of cash, cash equivalents and marketable debt securities, compared to $8.4 billion as of December 31, 2023. During the first quarter 2024, Gilead generated $2.2 billion in operating cash flow. During the first quarter 2024, Gilead paid dividends of $990 million and repurchased $400 million of common stock. First Quarter 2024 Product Sales Total first quarter 2024 product sales increased 5% to $6.6 billion, compared to the same period in 2023. Total product sales, excluding Veklury, increased 6% to $6.1 billion in the first quarter 2024, compared to the same period in 2023, primarily due to higher sales in HIV, Oncology and Liver Disease. HIV product sales increased 4% to $4.3 billion in the first quarter 2024, compared to the same period in 2023, primarily driven by higher demand. Biktarvy® (bictegravir 50mg/emtricitabine 200mg (“FTC”)/tenofovir alafenamide 25mg (“TAF”)) sales increased 10% to $2.9 billion in the first quarter 2024, compared to the same period in 2023, primarily driven by higher demand in the United States, Europe and other international markets. Descovy® (FTC 200mg/TAF 25mg) sales decreased 5% to $426 million in the first quarter 2024, compared to the same period in 2023, primarily driven by lower average realized price due to channel mix, partially offset by higher demand. The Liver Disease portfolio sales increased 9% to $737 million in the first quarter 2024, compared to the same period in 2023. This was primarily driven by favorable inventory dynamics, the timing of chronic hepatitis C virus (“HCV”) purchases by the Department of Corrections in the United States, as well as higher demand across chronic hepatitis B virus (“HBV”), HCV and, in the European Union (“EU”), chronic hepatitis D virus (“HDV”). Veklury sales decreased 3% to $555 million in the first quarter 2024, compared to the same period in 2023, primarily driven by lower rates of COVID-19 related hospitalizations. Cell Therapy product sales increased 7% to $480 million in the first quarter 2024, compared to the same period in 2023. Yescarta® (axicabtagene ciloleucel) sales increased 6% to $380 million in the first quarter 2024, compared to the same period in 2023, primarily driven by strong demand in relapsed or refractory (“R/R”) large B-cell lymphoma (“LBCL”) outside the United States. Tecartus® (brexucabtagene autoleucel) sales increased 13% to $100 million in the first quarter 2024, compared to the same period in 2023, with increased demand in R/R adult acute lymphoblastic leukemia and R/R mantle cell lymphoma. Trodelvy® (sacituzumab govitecan-hziy) sales increased 39% to $309 million in the first quarter 2024, compared to the same period in 2023, primarily driven by higher demand. First Quarter 2024 Product Gross Margin, Operating Expenses and Effective Tax Rate Product gross margin was 76.6% in the first quarter 2024, compared to 77.8% in the same period in 2023, primarily driven by product mix and higher intangible asset amortization expenses. Non-GAAP product gross margin was 85.4% in the first quarter 2024, compared to 86.2% in the same period in 2023, primarily driven by product mix. Research & development (“R&D”) expenses were $1.5 billion in the first quarter 2024, compared to $1.4 billion in the same period in 2023, primarily driven by costs related to the acquisition of CymaBay and restructuring expenses. Non-GAAP R&D expenses were $1.4 billion in the first quarter 2024, flat with the same period in 2023. Acquired IPR&D expenses were $4.1 billion in the first quarter 2024, primarily driven by the $3.9 billion charge related to the acquisition of CymaBay that closed on March 22, 2024. IPR&D impairment was $2.4 billion related to the assets acquired from Immunomedics in 2020 with no similar charges in 2023. Selling, general and administrative (“SG&A”) expenses were $1.4 billion in the first quarter 2024, compared to $1.3 billion in the same period in 2023. This increase reflects costs related to the acquisition of CymaBay and restructuring expenses. Non-GAAP SG&A expenses were $1.3 billion in the first quarter 2024, flat with the same period in 2023. The effective tax rate (“ETR”) was 7.0% in the first quarter 2024, compared to 24.3% in the same period in 2023, and non-GAAP ETR was (29.8)% in the first quarter 2024, compared to 18.9% in the same period in 2023. These changes primarily reflect the non-deductible acquired IPR&D charge for CymaBay. Guidance and Outlook For the full-year, Gilead expects: (in millions, except per share amounts) 4/25/24 Guidance Low End High End Comparison to Prior Guidance Product sales $ 27,100 $ 27,500 Unchanged Product sales, excluding Veklury $ 25,800 $ 26,200 Unchanged Veklury $ 1,300 $ 1,300 Unchanged Diluted EPS $ 0.10 $ 0.50 Previously $5.15 to $5.55 Non-GAAP diluted EPS $ 3.45 $ 3.85 Previously $6.85 to $7.25 Additional information and a reconciliation between GAAP and non-GAAP financial information for the 2024 guidance is provided in the accompanying tables. The financial guidance is subject to a number of risks and uncertainties. See the Forward-Looking Statements section below. Key Updates Since Our Last Quarterly Release Virology Presented data at the Conference on Retroviruses and Opportunistic Infections (“CROI”) across Gilead’s HIV long-acting treatment pipeline. For once-weekly oral dosing, this included Phase 2 data evaluating lenacapavir in combination with Merck & Co., Inc.’s islatravir as well as initial Phase 1b data for GS-1720, Gilead’s novel, investigational integrase inhibitor. Additionally, updated results were presented from the twice-yearly injectable Phase 1b study of lenacapavir in combination with investigational broadly neutralizing antibodies, teropavimab and zinlirvimab. Announced data at CROI evaluating Biktarvy for treatment of people with HIV and coinfections of HBV or tuberculosis, as well as results from a Phase 2/3 study evaluating once-daily oral combination of bictegravir and lenacapavir. Presented multiple real-world analyses at CROI supporting the use of Veklury for people hospitalized with COVID-19, including in immunocompromised people. Additionally, presented a real-world analysis evaluating the impact of Veklury on the risk of developing long-COVID. Announced data at CROI evaluating the safety and efficacy of Hepcludex® (bulevirtide) in people living with coinfections of HIV, HBV and HDV. In the United States and other areas outside of the EU and European Economic Area, bulevirtide is an investigational product and its safety and efficacy have not been established. Received approval by the U.S. Food and Drug Administration (“FDA”) to expand Biktarvy’s label to include treatment of people with HIV who have suppressed viral loads with known or suspected M184V/I resistance. Received approval from FDA to expand the indication for Vemlidy® (tenofovir alafenamide) to include treatment of chronic HBV in children six years and older who weigh at least 25 kg with compensated liver disease. Oncology Announced a research collaboration, option and license agreement with Merus N.V. (“Merus”) to discover novel antibody-based trispecific T-cell engagers in oncology. Entered into an exclusive license agreement with Xilio Therapeutics, Inc. (“Xilio”) to develop and commercialize Xilio’s tumor-activated IL-12 program, including investigational candidate XTX301 in advanced solid tumors. Inflammation Completed the acquisition of CymaBay for $4.3 billion in total equity value, or $3.9 billion net cash paid, adding investigational candidate seladelpar for the treatment of primary biliary cholangitis (“PBC”) to Gilead’s Liver Disease portfolio. Seladelpar is an investigational, oral, selective peroxisome proliferator-activated receptor delta (PPARδ) agonist, with Orphan Drug Designation in the United States and Europe. PPARδ has been shown to regulate critical metabolic and liver disease pathways. FDA accepted the New Drug Application for seladelpar in February 2024 for priority review, with a Prescription Drug User Fee Act target action date of August 14, 2024. Corporate Announced that Kevin Lofton is retiring from Gilead’s Board of Directors (the “Board”), effective at the conclusion of the Annual Meeting of Stockholders (“Annual Meeting”) on May 8, 2024. Anthony Welters, if re-elected at the Annual Meeting, will succeed Mr. Lofton as Lead Independent Director. Recognized as one of America’s Most JUST Companies by Just Capital and CNBC, reflecting Gilead’s longstanding commitment to operate responsibly. The Board declared a quarterly dividend of $0.77 per share of common stock for the second quarter of 2024. The dividend is payable on June 27, 2024, to stockholders of record at the close of business on June 14, 2024. Future dividends will be subject to Board approval. Certain amounts and percentages in this press release may not sum or recalculate due to rounding. Conference Call At 1:30 p.m. Pacific Time today, Gilead will host a conference call to discuss Gilead’s results. A live webcast will be available on and will be archived on for one year. Non-GAAP Financial Information The information presented in this document has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), unless otherwise noted as non-GAAP. Management believes non-GAAP information is useful for investors, when considered in conjunction with Gilead’s GAAP financial information, 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 Gilead’s operating results as reported under GAAP. Non-GAAP financial information generally excludes acquisition-related expenses including amortization of acquired intangible assets and inventory step-up charges, and other items that are considered unusual or not representative of underlying trends of Gilead’s business, fair value adjustments of equity securities and discrete and related tax charges or benefits associated with changes in tax related laws and guidelines. Although Gilead consistently excludes the amortization of acquired intangible assets from the non-GAAP financial information, management believes that it is important for investors to understand that such intangible assets were recorded as part of acquisitions and contribute to ongoing revenue generation. Non-GAAP measures may be defined and calculated differently by other companies in the same industry. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the accompanying tables. About Gilead Sciences Gilead Sciences, Inc. is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades, with the goal of creating a healthier world for all people. The company is committed to advancing innovative medicines to prevent and treat life-threatening diseases, including HIV, viral hepatitis, COVID-19 and cancer. Gilead operates in more than 35 countries worldwide, with headquarters in Foster City, California. Forward-Looking Statements Statements included in this press release that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Gilead cautions readers that forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include those relating to: Gilead’s ability to achieve its anticipated full year 2024 financial results, including as a result of the uncertainty of the amount and timing of Veklury revenues; Gilead’s ability to make progress on any of its long-term ambitions or priorities laid out in its corporate strategy; Gilead’s ability to accelerate or sustain revenues for its virology, oncology and other programs; Gilead’s ability to realize the potential benefits of acquisitions, collaborations or licensing arrangements, including the arrangements with CymaBay, Merus, and Xilio; patent protection and estimated loss of exclusivity for our products and product candidates; Gilead’s ability to initiate, progress or complete clinical trials within currently anticipated timeframes or at all, the possibility of unfavorable results from ongoing and additional clinical trials, including those involving Biktarvy, Hepcludex, Veklury, GS-1720, lenacapavir, seladelpar, teropavimab, XTX301, and zinlirvimab, and the risk that safety and efficacy data from clinical trials may not warrant further development of Gilead’s product candidates or the product candidates of Gilead’s strategic partners; Gilead’s ability to submit new drug applications for new product candidates or expanded indications in the currently anticipated timelines; Gilead’s ability to receive regulatory approvals in a timely manner or at all, including FDA approval of the New Drug Application for seladelpar, and the risk that any such approvals, if granted, may be subject to significant limitations on use; Gilead’s ability to successfully commercialize its products; the risk of potential disruptions to the manufacturing and supply chain of Gilead’s products; pricing and reimbursement pressures from government agencies and other third parties, including required rebates and other discounts; a larger than anticipated shift in payer mix to more highly discounted payer segments; market share and price erosion caused by the introduction of generic versions of Gilead products; the risk that physicians and patients may not see advantages of Gilead’s products over other therapies and may therefore be reluctant to prescribe the products, including Biktarvy and Vemlidy; and other risks identified from time to time in Gilead’s reports filed with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, Gilead makes estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. Gilead bases its estimates on historical experience and on various other market specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There may be other factors of which Gilead is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ significantly from these estimates. Further, results for the quarter ended March 31, 2024 are not necessarily indicative of operating results for any future periods. Gilead directs readers to its press releases, annual reports on Form 10-K, quarterly reports on Form 10-Q and other subsequent disclosure documents filed with the SEC. Gilead claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. The reader is cautioned that forward-looking statements are not guarantees of future performance and is cautioned not to place undue reliance on these forward-looking statements. All forward-looking statements are based on information currently available to Gilead and Gilead assumes no obligation to update or supplement any such forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements. Gilead owns or has rights to various trademarks, copyrights and trade names used in its business, including the following: GILEAD®, GILEAD SCIENCES®, KITETM, AMBISOME®, ATRIPLA®, BIKTARVY®, CAYSTON®, COMPLERA®, DESCOVY®, DESCOVY FOR PREP®, EMTRIVA®, EPCLUSA®, EVIPLERA®, GENVOYA®, HARVONI®, HEPCLUDEX®, HEPSERA®, JYSELECA®, LETAIRIS®, ODEFSEY®, SOVALDI®, STRIBILD®, SUNLENCA® , TECARTUS®, TRODELVY®, TRUVADA®, TRUVADA FOR PREP®, TYBOST®, VEKLURY®, VEMLIDY®, VIREAD®, VOSEVI®, YESCARTA® and ZYDELIG®. KEYTRUDA® is a registered trademark of Merck Sharp & Dohme LLC, a subsidiary of Merck & Co., Inc., Rahway, NJ, United States. Other trademarks are the property of their respective owners. For more information on Gilead Sciences, Inc., please visit or call the Gilead Public Affairs Department at 1-800-GILEAD-5 (1-800-445-3235). GILEAD SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended March 31, (in millions, except per share amounts) 2024 2023 Revenues: Product sales $ 6,647 $ 6,306 Royalty, contract and other revenues 39 46 Total revenues 6,686 6,352 Costs and expenses: Cost of goods sold 1,552 1,401 Research and development expenses 1,520 1,447 Acquired in-process research and development expenses 4,131 481 In-process research and development impairment 2,430 — Selling, general and administrative expenses 1,375 1,319 Total costs and expenses 11,008 4,647 Operating (loss) income (4,322 ) 1,705 Interest expense 254 230 Other (income) expense, net (91 ) 174 (Loss) income before income taxes (4,486 ) 1,300 Income tax (benefit) expense (315 ) 316 Net (loss) income (4,170 ) 985 Net loss attributable to noncontrolling interest — (26 ) Net (loss) income attributable to Gilead $ (4,170 ) $ 1,010 Basic (loss) earnings per share attributable to Gilead $ (3.34 ) $ 0.81 Shares used in basic (loss) earnings per share attributable to Gilead calculation 1,247 1,248 Diluted (loss) earnings per share attributable to Gilead $ (3.34 ) $ 0.80 Shares used in diluted (loss) earnings per share attributable to Gilead calculation 1,247 1,261 Cash dividends declared per share $ 0.77 $ 0.75 Research and development expenses as a % of revenues 22.7 % 22.8 % Selling, general and administrative expenses as a % of revenues 20.6 % 20.8 % Effective tax rate 7.0 % 24.3 % GILEAD SCIENCES, INC. TOTAL REVENUE SUMMARY (unaudited) Three Months Ended March 31, (in millions, except percentages) 2024 2023 Change Product sales: HIV $ 4,342 $ 4,190 4 % Liver Disease 737 675 9 % Oncology 789 670 18 % Other 224 199 13 % Total product sales excluding Veklury 6,092 5,733 6 % Veklury 555 573 (3 )% Total product sales 6,647 6,306 5 % Royalty, contract and other revenues 39 46 (15 )% Total revenues $ 6,686 $ 6,352 5 % GILEAD SCIENCES, INC. NON-GAAP FINANCIAL INFORMATION(1) (unaudited) Three Months Ended March 31, (in millions, except percentages) 2024 2023 Change Non-GAAP: Cost of goods sold $ 974 $ 871 12 % Research and development expenses $ 1,403 $ 1,439 (2 )% Acquired IPR&D expenses(2) $ 4,131 $ 481 NM Selling, general and administrative expenses $ 1,295 $ 1,318 (2 )% Other (income) expense, net $ (104 ) $ (82 ) 27 % Diluted (loss) earnings per share attributable to Gilead $ (1.32 ) $ 1.37 NM Product gross margin 85.4 % 86.2 % -83 bps Research and development expenses as a % of revenues 21.0 % 22.6 % -166 bps Selling, general and administrative expenses as a % of revenues 19.4 % 20.7 % -138 bps Operating margin (16.7 )% 35.3 % NM Effective tax rate (29.8 )% 18.9 % NM ________________________________ NM - Not Meaningful (1) Refer to Non-GAAP Financial Information section above for further disclosures on non-GAAP financial measures. A reconciliation between GAAP and non-GAAP financial information is provided in the tables below. (2) Equal to GAAP financial information. GILEAD SCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (unaudited) Three Months Ended March 31, (in millions, except percentages and per share amounts) 2024 2023 Cost of goods sold reconciliation: GAAP cost of goods sold $ 1,552 $ 1,401 Acquisition-related – amortization(1) (579 ) (530 ) Non-GAAP cost of goods sold $ 974 $ 871 Product gross margin reconciliation: GAAP product gross margin 76.6 % 77.8 % Acquisition-related – amortization(1) 8.7 % 8.4 % Non-GAAP product gross margin 85.4 % 86.2 % Research and development expenses reconciliation: GAAP research and development expenses $ 1,520 $ 1,447 Acquisition-related – other costs(2) (66 ) (8 ) Restructuring (50 ) — Non-GAAP research and development expenses $ 1,403 $ 1,439 IPR&D impairment reconciliation: GAAP IPR&D impairment $ 2,430 $ — IPR&D impairment (2,430 ) — Non-GAAP IPR&D impairment $ — $ — Selling, general and administrative expenses reconciliation: GAAP selling, general and administrative expenses $ 1,375 $ 1,319 Acquisition-related – other costs(2) (67 ) (1 ) Restructuring (13 ) — Non-GAAP selling, general and administrative expenses $ 1,295 $ 1,318 Operating (loss) income reconciliation: GAAP operating (loss) income $ (4,322 ) $ 1,705 Acquisition-related – amortization(1) 579 530 Acquisition-related – other costs(2) 133 9 Restructuring 63 — IPR&D impairment 2,430 — Non-GAAP operating (loss) income $ (1,117 ) $ 2,243 Operating margin reconciliation: GAAP operating margin (64.6 )% 26.8 % Acquisition-related – amortization(1) 8.7 % 8.3 % Acquisition-related – other costs(2) 2.0 % 0.1 % Restructuring 0.9 % — % IPR&D impairment 36.3 % — % Non-GAAP operating margin (16.7 )% 35.3 % Other (income) expense, net reconciliation: GAAP other (income) expense, net $ (91 ) $ 174 Loss from equity securities, net (14 ) (256 ) Non-GAAP other (income) expense, net $ (104 ) $ (82 ) GILEAD SCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION - (Continued) (unaudited) Three Months Ended March 31, (in millions, except percentages and per share amounts) 2024 2023 Effective tax rate and income tax (benefit) expense reconciliation: GAAP effective tax rate 7.0 % 24.3 % GAAP income tax (benefit) expense $ (315 ) $ 316 Income tax effect of non-GAAP adjustments: Acquisition-related – amortization(1) 121 107 Acquisition-related – other costs(2) 30 3 Restructuring 10 — IPR&D impairment 611 — Loss from equity securities, net (39 ) (1 ) Discrete and related tax charges(3) (39 ) (29 ) Non-GAAP income tax expense $ 379 $ 396 Non-GAAP effective tax rate (29.8 )% 18.9 % Net (loss) income attributable to Gilead reconciliation: GAAP net (loss) income attributable to Gilead $ (4,170 ) $ 1,010 Acquisition-related – amortization(1) 458 422 Acquisition-related – other costs(2) 103 6 Restructuring 54 — IPR&D impairment 1,819 — Loss from equity securities, net 53 257 Discrete and related tax charges(3) 39 29 Non-GAAP net (loss) income attributable to Gilead $ (1,644 ) $ 1,725 Diluted (loss) earnings per share reconciliation: GAAP diluted (loss) earnings per share $ (3.34 ) $ 0.80 Acquisition-related – amortization(1) 0.37 0.33 Acquisition-related – other costs(2) 0.08 0.01 Restructuring 0.04 — IPR&D impairment 1.46 — Loss from equity securities, net 0.04 0.20 Discrete and related tax charges(3) 0.03 0.02 Non-GAAP diluted (loss) earnings per share $ (1.32 ) $ 1.37 Non-GAAP adjustment summary: Cost of goods sold adjustments $ 579 $ 530 Research and development expenses adjustments 117 8 IPR&D impairment adjustments 2,430 — Selling, general and administrative expenses adjustments 80 1 Total non-GAAP adjustments to costs and expenses 3,205 539 Other (income) expense, net adjustments 14 256 Total non-GAAP adjustments before income taxes 3,219 795 Income tax effect of non-GAAP adjustments above (732 ) (109 ) Discrete and related tax charges(3) 39 29 Total non-GAAP adjustments to net income attributable to Gilead $ 2,526 $ 715 ______________________________ (1) Relates to amortization of acquired intangibles and inventory step-up charges. (2) Adjustments include integration expenses, contingent consideration fair value adjustments and other expenses associated with Gilead’s acquisitions of MYR GmbH, MiroBio, Ltd., Tmunity Therapeutics, Inc. and CymaBay Therapeutics, Inc. (3) Represents discrete and related deferred tax charges or benefits primarily associated with acquired intangible assets and transfers of intangible assets from a foreign subsidiary to Ireland and the United States. GILEAD SCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP 2024 FULL-YEAR GUIDANCE(1) (unaudited) (in millions, except percentages and per share amounts) Provided February 6, 2024 Updated April 25, 2024 Projected product gross margin GAAP to non-GAAP reconciliation: GAAP projected product gross margin 76.0% - 77.0% 76.0% - 77.0% Acquisition-related expenses ~ 9.0% ~ 9.0% Non-GAAP projected product gross margin 85.0% - 86.0% 85.0% - 86.0% Projected operating income GAAP to non-GAAP reconciliation: GAAP projected operating income $8,700 - $9,200 $1,900 - $2,400 IPR&D impairment, acquisition-related and restructuring expenses ~ 2,500 ~ 5,100 Non-GAAP projected operating income $11,200 - $11,700 $7,000 - $7,500 Projected effective tax rate GAAP to non-GAAP reconciliation: GAAP projected effective tax rate ~ 21% ~ 65% Income tax effect of above non-GAAP adjustments and fair value adjustments of equity securities, and discrete and related tax adjustments (~ 2%) (~ 35%) Non-GAAP projected effective tax rate ~ 19% ~ 30% Projected diluted EPS GAAP to non-GAAP reconciliation: GAAP projected diluted EPS $5.15 - $5.55 $0.10 - $0.50 IPR&D impairment, acquisition-related and restructuring expenses, fair value adjustments of equity securities and discrete and related tax adjustments ~ 1.70 ~ 3.35 Non-GAAP projected diluted EPS $6.85 - $7.25 $3.45 - $3.85 ________________________________ (1) Our full-year guidance excludes the potential impact of any (i) acquisitions or business development transactions that have not been executed, (ii) future fair value adjustments of equity securities and (iii) discrete tax charges or benefits associated with changes in tax related laws and guidelines that have not been enacted, as Gilead is unable to project such amounts. The non-GAAP full-year guidance includes non-GAAP adjustments to actual current period results as well as adjustments for the known future impact associated with events that have already occurred, such as future amortization of our intangible assets and the future impact of discrete and related deferred tax charges or benefits primarily associated with acquired intangible assets and transfers of intangible assets from a foreign subsidiary to Ireland and the United States. GILEAD SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) March 31, December 31, (in millions) 2024 2023 Assets Cash, cash equivalents and marketable debt securities $ 4,718 $ 8,428 Accounts receivable, net 4,669 4,660 Inventories 3,363 3,366 Property, plant and equipment, net 5,321 5,317 Intangible assets, net 23,428 26,454 Goodwill 8,314 8,314 Other assets 6,479 5,586 Total assets $ 56,292 $ 62,125 Liabilities and Stockholders’ Equity Current liabilities $ 13,015 $ 11,280 Long-term liabilities 25,822 28,096 Stockholders’ equity(1) 17,455 22,749 Total liabilities and stockholders’ equity $ 56,292 $ 62,125 ________________________________ (1) As of March 31, 2024 and December 31, 2023, there were 1,246 shares of common stock issued and outstanding. GILEAD SCIENCES, INC. SELECTED CASH FLOW INFORMATION (unaudited) Three Months Ended March 31, (in millions) 2024 2023 Net cash provided by operating activities $ 2,219 $ 1,744 Net cash used in investing activities (2,207 ) (826 ) Net cash used in financing activities (1,361 ) (1,406 ) Effect of exchange rate changes on cash and cash equivalents (18 ) 13 Net change in cash and cash equivalents (1,367 ) (476 ) Cash and cash equivalents at beginning of period 6,085 5,412 Cash and cash equivalents at end of period $ 4,718 $ 4,936 Three Months Ended March 31, (in millions) 2024 2023 Net cash provided by operating activities $ 2,219 $ 1,744 Capital expenditures (105 ) (109 ) Free cash flow(1) $ 2,114 $ 1,635 ________________________________ (1) Free cash flow is a non-GAAP liquidity measure. Please refer to our disclosures in the Non-GAAP Financial Information section above. GILEAD SCIENCES, INC. PRODUCT SALES SUMMARY (unaudited) Three Months Ended March 31, (in millions) 2024 2023 HIV Biktarvy – U.S. $ 2,315 $ 2,161 Biktarvy – Europe 365 304 Biktarvy – Rest of World 265 212 2,946 2,677 Descovy – U.S. 371 395 Descovy – Europe 26 25 Descovy – Rest of World 29 29 426 449 Genvoya – U.S. 332 417 Genvoya – Europe 49 55 Genvoya – Rest of World 21 29 403 501 Odefsey – U.S. 223 230 Odefsey – Europe 76 76 Odefsey – Rest of World 11 11 310 317 Symtuza - Revenue share(1) – U.S. 104 98 Symtuza - Revenue share(1) – Europe 33 36 Symtuza - Revenue share(1) – Rest of World 3 4 141 138 Other HIV(2) – U.S. 60 62 Other HIV(2) – Europe 45 32 Other HIV(2) – Rest of World 12 13 117 108 Total HIV – U.S. 3,405 3,364 Total HIV – Europe 596 528 Total HIV – Rest of World 342 298 4,342 4,190 Liver Disease Sofosbuvir / Velpatasvir(3) – U.S. 248 204 Sofosbuvir / Velpatasvir(3) – Europe 79 90 Sofosbuvir / Velpatasvir(3) – Rest of World 78 90 405 385 Vemlidy – U.S. 95 87 Vemlidy – Europe 11 9 Vemlidy – Rest of World 119 103 225 199 Other Liver Disease(4) – U.S. 42 27 Other Liver Disease(4) – Europe 47 41 Other Liver Disease(4) – Rest of World 19 23 107 91 Total Liver Disease – U.S. 385 318 Total Liver Disease – Europe 137 140 Total Liver Disease – Rest of World 215 217 737 675 Veklury Veklury – U.S. 315 252 Veklury – Europe 70 111 Veklury – Rest of World 169 209 555 573 GILEAD SCIENCES, INC. PRODUCT SALES SUMMARY - (Continued) (unaudited) Three Months Ended March 31, (in millions) 2024 2023 Oncology Cell Therapy Tecartus – U.S. 55 59 Tecartus – Europe 36 27 Tecartus – Rest of World 8 3 100 89 Yescarta – U.S. 170 210 Yescarta – Europe 158 121 Yescarta – Rest of World 52 28 380 359 Total Cell Therapy – U.S. 225 269 Total Cell Therapy – Europe 195 148 Total Cell Therapy – Rest of World 60 31 480 448 Trodelvy Trodelvy – U.S. 206 162 Trodelvy – Europe 68 54 Trodelvy – Rest of World 36 6 309 222 Total Oncology – U.S. 431 431 Total Oncology – Europe 262 202 Total Oncology – Rest of World 96 37 789 670 Other AmBisome – U.S. 14 6 AmBisome – Europe 70 60 AmBisome – Rest of World 60 49 144 116 Other(5) – U.S. 59 62 Other(5) – Europe 9 12 Other(5) – Rest of World 12 9 80 83 Total Other – U.S. 73 69 Total Other – Europe 79 72 Total Other – Rest of World 71 58 224 199 Total product sales – U.S. 4,609 4,434 Total product sales – Europe 1,144 1,053 Total product sales – Rest of World 894 819 $ 6,647 $ 6,306 ______________________________ (1) Represents Gilead’s revenue from cobicistat (“C”), FTC and TAF in Symtuza (darunavir/C/FTC/TAF), a fixed dose combination product commercialized by Janssen Sciences Ireland Unlimited Company. (2) Includes Atripla, Complera/Eviplera, Emtriva, Sunlenca, Stribild, Truvada and Tybost. (3) Includes Epclusa and the authorized generic version of Epclusa sold by Gilead’s separate subsidiary, Asegua Therapeutics LLC (“Asegua”). (4) Includes ledipasvir/sofosbuvir (Harvoni and the authorized generic version of Harvoni sold by Asegua), Hepcludex, Hepsera, Sovaldi, Viread and Vosevi. (5) Includes Cayston, Jyseleca, Letairis, Ranexa and Zydelig.