8-K: Gilead Sciences Reports Strong Q4 and Full Year 2024 Results, Driven by HIV and Oncology Growth

Gilead Sciences announces positive financial results for Q4 and full year 2024, highlighting growth in HIV, Oncology, and Liver Disease product sales.

Summary

• Gilead Sciences reported a 6% increase in total revenue for both the fourth quarter and full year 2024, reaching $7.6 billion and $28.8 billion, respectively.
• Product sales excluding Veklury (remdesivir) increased by 13% in Q4 and 8% for the full year.
• HIV product sales rose by 16% in Q4 and 8% for the full year, driven by higher demand and average realized price.
• Biktarvy sales increased by 21% in Q4 and 13% for the full year, reaching $3.8 billion and $13.4 billion, respectively.
• Oncology sales increased by 10% in Q4 and 12% for the full year, totaling $843 million and $3.3 billion, respectively.
• Liver Disease portfolio sales increased by 4% in Q4 and 9% for the full year, reaching $719 million and $3.0 billion, respectively.
• Veklury sales decreased by 53% in Q4 and 18% for the full year due to lower COVID-19 related hospitalizations.
• Diluted EPS increased to $1.42 in Q4 2024, compared to $1.14 in Q4 2023.
• Non-GAAP diluted EPS increased to $1.90 in Q4 2024, compared to $1.72 in Q4 2023.
• For the full year 2024, diluted EPS decreased to $0.38 compared to $4.50 in 2023, impacted by a pre-tax IPR&D impairment charge.
• Non-GAAP diluted EPS for the full year 2024 decreased to $4.62 compared to $6.72 in 2023.
• Gilead expects full-year 2025 product sales to be between $28.2 billion and $28.6 billion.
• Gilead expects full-year 2025 diluted EPS to be between $5.95 and $6.35.
• Gilead expects full-year 2025 non-GAAP diluted EPS to be between $7.70 and $8.10.

Sentiment

Score: 6

Explanation: The report presents a mixed picture. While Q4 and full-year revenue and certain product sales show growth, the decrease in full-year EPS and the decline in Veklury sales temper the positive aspects. The guidance for 2025 is cautiously optimistic.

Positives

• Product sales excluding Veklury increased 8% year-over-year to $26.8 billion for full year 2024.
• Biktarvy sales increased 13% year-over-year to $13.4 billion for full year 2024.
• Oncology sales increased 12% year-over-year to $3.3 billion for full year 2024.
• Gilead generated $3.0 billion in operating cash flow during the fourth quarter 2024.
• Gilead had $10.0 billion of cash, cash equivalents and marketable debt securities as of December 31, 2024, compared to $8.4 billion as of December 31, 2023.
• Trodelvy sales increased 19% to $355 million in the fourth quarter 2024 compared to the same period in 2023.
• Yescarta sales increased 6% to $390 million in the fourth quarter 2024 compared to the same period in 2023.
• Descovy sales increased 21% to $616 million in the fourth quarter 2024 compared to the same period in 2023.
• HIV product sales increased 16% to $5.5 billion in the fourth quarter 2024 compared to the same period in 2023.
• Product gross margin was 79.0% in the fourth quarter 2024 compared to 70.4% in the same period in 2023.

Negatives

• Veklury sales decreased 53% to $337 million in the fourth quarter 2024 compared to the same period in 2023.
• Diluted EPS decreased to $0.38 in the full year 2024 compared to $4.50 in 2023, primarily driven by a pre-tax IPR&D impairment charge.
• Non-GAAP diluted EPS decreased to $4.62 in the full year 2024 compared to $6.72 in 2023.
• Yescarta sales decreased in the United States.

Risks

• The financial guidance is subject to a number of risks and uncertainties.
• Gilead's ability to achieve its full year 2025 financial guidance is uncertain, including the amount and timing of Veklury revenues.
• There are risks related to Gilead's ability to realize the potential benefits of acquisitions, collaborations or licensing arrangements.
• There are risks related to patent protection and estimated loss of exclusivity for Gilead's products and product candidates.
• Pricing and reimbursement pressures from government agencies and other third parties could impact Gilead's financial results.
• Market share and price erosion caused by the introduction of generic versions of Gilead products could impact Gilead's financial results.

Future Outlook

Gilead expects full-year 2025 product sales between $28.2 billion and $28.6 billion, diluted EPS between $5.95 and $6.35, and non-GAAP diluted EPS between $7.70 and $8.10.

Management Comments

• Gilead delivered another exceptionally strong full year and fourth quarter, with growth in our base business product sales of 8% for 2024 and 13% year-over-year for the fourth quarter, said Daniel ODay, Gileads Chairman and Chief Executive Officer.
• From this foundation of commercial strength, we are planning for the potential launch of lenacapavir for HIV PrEP in Summer 2025, with its unique opportunity to extend the reach of HIV prevention.
• This potential in HIV, along with our strong and diverse portfolio, and improved operational efficiencies, positions Gilead to deliver increasing patient impact and compelling shareholder returns in the years ahead.

Industry Context

Gilead's focus on HIV, oncology, and liver diseases aligns with major trends in the biopharmaceutical industry, where companies are increasingly specializing in specific therapeutic areas to drive innovation and growth. The potential launch of lenacapavir for HIV PrEP could significantly impact the HIV prevention market.

Comparison to Industry Standards

• Gilead's growth in HIV and oncology is comparable to other major pharmaceutical companies in these sectors, such as GSK and Roche.
• The company's focus on operational efficiencies is in line with industry-wide efforts to improve profitability and shareholder returns.
• Gilead's R&D spending as a percentage of revenue is consistent with industry averages for large biopharmaceutical companies.
• The company's strategic collaborations with companies like Arcellx, LEO Pharma, Terray, and Tubulis are similar to partnerships pursued by other major players in the industry to expand their pipelines and access new technologies.
• Gilead's gross margins are in line with other large pharmaceutical companies.

Management Changes

Legal Proceedings

• Gilead reached a final settlement agreement with the U.S. Department of Justice and the U.S. Department of Health and Human Services on patents that the government alleged covered Truvada and Descovy for HIV PrEP.

Stakeholder Impact

• Shareholders may be impacted by the increased dividend and the potential for future growth.
• Patients may benefit from the development and commercialization of new medicines.
• Employees may be impacted by the company's restructuring and integration efforts.

Next Steps

• Potential launch of lenacapavir for HIV PrEP in Summer 2025.
• Continued development and commercialization of products in HIV, oncology, and liver diseases.
• Further progress on strategic collaborations and partnerships.

Key Dates