Gilead Sciences, Inc. · NASDAQ:GILD
Gilead Sciences — Q1 2020 Earnings Presentation
67 slides from Gilead Sciences's earnings presentation, Apr 30, 2020
Slide 1: Q1 2020 Earnings Results
Q1 2020 Earnings Results April 30, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements The projected financial results presented in the following slides represent management’s estimates of Gilead’s future financial results. Statements included in this press release that are not historical in nature are forward-looking statements within the meaning of the Pri
Slide 3: Contents
Contents Pages Key Highlights & COVID-19 Insights 4-8 Remdesivir 9-21 Financial Performance 22-33 Durable Core Business 34-46 Three Pillars of Gilead’s Existing Pipeline Opportunities 47-57 Next Chapter Strategy to Drive Additional Growth 58-60 Appendix 61-67 3
Slide 4: Key Highlights & COVID-19 Insights
Key Highlights & COVID-19 Insights 4
Slide 5: Q1 Earnings Call Highlights
Q1 • Solid financial performance delivering product sales of $5.5 billion in Q1 2020 with 5% YoY growth • Durable core business driven by HIV franchise delivering $4.1 billion in Q1 2020 with 14% YoY growth • Biktarvy sales of $1.7 billion in Q1 2020 with 8% QoQ and 113% YoY growth • Progressing pip
Slide 6: Overview of Recent COVID-19 Developments
Overview of Recent COVID-19 Developments • Work from home where possible; returns guided by local health considerations Employee • Added protection and support for employees onsite Support • Provision of new benefits, programs and resources • Supporting our communities including $20 million Gilead C
Slide 7: COVID-19 Macroeconomic Scenarios and Qualitative Implications
COVID-19 Macroeconomic Scenarios and Qualitative Implications WORST CASE BASE CASE BEST CASE Outbreak continues through YE and slow 2021 Rapid decline in COVID-19 trajectory and Epidemiologists forecast peak of pandemic March - July recovery blends into a dramatically different “new accelerated retu
Slide 8: Outlook
• We are at a moment of significant uncertainty and while it is exceptionally challenging to predict pandemic progression or ultimate impact, we have carefully examined multiple scenarios and expect to have greater clarity in the near future • We remain confident in the strength of our core business
Slide 9: Remdesivir
Remdesivir 9
Slide 10: Remdesivir Overview
Remdesivir Overview • Remdesivir is an investigational, broad-spectrum antiviral invented by Gilead, building on more than a decade of our research • We have been working rapidly to determine its safety and efficacy as a treatment for COVID-19 and to scale up manufacturing • Multiple clinical trials
Slide 11: Our Remdesivir Approach
Our Remdesivir Approach Establish Safety and Efficacy Generate clinical data to determine utility and support potential regulatory filings Common Goal Determine the safety and efficacy of Scale Up Manufacturing remdesivir as a Expand manufacturing to increase product supply treatment for COVID- ahea
Slide 12: Overview of Select Remdesivir Studies for the Treatment of COVID-19
Safety and Efficacy Overview of Select Remdesivir Studies1 Manufacturing Access For the Treatment of COVID-19 Moderate Severe Critical Target Placebo or Data Source Enrollment Hospitalized Requiring Intubated Standard of Key Question Data Availability – Key Result Patients Oxygen Patients Care inclu
Slide 13: Executive Summary of New Remdesivir Data
Safety and Efficacy Manufacturing Executive Summary of New Remdesivir Data Access NIAID Trial Gilead SIMPLE Severe Trial • Study designed to assess safety and efficacy of • Study designed to assess 5 days versus 10 days remdesivir in a broad population of patients of remdesivir in patients with seve
Slide 14: NIAID Remdesivir Trial – Interim Results Primary Endpoint: Time to Recovery
Safety and Efficacy NIAID Remdesivir Trial – Interim Results Manufacturing Primary Endpoint: Time to Recovery Access Days to Treatment Group 95% CI Hazard Ratio1 95% CI P-Value2 Recovery Remdesivir 11 Undisclosed Undisclosed Undisclosed <0.001 Placebo 15 Undisclosed “Preliminary results indicate tha
Slide 15: NIAID Remdesivir Trial – Interim Results Mortality Analysis
Safety and Efficacy NIAID Remdesivir Trial – Interim Results Manufacturing Mortality Analysis By Treatment Group Access Treatment Group Deaths (%) Hazard Ratio1 95% CI P-Value2 Remdesivir 8.0% Undisclosed Undisclosed 0.059 Placebo 11.6% 1 From stratified Cox Model. 2 Calculated using stratified log-
Slide 16: Gilead SIMPLE Severe Remdesivir Trial Primary Endpoint
Safety and Efficacy Gilead SIMPLE Severe Remdesivir Trial Manufacturing Primary Endpoint: Clinical Outcomes at Day 14 Access Clinical Status at Day 14* OR (95% CI) p-value RDV for 10 days / RDV for 5 days 0.75 (0.51, 1.12) 0.168 Baseline Clinical Status 3.69 (2.71, 5.03) <0.0001 • No statistical dif
Slide 17: Gilead SIMPLE Severe Remdesivir Trial Clinical Outcomes at Day 14
Safety and Efficacy Gilead SIMPLE Severe Remdesivir Trial Manufacturing Clinical Outcomes at Day 14 Access RDV for 5 Days RDV for 10 Days Outcome, n (%) (n=200) (n=197) Subjects with Recovery 140 (70%) 116 (59%) ≥ 2-pt Improvement in Ordinal Scale 129 (65%) 107 (54%) Discharge 120 (60%) 103 (52%) De
Slide 18: Remdesivir Manufacturing Scale-Up
Safety and Efficacy Manufacturing Remdesivir Manufacturing Scale-Up Access Production is time- and resource-intensive • Long, linear chemical synthesis that must be completed sequentially • Involves novel substances, specialized chemistry and sterile drug manufacturing capabilities Process improveme
Slide 19: Current Remdesivir Manufacturing Timeline
Safety and Efficacy Manufacturing Current Remdesivir Manufacturing Timeline Access 150 days Active 28 days Raw Materials Pharmaceutical primarily sourced internationally Finished Goods (includes time required to Ingredients (typical sterile manufacturing produce raw materials) is 60 days) domestic &
Slide 20: Remdesivir Manufacturing Projections
Safety and Efficacy Manufacturing Remdesivir Manufacturing Projections Access Potential for our supply to reach more patients based on results of the SIMPLE severe study1 >1,000,000 Treatment courses 500,000 Assumes 10-day treatment course 140,000 5,000 30,000 JAN APRIL MAY OCT DEC 2020 + Existing A
Slide 21: Access to Remdesivir
Safety and Efficacy Manufacturing Access to Remdesivir Access • Where authorized by regulatory authorities, we will focus on making remdesivir both accessible and affordable to governments and patients around the world • We commit to providing all our current supply of remdesivir at no cost for use
Slide 22: Financial Performance
Financial Performance 22
Slide 23: Financial Highlights: Q1 2020
Financial Highlights: Q1 2020 in millions, except percentages and per share amounts Q1 2019 Q4 2019 Q1 2020 YoY Change QoQ Change HIV1 3,618 4,577 4,134 14% (10%) HCV 790 630 729 (8%) 16% Yescarta 96 122 140 46% 15% Other Products2 696 467 464 (33%) (1%) Product Sales $5,200 $5,796 $5,467 5% (6%) CO
Slide 24: Total Revenue
Total Revenue in millions $5,879 $5,685 $5,604 $5,548 Q1 2020 up 5% from Q1 2019 $5,281 • Driven by HIV (including ~$200 million COVID-19- related inventory pull-forward which is expected to draw-down in future quarters) and Yescarta • Partially offset by HCV and other products1 Q1 2020 down 6% from
Slide 25: Total Product Sales
Total Product Sales Q1 2020 up 5% from Q1 2019 in millions By Therapeutic Area By Geography in millions $5,796 $5,796 $5,607 $5,516 $5,467 $5,607 $5,516 $5,467 $5,200 $122 $5,200 $440 $120 $118 $140 $467 $512 $513 $551 $96 $604 $522 $630 $464 $522 $840 $696 $1,041 $804 $842 $674 $729 $927 $882 $790
Slide 26: Non-GAAP Product Gross Margin
Non-GAAP Product Gross Margin 87.0% 87.0% 86.1% 87.1% 75.6% Q1 2020 flat from Q1 2019 Q1 2020 increase from Q4 2019 • Primarily due to unfavorable COGS impact mainly from inventory write-downs in Q4 2019 • Excluding COGS impact, non-GAAP product gross margin would have been ~87% in Q4 2019 Financial
Slide 27: Non-GAAP R&D Expenses
Non-GAAP R&D Expenses Q1 2020 up 8% from Q1 2019 in millions • Increase primarily due to ramp up of remdesivir, $1,103 including manufacturing scale-up and clinical trial $1,028 $996 $1,004 costs, totaling ~$50 million, partially offset by lower $932 clinical trial expenses as a result of Gilead’s p
Slide 28: Non-GAAP SG&A Expenses
Non-GAAP SG&A Expenses in millions $1,204 $1,096 $1,076 Q1 2020 up 4% from Q1 2019 $1,030 $1,045 • Primarily due to higher HIV promotional expenses in the U.S. Q1 2020 down 11% from Q4 2019 • Primarily due to seasonality of promotional expenses • Lower spend related to COVID-19 impact Financial info
Slide 29: Non-GAAP Operating Income & Margin
Non-GAAP Operating Income & Margin in millions Operating Income $2,866 $2,762 $2,765 $2,645 $2,155 Q1 2020 up 5% from Q1 2019 • Primarily due to higher revenues, partially offset by increased COGS and operating expenses Q1 2020 up 28% from Q4 2019 • Primarily due to unfavorable COGS impact mainly fr
Slide 30: Non-GAAP Diluted EPS
Non-GAAP Diluted EPS $1.72 2 $1.67 1 $1.68 $1.64 Q1 2020 flat from Q1 2019 Q1 2020 increase from Q4 2019 • Primarily due to unfavorable ($0.47) $1.10 COGS impact mainly driven by inventory write- downs in Q4 2019 and lower tax rate in Q1 2020 • Excluding COGS impact, non-GAAP EPS would have been $1.
Slide 31: Other Select Financial Information
Other Select Financial Information in millions, except days sales outstanding Dec 31, 2019 Mar 31, 2020 Cash, Cash Equivalents & Marketable Securities1 $25,840 $24,314 Operating Cash Flows During the Quarter $2,581 $1,436 Inventories2 $2,067 $2,021 Days Sales Outstanding (Accounts Receivable) 41 46
Slide 32: Q1 2020 Shareholder Return
Q1 2020 Shareholder Return Total Dividend Dollar Repurchase Dividend Average Shareholder Amount Dollar Amount1 Shares per Share Purchase Price Return (in millions) (in millions) (in millions) Q1 2020 $874 $0.68 $1,328 18,749,098 $70.82 $2,202 Dividend Repurchase • Paid quarterly dividend in Q1 2020
Slide 33: GAAP to Non-GAAP Reconciliation of Adjusted Debt and Adjusted EBITDA
GAAP to Non-GAAP Reconciliation of Outstanding Adjusted Debt and Adjusted EBITDA in billions where applicable Mar 31, 2019 Jun 30, 2019 Sep 30, 2019 Dec 31, 2019 Mar 31, 2020 Senior Unsecured Notes and Floating Rate Borrowings, net $26.58 $26.08 $24.59 $24.59 $24.10 Debt Discounts, Premiums and Issu
Slide 34: Three Pillars of Gilead’s Next Chapter
Three Pillars of Gilead’s Next Chapter Durable Core Existing Pipeline Strategy to Drive Business Opportunities Additional Growth + + 34
Slide 35: Building from Durable Core Business
Building from Durable Core Business Durable Core Existing Pipeline Strategy to Drive Business Opportunities Additional Growth + + 35
Slide 36: Durable HIV Franchise Shows Continued and Robust Growth
Viral Diseases Durable HIV Franchise Shows Continued and Inflammation Robust Growth Oncology 13% HIV franchise growth since 2011 1 90-95% • #1 prescribed HIV regimen and best HIV launch in history2,3 Highly effective single tablet • Expect to be preferred treatment Gilead patients expected on regime
Slide 37: Total HIV Product Sales
Viral Diseases Inflammation Total HIV Product Sales Oncology in millions $4,577 Q1 2020 up 14% from Q1 2019 $4,202 $195 $4,134 • U.S. - Biktarvy was #1 prescribed HIV regimen $4,041 $210 $562 across all patients with sales of $1.4 billion $187 $242 $3,618 $558 $219 $623 $639 • Europe - Biktarvy was
Slide 38: Descovy (FTC/TAF)-Based HIV Worldwide Product Sales
Viral Diseases Descovy (FTC/TAF)-Based HIV Worldwide Inflammation Product Sales Oncology in millions $3,525 $3,496 $125 $112 $3,140 $435 $409 $2,925 $104 $84 $436 $2,613 $437 $458 $66 $387 $363 $397 $358 $824 Q1 2020 up 34% from Q1 2019 $958 $342 $978 • Driven mainly by Biktarvy uptake $980 $1,015 Q
Slide 39: Top Prescribed HIV Regimens
Viral Diseases Inflammation Top Prescribed HIV Regimens Oncology U.S. EU5 Naïve Switch All Patients Naïve Switch All Patients (Q1 2020) (Q1 2020) (Q1 2020) (Q1 2020) (Q1 2020) (Q1 2020) 1 1 2 Other STR 2 Other STR Other STR Other STR 3 Other STR Other STR 3 Other Regimen STR containing STR containin
Slide 40: Continued Adoption of Descovy (FTC/TAF)-Based Regimens
Viral Diseases Continued Adoption of Descovy Inflammation (FTC/TAF)-Based Regimens Oncology ~89% of Gilead’s U.S. HIV Treatment Prescription Volume Comprised of Descovy (FTC/TAF)-Based Regimens 100% 90% ~89% 80% TDF-based % of Gilead’s Prescription Volume for HIV 70% Regimens 60% Treatment 50% 40% D
Slide 41: PrEP Use Continues to Grow in the U.S.
Viral Diseases Inflammation PrEP Use Continues to Grow in the U.S. Oncology Individuals Taking PrEP 241 in thousands 234 224 ~38% individuals on PrEP ~1.1 million individuals in U.S. 213 currently on Descovy could benefit from PrEP1 201 40-45% individuals on PrEP expected to be on Descovy by Q4’20 ~
Slide 42: Total HCV Product Sales by Geography
Viral Diseases Inflammation Total HCV Product Sales by Geography Oncology in millions $842 $790 $729 Q1 2020 down 8% from Q1 2019 $210 $674 $194 • Lower sales primarily due to competitive dynamics $630 $183 impacting net price $183 $142 Q1 2020 up 16% from Q4 2019 $203 $277 $148 $111 • Increased U.S
Slide 43: HCV Patient Initiations on Sofosbuvir-Based Regimens
Viral Diseases HCV Patient Initiations on Sofosbuvir-Based Inflammation Regimens in U.S., Europe and Japan Oncology in thousands 45 45 42 41 41 15 15 15 18 18 Q1 2020 U.S. market share at ~61% • Q1 2020 up 19 percentage points from January 2019 in the U.S.1 28 29 25 22 22 Q1 19 Q2 19 Q3 19 Q4 19 Q1
Slide 44: Additional Opportunities to Grow Antiviral Business
Viral Diseases Additional Opportunities to Grow Antiviral Inflammation Business Oncology Accelerate Drive China HBV Growth Achieve $1 billion+ franchise 8 products approved by 2022 through U.S. and since 2017 China Vemlidy growth 4 listed on NRDL for Jan 2020 reimbursement1 1 8 products approved in
Slide 45: Cell Therapy Business Update
Viral Diseases Inflammation Cell Therapy Business Update Oncology KTE-X19 • Sales of $140 million for Q1 2020 (46% YoY growth and 15% • FDA granted priority review for KTE-X19 in r/r Mantle Cell QoQ growth) Lymphoma • ~2,900 r/r 3L+ large B-cell lymphoma patients treated with • Expected US approval
Slide 46: Cell Therapy Commitments
Viral Diseases Inflammation Cell Therapy Commitments Oncology Kite remains committed to and focused on safely bringing lifesaving therapies to patients Working with ATCs to address the needs of Manufacturing operations Partnering with our patients being considered continue to deliver rapidly supplie
Slide 47: Executing on Existing Pipeline Opportunities
Executing on Existing Pipeline Opportunities Durable Core Existing Pipeline Strategy to Drive Business Opportunities Additional Growth + + 47
Slide 48: Overview of Clinical Pipeline Today
Overview of Clinical Pipeline Today Phase 1 Phase 2 Phase 3 NDA/BLA/MAA Viral Clinical Stage Diseases 48 Programs1 NDA/BLA/MAA, P3 and Inflammatory 16 Registrational P2 trials Diseases NMEs via in-licensing, 16 options, and product acquisitions Oncology Breakthrough Therapy 4 Designations Lighter sh
Slide 49: Reinforcing Commitment to HIV Leadership with Long-Acting Programs
Viral Diseases Reinforcing Commitment to HIV Leadership Inflammation with Innovative Long-Acting Programs Oncology Lenacapavir Capsid Inhibitor as the Foundation • Weekly oral potential Current Clinical Programs • Monthly 6 month SQ with self-admin potential HTE2 P2/3 • Breakthrough Designation1 T
Slide 50: Conference on Retroviruses and Opportunistic Infections (CROI) 2020
Viral Diseases Conference on Retroviruses and Inflammation Opportunistic Infections (CROI) 2020 Oncology HIV Prevention HIV Treatment HIV Pipeline Descovy for PrEP Biktarvy Lenacapavir capsid inhibitor Functional cure research • 96-Week DISCOVER trial data • Phase 3 data in Black or African • Phase
Slide 51: Filgotinib Marks Expansion into Inflammation
Viral Diseases Filgotinib Marks Expansion into Inflammation Inflammation with Potential for 5 Launches in Next 4 Years Oncology Filgotinib Selective JAK-1 inhibitor with potential best-in-class profile RA P3 Strong efficacy for remission and demonstrated safety UC P3 at both doses; favorable benefit
Slide 52: Building a Broad Inflammation and Fibrosis Portfolio with Galapagos
Viral Diseases Building a Broad Inflammation and Fibrosis Inflammation Portfolio with Galapagos Beyond Filgotinib Oncology GLPG-16903 – IPF P3 GLPG-1972 – OA P2 GLPG-12054 – IPF P2 GLPG-16903 – Systemic Sclerosis P2 9 clinical GLPG-0555 – Inflammation P1 programs1,2 GLPG-33125 – Inflammation P1 GLPG
Slide 53: Oncology Strategy Focused on Immuno-Oncology
Viral Diseases Oncology Strategy Focused on Inflammation Immuno-Oncology Oncology Building transformative therapies across complementary immuno-oncology platforms Cell Therapy Non-Cell Therapy Pioneering platform Transformative therapy Apply small molecule and biologics to advance new therapies and
Slide 54: Gilead Acquisition of Forty Seven
Viral Diseases Inflammation Gilead Acquisition of Forty Seven Oncology • Forty Seven’s lead program and scientific expertise bolster our strategic focus on expanding our I-O Strategic expertise and pipeline beyond cell therapy Fit Magrolimab Overview • Magrolimab, an anti-CD47 mAb currently in P1b/2
Slide 55: Gilead’s Growing Immuno-Oncology Pipeline
Viral Diseases Inflammation Gilead’s Growing Immuno-Oncology Pipeline Oncology Building transformative therapies across complementary immuno-oncology platforms Cell Therapy Non-Cell Therapy KTE-X19 r/r MCL BLA Anti-CD47 (magrolimab) MDS P3 Axi-cel 2L DLBCL P3 Anti-CD47 (magrolimab) AML P2 Axi-cel iN
Slide 56: American Society of Clinical Oncology (ASCO)
Viral Diseases American Society of Clinical Oncology Inflammation (ASCO) Oncology Accepted Abstracts for ASCO - May 29 - 31 Clinical Presentations Trials-In Progress • Phase 1B study for the first-in-class anti-CD47 antibody magrolimab combined • KITE-439: A Phase 1 Study of HPV16 E7 T Cell Receptor
Slide 57: Anticipated Milestones Through 2021
Viral Diseases Inflammation Anticipated Milestones Through 2021 Oncology Lenacapavir capsid inhibitor (new) COVID-19 Insight: Most clinical trial P2 data for naïve enrollment will be slowed or halted due to site and participant availability during Lenacapavir capsid inhibitor pandemic, which may res
Slide 58: Strategy to Drive Additional Growth
Strategy to Drive Additional Growth Durable Core Existing Pipeline Strategy to Drive Business Opportunities Additional Growth + + 58
Slide 59: Corporate Development Activities 2019-2020
Corporate Development Activities 2019-2020 Guiding Principles for Future Deals Focus on high quality science that build Prioritize clinical and commercial Pursue and execute partnerships from upon core areas of strength opportunities small to transformative in size and bolt-on acquisitions from smal
Slide 60: Three Pillars of Gilead’s Next Chapter
Three Pillars of Gilead’s Next Chapter Durable Core Existing Pipeline Strategy to Drive Business Opportunities Additional Growth + + Well positioned to maximize near-term opportunities and achieve long-term success 60
Slide 61: Appendix
Appendix 61
Slide 62: NIAID Remdesivir for COVID-19 Study Design
NIAID Remdesivir for COVID-19 Study Design Randomized, double-blinded, placebo-controlled trial Key inclusion criteria • Hospitalized n = 522 Placebo Primary endpoint • Confirmed SARS CoV2 n= 1:1 Time to clinical 1063 recovery or • Pneumonia by CXR or CT n = 541 discharge through • Or requiring oxyg
Slide 63: Gilead Remdesivir SIMPLE Severe Study Design
Gilead Remdesivir SIMPLE Severe Study Design Phase 3 randomized, open-label, multicenter study Key inclusion criteria • Hospitalized, confirmed CoV Part A Day 1 10 14 28 • SpO2 ≤ 94% • Radiographic evidence of n = 200 RDV 200 mg loading/ pulmonary infiltrates 100 mg QD 10 D 1:1 Primary endpoint • Cr
Slide 64: Viral Disease Pipeline
Viral Diseases Inflammation Viral Disease Pipeline Oncology Pre-Clinical Phase 1 Phase 2 Phase 3 Updates since Q4’19 Remdesivir COVID-19 NEW * Biktarvy (BIC/FTC/TAF) HIV treatment pediatric1 Lenacapavir capsid inhibitor (GS-6207) HIV HTE Registrational for HTE2 Lenacapavir capsid inhibitor (GS-6207)
Slide 65: Inflammatory Disease Pipeline
Viral Diseases Inflammation Inflammatory Disease Pipeline Oncology Pre-Clinical Phase 1 Phase 2 Phase 3 NDA/BLA/MAA Updates since Q4’19 Filgotinib JAK-1 inhibitor (GS-6034) Rheumatoid arthritis Filgotinib JAK-1 inhibitor (GS-6034) Ulcerative colitis Filgotinib JAK-1 inhibitor (GS-6034) Crohn’s disea
Slide 66: Oncology Pipeline
Viral Diseases Inflammation Oncology Pipeline Oncology Pre-Clinical Phase 1 Phase 2 Phase 3 NDA/BLA/MAA Updates since Q4’19 KTE-X19 r/r MCL BLA/MAA Axi-cel 2L DLBCL Axi-cel iNHL Pivotal Axi-cel 1L DLBCL Axi-cel 3L DLBCL (+rituximab or lenalidomide) Cell Therapy KTE-X19 Adult ALL Pivotal KTE-X19 Pedi
Slide 67: Thank You
THANK YOU