GILD

Gilead Sciences, Inc. (GILD)

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Gilead Sciences, Inc. (GILD)

Q4 2009 Earnings Call Transcript

January 26, 2010 4:30 pm ET

Executives

Susan Hubbard – VP, IR

John Martin – Chairman and CEO

Robin Washington – SVP and CFO

Kevin Young – EVP, Commercial Operations

Norbert Bischofberger– EVP, R&D and Chief Scientific Officer

John Milligan – President and COO

Analysts

Geoff Meacham – JP Morgan

Mark Schoenebaum – Deutsche Bank

Michael Aberman – Credit Suisse

Rachel McMinn – Bank of America/Merrill Lynch

Yaron Werber – Citi

Geoff Porges – Bernstein

Steve Harr – Morgan Stanley

Jason Kantor – RBC Capital Markets

Thomas Wei – Jefferies

Davis Bu – Goldman Sachs

Phil Nadeau – Cowen & Company

Tom Russo – Robert W. Baird

Jim Birchenough – Barclays Capital

Brett Holley – Oppenheimer

Joel Sendek – Lazard

Presentation

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Gilead Sciences fourth quarter and full-year 2009 earnings conference call. My name is Katina and I will be your conference operator today. At this time all participants are in a listen-only mode. We will conduct a question and answer session. As a reminder, this conference call is being recorded today, January 26, 2010.

I would now like to turn the call over to Susan Hubbard, Vice President of Investor Relations. Please go ahead.

Susan Hubbard

Thank you, Katina. Good afternoon, everyone and welcome to Gilead's fourth quarter and full year 2009 earnings conference call. Very pleased you could join us today.

We issued a press release this afternoon providing results for the fourth quarter and full year 2009. This press release is available on our Web site at www.gilead.com. We have also posted slides that outline the topics discussed on this call.

Joining me today are John Martin, Chairman and Chief Executive Officer, John Milligan, President and Chief Operating Officer, Kevin Young, Executive Vice President of Commercial Operations, Norbert Bischofberger, Executive Vice President of Research and Development and Chief Scientific Officer and Robin Washington, Senior Vice President and Chief Financial Officer.

We will be prepared to keep comments brief to allow more time for Q&A. I’d first like to remind you that we will be making forward-looking statements relating to future e vents, expectations, trends, objectives and financial results that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements are based on certain assumptions and are subject to a number of risks and uncertainties that would cause our actual results to differ materially from those expressed in any forward-looking statements. I refer you to our Form 10-K for the year-ended December 31st 2008, Form 10-Qs for the first, second and third quarters of 2009, subsequent press releases and other publicly filed SECs disclosures documents for a detailed description of risk factors and other matters related to our business.

In addition, please note that we undertake no obligation to update or revise these forward-looking statements. We will me making certain references to financial measures that are on a non-GAAP basis. We provided a reconciliation between GAAP and non-GAAP numbers in the press release which was issued this afternoon and on our corporate Web site at www.gilead.com.

I will turn the call over to John Martin.

John Martin

Good afternoon, everyone and thank you for joining us today. With the completion of the fourth quarter, Gilead has closed out another year of exceptional commercial execution and financial growth. Total revenues for the fourth quarter crossed a $2 billion mark for the first time in our history and we completed the year having generated over $7 billion in total revenue. This growth was chiefly driven by the continued momentum of our anti-viral franchise with record revenues of $1.6 billion and $5.8 billion for the quarter and year respectively.

Importantly, we generated operating cash flow of $955 million for the quarter and $3 billion for the year. I am also very pleased with the momentum of our pipeline programs during the past quarter. Norbert will talk about these programs in greater depth but I wanted to highlight a couple of things.

As you know, (inaudible) our product for the treatment of infections due to (inaudible) in patients for cystic fibrosis was reviewed by the FDA and Infected Drugs Advisory Committee back in December. The panel recommended 15-2 that the safety and efficacy data generated from the two pivotal trials support approval of the drug and unanimously voted that we have determined a right dose 75 milligrams given three times daily for this indication.

We await the PDUFA date of February 13 and are hopeful that the FDA will follow the recommendation of advisory committee. Cayston was approved last year in the European Union and Canada; we will continue to make this product available to patients in the United States through our expanded access program while we work toward approval and commercialization.

In preparation for 2010 we completed our thorough review of our pipeline portfolio, which now includes the cardiovascular metabolic programs brought to us through the acquisition of CV Therapeutics in April 2009. We are very enthusiastic about the early states work that has been done by our R&D team and now feel that we have both the commercial presence and R&D capability that will establish us as an important company in this specialty cardiovascular space.

While we were disappointed that the second Phase III study of Darusentan did not meet its primary end point, we quickly decisively came to the conclusion that this program should be discontinued, allowing us to redeploy our efforts and the funds that were earmarked to support this program to other more promising albeit earlier programs underway. I'm confident that we have in place the people and capabilities necessary to continue to grow across each of our therapeutic categories.

As you may know, significant progress was made over the course of 2009 to increase HIV screening initiatives in the United States. First in August 2009, the veterans’ administration adopted routine HIV screening. The VA is the single biggest provider of HIV care in the U.S.

In December, CMS announced Medicare will now cover annual voluntary screening of those at risk for HIV infection as well as women who are pregnant. And California law now requires a private insurers must cover routine HIV testing, the first state in the nation to do so.

Since 2006 when the CDC issued the recommendation that all individuals between the ages of 13 and 64 should be screened for HIV as part of the routine healthcare, 16 states modified their laws in furtherance of the recommendations. Only six states still require specific written informed consent for HIV testing and we expect further progress on this front over the course of 2010.

Read the rest of this transcript for free on seekingalpha.com