Gilead Sciences Inc. (GILD)
Q3 2010 Earnings Call
October 19, 2010 05:30 pm ET
Susan Hubbard - VP of IR
John Milligan - President and COO
John Martin - Chairman and CEO
Kevin Young - EVP, Commercial Operations
Norbert Bischofberger - EVP, Research and Development and CSO
Robin Washington - SVP and CFO
Geoff Meacham - JPMorgan
Mark Schoenebaum - ISI
Rachel McMinn - Banc of America Merrill Lynch
Yaron Werber - Citigroup
Josh Schimmer - Leerink Swann
Ian Somaiya - Piper Jaffrey
Geoffrey Porges - Sanford Bernstein
Thomas Wei - Jefferies & Company
Jason Kantor - RBC Capital Markets
Tom Russo - Robert W. Baird
Phil Nadeau - Cowen & Co.
Joel Sendek - Lazard Capital Markets
Robyn Karnauskas - Deutsche Bank
Jim Birchenough - Barclays Capital
Jason Zhang - BMO Capital Markets
Maged Shenouda - Stifel Nicolaus
Geoff Meacham - JPMorgan
Previous Statements by GILD
» Gilead Sciences, Inc. Q2 2010 Earnings Call Transcript
» Gilead Sciences Inc. Q1 2010 Earnings Call Transcript
» Gilead Sciences, Inc. Q4 2009 Earnings Call Transcript
At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded today, October 19, 2010.
I would now like to turn the call over to Susan Hubbard, Vice President of Investor Relations. Please go ahead.
Thank you, Stacey and good afternoon everyone. Welcome to Gilead's third quarter 2010 earnings conference call. We issued a press release this afternoon providing earnings results for the quarter. This press release is available on our website at www.gilead.com as are the slides that provide much more detail around the topics discussed today on this call. Similar to the format we introduced on our last earnings call, our prepared comments will be brief to allow more time for your questions.
Our speakers today will be John Milligan, President and Chief Operating Officer and John Martin, Chairman and Chief Executive Officer who will provide some comments on this quarter and our view about future and opportunities for the company. Norbert Bischofberger, Executive Vice President of R&D and Chief Scientific Officer, Robin Washington, Senior Vice President and Chief Financial Officer and Kevin Young, Executive Vice President of Commercial Operations are here as well for the Q&A session.
I would first like to remind you that we will be making statements relating to future events, 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 could cause our actual results to differ materially from those expressed in any forward-looking statements. I refer you to our latest SEC disclosure documents and recent press releases 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 be making certain references to financial measures that are on a non-GAAP basis. We provide a reconciliation between GAAP and non-GAAP number in the press release we just issued and on our corporate website at www.gilead.com.
I will now turn the call over to John Milligan.
Thanks Susan. Gilead posted strong third quarter 2010 results with non-GAAP net income of almost $760 million or $0.90 per share representing a year-over-year increase in net income and EPS of 4% and 15% respectively.
Sales growth was strong with total revenues of just over $1.94 billion, up 8% year-over-year. Antiviral product sales were record $1.65 billion, up 12% year-over-year.
The US contributed $923 million for antiviral product sales increasing 15% year-over-year, resulting from the continued strong growth in patients and market share in the US and up 4% sequentially despite the added impact of rebates to ADAP and PHS as mandated by healthcare reforms.
There are now over 600,000 HIV inspected patients in the US taking antiretroviral therapy and we believe we are started to see the impact of DHHS guidelines endorsing earlier treatment.
Europe contributed $614 million to our antiviral product sales increasing 5% year-over-year and 2% sequentially. Although we saw demand growth for our products across Europe including clinical trial purchases totaling $10 million, this is partially offset by the fourth quarter impact of mandated price reductions and fluctuations in foreign exchange rates as we described on our second quarter call.
The products in our cardiovascular franchise namely Letairis and Ranexa delivered strong year-over-year growth of 26% and 23% respectively but were relatively flat sequentially. Both products saw demand growth that was paired back by small adjustments in wholesale inventories as well as changes in average selling price due to selective discounts in to managed care.
Our newest product Cayston achieved nearly $15 million in its second full quarter sales in both the US and some countries of Europe. In June we presented data from our head-to-head study of Cayston versus TOBI showing statistical superiority over TOBI at day 28 and we were presenting a six month data from the study at the North American Cystic Fibrosis Conference taking place in Baltimore later this week. We continue to receive positive responses from the CF community as the importance of having an additional treatment option and a null antibiotic to address the growing incidence of TOBI resistance and intolerance.
We continue to be vigilant on expense management resulting in a very healthy non-GAAP operating margin nearly 55% and we generated $740 million in operating cash flow for the quarter. And we have also been aggressive in our $5 billion share repurchase program having a repurchase retired $1.55 billion worth of stock or more than 45 million shares during the third quarter alone.