Gilead Sciences Inc. (NASDAQ:GILD) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 04:30 pm ET

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Gilead Sciences Inc. (NASDAQ:GILD) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Gilead Sciences Third Quarter 2018 Earnings Conference Call. My name is Cherie, and I will be your conference operator today. At this time, all participants are in a listen-only mode. And as a reminder, this conference call is being recorded.

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

Executive
Sung Lee

Thank you, Cherie, and good afternoon, everyone. Just after market close today, we issued a press release with earnings results for the third quarter 2018. The press release and detailed slides are available on the Investor Relations section of the Gilead website.

The speakers on today's call will be Robin Washington, Executive Vice President and Chief Financial Officer; Laura Hamill, Executive Vice President, Worldwide Commercial Operations; John McHutchison, Chief Scientific Officer and Head of Research and Development; and John Milligan, President and Chief Executive Officer.

(Forward-Looking Cautionary Statement)

I will now turn the call over to Robin.

Executive
Robin Washington

We are pleased to share our financial results for the third quarter of 2018. Before I get into the financial results and commercial highlights for the quarter, I'd like to welcome Laura Hamill, who recently joined Gilead as Executive Vice President, Worldwide Commercial Operations. We are glad to have this key position filled, and are excited to have Laura on our team.

Laura is quickly becoming familiar with our business and has already provided significant commercial expertise on several strategic fronts. You'll hear from Laura in a few minutes, followed by John McHutchison with an update on our R&D efforts and then John Milligan with a few closing comments.

We had very strong execution in the third quarter, during which our HIV franchise achieved record quarterly sales. HCV revenues continued to be more predictable and in-line with our expectations, and further progress was made in cell therapy, including the approval of Yescarta in Europe. Total revenues for the third quarter were $5.6 billion with non-GAAP diluted earnings per share of $1.84. This compares to total revenues of $6.5 billion and non-GAAP diluted earnings per share of $2.27 for the same period last year.

Starting with HIV, product sales for the third quarter were $3.7 billion, up 12% year-over-year and 2% sequentially. The year-over-year increase was primarily due to the continued strong uptake of Genvoya and Odefsey, and the rapid adoption of Biktarvy. With 19% year-over-year revenue growth and 11% year-over-year prescription growth, our US HIV business continues to reflect strong underlying demand for Descovy-based regimens, which now account for 74% of Gilead's total US HIV prescription volume.

Sequentially, US HIV sales were up 5%, reflecting strong demand for Biktarvy. Payer mix in the third quarter was similar to the second quarter, where it was approximately equally split between private pay and government segments. In the second full quarter since its FDA approval in February, Biktarvy generated $375 million in sales in the US, becoming the number one prescribed regimen for both treatment-naive