GILD - Gilead Sciences, Inc. - Q2 2013 Earnings Call Transcript

    Company Name:Gilead Sciences, Inc.
    Event Title:Q2 2013 Earnings Call Transcript
    Event Date:25-Jul-2013
    Event Time:04:30 PM ET



    Ladies and gentlemen, thank you for standing by. And welcome to the Gilead Sciences Second Quarter 2013 Earnings Conference Call. My name is Phil and I'll 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 Patrick O'Brien, Vice President of Investor Relations. Please go ahead.

    Patrick O'Brien

    Vice President, Investor Relations
    Thank you Phil. Good afternoon everyone. We issued a press release this afternoon, providing earnings results for the second quarter which is available on our website where you can also find detailed slides that support today's call.

    For our prepared remarks and Q&A, I am joined by our Chairman and Chief Executive Officer, John Martin; our President and Chief Operating Officer, John Miligon; our Executive Vice President Research and Development, Norbert Bischofberger; our Executive Vice President of Commercial Operations, Kevin Young; and our Chief Financial Officer, Robin Washington.

    Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements, including plans and expectations with respect to our product candidates and financial projections, all of which involve certain assumptions, risks and uncertainties that are beyond our control and could cause our actual results to differ materially from these statements.

    A description of these risks can be found in our latest SEC disclosure documents and recent press releases. In addition, Gilead does not undertake any obligation to update any forward-looking statements made during this call. We will also be using non-GAAP financial measures to help you understand our underlying business performance, the GAAP to non-GAAP reconciliations are provided in our press release as well as on our website.

    I will now turn the call over to Robin Washington.

    Robin L. Washington

    Senior Vice President and Chief Financial Officer
    Thank you Patrick and thank you all for joining us. We are very pleased with our strong operating results for the second quarter, delivering product sales of 2.7 billion, an increase of 14% year-over-year and 11% sequentially and non-GAAP EPS are $0.50 per share.

    The U.S. contributed 1.6 billion to products sales , up 20% year-over-year, driven by strong underlying demand across all therapeutic areas including the continued uptake of Complera and Stribild where combined sales grew 11% over the previous quarter.

    The launch of Stribild continues to go well. Strong prescription demand was partially offset by a reduction in wholesaler inventory levels as Stribild was added to our existing inventory management agreement during the second quarter. Atripla, Complera and Stribild were the number one, two and three most prescribed HIV regimens for treatment naive patients in the U.S.

    Overall, major wholesaler inventory levels remained consistent quarter-over-quarter while sub-wholesaler inventories rebounded after a strong -- after a draw down in the first quarter. ADAP purchasing was robust in the second quarter and we are encouraged by the recent communication to states of the remaining funding allocations for the 2013 ADAP fiscal year.

    However, we anticipate a moderating of ADAP purchasing during the second half of 2013, given sequestration and strong purchasing during the first half of the year.

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