Gilead Sciences (GILD) 10-K risk factor changes: FY2021 vs FY2020

A manifestation of any of the following risks and uncertainties could, in circumstances we may or may not be able to accurately predict, materially and adversely affect our [removed: business,] [added: business and operations,] growth, reputation (including the commercial or scientific reputation of our products), prospects, product pipeline and sales, operating and financial results, financial condition, cash flows, liquidity and stock price.

During [removed: the twelve months ended December 31, 2020,] [added: 2021,] sales of our HIV products accounted for approximately [removed: 70%] [added: 60%] of our total product sales.

We may be unable to sustain or increase sales of our HIV products for any number of reasons, including market share gains by competitive [removed: products] [added: products, including generics,] or the inability to introduce new HIV medications necessary to remain competitive.

For example, [removed: most] [added: many] of our HIV products contain tenofovir alafenamide (“TAF”), [removed: tenofovir disoproxil fumarate (“TDF”) and/or emtricitabine (“FTC”),] which [removed: belong] [added: belongs] to the nucleoside class of antiviral therapeutics, and any changes to the treatment paradigm for HIV may cause nucleoside-based therapeutics to fall out of favor.

[removed: *Veklury (remdesivir)*][added: *Veklury*]

We face risks related to our [removed: significant investment in the rapid development, manufacturing] [added: supply] and distribution of [removed: Veklury (remdesivir),] [added: Veklury,] which was approved by the U.S. Food and Drug Administration (“FDA”) in October 2020 as a treatment for [removed: hospitalized] patients [added: hospitalized] with [removed: COVID-19.][added: coronavirus disease 2019 (“COVID-19”) and in January 2022 as a treatment for non-hospitalized adult and adolescent patients who are at high risk of progression to severe COVID-19, including hospitalization or death.]

While the utilization of [removed: remdesivir] [added: Veklury] has largely tracked [removed: the level] [added: rates] of [removed: infections,] [added: COVID-19 hospitalizations,] we are unable to accurately predict our revenues or supply needs over the short and long term due to the [removed: potential for new and better therapeutics,] [added: dynamic nature of] the [removed: availability] [added: pandemic, including the availability, uptake] and effectiveness of vaccines and [added: alternative treatments for COVID-19,] fluctuating hospital utilization [removed: rates.][added: rates, the emergence of new variants and timing of surges in infection.]

If we [removed: are unable to] [added: do not] accurately forecast demand or manufacture Veklury at levels [added: sufficient] to meet [removed: actual] demand, then [removed: this] [added: we] may [removed: result in] [added: experience product] shortages or [added: build] excess inventory that may be written off.

We [removed: are] [added: also remain] subject to significant public attention and scrutiny over the complex decisions made regarding [removed: the] clinical data, [added: supply,] allocation, distribution and pricing of Veklury, all of which affects our corporate reputation.

Advancing a novel and personalized therapy such as [removed: Yescarta,] [added: Yescarta or Tecartus,] which [removed: is a Chimeric Antigen Receptor] [added: are chimeric antigen receptor] (“CAR”) T cell [removed: therapy,] [added: therapies,] creates significant challenges, including:

- securing sufficient supply of other medications to manage side effects, such as tocilizumab and corticosteroids, which may not be available in sufficient quantities, may not adequately control the side effects and/or may have detrimental impacts on the efficacy of [removed: Yescarta;][added: cell therapy;]

[removed: We may not be able] [added: While FDA has approved some cell therapies, including Yescarta and Tecartus, we must continue] to demonstrate to the medical community [removed: and payers] the potential advantages of [removed: Yescarta] [added: cell therapy] compared to existing and future therapeutics.

For challenges related to the reimbursement of [removed: Yescarta,] [added: Yescarta and Tecartus,] see also “Our existing products are subject to reimbursement pressures from government agencies and other third parties, required rebates and other discounts on our products and other pricing pressures.”

We rely on third-party sites to collect patients’ white blood cells, known as apheresis centers, as well as shippers, couriers, and hospitals for the logistical collection of patients’ white blood cells and ultimate delivery of Yescarta [added: or Tecartus] to patients.

If we are unable to launch commercially successful new products or new indications for existing [removed: products] [added: products,] our business will be adversely impacted.

We believe these measures have caused some government agencies and other purchasers to reduce inventory of our products in the distribution [removed: channels.][added: channels, and we may continue to see this trend in the future.]

For the year ended December 31, [removed: 2020,] [added: 2021,] approximately [removed: 92%] [added: 91%] of our product sales in the United States were to three wholesalers, AmerisourceBergen Corporation, Cardinal Health, Inc. and McKesson Corporation.

The U.S. wholesalers with whom we have entered into inventory management agreements make estimates to determine [removed: end user] [added: end-user] demand and may not be completely effective in matching their inventory levels to actual [removed: end user] [added: end-user] demand.

As a result, changes in inventory levels held by those wholesalers can cause our operating results to fluctuate unexpectedly if our sales to these wholesalers do not match [removed: end user] [added: end-user] demand.

Adverse changes in economic conditions, increased competition or other factors may cause retail pharmacies to reduce their inventories of our products, which would reduce their orders from wholesalers and, consequently, the wholesalers’ orders from us, even if [removed: end user] [added: end-user] demand has not changed.

In the United States, the European Union [added: (“EU”)] and other significant or potentially significant markets for our products and product candidates, government authorities and third-party payers are increasingly attempting to limit or regulate the price of medical products and services.

[removed: For example,] Congress [added: has also] proposed bills to [removed: change] [added: require] the [removed: Medicare Part D benefit] [added: Department of Health and Human Services] to [added: negotiate prices for certain drugs,] impose an inflation-based rebate [added: on Medicare Part B and D drugs] when list prices for drugs grow faster than [removed: inflation] [added: inflation,] and [removed: to] increase manufacturer contributions in some or all of the [added: Medicare Part D] benefit phases.

Many countries outside the United States, including the [removed: European Union member states,] [added: EU Member States,] have established complex and lengthy procedures to obtain price [removed: approvals,] [added: approvals and] coverage reimbursement and periodically review their pricing and reimbursement decisions.

The outcome of this review cannot be predicted and could have an adverse effect on the pricing and reimbursement of our medicinal products in the [removed: European Union] [added: EU] member states.

For example, in December 2020, [removed: CMS] [added: Centers for Medicare & Medicaid Services (“CMS”)] issued a final rule that will make certain changes to the calculation of rebates under the Medicaid Drug Rebate Program.

[removed: Among other changes, effective January 1, 2023, the final rule will change the requirements for excluding manufacturer co-pay coupons from the Medicaid “best price.”] If these changes go into effect, they could substantially increase our Medicaid rebate obligations and decrease the prices we charge 340B covered entities.

The continued growth of the 340B program also limits the prices we may charge [removed: to] [added: on] an increasing [removed: number] [added: percentage] of [removed: customers.][added: sales.]

For example, beginning in fiscal year 2021, CMS established a new [removed: severity adjusted diagnosis related] [added: severity-adjusted diagnosis-related] group (“DRG”) 018 for Medicare inpatient reimbursement of CAR T products such as Yescarta and Tecartus.

Additionally, in the [removed: European Union,] [added: EU,] there are barriers to reimbursement in individual countries that could limit the uptake of Yescarta and Tecartus.

We may experience adverse impacts resulting from [removed: imports from countries where] [added: the importation of] our products [removed: are available at] [added: from] lower [removed: prices] [added: price markets] or [removed: imports] [added: the distribution] of [removed: unapproved generic] [added: illegally diverted] or counterfeit versions of our products.

In the [removed: European Union,] [added: EU,] we are required to permit products purchased in one [removed: European Union] [added: EU] member state to be sold in another member state.

These diverted products may be handled, shipped and stored inappropriately, which may affect the efficacy of the products and could harm [removed: patients,] [added: patients] and adversely impact us.

We are also aware of the existence of various [removed: “Buyers Clubs”] [added: suppliers] around the world that [removed: promote the personal importation of] [added: source our products and] generic versions of our products [removed: that have not been approved] [added: without Gilead’s authorization and sell them] for use in [removed: the] countries [removed: into which they are imported.][added: where those products have not been approved.]

As a result, patients may be at risk of taking unapproved medications [removed: which] [added: that] may not be what they purport to be, may not have the potency they claim to have or may contain harmful substances, which could adversely impact us.

Further, third parties [added: have illegally distributed and sold, and] may [added: continue to] illegally distribute and [removed: sell] [added: sell, illegally diverted and] counterfeit versions of our medicines, which do not meet the rigorous quality standards of our manufacturing and supply chain.

[removed: Counterfeit] [added: Illegally diverted and counterfeit] medicines pose a serious risk to patient health and [removed: safety and may raise the risk of product recalls.][added: safety.]

We are required to demonstrate the safety and efficacy of [removed: products] [added: product candidates] that we develop for each intended use through extensive preclinical studies and clinical trials.

We face numerous risks and uncertainties with our [removed: product candidates] [added: clinical trials] that could [added: result in delays or] prevent completion of [added: the] development [added: and approval] of [removed: these] [added: our] product candidates.

In addition, clinical trials involving our commercial products could raise new safety issues for our existing [removed: products.][added: products, which could adversely impact our business.]

[removed: In addition, we] [added: We] extensively outsource our clinical trial activities and usually perform only a small portion of the start-up activities in-house.

*Cell Therapy*

We operate a new automated manufacturing facility in Frederick, Maryland.

The facility is pending FDA approval for commercial manufacturing and, even if we obtain such approval, we have not manufactured our products in an automated facility on a commercial scale.

As a result, we may not be able to produce or otherwise obtain an amount of supply sufficient to satisfy demand for our products.

If we are unable to meet product demand, we will have difficulty meeting sales forecasts for products that we plan to manufacture at this facility.

As our products mature, pricing pressures from private insurers and government payers often result in a reduction of the net product prices.

For example, Congress has enacted laws requiring manufacturer refunds on certain amounts of discarded drug from single-use vials beginning in 2023 and eliminating the existing cap on Medicaid rebate amounts beginning in 2024.

Among other changes, effective January 1, 2023, the final rule will change the requirements for excluding manufacturer co-pay coupons from the Medicaid “best price.” These changes are subject to ongoing litigation.

For example, as part of an ongoing investigation in coordination with the U.S. Marshals and local law enforcement, we recently executed court-ordered seizures at 17 locations across eight U.S. states and seized thousands of bottles of Gilead-labeled medication with counterfeit supply chain documentation, including bottles labeled as Biktarvy and Descovy.

Our investigation revealed that pharmaceutical distributors that are not authorized by Gilead to sell Gilead medicine, sold to independent pharmacies nationwide, purported genuine Gilead medicine sourced from an illegal counterfeiting scheme.

Our actions to stop or prevent the distribution and sale of illegally diverted and counterfeit versions of our medicines around the world may be costly and unsuccessful, which may adversely affect our reputation and business, including our product revenues and financial results.

These risks and uncertainties include challenges in clinical trial protocol design, our ability to enroll patients in clinical trials, and the possibility of unfavorable or inadequate trial results to support further development of our product candidates, including failure to meet a trial’s primary endpoint, safety issues arising from our clinical trials, and the need to modify or delay our clinical trials or to perform additional trials.

For example, we recently announced clinical holds placed by FDA on clinical trials evaluating (1) injectable lenacapavir, (2) lenacapavir in combination with islatravir and (3) magrolimab, including in combination with azacitidine.

As a result, we may be unable to successfully complete our clinical trials on our anticipated timelines, or at all.

Based on trial results, it is possible that FDA and other regulatory authorities may not approve our product candidates, or that any market approvals may include significant limitations on the products’ use.

Therefore, our product candidates may never be successfully commercialized, and we may be unable to recoup the significant R&D and clinical trial expenses incurred.

In 2022, we anticipate the continued expansion of our clinical pipeline, which includes multiple planned Phase 3 study initiations in oncology and virology.

We expect to expend significant time and resources on our clinical trial activities without any assurance that we will recoup our investments or that our efforts will be commercially successful.

There are also risks associated with the use of third parties in our clinical trial activities.

For example, on February 1, 2022, we reached an agreement with ViiV Healthcare Company and related parties (collectively, “ViiV”) for a global resolution of all pending or potential claims related to our sales of Biktarvy, pursuant to which (1) ViiV granted Gilead a broad worldwide license and covenant not to sue relating to any past, present or future development or commercialization of bictegravir, and (2) Gilead agreed to make a one-time payment of $1.25 billion and an ongoing royalty at a rate of 3% on future sales of Biktarvy and the bictegravir component of bictegravir-containing products in the United States until October 5, 2027.

For example, we have observed lower levels of patient visits and testing volumes in HCV, resulting in fewer patient starts.

In addition, at times during the pandemic, we have seen lower levels of screening and diagnosis for HIV, resulting in fewer treatment initiations, as well as higher levels of discontinuations, resulting in a reduction in prescription refills.

Our field personnel have also had reduced access to healthcare personnel during the pandemic, including fewer in-person interactions, which has adversely impacted and may continue to adversely impact our commercial activities.

In the fourth quarter of 2021, we transitioned to a return-to-site phase for our U.S. flexible location employees.

For example, we have observed reductions in the overall U.S. HCV treatment, HIV treatment and HIV pre-exposure prophylaxis (“PrEP”) volumes at times during the pandemic, and it is uncertain when these volumes will all return to pre-pandemic levels.

- Interest Rates and Inflation: We hold interest-generating assets and interest-bearing liabilities, including our available-for-sale debt securities and our senior unsecured notes and credit facilities.

Fluctuations in the interest rate could expose us to increased financial risk.

In addition, changes in the inflation rate could also adversely impact our business and financial results.

Our aspirations, goals and disclosures related to environmental, social and governance (“ESG”) matters expose us to numerous risks, including risks to our reputation and stock price.

Institutional and individual investors are increasingly using ESG screening criteria to determine whether Gilead qualifies for inclusion in their investment portfolios.

We are frequently asked by investors and other stakeholders to set ambitious ESG goals and provide new and more robust disclosure on goals, progress toward goals and other matters of interest to ESG stakeholders.

In response, we have adapted the tracking and reporting of our corporate responsibility program to various evolving ESG frameworks, and we have established and announced goals and other objectives related to ESG matters.

These goal statements reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.

Our efforts to accomplish and accurately report on these goals and objectives present numerous operational, reputational, financial, legal and other risks, any of which could have a material negative impact, including on our reputation and stock price.

Our ability to achieve any goal or objective, including with respect to environmental and diversity initiatives, is subject to numerous risks, many of which are outside of our control.

Examples of such risks include: (1) the availability and cost of low- or non-carbon-based energy sources and technologies, (2) evolving regulatory requirements affecting ESG standards or disclosures, (3) the availability of suppliers that can meet our sustainability, diversity and other standards, (4) our ability to recruit, develop and retain diverse talent in our labor markets, and (5) the impact of our organic growth and acquisitions or dispositions of businesses or operations.

The standards for tracking and reporting on ESG matters are relatively new, have not been harmonized and continue to evolve.

Our selection of disclosure frameworks that seek to align with various reporting standards may change from time to time and may result in a lack of consistent or meaningful comparative data from period to period.

In addition, our processes and controls may not always comply with evolving standards for identifying, measuring and reporting ESG metrics, our interpretation of reporting standards may differ from those of others and such standards may change over time, any of which could result in significant revisions to our goals or reported progress in achieving such goals.

If our ESG practices do not meet evolving investor or other stakeholder expectations and standards, then our reputation, our ability to attract or retain employees and our attractiveness as an investment, business partner or acquiror could be negatively impacted.

Given the severity and urgency of the COVID-19 pandemic, we committed significant capital and resources for clinical trials and the scale-up of the production of remdesivir.

We expect our investment will continue through 2021 and beyond, as we continue to manufacture large quantities of finished product and conduct additional studies of specific patient populations, develop and evaluate new formulations and delivery methods and combinations with other therapies.

*Yescarta*

We may continue to see this trend in the future.

As our products mature, private insurers and government payers often reduce the amount they will reimburse patients for these products, which increases pressure on us to reduce prices.

In addition, in November 2020, the Centers for Medicare & Medicaid Services (“CMS”) issued an interim final rule that would substantially alter the Medicare Part B reimbursement system for physician-administered medicines as of January 1, 2021.

This rule is subject to ongoing litigation and CMS has been preliminarily enjoined from implementing the rule.

Our actions to discourage the distribution and sale of counterfeit versions of our medicines around the world may not be successful, and we may be adversely affected as a result.

If any of our product candidates fails to achieve its primary endpoint in clinical trials, if safety issues arise or if the results from our clinical trials are otherwise inadequate to support regulatory approval of our product candidates, commercialization of that product candidate could be delayed or halted.

In addition, we may also face challenges in clinical trial protocol design.

We may be adversely impacted if the clinical trials for any of the product candidates in our pipeline are delayed or terminated.

These risks include our ability to enroll patients in clinical trials, the possibility of unfavorable results of our clinical trials, the need to modify or delay our clinical trials or to perform additional trials and the risk of failing to obtain FDA and other regulatory agency approvals.

As a result, our product candidates may never be successfully commercialized.

In 2021, our key anticipated milestones for our product candidates include, among others, Phase 3 data readouts for (1) sacituzumab govitecan-hziy for the treatment of hormone receptor positive, human epidermal growth factor receptor 2 negative, metastatic breast cancer patients and (2) axicabtagene ciloleucel for the treatment of second line diffuse large B cell lymphoma.

We may be adversely impacted if we do not have favorable results from these studies and other programs in our pipeline cannot be completed on a timely basis or at all.

For example, in the United States, a challenge to the Affordable Care Act (“ACA”) is currently pending before the U.S. Supreme Court, which has resulted in uncertainty regarding the ACA’s future viability and destabilization of the health insurance market.

For example, in February 2018, ViiV filed a lawsuit against us in the U.S. District Court of Delaware, alleging that the commercialization of bictegravir, sold commercially in combination with TAF and FTC as Biktarvy, infringes on ViiV’s U.S. Patent No. 8,129,385 (the “’385 patent”), covering ViiV’s dolutegravir.

Bictegravir is structurally different from dolutegravir, and we believe that bictegravir does not infringe the claims of the ’385 patent.

The court has set a trial date of January 2022 for this lawsuit.

ViiV is seeking billions of dollars for alleged damages comprised of ViiV’s lost profits and a royalty on sales of bictegravir from launch through the trial.

In addition, should a court find that we are liable for infringement, we expect ViiV will seek a royalty on sales after the trial.

ViiV calculates these damages based on the cumulative U.S. revenues from Biktarvy since launch, which have totaled $11.46 billion through December 31, 2020 Although we cannot predict with certainty the ultimate outcome of this litigation, an adverse judgment could result in substantial monetary damages, including ViiV’s lost profits and royalties through trial, and a going-forward royalty stream on future sales.

For example, we have seen a reduction in prescription refills for HIV prevention as a result of higher discontinuations.

Currently, most Gilead sites are requiring flexible location employees to work from home while physical location dependent workers and mixed location workers continue to work on Gilead sites.

For example, our product sales, excluding Veklury, for the fourth quarter and full year 2020 decreased 7% and 3%, respectively, compared to the same periods in 2019, due in part to the continued effects of the pandemic on our HCV and HIV franchises.

For example, on January 31, 2020, the United Kingdom withdrew from the European Union, which initiated a transition period during which the United Kingdom and the European Union will negotiate their future relationship.

There is uncertainty concerning any changes in the laws and regulations governing the conduct of clinical trials and marketing of medicinal products in the United Kingdom following the country’s exit from the European Union.

This uncertainty may lead to significant complexity and risks for our company and our ability to research, develop and market medicinal products in the European Union and the United Kingdom.

We are dependent on information technology systems, infrastructure and data, which may be subject to cyberattacks, security breaches and legal claims.

There can be no assurance that our efforts, or the efforts of our partners and vendors, to invest in the protection of information technology infrastructure and data will prevent future service interruptions or identify breaches in our systems.

Such interruptions or breaches could cause the loss of critical or sensitive information, including personal information.

In addition, our insurance may not be sufficient in type or amount to cover the losses that may result from an interruption or breach of our systems.

In addition, significant judgment is required in determining our worldwide provision for income taxes.

Various factors may have favorable or unfavorable effects on our income tax rate including, but not limited to, our portion of the non-deductible annual branded prescription drug fee, the accounting for stock options and other share-based awards, mergers/acquisitions and restructurings, ability to maintain manufacturing and other operational activities in our Irish facilities, changes in the mix of earnings in the various tax jurisdictions in which we operate, changes in overall levels of pre-tax earnings, resolution of federal, state and foreign income tax audits.

The impact on our income tax provision resulting from the above mentioned factors may be significant.

MD&A is provided as a supplement to, and should be read in conjunction with, our audited Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements and other disclosures included in this Annual Report on Form 10-K (including the disclosures under Part I, Item [removed: 1A, *“*Risk Factors*”*).][added: 1A.]

Additional information related to the comparison of our results of operations between the years [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] is included in [removed: *“*Item] [added: Item] 7.

Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations*”*] [added: Operations] of our [removed: [2019] [added: [2020] Form [removed: 10-K](https://www.sec.gov/ix?doc=/Archives/edgar/data/882095/000088209520000006/a2019form10-k.htm#s11F232EE80B7FBB9B77B8F27BF3A0F35)] [added: 10-K](https://www.sec.gov/ix?doc=/Archives/edgar/data/882095/000088209521000008/gild-20201231.htm)] filed with the U.S. Securities and Exchange Commission (the [removed: “SEC”), and is incorporated by reference into this Annual Report on Form 10-K.][added: “SEC”).]

Gilead Sciences, Inc. [removed: (“Gilead”, “we”,] [added: (“Gilead,” “we,”] “our” or “us”) is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades, with the goal of creating a healthier world for all people.

Our portfolio of marketed products includes AmBisome®, Atripla®, Biktarvy®, Cayston®, Complera®, Descovy®, Descovy for PrEP®, Emtriva®, Epclusa®, Eviplera®, Genvoya®, Harvoni®, [added: Hepcludex® (bulevirtide),] Hepsera®, [removed: Jyseleca®,] [added: Jyseleca® (filgotinib),] Letairis®, Odefsey®, Ranexa®, Sovaldi®, Stribild®, [removed: TecartusTM,] [added: Tecartus®,] Trodelvy®, Truvada®, Truvada for PrEP®, Tybost®, Veklury®, Vemlidy®, Viread®, Vosevi®, Yescarta® and Zydelig®.

The approval status of [added: Hepcludex and] Jyseleca [removed: varies] [added: vary] worldwide, and [added: Hepcludex and] Jyseleca [removed: is] [added: are] not approved in the United States.

[removed: 2020 Business Highlights][added: Business Highlights(1)]

We [removed: also] continued to expand and strengthen [added: both] our commercial portfolio and clinical pipeline across [removed: various] therapeutic [added: focus] areas to drive future growth potential.

[removed: Upon closing, which is subject to regulatory clearances and other conditions, the] [added: The] acquisition [removed: will provide] [added: provides] us with [removed: Hepcludex® (bulevirtide),] [added: Hepcludex,] which [removed: was] [added: is] conditionally approved by [removed: the European Medicines Agency (“EMA”)] [added: EMA] for the treatment [removed: for] [added: of] chronic hepatitis delta virus (“HDV”) in [removed: July 2020.][added: adults with compensated liver disease.]

[removed: Collaborations] [added: Commitments] and [removed: Other Arrangements] [added: Contingencies] of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

[removed: | Regulatory Approval & Submission | | | | | | Viral Diseases | | |][added: *Viral Diseases*]

[removed: | | | | | | | Oncology | | |][added: *Oncology*]

[removed: | | | | | | | •FDA and EC] [added: *•*In March 2021, FDA] granted accelerated approval [removed: and conditional marketing authorization, respectively, for Tecartus] [added: of Yescarta] for the treatment of adult patients with relapsed or refractory [removed: mantle cell lymphoma. | | |][added: follicular lymphoma (“FL”).]

(1) We announced and discussed these updates in further detail in press releases available on our website at [removed: https://www.gilead.com/news-and-press/press-room/press-releases.][added: www.gilead.com.]

[removed: 2020] [added: 2021] Financial Highlights

| [removed: (In] [added: (in] millions, except percentages and per share amounts) | | | | | | [removed: 2020 | | | | | | Change] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | Change | | | [removed: | | | 2018 | | |]

| Total revenues | | | | | | $ | [removed: 24,689 | | | | | *10* |] [added: 27,305] | [removed: *%*] | | | | $ | [removed: 22,449] [added: 24,689] | | | | | [removed: *1*] [added: *11*] | | *%* | [removed: | | | $ | 22,127 | |]

| Net income attributable to Gilead | | | | | | $ | [removed: 123 | | | | | *(98)* |] [added: 6,225] | [removed: *%*] | | | | $ | [removed: 5,386 | | | | | *(1)* |] [added: 123] | [removed: *%*] | | | | [removed: $] [added: *NM*] | [removed: 5,455] | |

Strategy and Outlook [removed: 2021][added: 2022]

Beyond expanding our products and pipeline, we also continue to focus on our employees, the evolution of our culture and our efforts to promote racial [removed: equity.][added: equity and social justice.]

[removed: The] [added: While, the] COVID-19 pandemic continues to impact our business and broader market [removed: dynamics.][added: dynamics, we expect revenue growth of between 2 – 4% in 2022 product sales, excluding Veklury, as compared to 2021.]

Future product demand will depend on the nature of the COVID-19 pandemic, including [removed: duration of the pandemic,] [added: duration,] infection rates, hospitalizations, and availability [added: and adoption] of alternative therapies and [removed: vaccines being developed.][added: vaccines.]

Our ability to deliver on our strategy [removed: and 2021 objectives] is subject to a number of uncertainties, including, but not limited to, the effects of the COVID-19 pandemic, which remains unpredictable; the [added: uncertainty regarding the amount and timing of future Veklury sales; the] continuation of an uncertain global macroeconomic environment; our ability to realize the potential benefits of our acquisitions, collaborations or licensing arrangements; our ability to initiate, progress or complete clinical trials within currently anticipated [removed: timeframes;] [added: timeframes, including as a result of any current or future holds on clinical trials;] the possibility of unfavorable results from new and ongoing clinical trials; [removed: additional pricing pressures from payers] [added: our ability to submit new drug applications for new product candidates or expanded indications in the currently anticipated timelines; our ability to receive regulatory approvals in a timely manner or at all; market share] and [removed: competitors;] [added: price erosion caused by the introduction of generics; loss of exclusivity of our products;] higher than anticipated effects of the loss of exclusivity from Truvada and Atripla; slower than anticipated growth in Biktarvy, Trodelvy, Vemlidy and [removed: cell therapy] [added: Cell Therapy] products; [added: inaccuracies in our patient start estimates; additional pricing pressures from payers and competitors;] an increase in discounts, chargebacks and rebates due to ongoing contracts and future negotiations with commercial and government payers; [removed: market share and price erosion caused by the introduction of generics; loss of exclusivity of our products; inaccuracies in our HCV patient start estimates;] potential government actions that could have the effect of lowering prices; a larger-than anticipated shift in payer mix to [added: a] more highly discounted payer segment; and volatility in foreign currency exchange rates.

[removed: Total Revenues][added: Revenues]

| (In millions, except percentages) | | | | | | [removed: 2020 | | | | | | Change] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | Change | | | [removed: | | | 2018 | | |]

| Product sales: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | |]

| [removed: HIV products] [added: HIV Products] | | | | | | [removed: $] | [removed: 16,938] | | | | | [removed: *3*] | | [removed: *%*] | | | | [removed: $] | [removed: 16,438] | | | | | [removed: *12*] | | [removed: *%*] | | | | [removed: $] | [removed: 14,627] | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| [removed: HCV products] [added: HCV Products] | | | | | | [removed: 2,064] | | | | | | [removed: *(30)*] | | [removed: *%*] | | | | [removed: 2,936] | | | | | | [removed: *(20)*] | | [removed: *%*] | | | | [removed: 3,686] | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

[removed: |] Veklury [removed: | | | | | | 2,811 | | | | | | *NM* | | | | | | — | | | | | | *NM* | | | | | | — | | |]

| [removed: Cell therapy products] [added: Cell Therapy Products] | | | | | | [removed: 607] | | | | | | [removed: *33*] | | [removed: *%*] | | | | [removed: 456] | | | | | | [removed: *73*] | | [removed: *%*] | | | | [removed: 264] | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

[removed: |] Trodelvy [removed: | | | | | | 49 | | | | | | *NM* | | | | | | — | | | | | | *NM* | | | | | | — | | |]

| [removed: Other Products] [added: Other Products] | | | | | | [removed: 1,886] | | | | | | [removed: *(18)*] | | [removed: *%*] | | | | [removed: 2,289] | | | | | | [removed: *(26)*] | | [removed: *%*] | | | | [removed: 3,100] | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Royalty, contract and other revenues | | | | | | [removed: 334] [added: 91] | | | | | | [removed: *1*] [added: 196] | | [removed: *%*] | | | | [removed: 330] [added: 10] | | | | | | [removed: *(27)*] [added: 297] | | [removed: *%*] | | | | [removed: 450] [added: 76] | | | [added: | | | 241 | | | | | | 17 | | | | | | 334 | | | | | | *(11)* | | *%* |]

[removed: *Total Product] [added: *Product] Sales*

[removed: *HIV] [added: Other] Product [removed: Sales*][added: Sales]

The [added: increases were partially offset by the] decrease in [added: Truvada and Atripla sales in] the United [removed: States was] [added: States, as expected,] primarily due to [removed: lower sales volume driven by] the [added: continued generic competition following the October 2020] loss of exclusivity [removed: of Truvada and Atripla] in [removed: October 2020 and patients switching to regimens containing FTC/TAF.][added: the United States.]

[removed: *Cell] [added: Cell] Therapy [removed: Product Sales*]

Cell [removed: therapy] [added: Therapy] product sales, which include Yescarta and Tecartus, increased by [removed: 33%] [added: 43%] to [removed: $607] [added: $871] million in [removed: 2020,] [added: 2021,] compared to [removed: $456] [added: $607] million in [removed: 2019, primarily due to the continued uptake of Yescarta in Europe and the third quarter 2020 product launch of Tecartus in the United States.][added: 2020.]

[removed: *Gross-to-Net Deductions*][added: Gross-to-Net Deductions]

We record product sales net of estimated government and other rebates and chargebacks, cash discounts for prompt payment, distributor fees, sales [removed: return provisions] [added: returns] and other related costs.

Risk Factors).

We delivered strong financial performance in 2021.

Veklury continued to play a critical role in addressing the coronavirus disease 2019 (“COVID-19”) pandemic.

Veklury’s performance helped mitigate the impacts of COVID-19 on other parts of the business, including on our HIV and chronic hepatitis C virus (“HCV”) franchises, and the impacts of the October 2020 loss of exclusivity of Truvada and Atripla in the United States.

Despite these transitory headwinds, underlying demand for our virology portfolio remained strong, led by the continued growth of our Biktarvy franchise.

We also received increased contributions from our oncology franchise, experiencing growth in Trodelvy, as well as our Cell Therapy franchise.

During 2021, we announced an additional six filings for regulatory approval.

In addition to investing in our internal pipeline programs, we also continued to enter into and leverage our existing strategic collaborations and partnerships, including opting into four additional pipeline assets from our collaboration with Arcus Biosciences, Inc. (“Arcus”) to further develop the foundation for a more sustainable and diversified business.

- In October 2021, U.S. Food and Drug Administration (“FDA”) approved a new low-dose tablet dosage form of Biktarvy for pediatric patients weighing at least 14 kg to less than 25 kg who are virologically suppressed or new to antiretroviral therapy.

- In August 2021, our Marketing Authorization Application for lenacapavir, an investigational, long-acting HIV-1 capsid inhibitor, was fully validated and is now under evaluation with the European Medicines Agency (“EMA”).

- In June 2021, FDA granted approval of a new oral pellet formulation of Epclusa, expanding the pediatric indication to treat children as young as 3 years of age with chronic HCV.

- In June 2021, we submitted a New Drug Application to FDA for lenacapavir, an investigational, long-acting agent in development for the treatment of HIV-1 in people with limited therapy options.

- In March 2021, we entered into an agreement with Merck Sharp & Dohme Corp. (“Merck”), a subsidiary of Merck & Co., Inc., to jointly develop and commercialize long-acting investigational treatments in HIV that combine Gilead’s investigational capsid inhibitor, lenacapavir, and Merck’s investigational nucleoside reverse transcriptase translocation inhibitor, islatravir.

- In March 2021, we completed the acquisition of MYR GmbH (“MYR”).

*COVID-19*

- In January 2022, FDA granted expedited approval for Veklury for the treatment of non-hospitalized adult and adolescent patients who are at high risk of progression to severe COVID-19, including hospitalization or death.

- In December 2021, the European Commission granted approval to expand the indication for Veklury for use in the earlier stages of the disease in adult patients who do not require supplemental oxygen and are at increased risk of progressing to severe COVID-19.

- In April 2021, we announced that we will (i) provide assistance and support for expansion of local manufacturing capacity of remdesivir in India and will donate the active pharmaceutical ingredient and (ii) donate a minimum of 450,000 vials of Veklury (remdesivir) to the government of India.

- In January 2022, FDA approved an update to the prescribing information for Yescarta to include the use of prophylactic corticosteroids across all approved indications.

Yescarta is now the first and only chimeric antigen receptor (“CAR”) T-cell therapy with information in the label to help physicians manage, and potentially prevent, treatment side effects.

- In October 2021, FDA approved Tecartus for the treatment of adult patients with relapsed or refractory B-cell precursor acute lymphoblastic leukemia (“ALL”).

Tecartus is the first and only CAR T cell therapy approved for adults with ALL.

*•*In September 2021, Kite, a Gilead company (“Kite”) submitted a supplemental Biologics License Application to FDA for Yescarta to expand its current indication to include the treatment of adults with relapsed or refractory large B-cell lymphoma (“LBCL”) in the second-line setting.

- In August 2021, Kite and Appia Bio, Inc. entered into a collaboration and license agreement to research and develop hematopoietic stem cell derived cell therapies directed toward hematological malignancies.

- In June 2021, Kite entered into a research collaboration and license agreement with Shoreline Biosciences, Inc. to develop novel allogeneic cell therapies across a variety of cancer targets.

*•*In June 2021, Fosun Kite Biotechnology Co. Ltd, a joint venture between Kite and Shanghai Fosun Pharmaceutical (Group) Co., Ltd, received approval from the China National Medical Products Administration for axicabtagene ciloleucel for the treatment of adult patients with relapsed or refractory LBCL in China.

- In January 2022, we entered into a clinical trial collaboration agreement with Merck to evaluate Trodelvy in combination with Merck’s anti-programmed death receptor-1 (“PD-1”) therapy, Keytruda, in a first-line setting for patients with non-small cell lung cancer (“NSCLC”).

- In November 2021, the European Commission granted marketing authorization for Trodelvy for treatment of metastatic triple-negative breast cancer (“TNBC”) in adult patients with unresectable or metastatic TNBC who have received two or more prior systemic therapies, at least one of them for advanced disease.

- In November 2021, we exercised options to three programs in the clinical-stage portfolio of Arcus, including anti-TIGIT molecules domvanalimab and AB308, as well as clinical candidates etrumadenant (dual adenosine A2a/A2b receptor antagonist) and quemliclustat (small molecule CD73 inhibitor).

The transaction closed in December 2021.

- In October 2021, we entered into a clinical trial collaboration and supply agreement with Merck to evaluate the efficacy of Trodelvy in combination with Keytruda as a first-line treatment for patients with locally advanced or metastatic TNBC.

- In September 2021, Health Canada approved Trodelvy for the treatment of adult patients with unresectable locally advanced or metastatic TNBC who have received two or more therapies, at least one of them for metastatic disease.

Canada joined Australia, Great Britain, Switzerland and the United States among the countries that have approved Trodelvy for use under Project Orbis, a global collaborative review program for high impact oncology marketing applications across participating countries.

- In April 2021, FDA granted accelerated approval of Trodelvy for use in adult patients with locally advanced or metastatic urothelial cancer (“UC”), a new indication.

- In April 2021, FDA granted full approval of Trodelvy for adult patients with unresectable locally advanced or metastatic TNBC.

The content on the referenced websites does not constitute a part of and is not incorporated by reference into this Annual Report on Form 10-K.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Net income per share attributable to Gilead common stockholders - diluted | | | | | | $ | 4.93 | | | | | $ | 0.10 | | | | | *NM* | | |

Total revenues increased by 11% to $27.3 billion in 2021, compared to $24.7 billion in 2020, primarily due to increased sales of Veklury, our FDA-approved treatment for hospitalized patients with COVID-19.

Our financial performance was strong in 2020, despite the global impact of the COVID-19 pandemic, which is a clear reflection of the solid underlying fundamentals of our business driven by the HIV franchise and the increased demand we saw for Veklury amid the COVID-19 pandemic.

- In April, we acquired Forty Seven, Inc. (“Forty Seven”) for approximately $4.7 billion, gaining an investigational drug candidate, magrolimab, which is currently in Phase 2/3 clinical studies for a number of hematological cancers, including myelodysplastic syndrome, acute myeloid leukemia, non-Hodgkin lymphoma and solid tumors.

- In October, we acquired Immunomedics, Inc. (“Immunomedics”) for approximately $20.6 billion and gained Trodelvy, a Trop-2-directed antibody-drug conjugate, which was granted accelerated approval by the U.S. Food and Drug Administration (“FDA”) for the treatment of adult patients with metastatic triple-negative breast cancer (“mTNBC”).

Trodelvy has potential broader applicability for multiple tumor types, and is being studied as a monotherapy and combination agent for additional tumor types, including HR+/HER2- breast cancer, urothelial cancer, non-small cell lung cancer and other solid tumors.

- In December, we entered into a definitive agreement to acquire MYR GmbH.

- We significantly expanded our oncology portfolio through licensing, strategic collaboration as well as equity investments with our third-party collaboration partners.

Additional information is included in Note 11.

In addition to the assets we acquired pursuant to our strategic transactions, we developed several other therapies and treatments in our portfolio: Jyseleca, Tecartus and Veklury, the first FDA-approved antiviral therapy for COVID-19.

These efforts demonstrate our continued commitment to advancing innovative medicines in areas of unmet need.

*Key Product, Pipeline and Corporate Updates(1)*

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Category | | | | | | Therapeutic Area and Description | | |

| | | | | | | •FDA, European Commission (“EC”) and Japanese Ministry of Health, Labour and Welfare (“JMHLW”) granted full approval, conditional marketing authorization and regulatory approval, respectively, to Veklury for the treatment of patients with COVID-19. | | |

| | | | | | | •FDA approved a supplemental New Drug Application for Epclusa for the treatment of children ages 6 and older (or weighing at least 17 kg) with hepatitis C virus (“HCV”). | | |

| | | | | | | •We submitted a supplemental Biologics License Application (“sBLA”) to FDA for approval of Trodelvy as a treatment for adult patients with mTNBC based on the overall efficacy and safety results in the Phase 3 ASCENT trial. | | |

| | | | | | | •Kite Pharma, Inc. (“Kite”) submitted an sBLA to FDA for Yescarta for the treatment of relapsed or refractory indolent non-Hodgkin’s lymphoma. Kite also received EMA approval to implement a variation to the Yescarta Marketing Authorization for end-to-end manufacturing. | | |

| | | | | | | •FDA granted Breakthrough Therapy designation for magrolimab, a first-in-class, investigational, monoclonal antibody for the treatment of newly diagnosed myelodysplastic syndrome. | | |

| | | | | | | Inflammatory Diseases | | |

| | | | | | | •EMA validated and is reviewing the application of Gilead and Galapagos NV (“Galapagos”) for a new indication to the approved license for filgotinib 200mg. The proposed indication is for the treatment of adults with moderately to severely active ulcerative colitis. | | |

| | | | | | | •JMHLW and EC granted regulatory approval and marketing authorization of Jyseleca, respectively, for the treatment of adults with moderate to severe active rheumatoid arthritis. | | |

| Corporate Development | | | | | | Viral Diseases | | |

| | | | | | | •Gilead and Vir Biotechnology, Inc. established a clinical collaboration related to hepatitis B virus in January 2021. | | |

| | | | | | | •Gilead and Gritstone Oncology, Inc. announced that the companies have entered into a collaboration, option and license agreement related to a curative treatment of HIV in February 2021. | | |

| Other | | | | | | •Veklury Distribution: ◦Beginning October 1, 2020, we started distributing Veklury in the United States upon conclusion of the previous distribution agreement with the U.S. Federal government. ◦Gilead and European Union signed a joint procurement agreement, which covers purchases of Veklury for a six-month period through April 2021 and has the option to be extended by the parties for additional six-month periods. | | |

| | | | | | | •Board Appointments: ◦Jeffrey A. Bluestone, Ph.D., the President and Chief Executive Officer (“CEO”) of Sonoma Biotherapeutics. ◦Sandra J. Horning, retired Chief Medical Officer and Global Head of Product Development for Roche. ◦Javier J. Rodriguez, the CEO of DaVita Inc. ◦Anthony Welters, retired Senior Advisor to the Office of the CEO of UnitedHealth Group, Inc. | | |

| | | | | | | •Community Support: ◦In February 2021, we announced a new partnership with the Wake Forest University School of Divinity, as part of the ongoing COMPASS Initiative, to help mitigate the HIV epidemic in the Southern United States. ◦We launched the Racial Equity Community Impact Fund to initially provide $10 million in grants to 20 organizations working in community advocacy and mobilization, social justice and educational innovation. ◦COVID-19: We donated 1.5 million individual doses of remdesivir free of charge. ◦We made various donations to support current nonprofit grantees through the global Gilead COVID-19 Acute Relief and Emergency Support Grantee Fund. ◦We also made donations to the San Mateo Strong Fund and the Mayor’s Fund for Los Angeles. | | |

Additional information can be found in our disclosures filed or furnished with the SEC, including its Current Reports on Form 8-K and on Quarterly Reports on Form 10-Q, as applicable.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Diluted earnings per share | | | | | | $ | 0.10 | | | | | *(98)* | | *%* | | | | $ | 4.22 | | | | | *1* | | *%* | | | | $ | 4.17 | |

*2020 Compared to 2019*

Total revenues increased by 10% to $24.7 billion in 2020, compared to $22.4 billion in 2019, primarily due to Veklury sales and higher product sales in our HIV products, including the continued patient uptake of Biktarvy and growth of Descovy for pre-exposure prophylaxis (“PrEP”).

The increase was partially offset by lower sales volume of our Truvada (emtricitabine (“FTC”) and tenofovir disoproxil fumarate (“TDF”))-based products primarily due to the loss of exclusivity of Truvada and Atripla in the United States in October 2020, lower sales of HCV products due to the impact of the COVID-19 pandemic and the expected declines in sales of Letairis and Ranexa after generic entries in the first half of 2019.

Net income attributable to Gilead was $123 million or $0.10 per diluted share in 2020, compared to $5.4 billion or $4.22 per diluted share in 2019, primarily due to unfavorable changes in the fair value of our equity investments in Galapagos, the $1.2 billion discrete tax benefit recorded in 2019 related to intra-entity transfers of intangible assets to different tax jurisdictions, higher acquired in-process research and development (“IPR&D”) expenses related to our acquisition of Forty Seven and our collaborations and other investments we entered into during the year, as well as higher acquisition-related expenses.

In 2021, we will continue to focus on executing our strategy to expand and strengthen our commercial portfolio and clinical pipelines in new therapeutic areas, including oncology and inflammation, while maintaining our leadership in antiviral medications through the continued growth of Biktarvy, the development of lenacapavir, the expansion of our viral hepatitis business and our on-going efforts to develop safe and effective antivirals to patients suffering from viral infections.

We expect a gradual recovery in underlying market dynamics starting the second quarter 2021.

Truvada and Atripla sales are expected to continue to decline in the first quarter of 2021 and beyond as multiple generics are expected to enter the market starting in the second quarter of 2021.

Biktarvy, Trodelvy, Vemlidy and cell therapy are expected to be key growth drivers in 2021 absorbing the full year impact of the loss of exclusivity for Truvada and Atripla in the United States.

The acquisition of

We are exposed to market risks that may result from changes in foreign currency exchange rates, interest rates, credit risks and market [removed: price.][added: prices.]

Conversely, when the U.S. dollar weakens against these currencies, the relative [removed: amounts] [added: value] of such sales increase.

Overall, we are a net receiver of foreign currencies and, therefore, [added: we] benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. [removed: dollar relative to those foreign currencies in which we transact significant amounts of business.][added: dollar.]

Approximately 26% of our product sales were denominated in foreign currencies during [removed: 2020.][added: 2021.]

To partially mitigate the impact of changes in currency exchange rates on net cash flows from our foreign currency denominated sales, we may enter into foreign currency exchange forward [removed: and] [added: or] option contracts.

As of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] we had open foreign currency forward contracts with notional amounts of [removed: $2.4] [added: $2.9] billion and [removed: $2.9] [added: $2.4] billion, respectively.

A hypothetical 10% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates [removed: at] [added: as of] December 31, [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] would have resulted in a reduction in fair value of these contracts of approximately [removed: $249] [added: $333] million and [removed: $285] [added: $249] million, respectively, [removed: on this date and,] [added: and] if realized, would [added: have] negatively [removed: affect] [added: affected] earnings over the remaining life of the contracts.

- [added: a] competitive after-tax rate of return.

The following table summarizes the expected maturities and average interest rates of our interest-generating assets and interest-bearing liabilities [removed: at] [added: as of] December 31, [removed: 2020:][added: 2021:]

| [removed: (In] [added: (in] millions, except percentages) | | | | | | | | | [removed: 2021] [added: 2022] | | | | | | | | | [removed: 2022] [added: 2023] | | | | | | | | | [removed: 2023] [added: 2024] | | | | | | | | | [removed: 2024] [added: 2025] | | | | | | | | | [removed: 2025] [added: 2026] | | | | | | | | | Thereafter | | | | | | | | | Total | | | | | | | | | | | |

| Senior unsecured fixed rate notes, including current portion(1) | | | | | | $ | | | [removed: 2,250] [added: 1,500] | | | | | | $ | | | [removed: 1,500] [added: 2,250] | | | | | | $ | | | [removed: 2,750] [added: 1,750] | | | | | | $ | | | 1,750 | | | | | | $ | | | [removed: 1,750] [added: 2,750] | | | | | | $ | | | [removed: 18,500] [added: 15,750] | | | | | | $ | | | [removed: 28,500] [added: 25,750] | | | | | | $ | | | [removed: 32,588] [added: 28,599] | | |

| Average interest rate | | | | | | | | | [removed: 4.44] [added: 2.82] | | % | | | | | | | [removed: 2.82] [added: 1.33] | | % | | | | | | | [removed: 1.23] [added: 3.70] | | % | | | | | | | [removed: 3.70] [added: 3.50] | | % | | | | | | | [removed: 3.50] [added: 3.65] | | % | | | | | | | [removed: 3.81] [added: 3.84] | | % | | | | | | | | | | | | | | | | | | |

There were no amounts outstanding under the five-year revolving credit facility as of December 31, [removed: 2020.][added: 2021.]

The fair value of these equity securities was approximately [removed: $2.4] [added: $1.8] billion and [removed: $3.8] [added: $2.4] billion as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively.

A hypothetical 20% increase or decrease in the stock prices of these equity securities would [removed: increase] [added: have increased] or [removed: decrease] [added: decreased] their fair value [removed: at] [added: as of] December 31, [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] by approximately [removed: $478] [added: $364] million and [removed: $760] [added: $478] million, respectively.

| Available-for-sale debt securities | | | | | | $ | | | 1,188 | | | | | | $ | | | 599 | | | | | | $ | | | 643 | | | | | | $ | | | 37 | | | | | | $ | | | 7 | | | | | | $ | | | 23 | | | | | | $ | | | 2,497 | | | | | | $ | | | 2,497 | | |

| Average interest rate | | | | | | | | | 0.46 | | % | | | | | | | 0.61 | | % | | | | | | | 0.60 | | % | | | | | | | 1.09 | | % | | | | | | | 0.57 | | % | | | | | | | 0.60 | | % | | | | | | | | | | | | | | | | | | |

| Available-for-sale debt securities | | | | | | $ | | | 1,524 | | | | | | $ | | | 324 | | | | | | $ | | | 139 | | | | | | $ | | | 26 | | | | | | $ | | | 1 | | | | | | $ | | | 12 | | | | | | $ | | | 2,026 | | | | | | $ | | | 2,026 | | |

| Average interest rate | | | | | | | | | 0.45 | | % | | | | | | | 0.27 | | % | | | | | | | 0.45 | | % | | | | | | | 0.49 | | % | | | | | | | 0.51 | | % | | | | | | | 0.23 | | % | | | | | | | | | | | | | | | | | | |

| Senior unsecured floating rate notes and term loan, including current portion | | | | | | $ | | | 500 | | | | | | $ | | | — | | | | | | $ | | | 1,500 | | | | | | $ | | | — | | | | | | $ | | | — | | | | | | $ | | | — | | | | | | $ | | | 2,000 | | | | | | $ | | | 2,002 | | |

| Average interest rate | | | | | | | | | 0.38 | | % | | | | | | | — | | % | | | | | | | 1.15 | | % | | | | | | | — | | % | | | | | | | — | | % | | | | | | | — | | % | | | | | | | | | | | | | | | | | | |

Gilead Sciences, Inc. [removed: (“Gilead”, “we”,] [added: (“Gilead,” “we,”] “our” or “us”) is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades, with the goal of creating a healthier world for all people.

In [removed: 2020,] [added: 2021,] our primary revenue-generating products and the approved indications in the United States [removed: are] [added: were] as follows:

Biktarvy is a [removed: single tablet] [added: single-tablet] regimen of a fixed-dose combination of our antiretroviral medications, bictegravir, emtricitabine and tenofovir alafenamide (“TAF”).

Genvoya is a [removed: single tablet] [added: single-tablet] regimen of a fixed-dose combination of our antiretroviral medicines, elvitegravir, cobicistat, emtricitabine and TAF.

Odefsey is a [removed: single tablet] [added: single-tablet] regimen of a fixed-dose combination of our antiretroviral medications, emtricitabine and TAF, and rilpivirine marketed by Janssen Sciences Ireland Unlimited Company, one of the Janssen Pharmaceutical Companies of Johnson & Johnson (“Janssen”).

[removed: It] [added: Truvada] is a fixed-dose combination of our antiretroviral medications, [removed: TDF] [added: tenofovir disoproxil fumarate (“TDF”)] and emtricitabine.

The product, marketed in the United States as Complera and in Europe as Eviplera, is a [removed: single tablet] [added: single-tablet] regimen of a fixed-dose combination of our antiretroviral medications, [removed: tenofovir disoproxil fumarate (“TDF”)] [added: TDF] and emtricitabine, and Janssen’s rilpivirine hydrochloride.

Stribild is a [removed: single tablet] [added: single-tablet] regimen of a fixed-dose combination of our antiretroviral medications, elvitegravir, cobicistat, TDF and emtricitabine.

- Veklury® (remdesivir), an injection for intravenous use, is a nucleotide analog RNA polymerase inhibitor indicated for [removed: certain patients for] the treatment of coronavirus disease 2019 (“COVID-19”) [removed: requiring hospitalization.][added: in certain adults and children 12 years of age and older and weighing at least 88 pounds (40 kg) who are (i) hospitalized or (ii) not hospitalized and have mild-to-moderate COVID-19, and are at high risk for progression to severe COVID-19, including hospitalization or death*.]

- Epclusa® is an oral formulation of a once-daily [removed: single tablet] [added: single-tablet] regimen of sofosbuvir and velpatasvir for the treatment of chronic hepatitis C virus (“HCV”) infection in adults and certain pediatric patients with genotype 1, 2, 3, 4, 5 or 6: (i) without cirrhosis or with compensated cirrhosis or (ii) with decompensated cirrhosis for use in combination with ribavirin.

- Harvoni® is an oral formulation of a once-daily, [removed: single tablet] [added: single-tablet] regimen of ledipasvir and sofosbuvir for the treatment of chronic HCV infection in: (i) adults with genotype 1, 4, 5 or 6 without cirrhosis or with compensated cirrhosis, (ii) adults with genotype 1 [removed: infection] with decompensated cirrhosis, in combination with ribavirin, (iii) adults with genotype 1 or 4 who are liver transplant recipients without cirrhosis or with compensated cirrhosis, in combination with ribavirin, or (iv) certain pediatric patients with genotype 1, 4, 5 or 6 without cirrhosis or with compensated cirrhosis.

- Vosevi® is an oral formulation of a once-daily, [removed: single tablet] [added: single-tablet] regimen of sofosbuvir, velpatasvir and voxilaprevir for the re-treatment of chronic HCV infection in adults: (i) with genotype 1, 2, 3, 4, 5 or 6 previously treated with an NS5A inhibitor-containing regimen or (ii) with genotype 1a or 3 previously treated with a sofosbuvir-containing regimen without an NS5A inhibitor.

- Yescarta® (axicabtagene ciloleucel), a suspension for intravenous infusion, is a chimeric antigen receptor (“CAR”) [removed: T cell] [added: T-cell] therapy for the treatment of [added: (i)] adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, including diffuse large B-cell lymphoma (“DLBCL”) not otherwise specified, primary mediastinal large B-cell lymphoma, high-grade B-cell lymphoma and DLBCL arising from follicular [removed: lymphoma.][added: lymphoma, and (ii) adult patients with relapsed or refractory follicular lymphoma (“FL”) after two or more lines of systemic therapy*.]

- [removed: Tecartus™] [added: Tecartus®] (brexucabtagene autoleucel), a suspension for intravenous infusion, is a CAR T cell therapy for the treatment of [added: (i)] adult patients with relapsed or refractory mantle cell [removed: lymphoma.][added: lymphoma (“MCL”) and (ii) adult patients with relapsed or refractory B-cell precursor acute lymphoblastic leukemia (“ALL”).]

- Trodelvy® (sacituzumab govitecan-hziy), an injection for intravenous use, is a Trop-2 directed antibody and topoisomerase inhibitor conjugate indicated for the treatment of [added: (i)] adult patients with [added: unresectable locally advanced or] metastatic triple-negative breast cancer [added: (“TNBC”)] who have received [removed: at least] two [added: or more] prior [removed: therapies] [added: systemic therapies, at least one of them] for metastatic [removed: disease.][added: disease, and (ii) adult patients with locally advanced or metastatic urothelial cancer who have previously received a platinum-containing chemotherapy and either programmed death receptor-1 (“PD-1”) or programmed death-ligand 1 (“PD-L1”) inhibitor*.]

[removed: This] [added: *This] indication is approved under accelerated approval by FDA, and continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

- Zydelig® (idelalisib) is an oral formulation of a kinase inhibitor for the treatment of patients [removed: with: (i)] [added: with] relapsed chronic lymphocytic [removed: leukemia (“CLL”),] [added: leukemia,] in combination with rituximab, for whom rituximab alone would be considered appropriate therapy due to other [removed: co-morbidities, (ii) relapsed follicular B-cell non-Hodgkin lymphoma (FL) in patients who have received at least two prior systemic therapies or (iii) relapsed small lymphocytic lymphoma who have received at least two prior systemic therapies.][added: co-morbidities.]

During the [removed: twelve months] [added: year] ended December 31, [removed: 2020,] [added: 2021,] approximately [removed: 92%] [added: 91%] of our product sales in the United States and approximately [removed: 68%] [added: 65%] of our total worldwide revenues were to three large wholesalers, AmerisourceBergen Corporation, Cardinal Health, Inc. and McKesson Corporation.

As our products mature, [added: pricing pressures from] private insurers and government payers often [removed: reduce] [added: result in a reduction of] the [removed: amount they will reimburse patients, which increases pressure on us to reduce] [added: net product] prices.

These risks and uncertainties include our ability to enroll patients in clinical trials, the possibility of unfavorable results of our clinical trials, the need to modify or delay our clinical [removed: trials] [added: trials, including on account of clinical holds placed by regulatory authorities,] or to perform additional trials and the risk of failing to obtain regulatory approvals.

In [removed: 2020,] [added: 2021,] we continued to invest in and advance our R&D pipeline across our therapeutic areas.

Below is a summary of our product candidates that [removed: are] [added: were] in Phase 3 or registrational Phase 2 clinical trials or [removed: are] pending marketing authorization review by FDA or European Medicines Agency [removed: (“EMA”).][added: (“EMA”) as of the end of 2021.]

| Product [removed: Candidates] [added: Candidate] | | | | | | Description | | |

| Phase [removed: 3 or Phase 2/3] [added: 3] | | | | | | | | |

| Lenacapavir | | | | | | [removed: Lenacapavir,] [added: A New Drug Application and a Marketing Authorization Application have been filed with FDA and EMA, respectively, for lenacapavir,] an HIV capsid inhibitor, [removed: is being evaluated] as a component of a long-acting regimen for the treatment of HIV infection in heavily treatment-experienced people living with HIV. It has been granted Breakthrough Therapy designation by FDA for this indication. | | |

| [removed: Bulevirtide(1)] [added: Bulevirtide] | | | | | | [removed: Bulevirtide is being evaluated] [added: A Biologics License Application has been filed with FDA] for [added: bulevirtide for] the treatment of chronic hepatitis delta virus (“HDV”) infection. It has been granted both Orphan Drug and Breakthrough Therapy designations by FDA for [removed: chronic HDV infection. It] [added: this indication. In Europe, Hepcludex® (bulevirtide)] has [removed: also] been granted [removed: Breakthrough Therapy designation] [added: Conditional Marketing Authorization by the European Commission] and PRIority MEdicines [removed: (“PRIME”)] [added: (PRIME)] scheme eligibility by the [removed: European Commission for] [added: EMA as the first approved treatment in adults with] chronic HDV [removed: infection.] [added: infection with compensated liver disease.] | | |

| Filgotinib | | | | | | [removed: Filgotinib] [added: Filgotinib, a JAK1 inhibitor,] is being evaluated for the treatment of Crohn’s disease. | | |

| Sacituzumab govitecan-hziy | | | | | | Sacituzumab [removed: govitecan-hziy] [added: govitecan-hziy, a Trop-2 directed antibody and topoisomerase inhibitor conjugate,] is being evaluated for [removed: the treatment of] [added: (i)] hormone receptor positive (“HR+”), human epidermal growth factor receptor 2 negative (“HER2-”), metastatic breast cancer [removed: patients who have failed at least two prior chemotherapy regimens.] [added: and (ii) non-small cell lung cancer (“NSCLC”) as a second-line or third-line treatment.] | | |

| Brexucabtagene autoleucel | | | | | | Brexucabtagene [removed: autoleucel, a CAR T cell therapy,] [added: autoleucel] is being evaluated for the treatment of pediatric ALL. [removed: It has been granted Breakthrough Therapy designation by FDA for the pediatric ALL indication.] | | |

In [removed: 2020,] [added: addition,] we [removed: entered into 18 strategic partnerships and acquisitions] [added: seek] to enhance our commercial portfolio and clinical pipeline across multiple therapeutic [removed: areas.][added: areas through acquisitions, in-licensing and strategic collaborations.]

Our strategic business development activity reflects our commitment to focus on transformative science, build a sustainable and diverse portfolio and position ourselves for the [removed: near, medium] [added: near-, medium-] and long-term growth of our business.

For our product candidates that are fixed-dose combinations of [removed: single tablet] [added: single-tablet] regimens, the estimated patent expiration date provided corresponds to the latest expiring compound patent for one of the active ingredients in the [removed: single tablet] [added: single-tablet] regimen.

| [removed: Bulevirtide(1)] [added: Bulevirtide] | | | | | | 2030 | | | | | | | | | 2029 | | | | | |

| Axicabtagene ciloleucel | | | | | | [removed: 2027] [added: 2031] | | | | | | | | | — | | | [removed: (2)] [added: (1)] | | |

| Brexucabtagene autoleucel | | | | | | 2027 | | | | | | | | | — | | | [removed: (2)] [added: (1)] | | |

| Sacituzumab govitecan-hziy | | | | | | 2023 | | | [removed: (3)] [added: (2)] | | | | | | 2029 | | | | | |

[removed: (2)] [added: (1)] The composition of matter patent has expired in the European Union.

[removed: (3)] [added: (2)] An application for patent term extension was filed in the United States that, if granted, would extend the U.S. expiration date to at least 2028.

For our products that are fixed-dose combinations or [removed: single tablet] [added: single-tablet] regimens, the estimated patent expiration dates provided correspond to the latest expiring compound patent for one of the active ingredients in the [removed: single tablet] [added: single-tablet] regimen.

| Zydelig | | | | | | 2025 | | | [removed: (4)] [added: (2)] | | | | | | [removed: 2025] [added: 2029] | | | [removed: (4)] | | |

*This indication received expedited approval by FDA in January 2022.

*This indication is approved under accelerated approval by FDA, and continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

| Regulatory Filings | | | | | | | | |

| Lenacapavir | | | | | | Lenacapavir is being evaluated for an HIV PrEP indication. Program timeline is pending resolution of clinical hold placed by FDA on studies evaluating injectable lenacapavir. | | |

| Regulatory Filings | | | | | | | | |

| Yescarta (axicabtagene ciloleucel) | | | | | | A supplemental Biologics License Application and a Type II Variation Marketing Authorization Application have been filed with FDA and EMA, respectively, for axicabtagene ciloleucel, a CAR T cell therapy for the treatment of second-line DLBCL. A Type II Variation Marketing Authorization Application has been filed with EMA for axicabtagene ciloleucel for the treatment of relapsed or refractory FL. Yescarta has received accelerated approval by FDA for the treatment of adult patients with relapsed or refractory FL after two or more lines of systemic therapy. | | |

| Tecartus (brexucabtagene autoleucel) | | | | | | A Type II Variation Marketing Authorization Application has been filed with EMA for brexucabtagene autoleucel, a CAR T cell therapy, for the treatment of adult ALL. Tecartus has received FDA approval for the treatment of adult patients with relapsed or refractory B-cell precursor ALL. | | |

| Magrolimab | | | | | | Magrolimab, an anti-CD47, is being evaluated for (i) higher risk myelodysplastic syndrome (“MDS”) as a first-line treatment and (ii) acute myeloid leukemia (“AML”) as a first-line treatment. Program timelines are pending resolution of partial clinical holds placed by FDA on studies evaluating magrolimab. | | |

| Zimberelimab* | | | | | | Zimberelimab, an anti-PD-1 monoclonal antibody, is being evaluated for NSCLC as a first-line treatment. | | |

| Domvanalimab* | | | | | | Domvanalimab, an Fc-silent anti-TIGIT antibody, is being evaluated for NSCLC as a first-line treatment. | | |

*In collaboration with Arcus Biosciences, Inc. (“Arcus”).

See Note 11.

Collaborations and Other Arrangements of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding this collaboration.

In 2021, we also received regulatory approvals or authorizations from FDA and the European Commission to expand the indications of our products, including:

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Product | | | | | | Regulatory Approval or Authorization | | |

| Biktarvy | | | | | | FDA approved a new low-dose tablet dosage form of Biktarvy for pediatric patients weighing at least 14 kg to less than 25 kg who are virologically suppressed or new to antiretroviral therapy. | | |

| Epclusa | | | | | | FDA approved an expansion of the pediatric indication of Epclusa for the treatment of chronic HCV infection to include pediatric patients 3 years of age and older, regardless of HCV genotype or liver disease severity. | | |

| Veklury | | | | | | European Commission approved a variation to the Conditional Marketing Authorization for Veklury to include adults who do not require supplemental oxygen and are at an increased risk of progressing to severe COVID-19. | | |

| Yescarta | | | | | | FDA granted accelerated approval of Yescarta for the treatment of adult patients with relapsed or refractory FL. | | |

| Tecartus | | | | | | FDA approved Tecartus for the treatment of adult patients with relapsed or refractory B-cell precursor ALL. | | |

| Trodelvy | | | | | | FDA granted full approval of Trodelvy for adult patients with unresectable locally advanced or metastatic TNBC. FDA granted accelerated approval of Trodelvy for use in adult patients with locally advanced or metastatic UC. European Commission granted marketing authorization for Trodelvy as a monotherapy indicated for the treatment of adult patients with unresectable or metastatic TNBC who have received two or more prior systemic therapies, at least one of them for advanced disease. | | |

For example, in October 2021, we entered into a clinical trial collaboration with Merck Sharp & Dohme, Corp., a subsidiary of Merck & Co., Inc. (“Merck”), to evaluate Trodelvy in combination with Merck’s Keytruda in patients with first-line metastatic TNBC.

In November 2021, we expanded our research collaboration with Arcus and exercised our options to three programs in Arcus’s clinical-stage portfolio, including domvanalimab, which is in Phase 2 and 3 studies in NSCLC.

| Zimberelimab(3) | | | | | | 2036 | | | | | | | | | 2036 | | | | | |

| Domvanalimab(3) | | | | | | 2037 | | | | | | | | | 2036 | | | | | |

_______________________________

(3) In collaboration with Arcus.

| Yescarta | | | | | | 2031 | | | | | | | | | — | | | (3) | | |

______________________________

These facilities include:

- Frederick, Maryland: We utilize the facility for clinical manufacturing and processing of our cell therapy products.

Inclusion is a Gilead core value, and we believe building an inclusive and diverse workforce is critical to enabling Gilead’s mission.

In 2020, we introduced our Advancing Black Leadership Strategy, a multi-year initiative that outlines our commitments to create internal and external pipelines for diverse talent and to build awareness, capabilities and accountability among our people managers.

As part of this strategy, we set clear targets for representation within our overall workforce and executive populations, including goals to increase the percentage of female, Black and Hispanic employees with well-defined annual targets through 2025.

Gilead also implemented multiple programs to train managers on inclusion and diversity topics, and created strategies and initiatives focused on attracting, developing and retaining diverse talent and driving an inclusive culture in our workplace, which organizational leaders were required to regularly review starting in 2021.

Executive sponsors and leaders of our ERGs contribute to the advancement of our inclusion and diversity commitments through service on our Global Inclusion and Diversity Council.

Gilead is committed to providing a workplace for its employees that promotes health, safety, wellness and productivity.

In the fourth quarter of 2021, Gilead transitioned to a return-to-site phase for our U.S. flexible location employees.

| Remdesivir (injection) | | | | | | Remdesivir for injection is being evaluated for the outpatient treatment of COVID-19 (expanded indication). | | |

________________________________

(1) In December 2020, we entered into a definitive agreement to acquire MYR GmbH.

Upon closing, which is subject to regulatory clearances and other conditions, the acquisition will provide us with Hepcludex® (bulevirtide), which was conditionally approved by the European Commission for the treatment for chronic HDV infection in July 2020.

| Regulatory Filing | | | | | | | | |

| Filgotinib | | | | | | A marketing authorization application has been filed with EMA for filgotinib, a JAK1 inhibitor, for the treatment of ulcerative colitis. | | |

| Axicabtagene ciloleucel | | | | | | A supplemental Biologics License Application for axicabtagene ciloleucel, a CAR T cell therapy for the treatment of relapsed or refractory indolent non-Hodgkin’s lymphoma (“iNHL”), has been filed with FDA. It has been granted Breakthrough Therapy designation by FDA for the iNHL indication. | | |

| Brexucabtagene autoleucel | | | | | | Brexucabtagene autoleucel, a CAR T cell therapy, has received accelerated approval from FDA and conditional marketing authorization from the European Commission for the treatment of adult patients with relapsed or refractory mantle cell lymphoma after two or more lines of systemic therapy, including a Bruton’s tyrosine kinase inhibitor. Conditional marketing authorization in Europe is initially valid for one year but can be extended or converted into an unconditional authorization after the submission and assessment of additional confirmatory data. | | |

| Sacituzumab govitecan-hziy | | | | | | A supplemental Biologics License Application for full approval of sacituzumab govitecan-hziy, a Trop-2 directed antibody and topoisomerase inhibitor conjugate for the treatment of patients with metastatic triple-negative breast cancer (“mTNBC”) who have received at least two prior therapies, has been filed with FDA. It has been granted Breakthrough Therapy designation by FDA for the mTNBC indication. | | |

| Sacituzumab govitecan-hziy | | | | | | A supplemental Biologics License Application for accelerated approval of sacituzumab govitecan-hziy for the treatment of heavily-pretreated patients with metastatic urothelial cancer, has been filed with FDA. | | |

| Axicabtagene ciloleucel | | | | | | Axicabtagene ciloleucel is being evaluated for the treatment of second line diffuse large B cell lymphoma. | | |

| Magrolimab | | | | | | Magrolimab, an anti-CD47, is being evaluated for the treatment of myelodysplastic syndrome (“MDS”). It has been granted Breakthrough Therapy designation by FDA and PRIME scheme eligibility by the European Commission for the MDS indication. | | |

| Brexucabtagene autoleucel | | | | | | Brexucabtagene autoleucel, a CAR T cell therapy, is being evaluated for the treatment of adult acute lymphoblastic leukemia (“ALL”). It has been granted Breakthrough Therapy designation by FDA for the adult ALL indication. | | |

| Magrolimab | | | | | | Magrolimab is being evaluated for the treatment of diffuse large B cell lymphoma. | | |

We also seek to add to our portfolio of products and product candidates through acquisitions, in-licensing and strategic collaborations.

For example, the acquisition of Immunomedics, Inc. (“Immunomedics”) added Trodelvy and other pipeline programs to our oncology portfolio.

| Remdesivir | | | | | | 2035 | | | | | | | | | 2035 | | | | | |

Upon closing, which is subject to regulatory clearances and other conditions, the acquisition will provide us with bulevirtide.

| Atripla | | | | | | 2021 | | | (2) | | | | | | 2017 | | | | | |

| Truvada | | | | | | 2021 | | | (2) | | | | | | 2017 | | | (3) | | |

| Yescarta | | | | | | 2027 | | | (4) | | | | | | — | | | (5) | | |

__________________________________________

(2) In 2014, Gilead and Teva Pharmaceuticals (“Teva”) reached an agreement to settle the patent litigation concerning patents that protect emtricitabine in our Truvada and Atripla products, pursuant to which Teva was permitted to launch generic fixed-dose combinations of emtricitabine and TDF and generic fixed-dose combinations of emtricitabine, TDF and efavirenz in the United States on September 30, 2020.

(3) Supplementary protection certificates (“SPC”s) have been granted in several European countries.

The validity of these SPCs has been challenged by several generic manufacturers, many of whom launched their competing products in 2017.

(8) In December 2020, we entered into a definitive agreement to acquire MYR GmbH.

Bulevirtide has not been approved by FDA for any use, and its safety and efficacy have not been established.

See also Item 1A.

These facilities are located in Foster City, San Dimas, La Verne, Oceanside and El Segundo, California; Morris Plains, New Jersey; Dublin and Cork, Ireland; Hoofddorp, Netherlands; and Edmonton, Canada.

Risk Factors “We may face manufacturing difficulties, delays or interruptions, including at our third-party manufacturers and corporate partners.”

For more information, see Item 1A.

Inclusion is a Gilead core value.

In 2020, Gilead implemented multiple programs to train managers on I&D topics to build awareness and drive inclusive behaviors.

Gilead is committed to providing a safe, healthy and secure workplace for its employees.

To date, we have not identified any cases of viral transmission of COVID-19 in our workplace.

In 2020, in response to the COVID-19 pandemic, we implemented a number of temporary COVID-19-specific benefits, such as cost reimbursements for essential home office equipment, monthly reimbursements for childcare and home-schooling costs, and a special pay enhancement for our physical location dependent workers who are required to be onsite at Gilead due to the nature of their role, to support our workforce during the unique challenges presented by the pandemic.

As we make changes to pursue our ambition of becoming an employer of choice in our industry, it is important that we consider the input of employees.

Our listening strategy helps to gather employee input and measure our progress.

During 2020, we conducted several global surveys to assess and improve employee retention and engagement, gather feedback and take actions to address areas of employee concern.

Employee responses from these surveys were key to determining meaningful benefits related to the COVID-19 pandemic as well as the direction of our culture going forward.

For a description of our significant pending legal proceedings, [removed: please] see Note 14.

For the fiscal year ended December 31, [removed: 2020][added: 2021]

Commission File No. [removed: 0-19731][added: 000-19731]

| (State or Other Jurisdiction of [removed: Incorporation)] [added: Incorporation or Organization)] | | | (IRS Employer Identification No.) | | |

(Address of [removed: principal executive offices) (Zip] [added: Principal Executive Offices, Including Zip] Code)

Securities registered pursuant to Section 12(b) of the [added: Exchange] Act:

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the [added: Exchange] Act.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the [removed: Securities] Exchange Act [removed: of 1934] during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company or an emerging growth] company.

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant based upon the closing price of its Common Stock on the Nasdaq Global Select Market on June 30, [removed: 2020] [added: 2021] was [removed: $69.9] [added: $62.6] billion.*

The number of shares outstanding of the registrant’s Common Stock on February 18, [removed: 2021] [added: 2022] was [removed: 1,256,593,156][added: 1,253,886,724]

Specified portions of the registrant’s proxy statement, which will be filed with the Commission pursuant to Regulation 14A in connection with the registrant’s [removed: 2021] [added: 2022] Annual Meeting of Stockholders, to be held on May [removed: 12, 2021,] [added: 4, 2022,] are incorporated by reference into Part III of this Report.

* Based on a closing price of [removed: $76.94] [added: $68.86] per share on June 30, [removed: 2020.][added: 2021.]

Excludes [removed: 346,304,310] [added: 344,972,966] shares of the registrant’s Common Stock held by executive officers, directors and any stockholders whose ownership exceeds 5% of registrant’s common stock outstanding at June 30, [removed: 2020.][added: 2021.]

[removed: 2020] [added: 2021] Form 10-K Annual Report

| Item 1 | | | [removed: [Business](#ib93766b38a794f83a6a283fa0a85c17d_13)] [added: [Business](#i72faa4a0a4974dcca6db2bf491b63d7a_13)] | | | [removed: [3](#ib93766b38a794f83a6a283fa0a85c17d_13)] [added: [3](#i72faa4a0a4974dcca6db2bf491b63d7a_13)] | | |

| Item 1A | | | [Risk [removed: Factors](#ib93766b38a794f83a6a283fa0a85c17d_16)] [added: Factors](#i72faa4a0a4974dcca6db2bf491b63d7a_16)] | | | [removed: [16](#ib93766b38a794f83a6a283fa0a85c17d_16)] [added: [17](#i72faa4a0a4974dcca6db2bf491b63d7a_16)] | | |

| Item 1B | | | [Unresolved Staff [removed: Comments](#ib93766b38a794f83a6a283fa0a85c17d_19)] [added: Comments](#i72faa4a0a4974dcca6db2bf491b63d7a_19)] | | | [removed: [28](#ib93766b38a794f83a6a283fa0a85c17d_19)] [added: [29](#i72faa4a0a4974dcca6db2bf491b63d7a_19)] | | |

| Item 2 | | | [removed: [Properties](#ib93766b38a794f83a6a283fa0a85c17d_22)] [added: [Properties](#i72faa4a0a4974dcca6db2bf491b63d7a_22)] | | | [removed: [28](#ib93766b38a794f83a6a283fa0a85c17d_22)] [added: [29](#i72faa4a0a4974dcca6db2bf491b63d7a_22)] | | |

| Item 3 | | | [Legal [removed: Proceedings](#ib93766b38a794f83a6a283fa0a85c17d_25)] [added: Proceedings](#i72faa4a0a4974dcca6db2bf491b63d7a_25)] | | | [removed: [28](#ib93766b38a794f83a6a283fa0a85c17d_25)] [added: [30](#i72faa4a0a4974dcca6db2bf491b63d7a_25)] | | |

| Item 4 | | | [Mine Safety [removed: Disclosures](#ib93766b38a794f83a6a283fa0a85c17d_28)] [added: Disclosures](#i72faa4a0a4974dcca6db2bf491b63d7a_28)] | | | [removed: [28](#ib93766b38a794f83a6a283fa0a85c17d_28)] [added: [30](#i72faa4a0a4974dcca6db2bf491b63d7a_28)] | | |

| Item 5 | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ib93766b38a794f83a6a283fa0a85c17d_34)] [added: Securities](#i72faa4a0a4974dcca6db2bf491b63d7a_34)] | | | [removed: [29](#ib93766b38a794f83a6a283fa0a85c17d_34)] [added: [31](#i72faa4a0a4974dcca6db2bf491b63d7a_34)] | | |

| Item 7 | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ib93766b38a794f83a6a283fa0a85c17d_40)] [added: Operations](#i72faa4a0a4974dcca6db2bf491b63d7a_40)] | | | [removed: [32](#ib93766b38a794f83a6a283fa0a85c17d_40)] [added: [33](#i72faa4a0a4974dcca6db2bf491b63d7a_40)] | | |

| Item 7A | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#ib93766b38a794f83a6a283fa0a85c17d_64)] [added: Risk](#i72faa4a0a4974dcca6db2bf491b63d7a_64)] | | | [removed: [48](#ib93766b38a794f83a6a283fa0a85c17d_64)] [added: [47](#i72faa4a0a4974dcca6db2bf491b63d7a_64)] | | |

| Item 8 | | | [Financial Statements and Supplementary [removed: Data](#ib93766b38a794f83a6a283fa0a85c17d_67)] [added: Data](#i72faa4a0a4974dcca6db2bf491b63d7a_67)] | | | [removed: [51](#ib93766b38a794f83a6a283fa0a85c17d_67)] [added: [49](#i72faa4a0a4974dcca6db2bf491b63d7a_67)] | | |

| Item 9 | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ib93766b38a794f83a6a283fa0a85c17d_193)] [added: Disclosure](#i72faa4a0a4974dcca6db2bf491b63d7a_157)] | | | [removed: [103](#ib93766b38a794f83a6a283fa0a85c17d_193)] [added: [98](#i72faa4a0a4974dcca6db2bf491b63d7a_157)] | | |

| Item 9A | | | [Controls and [removed: Procedures](#ib93766b38a794f83a6a283fa0a85c17d_196)] [added: Procedures](#i72faa4a0a4974dcca6db2bf491b63d7a_163)] | | | [removed: [105](#ib93766b38a794f83a6a283fa0a85c17d_196)] [added: [100](#i72faa4a0a4974dcca6db2bf491b63d7a_163)] | | |

| Item 10 | | | [Directors, Executive Officers and Corporate [removed: Governance](#ib93766b38a794f83a6a283fa0a85c17d_208)] [added: Governance](#i72faa4a0a4974dcca6db2bf491b63d7a_172)] | | | [removed: [106](#ib93766b38a794f83a6a283fa0a85c17d_208)] [added: [100](#i72faa4a0a4974dcca6db2bf491b63d7a_172)] | | |

| Item 12 | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ib93766b38a794f83a6a283fa0a85c17d_214)] [added: Matters](#i72faa4a0a4974dcca6db2bf491b63d7a_178)] | | | [removed: [106](#ib93766b38a794f83a6a283fa0a85c17d_214)] [added: [101](#i72faa4a0a4974dcca6db2bf491b63d7a_178)] | | |

| Item 13 | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#ib93766b38a794f83a6a283fa0a85c17d_217)] [added: Independence](#i72faa4a0a4974dcca6db2bf491b63d7a_181)] | | | [removed: [106](#ib93766b38a794f83a6a283fa0a85c17d_217)] [added: [101](#i72faa4a0a4974dcca6db2bf491b63d7a_181)] | | |

| Item 14 | | | [Principal Accountant Fees and [removed: Services](#ib93766b38a794f83a6a283fa0a85c17d_220)] [added: Services](#i72faa4a0a4974dcca6db2bf491b63d7a_184)] | | | [removed: [106](#ib93766b38a794f83a6a283fa0a85c17d_220)] [added: [101](#i72faa4a0a4974dcca6db2bf491b63d7a_184)] | | |

| Item 15 | | | [Exhibits and Financial Statement [removed: Schedules](#ib93766b38a794f83a6a283fa0a85c17d_226)] [added: Schedules](#i72faa4a0a4974dcca6db2bf491b63d7a_190)] | | | [removed: [106](#ib93766b38a794f83a6a283fa0a85c17d_226)] [added: [101](#i72faa4a0a4974dcca6db2bf491b63d7a_190)] | | |

We own or have rights to various trademarks, copyrights and trade names used in our business, including the following: GILEAD®, GILEAD SCIENCES®, AMBISOME®, ATRIPLA®, BIKTARVY®, CAYSTON®, COMPLERA®, DESCOVY®, DESCOVY FOR PREP®, EMTRIVA®, EPCLUSA®, EVIPLERA®, GENVOYA®, HARVONI®, [added: HEPCLUDEX® (BULEVIRTIDE),] HEPSERA®, [removed: JYSELECA®,] [added: JYSELECA® (FILGOTINIB),] LETAIRIS®, ODEFSEY®, RANEXA®, SOVALDI®, STRIBILD®, [removed: TECARTUSTM,] [added: TECARTUS®,] TRODELVY®, TRUVADA®, TRUVADA FOR PREP®, TYBOST®, VEKLURY®, VEMLIDY®, VIREAD®, VOSEVI®, YESCARTA® and ZYDELIG®.

Words such as “expect,” “anticipate,” “target,” “goal,” “project,” “hope,” “intend,” “plan,” “believe,” “seek,” “estimate,” “continue,” “may,” “could,” “should,” “might,” “forecast,” [added: and] variations of such words and similar expressions are intended to identify such forward-looking statements.

In addition, any statements other than statements of historical fact are forward-looking statements, including statements regarding overall [removed: trends,] [added: trends;] operating cost and revenue [removed: trends,] [added: trends;] liquidity and capital [removed: needs,] [added: needs; plans and expectations with respect to products, product candidates, corporate strategy, business and operations, financial projections and the use of capital;] collaboration and licensing [removed: arrangements,] [added: arrangements;] ongoing litigation and investigation [removed: matters,] [added: matters;] statements regarding the anticipated future impact on our business of the ongoing coronavirus disease 2019 (“COVID-19”) and related public health [removed: measures, statements regarding the development, manufacturing and distribution of Veklury as a treatment for COVID-19] [added: measures;] and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions.*

The forward-looking statements included in this report are made only as of the date [removed: hereof.][added: hereof unless otherwise specified.]

Except as required under federal securities laws and the rules and regulations of the Securities and Exchange Commission (“SEC”), we do not undertake, and specifically decline, any obligation to update any of these statements or to publicly announce the results of any revisions to any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or [removed: otherwise.*][added: otherwise.]

Securities registered pursuant to Section 12(g) of the Exchange Act: None

| Item 6 | | | [\[Reserved\]](#i72faa4a0a4974dcca6db2bf491b63d7a_1662) | | | [33](#i72faa4a0a4974dcca6db2bf491b63d7a_1662) | | |

| Item 9B | | | [Other Information](#i72faa4a0a4974dcca6db2bf491b63d7a_166) | | | [100](#i72faa4a0a4974dcca6db2bf491b63d7a_166) | | |

| Item 9C | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i72faa4a0a4974dcca6db2bf491b63d7a_1732) | | | [100](#i72faa4a0a4974dcca6db2bf491b63d7a_1732) | | |

| Item 11 | | | [Executive Compensation](#i72faa4a0a4974dcca6db2bf491b63d7a_175) | | | [101](#i72faa4a0a4974dcca6db2bf491b63d7a_175) | | |

| Item 16 | | | [Form 10-K Summary](#i72faa4a0a4974dcca6db2bf491b63d7a_196) | | | [104](#i72faa4a0a4974dcca6db2bf491b63d7a_196) | | |

| [SIGNATURES](#i72faa4a0a4974dcca6db2bf491b63d7a_199) | | | | | | [105](#i72faa4a0a4974dcca6db2bf491b63d7a_199) | | |

In evaluating our business, you should carefully consider the risks described in the section entitled “Risk Factors” under Part I, Item 1A of this Annual Report on Form 10-K.

Any of the risks contained herein could materially and adversely affect our business, results of operations and financial condition.*

| Item 6 | | | [Selected Financial Data](#ib93766b38a794f83a6a283fa0a85c17d_37) | | | [31](#ib93766b38a794f83a6a283fa0a85c17d_37) | | |

| Item 9B | | | [Other Information](#ib93766b38a794f83a6a283fa0a85c17d_202) | | | [106](#ib93766b38a794f83a6a283fa0a85c17d_202) | | |

| Item 11 | | | [Executive Compensation](#ib93766b38a794f83a6a283fa0a85c17d_211) | | | [106](#ib93766b38a794f83a6a283fa0a85c17d_211) | | |

| Item 16 | | | [Form 10-K Summary](#ib93766b38a794f83a6a283fa0a85c17d_232) | | | [110](#ib93766b38a794f83a6a283fa0a85c17d_232) | | |

| [SIGNATURES](#ib93766b38a794f83a6a283fa0a85c17d_235) | | | | | | [111](#ib93766b38a794f83a6a283fa0a85c17d_235) | | |

LEXISCAN® is a registered trademark of Astellas U.S. LLC.

MACUGEN® is a registered trademark of Bausch Health Ireland Limited.

SYMTUZA® is a registered trademark of Janssen Sciences Ireland Unlimited Company.

TAMIFLU® is a registered trademark of Hoffmann-La Roche Inc. HEPCLUDEX® is a registered trademark of MYR GmbH.

Our corporate headquarters are located in Foster City, California, where we house our [removed: administrative] [added: administrative, manufacturing] and [removed: certain of our] R&D activities.

We also have R&D facilities in Emeryville, Oceanside and Santa Monica, California; [removed: Gaithersburg, Maryland;] Seattle, Washington; Morris Plains, New Jersey; [added: Frederick, Maryland;] Edmonton, Canada; and Dublin, Ireland.

Our principal manufacturing facilities are in El Segundo, La Verne, Oceanside and San Dimas, California; [removed: Morris Plains, New Jersey;] Edmonton, Canada; Cork, [removed: Ireland;] [added: Ireland] and Hoofddorp, Netherlands.

[removed: For more information about our manufacturing facilities, see Item 1 -] Business “*Our Manufacturing Facilities.*” Our global operations include offices in Europe, North America, Asia, South America, Africa, Australia and the Middle East.

We believe that our existing properties, including both owned and leased sites, are [removed: in good condition] [added: adequate] and suitable for the conduct of our business.

For more information about our manufacturing facilities, see Item 1.

As of February 18, [removed: 2021,] [added: 2022,] we had approximately [removed: 1,402] [added: 1,456] stockholders of record of our common stock.

[removed: ][added: ]

(1) This section is not “soliciting material,” is not deemed “filed” with the [removed: SEC] [added: Securities] and [added: Exchange Commission (“SEC”) and] is not to be incorporated by reference in any of our filings under the Securities Act [added: of 1933, as amended (the “Securities Act”)] or the [added: Securities] Exchange Act [added: of 1934 (“Exchange Act”)] whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

(2) Shows the cumulative return on investment assuming an investment of $100 in our common stock, the NBI Index and the S&P 500 Index on December 31, [removed: 2015,] [added: 2016,] and assuming that all dividends were reinvested.

The following table provides certain information with respect to our equity compensation plans in effect as of December 31, [removed: 2020:][added: 2021:]

| 2004 Equity Incentive Plan(2) | | | | | | [removed: 16.1] [added: 15.2] | | | | | | $ | [removed: 69.43] [added: 70.95] | | | | | [removed: 85.9] [added: 74.9] | | |

| Employee Stock Purchase Plan(3) | | | | | | | | | | | | | | | | | | [removed: 7.1] [added: 5.1] | | |

| Total equity compensation plans approved by security holders | | | | | | [removed: 16.1] [added: 15.2] | | | | | | $ | [removed: 69.43] [added: 70.95] | | | | | [removed: 93.0] [added: 80.0] | | |

| Equity [removed: Compensation] [added: compensation] plans not approved by security holders(4) | | | | | | [removed: 0.5] [added: 1.6] | | | | | | $ | [removed: 68.57] [added: 67.28] | | | | | [removed: 10.3] [added: 6.7] | | |

(1) Does not take into account [removed: 20] [added: 22] million restricted stock units, performance share awards or units and phantom shares, which have no exercise price and were granted under our 2004 and 2018 Equity Incentive Plans.

The 2018 Plan is intended to help the [removed: Company] [added: Gilead] secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of [removed: the Company] [added: Gilead] and any affiliate, and provide a means by which the eligible recipients may benefit from increases in value of Gilead common stock.

The 2018 Plan provides for the award of incentive stock options and [removed: Nonstatutory] [added: non-qualified] stock options, each of which must generally have an exercise price equal to at least the fair market value of our common stock on the date of grant; stock appreciation rights; restricted stock awards; restricted stock unit awards; performance stock awards; other stock awards; and performance cash awards.

From and after April 7, 2020, Gilead has granted restricted stock [added: units, performance share awards or] units and stock options under the 2018 Plan, and these are the only types of equity awards outstanding under the plan.

As of December 31, [removed: 2020, 10.3] [added: 2021, 6.7] million shares of Gilead common stock remained available for issuance under the 2018 Plan.

In the first quarter of 2016, our Board of Directors authorized a $12.0 billion stock repurchase program [removed: (“2016] [added: (the “2016] Program”) under which repurchases may be made in the open market or in privately negotiated transactions.

In the first quarter of 2020, our Board of Directors authorized a new $5.0 billion stock repurchase program [removed: (“2020] [added: (the “2020] Program”), which will commence upon the completion of the 2016 Program.

During [removed: 2020,] [added: 2021,] we repurchased and retired [removed: 22] [added: 8] million shares of our common stock for [removed: $1.6 billion] [added: $546 million] through open market transactions under the 2016 Program.

As of December 31, [removed: 2020,] [added: 2021,] the remaining authorized repurchase amount from both programs was [removed: $6.8] [added: $6.3] billion.

The table below summarizes our stock repurchase activity for the three months ended December 31, [removed: 2020:][added: 2021:]

| Total | | | | | | 16.8 | | | | | | $ | 70.60 | | | | | 86.7 | | |

| October 1 - October 31, 2021 | | | | | | 309 | | | | | | $ | 67.47 | | | | | 283 | | | | | | $ | 6,299 | |

| November 1 - November 30, 2021 | | | | | | 372 | | | | | | $ | 67.66 | | | | | 281 | | | | | | $ | 6,280 | |

| December 1 - December 31, 2021 | | | | | | 195 | | | | | | $ | 70.37 | | | | | 155 | | | | | | $ | 6,269 | |

| Total | | | | | | 876 | | | (1) | | | $ | 68.19 | | | | | 719 | | | (1) | | | | | |

(1) The difference between the total number of shares purchased and the total number of shares purchased as part of a publicly announced program is due to shares of common stock withheld by us from employee restricted stock awards in order to satisfy applicable tax withholding obligations.

*Dividends*

For the years ended December 31, 2021 and 2020, we paid quarterly dividends.

We expect to continue to pay quarterly dividends, although the amount and timing of any future dividends are subject to declaration by our Board of Directors.

Additional information is included in Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations to the Consolidated Financial Statements.

| Total | | | | | | 16.6 | | | | | | $ | 69.40 | | | | | 103.3 | | |

| October 1 - October 31, 2020 | | | | | | 27 | | | | | | $ | 63.84 | | | | | — | | | | | | $ | 6,816 | |

| November 1 - November 30, 2020 | | | | | | 171 | | | | | | $ | 60.49 | | | | | — | | | | | | $ | 6,816 | |

| December 1 - December 31, 2020 | | | | | | 34 | | | | | | $ | 59.82 | | | | | — | | | | | | $ | 6,816 | |

| Total | | | | | | 232 | | | (1) | | | $ | 60.78 | | | | | — | | | (1) | | | | | |

(1) A total of 232 thousand shares were transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock units during the period.

We did not purchase any shares of our common stock in the open market pursuant to our repurchase program.

GILEAD SCIENCES, INC.

SELECTED CONSOLIDATED FINANCIAL DATA

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| (in millions, except per share amounts) | | | | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | |

| CONSOLIDATED STATEMENT OF INCOME DATA(1): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total revenues | | | | | | $ | 24,689 | | | | | $ | 22,449 | | | | | $ | 22,127 | | | | | $ | 26,107 | | | | | $ | 30,390 | |

| Total costs and expenses(2) | | | | | | $ | 20,618 | | | | | $ | 18,162 | | | | | $ | 13,927 | | | | | $ | 11,983 | | | | | $ | 12,757 | |

| Income from operations | | | | | | $ | 4,071 | | | | | $ | 4,287 | | | | | $ | 8,200 | | | | | $ | 14,124 | | | | | $ | 17,633 | |

| Income tax expense (benefit)(3) | | | | | | $ | 1,580 | | | | | $ | (204) | | | | | $ | 2,339 | | | | | $ | 8,885 | | | | | $ | 3,609 | |

| Net income(2)(3) | | | | | | $ | 89 | | | | | $ | 5,364 | | | | | $ | 5,460 | | | | | $ | 4,644 | | | | | $ | 13,488 | |

| Net income attributable to Gilead(2)(3) | | | | | | $ | 123 | | | | | $ | 5,386 | | | | | $ | 5,455 | | | | | $ | 4,628 | | | | | $ | 13,501 | |

| Net income per share attributable to Gilead common stockholders - basic(2)(3) | | | | | | $ | 0.10 | | | | | $ | 4.24 | | | | | $ | 4.20 | | | | | $ | 3.54 | | | | | $ | 10.08 | |

| Shares used in per share calculation - basic | | | | | | 1,257 | | | | | | 1,270 | | | | | | 1,298 | | | | | | 1,307 | | | | | | 1,339 | | |

| Net income per share attributable to Gilead common stockholders - diluted(2)(3) | | | | | | $ | 0.10 | | | | | $ | 4.22 | | | | | $ | 4.17 | | | | | $ | 3.51 | | | | | $ | 9.94 | |

| Shares used in per share calculation - diluted | | | | | | 1,263 | | | | | | 1,277 | | | | | | 1,308 | | | | | | 1,319 | | | | | | 1,358 | | |

| Cash dividends declared per share | | | | | | $ | 2.72 | | | | | $ | 2.52 | | | | | $ | 2.28 | | | | | $ | 2.08 | | | | | $ | 1.84 | |

| | | | | | | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| (in millions) | | | | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | |

| CONSOLIDATED BALANCE SHEET DATA(1): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cash, cash equivalents and marketable debt securities(4)(5) | | | | | | $ | 7,910 | | | | | $ | 25,840 | | | | | $ | 31,512 | | | | | $ | 36,694 | | | | | $ | 32,380 | |

| Working capital(3)(4)(5) | | | | | | $ | 4,599 | | | | | $ | 20,537 | | | | | $ | 25,231 | | | | | $ | 20,188 | | | | | $ | 10,370 | |

| Total assets(4)(5) | | | | | | $ | 68,407 | | | | | $ | 61,627 | | | | | $ | 63,675 | | | | | $ | 70,283 | | | | | $ | 56,977 | |

| Other long-term obligations | | | | | | $ | 5,128 | | | | | $ | 1,009 | | | | | $ | 1,040 | | | | | $ | 558 | | | | | $ | 297 | |

| Long-term debt, including current portion(4) | | | | | | $ | 31,402 | | | | | $ | 24,593 | | | | | $ | 27,322 | | | | | $ | 33,542 | | | | | $ | 26,346 | |

| Retained earnings(3) | | | | | | $ | 14,381 | | | | | $ | 19,388 | | | | | $ | 19,024 | | | | | $ | 19,012 | | | | | $ | 18,154 | |

| Total stockholders’ equity(3) | | | | | | $ | 18,221 | | | | | $ | 22,650 | | | | | $ | 21,534 | | | | | $ | 20,501 | | | | | $ | 19,363 | |

_______________________________

(1) See Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 of this Annual Report on Form 10-K for a description of our results of operations for 2020.

(2) In 2020, we recorded acquired in-process research and development (“IPR&D”) expenses of $5.9 billion primarily related to our acquisition of Forty Seven, Inc. (“Forty Seven”) as well as other collaborations and investments we entered into during the year.

In 2019, we recorded acquired IPR&D expenses of $5.1 billion primarily due to $3.92 billion of upfront collaboration and licensing expenses related to our global research and development collaboration with Galapagos NV, and a pre-tax impairment charge of $800 million from assets obtained in our acquisition of Kite Pharma, Inc. (“Kite”).

(3) In 2020, we recorded discrete tax benefits of $167 million related to settlements with taxing authorities.

In 2019, we recorded a deferred tax benefit of $1.2 billion related to intangible asset transfers from a foreign subsidiary to Ireland and the United States.

In 2018, we recorded a deferred tax charge of $588 million related to a transfer of acquired intangible assets from a foreign subsidiary to the United States.

In December 2017, we recorded an estimated $5.5 billion net charge related to the enactment of the Tax Cuts and Jobs Act (“Tax Reform”).

Tax Reform also lowered the corporate tax rate in the United States from 35% to 21% effective for tax years beginning after December 31, 2017.

(4) In 2020, in connection with the acquisition of Immunomedics, we issued $7.25 billion principal amount of senior unsecured notes and borrowed an aggregate principal amount of $1.0 billion under a three-year term loan facility.

Also in 2020, we repaid $2.5 billion principal amount of our senior unsecured notes at maturity.

In 2019, we repaid $2.8 billion principal amount of our senior unsecured notes at maturity.

Years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

| [Report of Independent Registered Public Accounting [removed: Firm](#ib93766b38a794f83a6a283fa0a85c17d_73)] [added: Firm (PCAOB ID:](#i72faa4a0a4974dcca6db2bf491b63d7a_73) 42[)](#i72faa4a0a4974dcca6db2bf491b63d7a_73)] | | | | | | [removed: [52](#ib93766b38a794f83a6a283fa0a85c17d_73)] [added: [50](#i72faa4a0a4974dcca6db2bf491b63d7a_73)] | | |

| [Audited Consolidated Financial [removed: Statements:](#ib93766b38a794f83a6a283fa0a85c17d_76)] [added: Statements:](#i72faa4a0a4974dcca6db2bf491b63d7a_76)] | | | | | | | | |

| [Consolidated Balance [removed: Sheets](#ib93766b38a794f83a6a283fa0a85c17d_79)] [added: Sheets](#i72faa4a0a4974dcca6db2bf491b63d7a_79)] | | | | | | [removed: [55](#ib93766b38a794f83a6a283fa0a85c17d_79)] [added: [52](#i72faa4a0a4974dcca6db2bf491b63d7a_79)] | | |

| [Consolidated Statements of [removed: Income](#ib93766b38a794f83a6a283fa0a85c17d_85)] [added: Income](#i72faa4a0a4974dcca6db2bf491b63d7a_82)] | | | | | | [removed: [56](#ib93766b38a794f83a6a283fa0a85c17d_85)] [added: [53](#i72faa4a0a4974dcca6db2bf491b63d7a_82)] | | |

[removed: | [Consolidated] [added: Consolidated] Statements of Comprehensive [removed: Income](#ib93766b38a794f83a6a283fa0a85c17d_88) | | | | | | [57](#ib93766b38a794f83a6a283fa0a85c17d_88) | | |][added: Income (Loss)]

| [Consolidated Statements of Stockholders’ [removed: Equity](#ib93766b38a794f83a6a283fa0a85c17d_94)] [added: Equity](#i72faa4a0a4974dcca6db2bf491b63d7a_88)] | | | | | | [removed: [58](#ib93766b38a794f83a6a283fa0a85c17d_94)] [added: [55](#i72faa4a0a4974dcca6db2bf491b63d7a_88)] | | |

| [Consolidated Statements of Cash [removed: Flows](#ib93766b38a794f83a6a283fa0a85c17d_100)] [added: Flows](#i72faa4a0a4974dcca6db2bf491b63d7a_91)] | | | | | | [removed: [59](#ib93766b38a794f83a6a283fa0a85c17d_100)] [added: [56](#i72faa4a0a4974dcca6db2bf491b63d7a_91)] | | |

| [Notes to Consolidated Financial [removed: Statements](#ib93766b38a794f83a6a283fa0a85c17d_103)] [added: Statements](#i72faa4a0a4974dcca6db2bf491b63d7a_94)] | | | | | | [removed: [60](#ib93766b38a794f83a6a283fa0a85c17d_103)] [added: [57](#i72faa4a0a4974dcca6db2bf491b63d7a_94)] | | |

We have audited the accompanying consolidated balance sheets of Gilead Sciences, Inc. (the Company) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February [removed: 25, 2021] [added: 23, 2022] expressed an unqualified opinion thereon.

| *Description of the Matter* | | | | | | As more fully described in Note 1, the Company estimates reductions to its revenues for amounts payable to payers and healthcare providers in the United States under various government and commercial rebate programs in the period that the related sales occur. Rebates may vary by product, payer and individual payer plans, [added: some of] which may not be known at the point of sale. Estimated reductions to revenue are based on product sales, historical and expected payer mix, discount rates, and various other estimated and actual data, adjusted for current period expectations. Auditing the Company’s estimated reductions to revenue for rebates was complex and involved significant judgment, particularly in assessing the reasonableness of estimated payer mix applied to sales during the period. This estimate relies heavily on historical data that is adjusted for changes in payer mix expectations over time. | | |

| *How We Addressed the Matter in Our Audit* | | | | | | We evaluated and tested the design and operating effectiveness of the Company’s internal controls over management’s estimation and review of reductions from revenue for rebate programs, including controls to assess the payer mix assumption. We also tested the completeness and accuracy of data utilized in the controls, and the accuracy of calculations supporting management’s estimates. To test management’s estimation methodology for determining the payer mix, our audit procedures included, among others, [added: analytically] evaluating [added: management’s estimates, evaluating] evidence contrary to the estimated amounts, performing a sensitivity analysis on the rates used in the estimates and performing a comparison of actual payments related to amounts accrued during the current and prior years. | | |

| | | | | | | Valuation of in-process research and development intangible [removed: assets] [added: assets acquired from Immunomedics, Inc.] | | |

| *Description of the Matter* | | | | | | At December 31, [removed: 2020,] [added: 2021,] the Company’s in-process research and development [removed: (“IPR&D”)] [added: (IPR&D)] intangible assets [removed: from acquisitions prior to] [added: acquired in connection with the] 2020 [added: acquisition of Immunomedics, Inc.] were [removed: $1.1] [added: $14.7] billion. As discussed in Note 1, intangible assets with indefinite useful lives related to purchased IPR&D projects are measured at their respective fair values as of the acquisition date and are considered indefinite-lived until the completion or abandonment of the associated R&D efforts. The Company tests indefinite-lived intangible assets for impairment on an annual basis and in between annual tests if they become aware of any events or changes that would indicate the fair values of the assets are below their carrying amounts. Auditing the impairment test [added: of the IPR&D intangible assets acquired from Immunomedics] was complex due to the significant judgment required in estimating [removed: the] [added: their] fair [removed: values of the IPR&D intangible assets.] [added: values.] In particular, the fair value estimates required the use of valuation methodologies that were sensitive to significant assumptions (e.g., discount rate, [removed: projected research and development costs,] probability of technical [added: and regulatory] success, addressable patient population, [added: treatment duration and] projected market [removed: share and product profitability),] [added: share),] which were affected by expected future market or economic conditions. | | |

| *How We Addressed the Matter in Our Audit* | | | | | | We evaluated and tested the design and operating effectiveness of the Company’s internal controls over the determination of the estimated fair value of the IPR&D intangible [removed: assets.] [added: assets acquired from Immunomedics.] For example, we tested controls over management's review of the valuation methodologies and the significant assumptions used to develop the fair value estimates. We also tested management's controls to validate that the data used in the fair value estimates were complete and accurate. To test the estimated fair value of the [removed: Company’s] [added: Company's] IPR&D intangible [removed: assets,] [added: assets acquired from Immunomedics,] our audit procedures, among others, included evaluating the [removed: Company’s] [added: Company's] use of appropriate valuation methodologies with [removed: the] assistance [removed: of] [added: from] a valuation specialist, [removed: performing] [added: evaluating] sensitivity analyses to determine which assumptions had the greatest impact on the overall determination of value, and testing the completeness and accuracy of the underlying data. Our audit procedures over the most significant assumptions included comparing the assumptions to current industry, market and economic trends, to historical results of the [removed: Company’s] [added: Company's] business and other guideline companies within the same industry and to other relevant factors. For example, [removed: to evaluate] [added: we evaluated] the probability of technical [removed: success, we considered] [added: and regulatory success by considering] the phase of development of the [removed: IPR&D] [added: clinical] projects, and the Company's history of obtaining regulatory approval. [added: In addition, we evaluated the expected addressable patient populations by comparing the Company’s estimates to external industry forecasts.] | | |

| (in millions, except per share amounts) | | | | | | [added: 2021 | | | | | |] 2020 | | | | | | 2019 | | |

| Cash and cash equivalents | | | | | | $ | [removed: 5,997] [added: 5,338] | | | | | $ | [removed: 11,631] [added: 5,997] | |

| Short-term marketable [added: debt] securities | | | | | | [removed: 1,411] [added: 1,182] | | | | | | [removed: 12,721] [added: 1,411] | | |

| Accounts receivable, net | | | | | | [removed: 4,892] [added: 4,493] | | | | | | [removed: 3,582] [added: 4,892] | | |

| Inventories | | | | | | [removed: 1,683] [added: 1,618] | | | | | | [removed: 922] [added: 1,683] | | |

| Prepaid and other current assets | | | | | | [removed: 2,013] [added: 2,141] | | | | | | [removed: 1,440] [added: 2,013] | | |

| Total current assets | | | | | | [removed: 15,996] [added: 14,772] | | | | | | [removed: 30,296] [added: 15,996] | | |

| Property, plant and equipment, net | | | | | | [removed: 4,967] [added: 5,121] | | | | | | [removed: 4,502] [added: 4,967] | | |

| Long-term marketable [added: debt] securities | | | | | | [removed: 502] [added: 1,309] | | | | | | [removed: 1,488] [added: 502] | | |

| Intangible assets, net | | | | | | [removed: 33,126] [added: 33,455] | | | | | | [removed: 13,786] [added: 33,126] | | |

| Goodwill | | | | | | [removed: 8,108] [added: 8,332] | | | | | | [removed: 4,117] [added: 8,108] | | |

| Other long-term assets | | | | | | [removed: 5,708] [added: 4,963] | | | | | | [removed: 7,438] [added: 5,708] | | |

| Total assets | | | | | | $ | [removed: 68,407] [added: 67,952] | | | | | $ | [removed: 61,627] [added: 68,407] | |

| Accounts payable | | | | | | $ | [removed: 844] [added: 705] | | | | | $ | [removed: 713] [added: 844] | |

| Accrued government and other rebates | | | | | | [removed: 3,460] [added: 3,244] | | | | | | [removed: 3,473] [added: 3,460] | | |

| [removed: Other accrued] [added: Accrued and other current] liabilities | | | | | | [removed: 4,336] [added: 6,145] | | | | | | [removed: 3,074] [added: 4,336] | | |

| Current portion of long-term debt and other obligations, net | | | | | | [removed: 2,757] [added: 1,516] | | | | | | [removed: 2,499] [added: 2,757] | | |

| Total current liabilities | | | | | | [removed: 11,397] [added: 11,610] | | | | | | [removed: 9,759] [added: 11,397] | | |

| Long-term debt, net | | | | | | [removed: 28,645] [added: 25,179] | | | | | | [removed: 22,094] [added: 28,645] | | |

| Long-term income taxes payable | | | | | | [removed: 5,016] [added: 4,767] | | | | | | [removed: 6,115] [added: 5,016] | | |

| Other long-term obligations | | | | | | [removed: 5,128] [added: 976] | | | | | | [removed: 1,009] [added: 1,214] | | |

| Common stock, par value $0.001 per share; 5,600 authorized; 1,254 [removed: and 1,266] shares issued and [removed: outstanding, respectively] [added: outstanding as of December 31, 2021 and 2020] | | | | | | 1 | | | | | | 1 | | |

| Additional paid-in capital | | | | | | [removed: 3,880] [added: 4,661] | | | | | | [removed: 3,051] [added: 3,880] | | |

February 23, 2022

| Deferred tax liability | | | | | | 4,356 | | | | | | 3,914 | | |

| Net income (loss) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,225 | | | | | | (24) | | | | | | 6,201 | | |

| Repurchases of common stock | | | | | | (11) | | | | | | — | | | | | | (28) | | | | | | — | | | | | | (664) | | | | | | — | | | | | | (692) | | |

| Balance as of December 31, 2021 | | | | | | 1,254 | | | | | | $ | 1 | | | | | $ | 4,661 | | | | | $ | 83 | | | | | $ | 16,324 | | | | | $ | (5) | | | | | $ | 21,064 | |

| Net income | | | | | | $ | 6,201 | | | | | $ | 89 | | | | | $ | 5,364 | |

Gilead Sciences, Inc. (“Gilead,” “we,” “our” or “us”) is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades, with the goal of creating a healthier world for all people.

We are committed to advancing innovative medicines to prevent and treat life-threatening diseases, including HIV, viral hepatitis and cancer.

We did not have any material VIEs as of December 31, 2021.

Certain reclassifications have been made to prior periods in the Consolidated Financial Statements and accompanying notes to conform with the current presentation.

Taxes assessed by governmental authorities and collected from customers are excluded from product sales.

Acquired In-Process Research and Development Expenses

The acquired IPR&D is expensed on acquisition date.

Future costs to develop these IPR&D projects are recorded in Research and development expenses on our Consolidated Statements of Income as incurred.

We believe the fair value option best reflects the underlying economics of these investments.

Share-Based Compensation

Contingencies

We accrue the best estimate of loss within a range; however, if no estimate in the range is better than any other, then we accrue the minimum amount in the range.

If we determine that a material loss is reasonably possible, we disclose the possible loss or range of loss, or that the amount of loss cannot be estimated at this time.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by tax authorities based on the technical merits of the position.

The tax benefit recognized in the Consolidated Financial Statements for a particular tax position is based on the largest benefit that is more likely than not to be realized.

The amount of unrecognized tax benefits (“UTB”) is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax law, new regulations or interpretations by tax authorities, new information obtained during a tax examination or resolution of an examination.

We recognize both accrued interest and penalties, where appropriate, related to UTB in Income tax (expense) benefit on our Consolidated Statements of Income.

| Hepatitis B virus (“HBV”) / Hepatitis Delta virus (“HDV”) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Other HBV/HDV(6) | | | | | | 2 | | | | | | 42 | | | | | | — | | | | | | 44 | | | | | | 10 | | | | | | 8 | | | | | | — | | | | | | 18 | | | | | | 2 | | | | | | 9 | | | | | | — | | | | | | 11 | | | | | | | | | | | | | | |

| Total HBV/HDV | | | | | | 397 | | | | | | 104 | | | | | | 468 | | | | | | 969 | | | | | | 380 | | | | | | 71 | | | | | | 409 | | | | | | 860 | | | | | | 343 | | | | | | 99 | | | | | | 300 | | | | | | 742 | | | | | | | | | | | | | | |

| Tecartus | | | | | | 136 | | | | | | 40 | | | | | | — | | | | | | 176 | | | | | | 34 | | | | | | 10 | | | | | | — | | | | | | 44 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Trodelvy | | | | | | 370 | | | | | | 10 | | | | | | — | | | | | | 380 | | | | | | 49 | | | | | | — | | | | | | — | | | | | | 49 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Other(7) | | | | | | 100 | | | | | | 80 | | | | | | 29 | | | | | | 209 | | | | | | 136 | | | | | | 45 | | | | | | 14 | | | | | | 195 | | | | | | 151 | | | | | | 43 | | | | | | 9 | | | | | | 203 | | | | | | | | | | | | | | |

| Total Other | | | | | | 381 | | | | | | 389 | | | | | | 257 | | | | | | 1,027 | | | | | | 551 | | | | | | 314 | | | | | | 161 | | | | | | 1,026 | | | | | | 1,069 | | | | | | 331 | | | | | | 147 | | | | | | 1,547 | | | | | | | | | | | | | | |

(6) Includes Hepcludex and Hepsera.

Revenues recognized from performance obligations satisfied in prior years related to our revenue share with Janssen, as described in Note 11.

Revenues from product sales, net of gross-to-net deductions, are recorded only to the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring when the uncertainty associated with gross-to-net deductions is subsequently resolved.

This was primarily related to changes in estimates for accrued government and other rebates and allowances for sales returns upon product expiration.

Contract liabilities, which generally result from receipt of advance payment before our performance under the contract, were not material as of December 31, 2021 and 2020, respectively.

| Equity investment in Arcus(1) | | | | | | 559 | | | | | | — | | | | | | — | | | | | | 559 | | | | | | 212 | | | | | | — | | | | | | — | | | | | | 212 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Liability for MYR GmbH (“MYR”) contingent consideration | | | | | | $ | — | | | | | $ | — | | | | | $ | 317 | | | | | $ | 317 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

_______________________________

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | Valuation of intangible assets acquired in a business combination | | |

| *Description of the Matter* | | | | | | As described in Note 6, on October 23, 2020, the Company completed its acquisition of Immunomedics, Inc. (“Immunomedics”) for $20.6 billion in cash consideration. The transaction was accounted for as a business combination using the acquisition method of accounting. The acquisition date fair values of acquired finite-lived intangible assets, comprised of commercial product rights, and indefinite-lived intangible assets, comprised of IPR&D intangible assets, was estimated to be $4.6 billion and $15.8 billion, respectively, using a probability-weighted income approach that discounts expected future cash flows to present value. Auditing the acquisition date fair values of the intangible assets acquired from Immunomedics was complex due to the significant judgment required in estimating the fair values of each asset. In particular, the fair value estimates required the use of valuation methodologies that were sensitive to significant assumptions (e.g., discount rate, projected research and development costs, probability of technical success, addressable patient population, treatment duration, projected market share and product profitability), which were affected by expected future market or economic conditions. | | |

| *How We Addressed the Matter in Our Audit* | | | | | | We evaluated and tested the design and operating effectiveness of the Company’s internal controls over the determination of the estimated fair value of the intangible assets. For example, we tested controls over management's review of the valuation methodologies and the significant assumptions used to develop the fair value estimates of the intangible assets. We also tested management's controls to validate that the data used in the fair value estimates were complete and accurate. To test the estimated fair value of the Company's intangible assets acquired from Immunomedics, our audit procedures, among others, included evaluating the Company's use of appropriate valuation methodologies with the assistance of a valuation specialist, performing sensitivity analyses to determine which assumptions had the greatest impact on the overall determination of value and testing the completeness and accuracy of the underlying data used to develop the assumptions. Our audit procedures over the significant assumptions included comparing the most significant assumptions to current industry, market and economic trends, to historical results of the Company's business and other guideline companies within the same industry and to other relevant factors. For example, we evaluated the probability of technical success by considering the phase of development of the clinical projects, and the Company's history of obtaining regulatory approval. In addition, we evaluated the expected addressable patient populations by comparing the Company’s estimates to external industry forecasts. | | |

February 25, 2021

| Balance at December 31, 2017 | | | | | | 1,308 | | | | | | $ | 1 | | | | | $ | 1,264 | | | | | $ | 165 | | | | | $ | 19,012 | | | | | $ | 59 | | | | | $ | 20,501 | |

| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,455 | | | | | | 5 | | | | | | 5,460 | | |

| Repurchases of common stock | | | | | | (42) | | | | | | — | | | | | | (112) | | | | | | — | | | | | | (2,940) | | | | | | — | | | | | | (3,052) | | |

| Cumulative effect from the adoption of new accounting standard (Note 1) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (7) | | | | | | — | | | | | | (7) | | |

| Change in noncontrolling interest (Note 11) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (72) | | | | | | (72) | | |

Gilead Sciences, Inc. (“Gilead”, “we”, “our” or “us”), incorporated in Delaware on June 22, 1987, is a research-based biopharmaceutical company that discovers, develops and commercializes innovative medicines in areas of unmet medical need.

With each new discovery and investigational drug candidate, we strive to transform and simplify care for people with life-threatening illnesses around the world.

Gilead’s primary areas of focus include HIV, viral hepatitis and cancer.

We seek to add to our existing portfolio of products through our internal discovery and clinical development programs, product acquisition, in-licensing and strategic collaborations.

Reclassification

Our Consolidated Statement of Cash Flows for the year ended December 31, 2019, has been conformed to separately present acquired IPR&D expenses exclusive of IPR&D impairments.

Comparative amounts in our Consolidated Statement of Cash Flows for the year ended December 31, 2018 were not material.

There was no change in income from operations or operating cash flow as a result of these reclassifications.

There were no material write-offs charged against the allowance for the year ended December 31, 2020.

Certain of the raw materials and components that we utilize in our operations are obtained through single suppliers.

Certain of the raw materials that we utilize in our operations are made at only one facility.

Since the suppliers of key components and raw materials must be named in a new drug application filed with U.S. Food and Drug Administration (“FDA”) for a product, significant delays can occur if the qualification of a new supplier is required.

If delivery of material from our suppliers is interrupted for any reason, we may be unable to ship our commercial products or to supply our product candidates for clinical trials.

On January 1, 2019, we adopted Accounting Standards Update No. 2016-02 (Topic 842) “Leases,” which requires lessees to recognize right-of-use assets and lease liabilities for operating leases with a lease term greater than one year.

We adopted Topic 842 using the modified retrospective method.

As such, results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under Topic 840 “Leases.”

We record liabilities related to unrecognized tax benefits in accordance with the guidance that clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

An adverse resolution of one or more of these uncertain tax positions in any period could have a material impact on the results of operations for that period.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13 “Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments” and has since modified the standard with several ASUs (collectively, “Topic 326”).

Topic 326 requires measurement and recognition of expected credit losses for financial assets.

On January 1, 2020, we adopted this standard using a modified retrospective approach.

In connection with the adoption of Topic 326, we made an accounting policy election to not measure an allowance for credit losses for accrued interest receivable.

In November 2018, the FASB issued Accounting Standards Update No. 2018-18 “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” (“ASU 2018-18”).

ASU 2018-18 clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under Topic 606, “Revenue from Contracts with Customers” when the counterparty is a customer.

In addition, the update precludes an entity from presenting consideration from a transaction in a collaborative arrangement as customer revenue if the counterparty is not a customer for that transaction.

On January 1, 2020, we adopted this standard and applied it retrospectively to January 1, 2018 when we initially adopted Topic 606.

The adoption did not have an impact on our Consolidated Financial Statements.

| Tecartus | | | | | | 34 | | | | | | 10 | | | | | | — | | | | | | 44 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | |

We have audited Gilead Sciences, Inc.’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Gilead Sciences, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes and our report dated February [removed: 25, 2021] [added: 23, 2022] expressed an unqualified opinion thereon.

February 23, 2022

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Immunomedics, Inc., which is included in the 2020 consolidated financial statements of the Company and constituted 3% and 11% of total assets and liabilities, respectively, as of December 31, 2020 and less than 1% of revenues for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Immunomedics, Inc.

February 25, 2021

An evaluation as of December 31, [removed: 2020] [added: 2021] was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our “disclosure controls and procedures,” which are defined in Rule 13a-15(e) [added: and 15d-15(e)] under the Securities Exchange Act of 1934, as amended (the [removed: Exchange Act),] [added: “Exchange Act”),] as controls and other procedures of a company that are designed to ensure that the information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective [removed: at] [added: as of] December 31, [removed: 2020.][added: 2021.]

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) [added: and 15d-15(f)] of the Exchange Act.

Based on our evaluation, we concluded that our internal control over financial reporting was effective as of December 31, [removed: 2020.][added: 2021.]

Our independent registered public accounting firm, Ernst & Young LLP, has audited our Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K and have issued a report on our internal control over financial reporting as of December 31, [removed: 2020.][added: 2021.]

[removed: Their] [added: Its] report on the audit of internal control over financial reporting appears [removed: below.][added: above.]

Our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated any changes in our internal control over financial reporting that occurred during the quarter ended December 31, [removed: 2020,] [added: 2021,] and has concluded that there was no change during such quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

The scope of management’s assessment of the effectiveness of internal control over financial reporting excluded Immunomedics, Inc., which Gilead acquired in a business combination on October 23, 2020.

Total assets, excluding goodwill and intangibles assets, total liabilities, and total revenues of Immunomedics represented approximately 3%, 11% and less than 1% of the total assets, total liabilities and total revenues of Gilead’s Consolidated Financial Statements as of and for the year ended December 31, 2020, respectively.

PART III

Not applicable.

PART III

The information required by this Item concerning our directors and executive officers is incorporated by reference to the sections of our Definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with our [removed: 2021] [added: 2022] Annual Meeting of Stockholders (the “Proxy Statement”) under the headings “The Gilead Board of Directors - Nominees,” “Board Structure,” “Executive Officers,” and, if applicable, “Delinquent Section 16(a) Reports.”

The Code of Ethics is available on our website at [removed: http://www.gilead.com] [added: www.gilead.com] in the [removed: Investors] [added: “Investors”] section under “Corporate Governance.” We intend to disclose future amendments to certain provisions of the Code of Ethics, and waivers of the Code of Ethics granted to executive officers and directors, on the website within four business days following the date of the amendment or waiver.

The information required by this Item is incorporated by reference to the sections of the Proxy Statement under the headings “Executive Compensation,” “Committees of our Board of Directors,” “Compensation [added: and Talent] Committee Report,” and “Compensation of Non-Employee Board Members.”

| [Report of Independent Registered Public Accounting [removed: Firm](#ib93766b38a794f83a6a283fa0a85c17d_73)] [added: Firm (PCAOB ID: 42)](#i72faa4a0a4974dcca6db2bf491b63d7a_73)] | | | [removed: [52](#ib93766b38a794f83a6a283fa0a85c17d_73)] [added: [50](#i72faa4a0a4974dcca6db2bf491b63d7a_73)] | | |

| [Audited Consolidated Financial [removed: Statements:](#ib93766b38a794f83a6a283fa0a85c17d_76)] [added: Statements:](#i72faa4a0a4974dcca6db2bf491b63d7a_76)] | | | | | |

| [Consolidated Balance [removed: Sheets](#ib93766b38a794f83a6a283fa0a85c17d_79)] [added: Sheets](#i72faa4a0a4974dcca6db2bf491b63d7a_79)] | | | [removed: [55](#ib93766b38a794f83a6a283fa0a85c17d_79)] [added: [52](#i72faa4a0a4974dcca6db2bf491b63d7a_79)] | | |

| [Consolidated Statements of [removed: Income](#ib93766b38a794f83a6a283fa0a85c17d_85)] [added: Income](#i72faa4a0a4974dcca6db2bf491b63d7a_82)] | | | [removed: [56](#ib93766b38a794f83a6a283fa0a85c17d_85)] [added: [53](#i72faa4a0a4974dcca6db2bf491b63d7a_82)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#ib93766b38a794f83a6a283fa0a85c17d_88)] [added: Income (Loss)](#i72faa4a0a4974dcca6db2bf491b63d7a_85)] | | | [removed: [57](#ib93766b38a794f83a6a283fa0a85c17d_88)] [added: [54](#i72faa4a0a4974dcca6db2bf491b63d7a_85)] | | |

| [Consolidated Statements of Stockholders’ [removed: Equity](#ib93766b38a794f83a6a283fa0a85c17d_94)] [added: Equity](#i72faa4a0a4974dcca6db2bf491b63d7a_88)] | | | [removed: [58](#ib93766b38a794f83a6a283fa0a85c17d_94)] [added: [55](#i72faa4a0a4974dcca6db2bf491b63d7a_88)] | | |

| [Consolidated Statements of Cash [removed: Flows](#ib93766b38a794f83a6a283fa0a85c17d_100)] [added: Flows](#i72faa4a0a4974dcca6db2bf491b63d7a_91)] | | | [removed: [59](#ib93766b38a794f83a6a283fa0a85c17d_100)] [added: [56](#i72faa4a0a4974dcca6db2bf491b63d7a_91)] | | |

| [Notes to Consolidated Financial [removed: Statements](#ib93766b38a794f83a6a283fa0a85c17d_103)] [added: Statements](#i72faa4a0a4974dcca6db2bf491b63d7a_94)] | | | [removed: [60](#ib93766b38a794f83a6a283fa0a85c17d_103)] [added: [57](#i72faa4a0a4974dcca6db2bf491b63d7a_94)] | | |

| (1) | | | 2.1 | | | | | | | | | [Agreement and Plan of Merger, dated September 13, 2020, among Immunomedics, Inc., Gilead Sciences, Inc. and Maui Merger Sub, [removed: Inc.](http://www.sec.gov/Archives/edgar/data/882095/000095010320017822/dp136480_ex0201.htm)[.](http://www.sec.gov/Archives/edgar/data/882095/000110465920027472/tm2011253d2_ex2-1.htm)] [added: Inc](http://www.sec.gov/Archives/edgar/data/882095/000095010320017822/dp136480_ex0201.htm)[.](http://www.sec.gov/Archives/edgar/data/882095/000110465920027472/tm2011253d2_ex2-1.htm)] | | |

| (4) | | | [removed: 4.2] [added: 4.1] | | | | | | | | | [Indenture related to Senior Notes, dated as of March 30, 2011, between Registrant and Wells Fargo, National Association, as Trustee](http://www.sec.gov/Archives/edgar/data/882095/000119312511086814/dex41.htm) | | |

| (4) | | | [removed: 4.3] [added: 4.2] | | | | | | | | | [First Supplemental Indenture related to Senior Notes, dated as of March 30, 2011, between Registrant and Wells Fargo, National Association, as Trustee (including form of Senior Notes)](http://www.sec.gov/Archives/edgar/data/882095/000119312511086814/dex42.htm) | | |

| (5) | | | [removed: 4.4] [added: 4.3] | | | | | | | | | [Second Supplemental Indenture related to Senior Notes, dated as of December 13, 2011, between Registrant and Wells Fargo, National Association, as Trustee [removed: (including Form of 2021 Note, Form] [added: (including](http://www.sec.gov/Archives/edgar/data/882095/000119312511339157/d269235dex41.htm) [Form] of 2041 Note)](http://www.sec.gov/Archives/edgar/data/882095/000119312511339157/d269235dex41.htm) | | |

| (6) | | | [removed: 4.5] [added: 4.4] | | | | | | | | | [Third Supplemental Indenture related to Senior Notes, dated as of March 7, 2014, between Registrant and Wells Fargo, National Association, as Trustee (including Form of 2024 [removed: Note, Form] [added: Note](http://www.sec.gov/Archives/edgar/data/882095/000119312514089047/d688498dex41.htm) [a](http://www.sec.gov/Archives/edgar/data/882095/000119312514089047/d688498dex41.htm)[nd](http://www.sec.gov/Archives/edgar/data/882095/000119312514089047/d688498dex41.htm) [Form] of 2044 Note)](http://www.sec.gov/Archives/edgar/data/882095/000119312514089047/d688498dex41.htm) | | |

| (7) | | | [removed: 4.6] [added: 4.5] | | | | | | | | | [Fourth Supplemental Indenture related to Senior Notes, dated as of November 17, 2014, between Registrant and Wells Fargo, National Association, as Trustee [removed: (including Form of 2020 Note, Form] [added: (including](http://www.sec.gov/Archives/edgar/data/882095/000119312514415184/d821656dex41.htm) [Form] of 2025 [removed: Note, Form] [added: Note](http://www.sec.gov/Archives/edgar/data/882095/000119312514415184/d821656dex41.htm) [and](http://www.sec.gov/Archives/edgar/data/882095/000119312514415184/d821656dex41.htm) [Form] of 2045 Note)](http://www.sec.gov/Archives/edgar/data/882095/000119312514415184/d821656dex41.htm) | | |

| (8) | | | [removed: 4.7] [added: 4.6] | | | | | | | | | [Fifth Supplemental Indenture, dated as of September 14, 2015, between Registrant and Wells Fargo Bank, National Association, as Trustee [removed: (including Form of 2020 Note, Form of 2022 Note, Form] [added: (including](http://www.sec.gov/Archives/edgar/data/882095/000119312515319560/d68529dex41.htm) [Form] of 2026 Note, Form of 2035 Note and Form of 2046 Note)](http://www.sec.gov/Archives/edgar/data/882095/000119312515319560/d68529dex41.htm) | | |

| (9) | | | [removed: 4.8] [added: 4.7] | | | | | | | | | [Sixth Supplemental Indenture, dated as of September 20, 2016, between Registrant and Wells Fargo Bank, National Association, as Trustee [removed: (including Form of 2022 Note, Form] [added: (including](http://www.sec.gov/Archives/edgar/data/882095/000119312516714926/d259911dex41.htm) [Form] of 2023 Note, Form of 2027 Note, Form of 2036 Note and Form of 2047 Note)](http://www.sec.gov/Archives/edgar/data/882095/000119312516714926/d259911dex41.htm) | | |

| (10) | | | [removed: 4.9] [added: 4.8] | | | | | | | | | [Eighth Supplemental Indenture, dated as of September 30, 2020, between [removed: the Company and] [added: the](http://www.sec.gov/Archives/edgar/data/882095/000110465920110185/tm2031940d2_ex4-1.htm) [Registrant](http://www.sec.gov/Archives/edgar/data/882095/000110465920110185/tm2031940d2_ex4-1.htm) [and] Wells Fargo Bank, National Association, as Trustee (including form of notes)](http://www.sec.gov/Archives/edgar/data/882095/000110465920110185/tm2031940d2_ex4-1.htm) | | |

| (11) | | | [removed: 4.10] [added: 4.9] | | | | | | | | | [Description of Registrant’s Securities](http://www.sec.gov/Archives/edgar/data/882095/000088209520000006/gild2019form10-kex49.htm) | | |

| [added: (13)] | | | [removed: 10.2*,] [added: 10.2*] | | | | | | | | | [Amendment No. 1 to Gilead Sciences, Inc. 2004 Equity Incentive Plan, amended and restated May 10, [removed: 2017](https://www.sec.gov/Archives/edgar/data/882095/000088209521000008/gild20ormex102amendmentto2.htm)] [added: 2017](http://www.sec.gov/Archives/edgar/data/882095/000088209521000008/gild20ormex102amendmentto2.htm)] | | |

| [removed: (13)] [added: (14)] | | | 10.3* | | | | | | | | | [Form of employee stock option agreement under 2004 Equity Incentive Plan (for grants made in 2011 through 2018)](http://www.sec.gov/Archives/edgar/data/882095/000119312511132405/dex1042.htm) | | |

| [removed: (14)] [added: (15)] | | | 10.4* | | | | | | | | | [Form of employee stock option agreement under 2004 Equity Incentive Plan (for grants made in 2019)](http://www.sec.gov/Archives/edgar/data/882095/000088209519000020/gildq22019ex104.htm) | | |

| [removed: (15)] [added: (16)] | | | 10.5* | | | | | | | | | [Form of global employee stock option agreement under 2004 Equity Incentive Plan (4 year vest) (for grants made in 2019)](http://www.sec.gov/Archives/edgar/data/882095/000088209519000027/gildq32019ex105.htm) | | |

| [removed: (16)] [added: (17)] | | | 10.6* | | | | | | | | | [Form of global employee stock option agreement under 2004 Equity Incentive Plan (4 year vest) (for [removed: grants commencing in] [added: grants](http://www.sec.gov/Archives/edgar/data/882095/000088209520000013/gildq12020ex105.htm) [made](http://www.sec.gov/Archives/edgar/data/882095/000088209520000013/gildq12020ex105.htm) [in] 2020)](http://www.sec.gov/Archives/edgar/data/882095/000088209520000013/gildq12020ex105.htm) | | |

| [removed: (17)] [added: (19)] | | | [removed: 10.7*] [added: 10.8*] | | | | | | | | | [Form of non-employee director stock option agreement under 2004 Equity Incentive Plan (for grants made in 2009 through 2012)](http://www.sec.gov/Archives/edgar/data/882095/000119312509165506/dex1019.htm) | | |

| [removed: (18)] [added: (20)] | | | [removed: 10.8*] [added: 10.9*] | | | | | | | | | [Form of non-employee director stock option agreement (U.S.) under 2004 Equity Incentive Plan (for grants made in 2013)](http://www.sec.gov/Archives/edgar/data/882095/000088209513000038/gildq21310-qex1043.htm) | | |

| [removed: (18)] [added: (20)] | | | [removed: 10.9*] [added: 10.10*] | | | | | | | | | [Form of non-employee director stock option agreement (non-U.S.) under 2004 Equity Incentive Plan (for grants made in 2013)](http://www.sec.gov/Archives/edgar/data/882095/000088209513000038/gildq21310-qex1044.htm) | | |

| [removed: (19)] [added: (21)] | | | [removed: 10.10*] [added: 10.11*] | | | | | | | | | [Form of non-employee director stock option agreement under 2004 Equity Incentive Plan (for grants made in 2014 through 2018)](http://www.sec.gov/Archives/edgar/data/882095/000088209514000038/ex1045-stockoptionagreement.htm) | | |

| [removed: (14)] [added: (15)] | | | [removed: 10.11*] [added: 10.12*] | | | | | | | | | [Form of non-employee director stock option agreement under 2004 Equity Incentive Plan (for grants](http://www.sec.gov/Archives/edgar/data/882095/000088209519000020/gildq22019ex109.htm) [made](http://www.sec.gov/Archives/edgar/data/882095/000088209519000020/gildq22019ex109.htm) [in 2019)](http://www.sec.gov/Archives/edgar/data/882095/000088209519000020/gildq22019ex109.htm) | | |

| [removed: (20)] [added: (22)] | | | [removed: 10.12*] [added: 10.13*] | | | | | | | | | [Form of non-employee director stock option agreement under 2004 Equity Incentive Plan (for grants commencing in 2020)](http://www.sec.gov/Archives/edgar/data/882095/000088209520000019/gildq22020ex10112020no.htm) | | |

| [removed: (21)] [added: (15)] | | | [removed: 10.13*] [added: 10.14*] | | | | | | | | | [Form of performance share award agreement - TSR Goals (U.S.) [removed: with Director Retirement Provisions] under 2004 Equity Incentive Plan (for grants made in [removed: 2016 through 2018)](http://www.sec.gov/Archives/edgar/data/882095/000088209516000046/gildq12016ex1041.htm)] [added: 2019)](http://www.sec.gov/Archives/edgar/data/882095/000088209519000020/gildq22019ex1012.htm)] | | |

| [removed: (14)] [added: (15)] | | | [removed: 10.14*] [added: 10.17*] | | | | | | | | | [Form of performance share award agreement - [removed: TSR] [added: Revenue] Goals (U.S.) under 2004 Equity Incentive Plan (for grants made in [removed: 2019)](http://www.sec.gov/Archives/edgar/data/882095/000088209519000020/gildq22019ex1012.htm)] [added: 2019)](http://www.sec.gov/Archives/edgar/data/882095/000088209519000020/gildq22019ex1015.htm)] | | |

| [removed: (16)] [added: (17)] | | | 10.15* | | | | | | | | | [Form of performance share award agreement - TSR Goals (U.S.) under 2004 Equity Incentive Plan (for [removed: grants commencing in] [added: grants](http://www.sec.gov/Archives/edgar/data/882095/000088209520000013/gildq12020ex1013.htm) [made](http://www.sec.gov/Archives/edgar/data/882095/000088209520000013/gildq12020ex1013.htm) [in] 2020)](http://www.sec.gov/Archives/edgar/data/882095/000088209520000013/gildq12020ex1013.htm) | | |