Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


(in millions, except per share amounts)	March 31, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	7,926	$	9,991
Accounts receivable, net	4,388		4,420
Inventories	1,759		1,710
Prepaid and other current assets	2,828		3,052
Total current assets	16,901		19,173
Property, plant and equipment, net	5,421		5,414
Intangible assets, net	19,355		19,948
Goodwill	8,314		8,314
Deferred tax assets	2,572		2,378
Other long-term assets	3,871		3,769
Total assets	$	56,434	$	58,995
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	737	$	833
Accrued rebates	4,185		3,892
Current portion of long-term debt, net	2,806		1,815
Other current liabilities	4,615		5,464
Total current liabilities	12,344		12,004
Long-term debt, net	22,146		24,896
Long-term income taxes payable	819		830
Deferred tax liabilities	709		724
Other long-term liabilities	1,337		1,295
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, par value $0.001 per share; 5 shares authorized; none outstanding	—		—
Common stock, par value $0.001 per share; 5,600 shares authorized; 1,245 and 1,246 shares issued and outstanding, respectively	1		1
Additional paid-in capital	8,138		7,700
Accumulated other comprehensive income	92		132
Retained earnings	10,931		11,497
Total Gilead stockholders’ equity	19,162		19,330
Noncontrolling interest	(84)		(84)
Total stockholders’ equity	19,078		19,246
Total liabilities and stockholders’ equity	$	56,434	$	58,995

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	Three Months Ended
	March 31,
(in millions, except per share amounts)	2025		2024
Revenues:
Product sales	$	6,613	$	6,647
Royalty, contract and other revenues	54		39
Total revenues	6,667		6,686
Costs and expenses:
Cost of goods sold	1,540		1,552
Research and development expenses	1,379		1,520
Acquired in-process research and development expenses	253		4,131
In-process research and development impairments	—		2,430
Selling, general and administrative expenses	1,258		1,375
Total costs and expenses	4,430		11,008
Operating income (loss)	2,237		(4,322)
Interest expense	260		254
Other (income) expense, net	328		(91)
Income (loss) before income taxes	1,649		(4,486)
Income tax expense (benefit)	334		(315)
Net income (loss)	1,315		(4,170)
Net income attributable to noncontrolling interest	—		—
Net income (loss) attributable to Gilead	$	1,315	$	(4,170)

Basic earnings (loss) per share attributable to Gilead	$	1.06	$	(3.34)
Diluted earnings (loss) per share attributable to Gilead	$	1.04	$	(3.34)

Shares used in basic earnings (loss) per share attributable to Gilead calculation	1,246		1,247
Shares used in diluted earnings (loss) per share attributable to Gilead calculation	1,259		1,247

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)


	Three Months Ended
	March 31,
(in millions)	2025		2024
Net income (loss):	$	1,315	$	(4,170)
Other comprehensive (loss) income, net of reclassifications and taxes:
Net gain (loss) on foreign currency translation	18		(17)
Net gain on available-for-sale debt securities	—		5
Net (loss) gain on cash flow hedges	(58)		53
Other comprehensive (loss) income, net	(40)		41
Comprehensive income (loss), net	1,275		(4,130)
Comprehensive income attributable to noncontrolling interest, net	—		—
Comprehensive income (loss) attributable to Gilead, net	$	1,275	$	(4,130)

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)


		Three Months Ended March 31, 2025
(in millions, except per share amounts)		Gilead Stockholders' Equity													Noncontrolling Interest		Total Stockholders' Equity
	Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Income			Retained Earnings
	Shares		Amount
Balance as of December 31, 2024		1,246		$	1		$	7,700		$	132		$	11,497	$	(84)	$	19,246
Net income		—		—			—			—			1,315		—		1,315
Other comprehensive loss, net		—		—			—			(40)			—		—		(40)
Issuances under employee stock purchase plan		1		—			82			—			—		—		82
Issuances under equity incentive plans		7		—			175			—			—		—		175
Stock-based compensation		—		—			211			—			—		—		211
Repurchases of common stock under repurchase programs ($102.46 average price per share)		(7)		—			(29)			—			(701)		—		(730)
Repurchases of common stock for employee tax withholding under equity incentive plans and other		(2)		—			—			—			(176)		—		(176)
Dividends declared ($0.79 per share)				—			—			—			(1,004)		—		(1,004)
Balance as of March 31, 2025		1,245		$	1		$	8,138		$	92		$	10,931	$	(84)	$	19,078


		Three Months Ended March 31, 2024
(in millions, except per share amounts)		Gilead Stockholders' Equity													Noncontrolling Interest		Total Stockholders' Equity
	Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Income			Retained Earnings
	Shares		Amount
Balance as of December 31, 2023		1,246		$	1		$	6,500		$	28		$	16,304	$	(84)	$	22,749
Net loss		—		—			—			—			(4,170)		—		(4,170)
Other comprehensive income, net		—		—			—			41			—		—		41
Issuances under employee stock purchase plan		1		—			80			—			—		—		80
Issuances under equity incentive plans		6		—			65			—			—		—		65
Stock-based compensation		—		—			188			—			—		—		188
Repurchases of common stock under repurchase programs ($76.88 average price per share)		(5)		—			(20)			—			(380)		—		(400)
Repurchases of common stock for employee tax withholding under equity incentive plans and other		(2)		—			—			—			(116)		—		(116)
Dividends declared ($0.77 per share)		—		—			—			—			(980)		—		(980)
Balance as of March 31, 2024		1,246		$	1		$	6,813		$	69		$	10,656	$	(84)	$	17,455

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Three Months Ended
	March 31,
(in millions)	2025		2024
Operating Activities:
Net income (loss)	$	1,315	$	(4,170)
Adjustments to reconcile Net income (loss) to net cash provided by operating activities:
Depreciation expense	97		94
Amortization expense	599		596
Stock-based compensation expense	209		187
Deferred income taxes	(199)		(723)
Net loss from equity securities	426		14
Acquired in-process research and development expenses	253		4,131
In-process research and development impairments	—		2,430
Other, net	91		119
Changes in operating assets and liabilities:
Accounts receivable, net	79		(66)
Inventories	(223)		(45)
Prepaid expenses and other	12		(37)
Accounts payable	(105)		72
Income tax assets and liabilities, net	(552)		(208)
Accrued and other liabilities	(244)		(175)
Net cash provided by operating activities	1,757		2,219
Investing Activities:
Purchases of marketable debt securities	—		(244)
Proceeds from sales of marketable debt securities	—		2,265
Proceeds from maturities of marketable debt securities	—		327
Acquisitions, including in-process research and development, net of cash acquired	(273)		(4,043)
Purchases of equity securities	(16)		(410)
Purchases of property, plant and equipment	(104)		(105)
Other investing activities, net	(23)		5
Net cash used in investing activities	(415)		(2,207)
Financing Activities:
Proceeds from issuances of common stock	252		146
Repurchases of common stock under repurchase programs	(730)		(400)
Repayments of debt and other obligations	(1,762)		—
Payments of dividends	(1,010)		(990)
Other financing activities, net	(176)		(116)
Net cash used in financing activities	(3,426)		(1,361)
Effect of exchange rate changes on cash and cash equivalents	19		(18)
Net change in cash and cash equivalents	(2,065)		(1,367)
Cash and cash equivalents at beginning of period	9,991		6,085
Cash and cash equivalents at end of period	7,926		4,718

See accompanying notes.

GILEAD SCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying Condensed Consolidated Financial Statements and related Notes to Condensed Consolidated Financial Statements of Gilead Sciences, Inc. (“Gilead,” “we,” “our” or “us”) should be read in conjunction with the audited Consolidated Financial Statements and the related notes thereto for the year ended December 31, 2024, included in our Annual Report on Form 10-K filed with U.S. Securities and Exchange Commission. There have been no material changes to the summary of our business or significant accounting policies as disclosed in that filing.

These interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and include all adjustments consisting of normal recurring adjustments that the management of Gilead believes are necessary for a fair presentation of the periods presented and are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period.

Certain amounts and percentages in these Condensed Consolidated Financial Statements and accompanying notes may not sum or recalculate due to rounding.

2. REVENUES

Disaggregation of Revenues

The following table summarizes our Total revenues:


	Three Months Ended March 31, 2025								Three Months Ended March 31, 2024
(in millions)	U.S.		Europe		Rest of World		Total		U.S.		Europe		Rest of World		Total
Product sales:
HIV
Biktarvy	$	2,474	$	375	$	301	$	3,150	$	2,315	$	365	$	265	$	2,946
Descovy	538		21		27		586		371		26		29		426
Genvoya	305		40		19		364		332		49		21		403
Odefsey	215		57		10		281		223		76		11		310
Symtuza - Revenue share(1)	82		29		3		114		104		33		3		141
Other HIV(2)	50		31		10		91		60		45		12		117
Total HIV	3,664		553		370		4,587		3,405		596		342		4,342

Liver Disease
Sofosbuvir/Velpatasvir(3)	166		80		99		346		248		79		78		405
Vemlidy	100		12		140		252		95		11		119		225
Other Liver Disease(4)	68		76		17		161		42		47		19		107
Total Liver Disease	335		168		256		758		385		137		215		737

Veklury	199		22		82		302		315		70		169		555

Oncology
Cell Therapy
Tecartus	40		31		8		78		55		36		8		100
Yescarta	160		149		77		386		170		158		52		380
Total Cell Therapy	200		180		84		464		225		195		60		480

Trodelvy	181		75		37		293		206		68		36		309
Total Oncology	381		255		121		757		431		262		96		789

Other
AmBisome	5		67		66		139		14		70		60		144
Other(5)	47		9		14		70		59		9		12		80
Total Other	52		76		81		209		73		79		71		224
Total product sales	4,631		1,073		909		6,613		4,609		1,144		894		6,647
Royalty, contract and other revenues	37		11		6		54		23		15		1		39
Total revenues	$	4,668	$	1,084	$	915	$	6,667	$	4,633	$	1,159	$	894	$	6,686

(1) Represents our revenue from cobicistat (“C”), emtricitabine (“FTC”) and tenofovir alafenamide (“TAF”) in Symtuza (darunavir/C/FTC/TAF), a fixed dose combination product commercialized by Janssen Sciences Ireland Unlimited Company (“Janssen Ireland”).

(2) Includes Atripla, Complera/Eviplera, Emtriva, Stribild, Sunlenca, Truvada and Tybost.

(3) Includes Epclusa and the authorized generic version of Epclusa sold by Gilead’s separate subsidiary, Asegua Therapeutics LLC (“Asegua”).

(4) Includes ledipasvir/sofosbuvir (Harvoni and the authorized generic version of Harvoni sold by Asegua), Hepcludex, Hepsera, Livdelzi/Lyvdelzi, Sovaldi, Viread and Vosevi.

(5) Includes Cayston, Jyseleca, Letairis and Zydelig.

Revenues Recognized from Performance Obligations Satisfied in Prior Years

The following table summarizes revenues recognized from performance obligations satisfied in prior years:


	Three Months Ended
	March 31,
(in millions)	2025		2024
Revenue share with Janssen Ireland and royalties for licenses of intellectual property	$	157	$	171
Changes in estimates	$	214	$	160

Contract Balances

The following table summarizes our contract balances:


(in millions)	March 31, 2025		December 31, 2024
Contract assets	$	304	$	277
Contract liabilities(1)	$	56	$	58

(1) Future revenues recognized from contract liabilities are not expected to be material in any one year.

3. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following table summarizes the types of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy:


	March 31, 2025								December 31, 2024
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:







Equity securities:
Money market funds	$	6,255	$	—	$	—	$	6,255	$	8,502	$	—	$	—	$	8,502
Publicly traded equity securities(1)	1,189		—		—		1,189		1,561		—		—		1,561
Deferred compensation plan	340		—		—		340		343		—		—		343
Foreign currency derivative contracts	—		44		—		44		—		128		—		128
Total	$	7,784	$	44	$	—	$	7,828	$	10,405	$	128	$	—	$	10,533
Liabilities:
Contingent consideration liability	$	—	$	—	$	216	$	216	$	—	$	—	$	206	$	206
Deferred compensation plan	340		—		—		340		343		—		—		343
Foreign currency derivative contracts	—		28		—		28		—		3		—		3
Total	$	340	$	28	$	216	$	584	$	343	$	3	$	206	$	552

(1) Publicly traded equity securities include our investments in Arcellx, Inc. (“Arcellx”) of $441 million and Galapagos NV (“Galapagos”) of $419 million as of March 31, 2025, which are subject to contractual sale restrictions. Our investment in Arcellx is restricted until June 2025, and our investment in Galapagos is currently restricted as described further in Note 6. Acquisitions, Collaborations and Other Arrangements.

Level 2 Inputs

Foreign Currency Derivative Contracts

Our foreign currency derivative contracts have maturities of 18 months or less and all are with counterparties that have a minimum credit rating of A- or equivalent by S&P Global Ratings, Moody’s Investors Service, Inc. or Fitch Ratings, Inc. We estimate the fair values of these contracts by utilizing an income-based industry standard valuation model for which all significant inputs are observable, either directly or indirectly. These inputs include foreign currency exchange rates, Secured Overnight Financing Rate (“SOFR”) and swap rates. These inputs, where applicable, are observable at commonly quoted intervals.

Level 3 Inputs

Contingent Consideration Liability

In connection with our first quarter 2021 acquisition of MYR GmbH, we are subject to a potential contingent consideration payment of up to €300 million, subject to customary adjustments, which is revalued each reporting period using probability-weighted scenarios for U.S. Food and Drug Administration (“FDA”) approval of Hepcludex until the related contingency is resolved.

The following table summarizes the change in fair value of our contingent consideration liability:


	Three Months Ended
	March 31,
(in millions)	2025		2024
Beginning balance	$	206	$	228
Changes in valuation assumptions(1)	2		—
Effect of foreign exchange remeasurement(2)	7		(6)
Ending balance(3)	$	216	$	222

(1) Included in Research and development expenses on our Condensed Consolidated Statements of Operations.

(2) Included in Other (income) expense, net on our Condensed Consolidated Statements of Operations.

(3) Included in Other long-term liabilities on our Condensed Consolidated Balance Sheets.

Fair Value Level Transfers

There were no transfers between Level 1, Level 2 and Level 3 in the periods presented.

Nonrecurring Fair Value Measurements

During the three months ended March 31, 2024, we recorded a partial impairment charge of $2.4 billion related to certain acquired in-process research and development (“IPR&D”) assets. See Note 7. Intangible Assets for additional information.

Other Fair Value Disclosures

Senior Unsecured Notes

The following table summarizes the total estimated fair value and carrying value of our senior unsecured notes, determined using Level 2 inputs based on their quoted market values:


(in millions)	March 31, 2025		December 31, 2024
Fair value	$	21,886	$	23,335
Carrying value	$	23,816	$	25,562

Liability Related to Future Royalties

We recorded a liability related to future royalties as part of our 2020 acquisition of Immunomedics, Inc., which is subsequently amortized using the effective interest method over the remaining estimated life. The fair value of the liability related to future royalties, determined using Level 3 inputs, was approximately $0.9 billion as of March 31, 2025 and December 31, 2024, and the carrying value was $1.1 billion as of March 31, 2025 and December 31, 2024.

4. EQUITY SECURITIES

The following table summarizes the classification of our equity securities on our Condensed Consolidated Balance Sheets:


(in millions)	March 31, 2025		December 31, 2024
Equity securities measured at fair value:
Cash and cash equivalents	$	6,255	$	8,502
Prepaid and other current assets	1,204		1,577
Other long-term assets	325		327
Equity method investments and other equity investments without readily determinable fair values:
Other long-term assets(1)	359		386
Total	$	8,143	$	10,791

(1) Mostly comprised of equity interests in certain collaboration partners and investment funds that are considered to be variable interest entities (“VIEs”) for which we are not the primary beneficiary. Our maximum exposure to loss as a result of our involvement in these VIEs is limited to the value of our investment.

For our equity method investments in Galapagos and Arcus Biosciences, Inc. (“Arcus”), we elected and applied the fair value option as we believe it best reflects the underlying economics of these investments. Our investment in Galapagos is subject to certain lock-up provisions as discussed in Note 6. Acquisitions, Collaborations and Other Arrangements and was classified in Prepaid and other current assets as of March 31, 2025 and December 31, 2024 at $419 million and $462 million, respectively. Our investment in Arcus was classified in Prepaid and other current assets as of March 31, 2025 and December 31, 2024 at $247 million and $448 million, respectively.

The following table summarizes net unrealized gains and losses related to equity securities still held as of the respective ending balance sheet dates for the periods below, included in Other (income) expense, net on our Condensed Consolidated Statements of Operations:


	Three Months Ended
	March 31,
(in millions)	2025		2024
Unrealized loss, net	$	436	$	15

5. DERIVATIVE FINANCIAL INSTRUMENTS

Our operations in foreign countries expose us to market risk associated with foreign currency exchange rate fluctuations between the U.S. dollar and various foreign currencies, primarily the Euro. To manage this risk, we hedge a portion of our foreign currency exposures related to outstanding monetary assets and liabilities as well as forecasted product sales using foreign currency exchange forward contracts. In general, the market risk related to these contracts is offset by corresponding gains and losses on the hedged transactions. The credit risk associated with these contracts is driven by changes in interest and currency exchange rates and, as a result, varies over time. By working only with major banks and closely monitoring current market conditions, we seek to limit the risk that counterparties to these contracts may be unable to perform. We also seek to limit our risk of loss by entering into contracts that permit net settlement at maturity. Therefore, our overall risk of loss in the event of a counterparty default is limited to the amount of any unrealized gains on outstanding contracts (i.e., those contracts that have a positive fair value) at the date of default. We do not enter into derivative contracts for trading purposes.

The derivative instruments we use to hedge our exposures for certain monetary assets and liabilities that are denominated in a non-functional currency are not designated as hedges. The derivative instruments we use to hedge our exposures for forecasted product sales are designated as cash flow hedges and have maturities of 18 months or less.

We held foreign currency exchange contracts with outstanding notional amounts of $3.4 billion and $2.9 billion as of March 31, 2025 and December 31, 2024, respectively.

While all our derivative contracts allow us the right to offset assets and liabilities, we have presented amounts on our Condensed Consolidated Balance Sheets on a gross basis. The following table summarizes the classification and fair values of derivative instruments, including the potential effect of offsetting:


	March 31, 2025
(in millions)	Prepaid and other current assets		Other long-term assets		Total Derivative Assets		Other current liabilities		Other long-term liabilities		Total Derivative Liabilities
Foreign currency exchange contracts designated as hedges	$	40	$	1	$	41	$	13	$	5	$	18
Foreign currency exchange contracts not designated as hedges	3		—		3		10		—		10
Total derivatives presented gross on the Condensed Consolidated Balance Sheets					$	44					$	28

Gross amounts not offset on the Condensed Consolidated Balance Sheets:
Derivative financial instruments					$	(25)					$	(25)
Cash collateral received / pledged					—						—
Net amount (legal offset)					$	19					$	3


	December 31, 2024
(in millions)	Prepaid and other current assets		Other long-term assets		Total Derivative Assets		Other current liabilities		Other long-term liabilities		Total Derivative Liabilities
Foreign currency exchange contracts designated as hedges	$	90	$	10	$	100	$	—	$	—	$	—
Foreign currency exchange contracts not designated as hedges	28		—		28		3		—		3
Total derivatives presented gross on the Condensed Consolidated Balance Sheets					$	128					$	3

Gross amounts not offset on the Condensed Consolidated Balance Sheets:
Derivative financial instruments					$	(3)					$	(3)
Cash collateral received / pledged					—						—
Net amount (legal offset)					$	125					$	—

The following table summarizes the effect of our derivative contracts on our Condensed Consolidated Financial Statements:


	Three Months Ended
	March 31,
(in millions)	2025		2024
Derivatives designated as hedges:
Net (loss) gain recognized in Accumulated other comprehensive income	$	(45)	$	61
Net gain reclassified from Accumulated other comprehensive income into Product sales	$	21	$	—
Derivatives not designated as hedges:
Net (loss) gain recognized in Other (income) expense, net	$	(5)	$	23

The majority of gains and losses related to the hedged forecasted transactions reported in Accumulated other comprehensive income as of March 31, 2025 are expected to be reclassified to Product sales within 12 months. There were no discontinuances of cash flow hedges for the three months ended March 31, 2025 and 2024.

The cash flow effects of our derivative contracts for the three months ended March 31, 2025 and 2024 were included within Net cash provided by operating activities on our Condensed Consolidated Statements of Cash Flows.

6. ACQUISITIONS, COLLABORATIONS AND OTHER ARRANGEMENTS

We enter into acquisitions, licensing and strategic collaborations and other similar arrangements with third parties for the research, development and commercialization of certain products and product candidates. The collaborations involve two or more parties who are active participants in the operating activities of the collaboration and are exposed to significant risks and rewards depending on the commercial success of the activities. The financial terms of these arrangements may include non-refundable upfront payments, expense reimbursements, payments by us for options to acquire certain rights, contingent obligations by us for potential development and regulatory milestone payments and/or sales-based milestone payments, royalty payments, revenue or profit-sharing arrangements, cost-sharing arrangements and equity investments.

Acquisitions

CymaBay

In March 2024, we completed the acquisition of CymaBay Therapeutics, Inc. (“CymaBay”) for total consideration of $3.9 billion, net of cash acquired. Upon closing, CymaBay became our wholly-owned subsidiary.

We accounted for this transaction as an asset acquisition since the lead asset, seladelpar, an investigational, oral, peroxisome proliferator-activated receptor delta agonist shown to regulate critical metabolic and liver disease pathways, represented substantially all of the fair value of the gross assets acquired. During the three months ended March 31, 2024, we recorded a $3.9 billion charge, representing an acquired IPR&D asset with no alternative future use, to Acquired in-process research and development expenses, as well as share-based compensation expense of $133 million related to the cash settlement of unvested CymaBay employee stock awards attributable to post-acquisition services, with $67 million being recorded in Research and development expenses and $67 million in Selling, general and administrative expenses on our Condensed Consolidated Statements of Operations.

Collaborations and Other Arrangements

Galapagos

In January 2025, we agreed to amend our option, license and collaboration agreement with Galapagos (the “OLCA”) commensurate with Galapagos’ announcement for a planned separation of Galapagos into two entities: a newly to be formed company (to be named at a later date, herein “SpinCo”) with an initial capital allocation of up to approximately €2.45 billion (approximately $2.54 billion as of the time of announcement) and Galapagos. At the time of separation, should it occur, Galapagos’ and our rights and responsibilities under the OLCA would transfer to SpinCo, and Galapagos would gain full global development and commercialization rights to its pipeline, subject to payment of single digit royalties to Gilead on net sales of certain products. This separation is expected to occur by mid-2025. As a result of the amendment, Gilead’s ownership stake in Galapagos is subject to lock-up until December 2025, and upon separation, Gilead will hold approximately 25% of the outstanding shares in both Galapagos and SpinCo and will be subject to a lock-up of Galapagos shares through March 2027 and of SpinCo shares until six months after the separation, subject to certain customary exceptions and early termination provisions. The two Gilead designees appointed to Galapagos’ board of directors will step down upon the separation and Gilead will be entitled to nominate two directors to SpinCo’s board.

LEO Pharma

In January 2025, we entered into a strategic partnership with LEO Pharma A/S (“LEO Pharma”) to accelerate the development and commercialization of LEO Pharma’s small molecule oral signal transducer and activator of transcription 6 (“STAT6”) programs for the potential treatment of patients with inflammatory diseases. Gilead will have global rights to develop, manufacture, and commercialize the small molecule oral STAT6 program. LEO Pharma will have the option to potentially co-commercialize oral programs for dermatology outside the U.S. LEO Pharma will hold exclusive global rights to STAT6 topical formulations in dermatology. Upon closing of the agreement, we made a $250 million upfront payment to LEO Pharma which was charged to Acquired in-process research and development expenses on our Condensed Consolidated Statements of Operations. In addition, LEO Pharma is eligible to receive up to approximately $1.5 billion in additional milestone payments and may also receive tiered royalties on sales of oral STAT6 products.

Arcus

In January 2024, we amended our collaboration agreement with Arcus whereby we acquired approximately 15.2 million additional shares of Arcus common stock at a premium for $320 million. We recorded $233 million for the fair value of the equity investment in Prepaid and other current assets on our Condensed Consolidated Balance Sheets and $87 million for the premium in Other (income) expense, net on our Condensed Consolidated Statements of Operations. As part of the January 2024 amendment, we committed to a $100 million continuation fee, which was charged to Acquired in-process research and development expenses on our Condensed Consolidated Statements of Operations and paid later in 2024. Our number of designees on Arcus’ board of directors was also increased to three. As of March 31, 2025, we held 31.4 million shares, or approximately 30% of the issued and outstanding voting stock of Arcus.

7. INTANGIBLE ASSETS

The following table summarizes our Intangible assets, net:


	March 31, 2025								December 31, 2024
(in millions)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation Adjustment		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation Adjustment		Net Carrying Amount
Finite-lived assets:
Intangible asset – sofosbuvir	$	10,720	$	(7,923)	$	—	$	2,797	$	10,720	$	(7,749)	$	—	$	2,971
Intangible asset – axicabtagene ciloleucel	7,110		(2,822)		—		4,288		7,110		(2,721)		—		4,389
Intangible asset – Trodelvy	11,730		(3,353)		—		8,377		11,730		(3,083)		—		8,647
Intangible asset – Hepcludex	845		(351)		—		494		845		(329)		—		516
Other	1,479		(971)		1		510		1,474		(940)		1		535
Total finite-lived assets	31,884		(15,421)		1		16,465		31,879		(14,822)		1		17,058
Indefinite-lived assets – IPR&D(1)	2,890		—		—		2,890		2,890		—		—		2,890
Total intangible assets	$	34,774	$	(15,421)	$	1	$	19,355	$	34,769	$	(14,822)	$	1	$	19,948

(1) The Indefinite-lived assets – IPR&D balance as of March 31, 2025 was comprised of $1.8 billion related to sacituzumab govitecan-hziy (“SG”) for non-small cell lung cancer (“NSCLC”) and $1.1 billion related to bulevirtide.

Impairment Assessments

No indicators of impairment were noted for the three months ended March 31, 2025 and 2024, except as described in “2024 Impairment” below.

2024 Impairment

In January 2024, we received data from our Phase 3 EVOKE-01 study of Trodelvy evaluating SG indicating that the study did not meet its primary endpoint of overall survival in previously treated metastatic NSCLC, thus triggering a review for potential impairment of the NSCLC IPR&D intangible asset. Based on our evaluation of the study results and all other data currently available, and in connection with the preparation of the financial statements for the first quarter, we performed an interim impairment test and determined that the revised estimated fair value of the NSCLC IPR&D intangible asset was below its carrying value. As a result, we recognized a partial impairment charge of $2.4 billion in In-process research and development impairments on our Condensed Consolidated Statements of Operations for the three months ended March 31, 2024.

To arrive at the revised estimated fair value as of March 31, 2024, we used a probability-weighted income approach that discounts expected future cash flows to present value, which requires the use of Level 3 fair value measurements and inputs, including critical estimated inputs, such as: revenues and operating profits related to the planned utilization of SG in NSCLC, which includes inputs such as addressable patient population, projected market share, treatment duration, and the life of the potential commercialized product; the probability of technical and regulatory success; the time and resources needed to complete the development and approval of SG in NSCLC; an appropriate discount rate based on the estimated weighted-average cost of capital for companies with profiles similar to our profile; and risks related to the viability of and potential alternative treatments in any future target markets. We used a discount rate of 7.00% which is based on the estimated weighted-average cost of capital for companies with profiles similar to ours.

8. OTHER FINANCIAL INFORMATION

Accounts Receivable, Net

The following table summarizes our Accounts receivable, net:


(in millions)	March 31, 2025		December 31, 2024
Accounts receivable	$	5,255	$	5,319
Less: allowances for chargebacks	717		759
Less: allowances for cash discounts and other	90		89
Less: allowances for credit losses	59		52
Accounts receivable, net	$	4,388	$	4,420

The majority of our trade accounts receivable arises from product sales in the U.S. and Europe.

Inventories

The following table summarizes our Inventories:


(in millions)	March 31, 2025		December 31, 2024
Raw materials	$	1,196	$	1,295
Work in process	1,076		847
Finished goods	1,506		1,447
Total	$	3,778	$	3,589
Reported as:
Inventories	$	1,759	$	1,710
Other long-term assets(1)	2,018		1,879
Total	$	3,778	$	3,589

(1) Amounts primarily consist of raw materials.

Property, Plant and Equipment, Net

The following table summarizes our Property, plant and equipment, net:


(in millions)	March 31, 2025		December 31, 2024
Property, plant and equipment	$	7,963	$	7,884
Less: accumulated depreciation	2,542		2,470
Property, plant and equipment, net	$	5,421	$	5,414

Accumulated Other Comprehensive Income

The following tables summarize the changes in Accumulated other comprehensive income by component, net of tax:


(in millions)	Foreign Currency Translation		Available-for-Sale Debt Securities		Cash Flow Hedges		Total
Balance as of December 31, 2024	$	36	$	—	$	96	$	132
Net unrealized gain (loss), net of tax impact of $0, $0, and $(6), respectively	18		—		(40)		(22)
Reclassifications to net income, net of tax impact of $0, $0, and $3, respectively	—		—		(18)		(18)
Other comprehensive income (loss), net	18		—		(58)		(40)
Balance as of March 31, 2025	$	54	$	—	$	38	$	92


(in millions)	Foreign Currency Translation		Available-for-Sale Debt Securities		Cash Flow Hedges		Total
Balance as of December 31, 2023	$	62	$	(5)	$	(29)	$	28
Net unrealized (loss) gain, net of tax impact of $0, $0, and $8, respectively	(17)		—		53		36
Reclassifications to net income net of tax impact of $0, $0, and $0, respectively	—		5		—		5
Other comprehensive (loss) income, net	(17)		5		53		41
Balance as of March 31, 2024	$	45	$	—	$	24	$	69

The following table summarizes the reclassifications out of Accumulated other comprehensive income and into Net income (loss), including the affected line items from our Condensed Consolidated Statements of Operations:


	Three Months Ended
	March 31,
(in millions)	2025		2024		Line Item Affected
Net gain related to cash flow hedges	$	21	$	—	Product sales
Net loss related to available-for-sale debt securities	$	—	$	5	Other (income) expense, net
Income tax expense	$	3	$	—	Income tax expense (benefit)

Restructuring

During the three months ended March 31, 2025 and 2024, we incurred restructuring charges of $74 million and $63 million, respectively, primarily related to reductions in our workforce. We recorded $38 million and $50 million of these charges in Research and development expenses and $36 million and $13 million of these charges in Selling, general and administrative expenses on our Condensed Consolidated Statements of Operations during the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we have recorded a liability of $138 million on our Condensed Consolidated Balance Sheets associated with these restructuring charges, a majority of which we anticipate will be paid in the next 12 months.

Other (Income) Expense, Net

The following table summarizes the components of Other (income) expense, net:


	Three Months Ended
	March 31,
(in millions)	2025		2024
Loss from equity securities, net	$	426	$	14
Interest income	(94)		(108)
Other, net	(4)		4
Other (income) expense, net	$	328	$	(91)

9. DEBT AND CREDIT FACILITIES

The following table summarizes the carrying amount of our borrowings under various financing arrangements:


(in millions)				Carrying Amount
Type of Borrowing	Issue Date	Maturity Date	Interest Rate	March 31, 2025		December 31, 2024
Senior Unsecured	November 2014	February 2025	3.50%	$	—	$	1,750
Senior Unsecured	September 2015	March 2026	3.65%	2,748		2,747
Senior Unsecured	September 2016	March 2027	2.95%	1,249		1,249
Senior Unsecured	September 2020	October 2027	1.20%	748		748
Senior Unsecured	November 2024	November 2029	4.80%	746		746
Senior Unsecured	September 2020	October 2030	1.65%	995		995
Senior Unsecured	September 2023	October 2033	5.25%	993		993
Senior Unsecured	November 2024	June 2035	5.10%	991		991
Senior Unsecured	September 2015	September 2035	4.60%	994		994
Senior Unsecured	September 2016	September 2036	4.00%	744		744
Senior Unsecured	September 2020	October 2040	2.60%	989		989
Senior Unsecured	December 2011	December 2041	5.65%	997		997
Senior Unsecured	March 2014	April 2044	4.80%	1,738		1,738
Senior Unsecured	November 2014	February 2045	4.50%	1,735		1,735
Senior Unsecured	September 2015	March 2046	4.75%	2,224		2,224
Senior Unsecured	September 2016	March 2047	4.15%	1,730		1,730
Senior Unsecured	September 2020	October 2050	2.80%	1,479		1,479
Senior Unsecured	September 2023	October 2053	5.55%	988		988
Senior Unsecured	November 2024	November 2054	5.50%	989		989
Senior Unsecured	November 2024	November 2064	5.60%	739		738
Total senior unsecured notes				23,816		25,562
Liability related to future royalties				1,136		1,148
Total debt, net				24,952		26,710
Less: Current portion of long-term debt, net				2,806		1,815
Total Long-term debt, net				$	22,146	$	24,896

Senior Unsecured Notes

We are required to comply with certain covenants under our note indentures governing our senior unsecured notes. As of March 31, 2025, we were not in violation of any covenants. In February 2025, we repaid $1.75 billion of principal balance related to our senior unsecured notes due at maturity.

Revolving Credit Facility

As of March 31, 2025 and December 31, 2024, there were no amounts outstanding under our $2.5 billion revolving credit facility maturing in June 2029, and we were in compliance with all covenants.

10. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

We are a party to various legal actions. Certain significant matters are described below. We recognize accruals for such actions to the extent that we conclude that a loss is both probable and reasonably estimable. We accrue for the best estimate of a 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 and the loss or range of loss can be estimated, we disclose the possible loss. Unless otherwise noted, the outcome of these matters either is not expected to be material or is not possible to determine such that we cannot reasonably estimate the maximum potential exposure or the range of possible loss. As of March 31, 2025 and December 31, 2024, we had approximately $220 million and $242 million of accruals on our Condensed Consolidated Balance Sheets, respectively, for the matters described herein, with approximately $200 million accrued for a settlement with the U.S. Attorney’s Office for the Southern District of New York that we entered into in April 2025.

Litigation with Generic Manufacturers

As part of the approval process for some of our products, FDA granted us a New Chemical Entity (“NCE”) exclusivity period during which other manufacturers’ applications for approval of generic versions of our products will not be approved. Generic manufacturers may challenge the patents protecting products that have been granted NCE exclusivity one year prior to the end of the NCE exclusivity period. Generic manufacturers have sought and may continue to seek FDA approval for a similar or identical drug through an abbreviated new drug application (“ANDA”), the application form typically used by manufacturers seeking approval of a generic drug. The sale of generic versions of our products prior to their patent expiration would have a significant negative effect on our revenues and results of operations. To seek approval for a generic version of a product having NCE status, a generic company may submit its ANDA to FDA four years after the branded product’s approval.

Starting in March 2022, we received letters from Lupin Ltd. (“Lupin”), Laurus Labs (“Laurus”) and Cipla Ltd. (“Cipla”), indicating that they have submitted ANDAs to FDA requesting permission to market and manufacture generic versions of the adult dosage strength of Biktarvy. Lupin, Laurus, and Cipla have challenged the validity of four of the six patents listed in the Orange Book as associated with Biktarvy. We filed a lawsuit against Lupin, Laurus and Cipla in May 2022 in the U.S. District Court of Delaware and intend to enforce and defend our intellectual property. Additionally, in November 2023, we received a letter from Cipla indicating that it has submitted an ANDA to FDA requesting permission to market and manufacture a generic version of the pediatric dosage strength of Biktarvy. Cipla challenged the validity of two of the patents listed in the Orange Book as associated with Biktarvy. We filed a separate lawsuit against Cipla in December 2023 in the U.S. District Court of Delaware. This lawsuit has been consolidated with the first lawsuit, with a single trial scheduled for October 2025. In October 2024, Cipla separately filed a petition at the U.S. Patent & Trademark Office (“USPTO”) for inter partes review of one of the patents at issue in District Court litigation. We intend to defend this patent at the USPTO.

Antitrust and Consumer Protection

We, along with Bristol-Myers Squibb Company (“BMS”), Johnson & Johnson, Inc. (“Johnson & Johnson”), and Teva Pharmaceutical Industries Ltd. (“Teva”) have been named as defendants in class action lawsuits filed in 2019 and 2020 related to various drugs used to treat HIV, including drugs used in combination antiretroviral therapy. Plaintiffs allege that we (and the other defendants) engaged in various conduct to restrain competition in violation of federal and state antitrust laws and state consumer protection laws. The lawsuits, which have been consolidated, are pending in the U.S. District Court for the Northern District of California. The lawsuits seek to bring claims on behalf of direct purchasers consisting largely of wholesalers and indirect or end-payor purchasers, including health insurers and individual patients. Plaintiffs seek damages, permanent injunctive relief and other relief. In the second half of 2021 and first half of 2022, several plaintiffs consisting of retail pharmacies, individual health plans and United Healthcare, filed separate lawsuits effectively opting out of the class action cases, asserting claims that are substantively the same as the classes. These cases have been coordinated with the class actions. In March 2023, the District Court granted our motion to hold separate trials as to (i) the allegations against us and Teva seeking monetary damages relating to Truvada and Atripla (“Phase I”) and (ii) the allegations against us and, in part, Johnson & Johnson, seeking monetary damages and injunctive relief relating to Complera (“Phase II”). In May 2023, we settled claims with the direct purchaser class and the retailer opt-out plaintiffs for $525 million, which we paid in the second half of 2023. The settlement agreements are not an admission of liability or fault by us. In June 2023, the jury returned a complete verdict in Gilead’s favor on the remaining plaintiffs’ Phase I allegations. In November 2023, the court denied plaintiffs’ motion to set aside the verdict, and in February 2024, the court entered final judgment on the Phase I verdict and certain summary judgment rulings. In September 2024, plaintiffs filed their opening appellate briefs challenging the Phase I verdict and those summary judgment rulings. We filed our responsive briefs in January 2025. Plaintiffs filed their reply briefs in March 2025. The court has stayed Phase II pending the appeal of Phase I. While we intend to vigorously oppose the appeal and defend against the Phase II claims, we cannot predict the ultimate outcome. If plaintiffs are successful in their appeal or Phase II claims, we could be required to pay monetary damages or could be subject to permanent injunctive relief in favor of plaintiffs.

In January 2022, we, along with BMS and Janssen Products, L.P., were named as defendants in a lawsuit filed in the Superior Court of the State of California, County of San Mateo, by Aetna, Inc. on behalf of itself and its affiliates and subsidiaries that effectively opts the Aetna plaintiffs out of the above class actions. The allegations are substantively the same as those in the class actions. The Aetna plaintiffs seek damages, permanent injunctive relief and other relief. In March 2024, the court denied our motion for judgment on the pleadings to preclude Aetna from re-litigating claims that were dismissed at summary judgment in the above class action cases. We filed a writ petition appealing the denial of our motion for judgment on the pleadings, which the appellate court denied in May 2024. In April 2024, the court granted our motion to bifurcate the case to adjudicate the issue of preclusion before litigating the merits of the case. In July 2024, Aetna filed a request to voluntarily dismiss two of its claims with prejudice, which the court subsequently granted, leaving only the claims related to Truvada and Atripla. In September 2024, Aetna filed an amended complaint with respect to these claims. In October 2024, we filed a demurrer and motion to strike plaintiff’s claims. In April 2025, the court overruled the demurrer and stated in its order that an immediate appeal is warranted.

In February 2021, we, along with BMS and Teva, were named as defendants in a lawsuit filed in the First Judicial District Court for the State of New Mexico, County of Santa Fe by the New Mexico Attorney General. The New Mexico Attorney General alleges that we (and the other defendants) restrained competition in violation of New Mexico antitrust and consumer protection laws. The New Mexico Attorney General seeks damages, permanent injunctive relief and other relief. We moved to dismiss the case based on lack of personal jurisdiction and, in July 2023, the New Mexico Supreme Court remanded the case back to the trial court for limited jurisdictional discovery.

We intend to vigorously defend ourselves in these actions, however, we cannot predict the ultimate outcome. If plaintiffs are successful in their claims, we could be required to pay significant monetary damages or could be subject to permanent injunctive relief awarded in favor of plaintiffs, which may result in a material, adverse effect on our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable.

Product Liability

We have been named as a defendant in one putative class action lawsuit and various product liability lawsuits related to Viread, Truvada, Atripla, Complera and Stribild. Plaintiffs allege that Viread, Truvada, Atripla, Complera and/or Stribild caused them to experience kidney, bone and/or tooth injuries. The lawsuits, which are pending in state or federal court in California and Missouri, involve approximately 22,000 active plaintiffs. Plaintiffs in these cases seek damages and other relief on various grounds for alleged personal injury and economic loss. The first bellwether trial in California state court was scheduled to begin in October 2022 but is currently stayed pending the conclusion of appellate proceedings in the California Supreme Court. In the California federal case, Gilead agreed to make a one-time payment of approximately $39 million to a group of plaintiffs (approximately 2,470 plaintiffs). The federal court set a trial date of March 2027 for the first bellwether trial of the remaining cases. Briefing is ongoing in the putative class action in Missouri regarding whether the court should certify the proposed class. We intend to vigorously defend ourselves in these actions, however, we cannot predict the ultimate outcome. If plaintiffs are successful in their claims, we could be required to pay significant monetary damages, which may result in a material, adverse effect on our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable.

Government Investigation

In 2017, we received a subpoena from the U.S. Attorney’s Office for the Southern District of New York requesting documents related to our promotional speaker programs for HIV. In April 2025, we entered into a settlement agreement to resolve the government’s investigation.

Qui Tam Litigation

A former sales employee filed a qui tam lawsuit against Gilead in March 2017 in U.S. District Court for the Eastern District of Pennsylvania. Following the government’s decision not to intervene in the suit, the case was unsealed in December 2020. The lawsuit alleges that certain of Gilead’s HCV sales and marketing activities and donations to an independent charitable foundation violated the federal False Claims Act and various state false claims acts. The lawsuit seeks all available relief under these statutes.

Health Choice Advocates, LLC (“Health Choice”) filed a qui tam lawsuit against Gilead in May 2020 in Texas state court. The lawsuit alleged that Gilead violated the Texas Medicare Fraud Prevention Act (“TMFPA”) through our clinical educator programs for Sovaldi and Harvoni and our HCV and HIV patient support programs. The lawsuit sought all available relief under the TMFPA. Health Choice voluntarily dismissed the case without prejudice in August 2023, and commenced a new action in October 2023, asserting largely identical allegations and claims. In the newly filed action, the Texas Attorney General has intervened as a plaintiff.

We intend to vigorously defend ourselves in these actions, however, we cannot predict the ultimate outcomes. If any of these plaintiffs are successful in their claims, we could be required to pay significant monetary damages, which may result in a material, adverse effect on our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable.

Other Matters

We are a party to various legal actions that arose in the ordinary course of our business. We do not believe that it is probable or reasonably possible that these other legal actions will have a material adverse impact on our consolidated financial position, results of operations or cash flows.

11. EARNINGS (LOSS) PER SHARE

The following table shows the calculation of Basic and Diluted earnings (loss) per share attributable to Gilead:


	Three Months Ended
	March 31,
(in millions, except per share amounts)	2025		2024
Net income (loss) attributable to Gilead	$	1,315	$	(4,170)
Shares used in basic earnings (loss) per share attributable to Gilead calculation	1,246		1,247
Dilutive effect of stock options and equivalents	13		—
Shares used in diluted earnings (loss) per share attributable to Gilead calculation	1,259		1,247

Basic earnings (loss) per share attributable to Gilead	$	1.06	$	(3.34)
Diluted earnings (loss) per share attributable to Gilead	$	1.04	$	(3.34)

Potential shares of common stock excluded from the computation of Diluted earnings (loss) per share attributable to Gilead because their effect would have been antidilutive were 2 million and 13 million for the three months ended March 31, 2025 and 2024, respectively.

12. INCOME TAXES

The following table summarizes our Income tax expense (benefit):


	Three Months Ended
	March 31,
(in millions, except percentages)	2025			2024
Income (loss) before income taxes	$	1,649		$	(4,486)
Income tax expense (benefit)	$	334		$	(315)
Effective tax rate	20.2		%	7.0		%

Our effective income tax rate of 20.2% for the three months ended March 31, 2025 differed from the U.S. federal statutory rate of 21% primarily due to tax benefits from stock-based compensation and provision to return adjustments, partially offset by fair value losses on our equity investments that are non-deductible for income tax purposes.

Our effective income tax rate of 7.0% for the three months ended March 31, 2024 differed from the U.S. federal statutory rate of 21% primarily due to $3.9 billion of non-deductible acquired IPR&D expense recorded in connection with our acquisition of CymaBay, partially offset by a decrease in state deferred tax liabilities associated with the $2.4 billion NSCLC IPR&D intangible asset impairment charge and settlements with tax authorities.

Our income tax returns are subject to audit by federal, state and foreign tax authorities. We are currently under examination by the Internal Revenue Service for our 2019 to 2021 tax years. There are differing interpretations of tax laws and regulations, and as a result, significant disputes may arise with these tax authorities involving issues on the timing and amount of deductions and allocations of income among various tax jurisdictions. We periodically evaluate our exposures associated with our tax filing positions.

13. SEGMENT INFORMATION

We have one operating segment which primarily focuses on the discovery, development and commercialization of innovative medicines in areas of unmet medical need. Our Chief Executive Officer, as the chief operating decision-maker (“CODM”), manages and allocates resources to the operations of our company on an entity-wide basis, using Net income (loss) attributable to Gilead as the primary performance measure. Managing and allocating resources on this basis enables our CODM to assess the overall level of resources available and how to best deploy these resources across functions and research and development (“R&D”) projects based on unmet medical need, scientific data, probability of technical and regulatory successful development, market potential and other considerations, and, as necessary, reallocate resources among our internal R&D portfolio and external opportunities to best support the long-term growth of our business. Our CODM is regularly provided with entity-wide expense categories similar to those found on our Condensed Consolidated Statements of Operations, as well as the following:


	Three Months Ended
	March 31,
(in millions)	2025		2024
Selling and marketing expenses	$	753	$	743
General and administrative expenses	505		632
Selling, general and administrative expenses	$	1,258	$	1,375

Asset information is not regularly provided to the CODM for assessing performance and allocating resources other than consolidated cash, cash equivalents and marketable debt securities, which can be found on our Condensed Consolidated Balance Sheets.

14. SUBSEQUENT EVENTS

We have evaluated subsequent events and determined that there are no further events or transactions to be disclosed other than those already disclosed elsewhere in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

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