Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Gilead Sciences Inc | |
Entity Central Index Key | 882,095 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 1,306,268,996 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 11,508 | $ 8,229 |
Short-term marketable securities | 16,879 | 3,666 |
Accounts receivable, net of allowances of $595 at September 30, 2017 and $763 at December 31, 2016 | 4,122 | 4,514 |
Inventories | 1,144 | 1,587 |
Prepaid and other current assets | 1,664 | 1,592 |
Total current assets | 35,317 | 19,588 |
Property, plant and equipment, net | 3,100 | 2,865 |
Long-term deferred tax assets | 1,147 | 1,259 |
Long-term marketable securities | 12,973 | 20,485 |
Intangible assets, net | 8,342 | 8,971 |
Goodwill | 1,172 | 1,172 |
Other long-term assets | 2,611 | 2,637 |
Total assets | 64,662 | 56,977 |
Current liabilities: | ||
Accounts payable | 696 | 1,206 |
Accrued government and other rebates | 4,672 | 5,021 |
Other accrued liabilities | 2,482 | 2,991 |
Current portion of long-term debt and other obligations, net | 1,747 | 0 |
Total current liabilities | 9,597 | 9,218 |
Long-term debt, net | 27,515 | 26,346 |
Long-term income taxes payable | 2,037 | 1,753 |
Other long-term obligations | 259 | 297 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.001 per share; 5 shares authorized; none outstanding | 0 | 0 |
Common stock, par value $0.001 per share; shares authorized of 5,600 at September 30, 2017 and December 31, 2016; shares issued and outstanding of 1,307 at September 30, 2017 and 1,310 at December 31, 2016 | 1 | 1 |
Additional paid-in capital | 906 | 454 |
Accumulated other comprehensive income | 249 | 278 |
Retained earnings | 23,689 | 18,154 |
Total Gilead stockholders’ equity | 24,845 | 18,887 |
Noncontrolling interest | 409 | 476 |
Total stockholders’ equity | 25,254 | 19,363 |
Total liabilities and stockholders’ equity | $ 64,662 | $ 56,977 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for accounts receivable and chargebacks | $ 595 | $ 763 |
Preferred Stock, Par Value (usd per share) | $ 0.001 | $ 0.001 |
Preferred Stock, Authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred Stock Outstanding (in shares) | 0 | 0 |
Common Stock Par Value (usd per share) | $ 0.001 | $ 0.001 |
Common Stock Authorized (in shares) | 5,600,000,000 | 5,600,000,000 |
Common Stock Issued (in shares) | 1,307,000,000 | 1,310,000,000 |
Common Stock Outstanding (in shares) | 1,307,000,000 | 1,310,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Product sales | $ 6,402 | $ 7,405 | $ 19,825 | $ 22,737 |
Royalty, contract and other revenues | 110 | 95 | 333 | 333 |
Total revenues | 6,512 | 7,500 | 20,158 | 23,070 |
Costs and expenses: | ||||
Cost of goods sold | 1,032 | 1,129 | 3,115 | 3,186 |
Research and development expenses | 789 | 1,141 | 2,584 | 3,890 |
Selling, general and administrative expenses | 879 | 831 | 2,626 | 2,406 |
Total costs and expenses | 2,700 | 3,101 | 8,325 | 9,482 |
Income from operations | 3,812 | 4,399 | 11,833 | 13,588 |
Interest expense | (291) | (242) | (821) | (699) |
Other income (expense), net | 150 | 119 | 391 | 288 |
Income before provision for income taxes | 3,671 | 4,276 | 11,403 | 13,177 |
Provision for income taxes | 959 | 951 | 2,923 | 2,788 |
Net income | 2,712 | 3,325 | 8,480 | 10,389 |
Net loss attributable to noncontrolling interest | (6) | (5) | (13) | (4) |
Net income attributable to Gilead | $ 2,718 | $ 3,330 | $ 8,493 | $ 10,393 |
Net income per share attributable to Gilead common stockholders - basic (usd per share) | $ 2.08 | $ 2.52 | $ 6.50 | $ 7.72 |
Shares used in per share calculation - basic (in shares) | 1,306 | 1,322 | 1,307 | 1,347 |
Net income per share attributable to Gilead common stockholders - diluted (usd per share) | $ 2.06 | $ 2.49 | $ 6.44 | $ 7.59 |
Shares used in per share calculation - diluted (in shares) | 1,319 | 1,339 | 1,319 | 1,369 |
Cash dividends declared (usd per share) | $ 0.52 | $ 0.47 | $ 1.56 | $ 1.37 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 2,712 | $ 3,325 | $ 8,480 | $ 10,389 |
Other comprehensive income (loss): | ||||
Net foreign currency translation losses, net of tax | (4) | (50) | (51) | (39) |
Available-for-sale securities: | ||||
Net unrealized gains, net of tax impact of $1, $1, $4 and $19, respectively | 185 | 29 | 311 | 159 |
Reclassifications to net income, net of tax impact of $0, $0, $(8) and $0, respectively | (1) | (6) | (7) | (8) |
Net change | 184 | 23 | 304 | 151 |
Cash flow hedges: | ||||
Net unrealized losses, net of tax impact of $(2), $2, $(11) and $(9), respectively | (76) | (45) | (278) | (249) |
Reclassifications to net income, net of tax impact of $1, $(1), $0 and $(8), respectively | 25 | 10 | (4) | (59) |
Net change | (51) | (35) | (282) | (308) |
Other comprehensive income (loss) | 129 | (62) | (29) | (196) |
Comprehensive income | 2,841 | 3,263 | 8,451 | 10,193 |
Comprehensive loss attributable to noncontrolling interest | (6) | (5) | (13) | (4) |
Comprehensive income attributable to Gilead | $ 2,847 | $ 3,268 | $ 8,464 | $ 10,197 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Available-for-sale securities: | ||||
Tax impact on net unrealized gains (losses) | $ 1 | $ 1 | $ 4 | $ 19 |
Tax impact of reclassifications to net income | 0 | 0 | (8) | 0 |
Cash flow hedges: | ||||
Tax impact on net unrealized gains | (2) | 2 | (11) | (9) |
Tax impact of reclassifications to net income | $ 1 | $ (1) | $ 0 | $ (8) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Activities: | ||
Net income | $ 8,480 | $ 10,389 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 155 | 129 |
Amortization expense | 734 | 737 |
Stock-based compensation expense | 304 | 278 |
Deferred income taxes | 127 | (95) |
In-process research and development impairment | 0 | 231 |
Other | 227 | 142 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 473 | 770 |
Inventories | (79) | (274) |
Prepaid expenses and other | 311 | (785) |
Accounts payable | (515) | (115) |
Income taxes payable | (48) | 1,029 |
Accrued liabilities | (1,024) | 1,072 |
Net cash provided by operating activities | 9,145 | 13,508 |
Investing Activities: | ||
Purchases of marketable securities | (18,813) | (19,881) |
Proceeds from sales of marketable securities | 8,966 | 10,376 |
Proceeds from maturities of marketable securities | 4,164 | 1,131 |
Other investments | 0 | (357) |
Capital expenditures | (370) | (579) |
Net cash used in investing activities | (6,053) | (9,310) |
Financing Activities: | ||
Proceeds from debt financing, net of issuance costs | 2,991 | 5,293 |
Proceeds from convertible note hedges | 0 | 956 |
Proceeds from issuances of common stock | 183 | 180 |
Repurchases of common stock | (848) | (10,001) |
Repayments of debt and other obligations | (90) | (1,251) |
Payments to settle warrants | 0 | 469 |
Payments of dividends | (2,049) | (1,836) |
Other | (141) | (249) |
Net cash provided by (used in) financing activities | 46 | (7,377) |
Effect of exchange rate changes on cash and cash equivalents | 141 | 137 |
Net change in cash and cash equivalents | 3,279 | (3,042) |
Cash and cash equivalents at beginning of period | 8,229 | 12,851 |
Cash and cash equivalents at end of period | $ 11,508 | $ 9,809 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. The financial statements include all adjustments, consisting of normal recurring adjustments that the management of Gilead Sciences, Inc. (Gilead, we, our or us) believes are necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period. The accompanying Condensed Consolidated Financial Statements include the accounts of Gilead, our wholly-owned subsidiaries and certain variable interest entities for which we are the primary beneficiary. All intercompany transactions have been eliminated. For consolidated entities where we own or are exposed to less than 100% of the economics, we record net income or loss attributable to noncontrolling interest in our Condensed Consolidated Statements of Income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. We assess whether we are the primary beneficiary of a variable interest entity (VIE) at the inception of the arrangement and at each reporting date. This assessment is based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or our right to receive benefits from the VIE that could potentially be significant to the VIE. As of September 30, 2017 , the only material VIE was our joint venture with Bristol-Myers Squibb Company (BMS), which is described in Note 7 , Collaborative Arrangements. The accompanying Condensed Consolidated Financial Statements and related Notes to Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the related notes thereto for the year ended December 31, 2016 , included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission. Significant Accounting Policies, Estimates and Judgments The preparation of these Condensed Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an ongoing basis, we evaluate our significant accounting policies and estimates. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates are assessed each period and updated to reflect current information. Actual results may differ significantly from these estimates. Concentrations of Risk We are subject to credit risk from our portfolio of cash, cash equivalents and marketable securities. Under our investment policy, we limit amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. We are not exposed to any significant concentrations of credit risk from these financial instruments. The goals of our investment policy, in order of priority, are as follows: safety and preservation of principal and diversification of risk, liquidity of investments sufficient to meet cash flow requirements and a competitive after-tax rate of return. We are also subject to credit risk from our accounts receivable related to our product sales. The majority of our trade accounts receivable arises from product sales in the United States and Europe. To date, we have not experienced significant losses with respect to the collection of our accounts receivable. We believe that our allowance for doubtful accounts was adequate at September 30, 2017 . Recently Adopted Accounting Pronouncements In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Balance Sheet Classification of Deferred Taxes.” We adopted this standard on a retrospective basis in the first quarter of 2017. ASU 2015-17 requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet. As a result, our Condensed Consolidated Balance Sheet as of December 31, 2016 was retrospectively adjusted, resulting in a reduction in Total current assets of $857 million and an increase in Long-term deferred tax assets of $857 million . The resulting reclassification of our deferred tax liabilities was not material. In March 2016, the FASB issued Accounting Standards Update No. 2016-09 (ASU 2016-09) “Improvements to Employee Share-Based Payment Accounting.” We adopted this standard in the first quarter of 2017. One aspect of the standard requires that excess tax benefits and deficiencies that arise upon vesting or exercise of share-based awards be recognized in the income statement on a prospective basis. Under previous guidance, the tax effects were recorded in additional paid-in capital. As a result, we recognized $27 million and $60 million of excess tax benefits in Provision for income taxes on our Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2017 , respectively. The resulting impact to the shares used in the calculation of diluted earnings per share for the three and nine months ended September 30, 2017 was not material. Additionally, as allowed by the standard, we elected to continue to estimate potential forfeitures. Another aspect of ASU 2016-09 amends the presentation of certain share-based payment items on the statement of cash flows, which we adopted on a retrospective basis. As a result, our Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2016 was adjusted to (a) reclassify $162 million of excess tax benefits from stock-based compensation from Net cash used in financing activities to Net cash provided by operating activities and (b) reclassify $163 million of employee taxes paid to tax authorities when we withheld shares to meet the minimum statutory withholding requirement from changes in Accrued liabilities within Net cash provided by operating activities to Other within Net cash used in financing activities. Recently Issued Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09) “Revenue from Contracts with Customers.” The standard’s core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will become effective for us beginning in the first quarter of 2018. Early adoption is permitted in 2017. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. The FASB issued supplemental adoption guidance and clarification to ASU 2014-09 in March 2016, April 2016, May 2016 and December 2016 within ASU 2016-08 “Revenue from Contracts with Customers: Principal versus Agent Considerations,” ASU 2016-10 “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing,” ASU 2016-12 “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients” and ASU 2016-20 “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” respectively. We expect to adopt these standards using the modified retrospective approach. The cumulative effect of adopting these standards will be recorded to retained earnings on January 1, 2018. We have completed our initial assessment of the effect of adoption. Based on this assessment, we expect changes in our revenue recognition policy relating to royalty revenues and certain other revenues that are currently recognized on a cash basis or sell through method. Upon adoption of these standards, these revenues will be recognized in the periods in which the sales occur, subject to the constraint on variable consideration. We currently do not expect that adopting these standards will have a material impact on our Condensed Consolidated Financial Statements. In January 2016, the FASB issued Accounting Standards Update No. 2016-01 (ASU 2016-01) “Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 changes accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, it clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The guidance will become effective for us beginning in the first quarter of 2018 and must be adopted using a modified retrospective approach, with certain exceptions. Early adoption is permitted for certain provisions. We plan to adopt this guidance in the first quarter of 2018. We expect an impact primarily related to the recognition and measurement of our available-for-sale equity securities; however, the impact of the adoption of this standard on our Condensed Consolidated Financial Statements will depend on the fair value of our equity securities as of the date of the adoption. In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02) “Leases.” ASU 2016-02 amends a number of aspects of lease accounting, including requiring lessees to recognize almost all leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. The guidance will become effective for us beginning in the first quarter of 2019 and is required to be adopted using a modified retrospective approach. Early adoption is permitted. We are evaluating the impact of the adoption of this standard, and we anticipate recognition of additional assets and corresponding liabilities related to leases on our Condensed Consolidated Balance Sheets. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. This guidance will become effective for us beginning in the first quarter of 2020 and must be adopted using a modified retrospective approach, with certain exceptions. Early adoption is permitted beginning in the first quarter of 2019. We are evaluating the impact of the adoption of this standard on our Condensed Consolidated Financial Statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01 (ASU 2017-01) “Clarifying the Definition of a Business.” ASU 2017-01 clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. This guidance will become effective for us beginning in the first quarter of 2018 and is required to be adopted on a prospective basis. Early adoption is permitted. We anticipate that the adoption of this guidance will result in more transactions being accounted for as asset acquisitions rather than business acquisitions. In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04) “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment.” ASU 2017-04 simplifies the goodwill impairment test. Under the new guidance, goodwill impairment will be measured by the amount by which the carrying value of a reporting unit exceeds its fair value, without exceeding the carrying amount of goodwill allocated to that reporting unit. This guidance will become effective for us beginning in the first quarter of 2020 and is required to be adopted on a prospective basis. Early adoption is permitted. We currently do not expect that adopting this standard will have a material impact on our Condensed Consolidated Financial Statements. In February 2017, the FASB issued Accounting Standards Update No. 2017-05 (ASU 2017-05) “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU 2017-05 clarifies the scope of the derecognition of nonfinancial assets, defines in substance financial assets, adds guidance for partial sales of nonfinancial assets and clarifies the recognition of gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. This guidance will become effective for us beginning in the first quarter of 2018 and may be adopted using either a full retrospective or a modified retrospective approach. Early adoption is permitted. We are required to adopt the amendments in this standard at the same time that we adopt the amendments in ASU 2014-09. We plan to adopt this guidance in the first quarter of 2018 using a modified retrospective approach. We are evaluating the impact of the adoption of this standard on our Condensed Consolidated Financial Statements. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |
Fair Value Disclosures | FAIR VALUE MEASUREMENTS We determine the fair value of financial and non-financial assets and liabilities using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows: • Level 1 inputs include quoted prices in active markets for identical assets or liabilities; • Level 2 inputs include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. For our marketable securities, we review trading activity and pricing as of the measurement date. When sufficient quoted pricing for identical securities is not available, we use market pricing and other observable market inputs for similar securities obtained from various third-party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data; and • Level 3 inputs include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Our Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation. Our financial instruments consist primarily of cash and cash equivalents, marketable securities, accounts receivable, foreign currency exchange contracts, equity securities, accounts payable and long-term debt. Cash and cash equivalents, marketable securities, foreign currency exchange contracts and equity securities are reported at their respective fair values on our Condensed Consolidated Balance Sheets. Long-term debt is reported at its amortized costs on our Condensed Consolidated Balance Sheets. The remaining financial instruments are reported on our Condensed Consolidated Balance Sheets at amounts that approximate current fair values. There were no transfers between Level 1, Level 2 and Level 3 in the periods presented. 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 (in millions): September 30, 2017 December 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Corporate debt securities $ — $ 14,845 $ — $ 14,845 $ — $ 12,603 $ — $ 12,603 U.S. treasury securities 4,125 — — 4,125 5,529 — — 5,529 Money market funds 9,025 — — 9,025 5,464 — — 5,464 Residential mortgage and asset-backed securities — 4,213 — 4,213 — 3,602 — 3,602 U.S. government agencies securities — 958 — 958 — 975 — 975 Certificates of deposit — 5,511 — 5,511 — 943 — 943 Non-U.S. government securities — 684 — 684 — 720 — 720 Municipal debt securities — 10 — 10 — 27 — 27 Equity securities 683 — — 683 428 — — 428 Foreign currency derivative contracts — 30 — 30 — 336 — 336 Deferred compensation plan 110 — — 110 84 — — 84 Total $ 13,943 $ 26,251 $ — $ 40,194 $ 11,505 $ 19,206 $ — $ 30,711 Liabilities: Deferred compensation plan $ 110 $ — $ — $ 110 $ 84 $ — $ — $ 84 Foreign currency derivative contracts — 101 — 101 — 37 — 37 Contingent consideration — — 16 16 — — 25 25 Total $ 110 $ 101 $ 16 $ 227 $ 84 $ 37 $ 25 $ 146 Level 2 Inputs We estimate the fair values of Level 2 instruments by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs. Substantially all of our foreign currency derivative contracts have maturities within an 18-month time horizon 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 taking into consideration valuations obtained from a third-party valuation service that utilizes 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, London Interbank Offered Rates (LIBOR) and swap rates. These inputs, where applicable, are observable at commonly quoted intervals. The total estimated fair values of our long-term debt, determined using Level 2 inputs based on their quoted market values, were approximately $31.1 billion and $27.0 billion at September 30, 2017 and December 31, 2016 , respectively, and the carrying values were $29.3 billion and $26.3 billion at September 30, 2017 and December 31, 2016 , respectively. Level 3 Inputs As of September 30, 2017 and December 31, 2016 , the only assets or liabilities that were measured using Level 3 inputs on a recurring basis were our contingent consideration liabilities, which were immaterial. Our policy is to recognize transfers into or out of Level 3 classification as of the actual date of the event or change in circumstances that caused the transfer. |
Available-for-Sale Securities
Available-for-Sale Securities | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-Sale Securities | AVAILABLE-FOR-SALE SECURITIES Estimated fair values of available-for-sale securities are generally based on prices obtained from commercial pricing services. The following table summarizes our available-for-sale securities (in millions): September 30, 2017 December 31, 2016 Amortized Gross Gross Estimated Amortized Gross Gross Estimated Corporate debt securities $ 14,858 $ 10 $ (23 ) $ 14,845 $ 12,657 $ 7 $ (61 ) $ 12,603 U.S. treasury securities 4,147 — (22 ) 4,125 5,558 1 (30 ) 5,529 Money market funds 9,025 — — 9,025 5,464 — — 5,464 Residential mortgage and asset-backed securities 4,221 1 (9 ) 4,213 3,613 2 (13 ) 3,602 U.S. government agencies securities 963 — (5 ) 958 981 — (6 ) 975 Certificates of deposit 5,511 — — 5,511 943 — — 943 Non-U.S. government securities 687 — (3 ) 684 725 — (5 ) 720 Municipal debt securities 10 — — 10 27 — — 27 Equity securities 357 326 — 683 357 71 — 428 Total $ 39,779 $ 337 $ (62 ) $ 40,054 $ 30,325 $ 81 $ (115 ) $ 30,291 The following table summarizes the classification of our available-for-sale securities on our Condensed Consolidated Balance Sheets (in millions): September 30, 2017 December 31, 2016 Cash and cash equivalents $ 9,519 $ 5,712 Short-term marketable securities 16,879 3,666 Prepaid and other current assets 683 — Long-term marketable securities 12,973 20,485 Other long-term assets — 428 Total $ 40,054 $ 30,291 Cash and cash equivalents in the table above excludes cash of $2.0 billion and $2.5 billion as of September 30, 2017 and December 31, 2016 , respectively. The following table summarizes our available-for-sale securities by contractual maturity (in millions): September 30, 2017 Amortized Cost Fair Value Within one year $ 26,408 $ 26,398 After one year through five years 12,867 12,827 After five years through ten years 106 105 After ten years 41 41 Total $ 39,422 $ 39,371 The following table summarizes our available-for-sale securities that were in a continuous unrealized loss position but were not deemed to be other-than-temporarily impaired (in millions): Less Than 12 Months 12 Months or Greater Total Gross Estimated Gross Estimated Gross Estimated September 30, 2017 Corporate debt securities $ (13 ) $ 5,990 $ (10 ) $ 1,654 $ (23 ) $ 7,644 U.S. treasury securities (13 ) 2,771 (9 ) 1,293 (22 ) 4,064 Residential mortgage and asset-backed securities (7 ) 2,802 (2 ) 151 (9 ) 2,953 U.S. government agencies securities (3 ) 664 (2 ) 247 (5 ) 911 Non-U.S. government securities (2 ) 462 (1 ) 222 (3 ) 684 Certificates of deposit — 12 — — — 12 Total $ (38 ) $ 12,701 $ (24 ) $ 3,567 $ (62 ) $ 16,268 December 31, 2016 Corporate debt securities $ (60 ) $ 8,685 $ (1 ) $ 155 $ (61 ) $ 8,840 U.S. treasury securities (30 ) 5,081 — — (30 ) 5,081 Residential mortgage and asset-backed securities (13 ) 2,180 — 42 (13 ) 2,222 U.S. government agencies securities (6 ) 897 — — (6 ) 897 Non-U.S. government securities (5 ) 714 — 5 (5 ) 719 Certificates of deposit — 15 — — — 15 Municipal debt securities — 11 — — — 11 Total $ (114 ) $ 17,583 $ (1 ) $ 202 $ (115 ) $ 17,785 We held a total of 2,181 and 2,709 positions as of September 30, 2017 and December 31, 2016 , respectively, related to our debt securities that were in an unrealized loss position. Based on our review of our available-for-sale securities, we believe we had no other-than-temporary impairments on these securities as of September 30, 2017 and December 31, 2016 , because we do not intend to sell these securities nor do we believe that we will be required to sell these securities before the recovery of their amortized cost basis. Gross realized gains and gross realized losses were immaterial for the three and nine months ended September 30, 2017 and 2016 . |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 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 and Yen. In order to manage this risk, we may 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 or option 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 unrecognized 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. We hedge our exposure to foreign currency exchange rate fluctuations for certain monetary assets and liabilities of our entities that are denominated in a non-functional currency. The derivative instruments we use to hedge this exposure are not designated as hedges and, as a result, changes in their fair value are recorded in Other income (expense), net , on our Condensed Consolidated Statements of Income. We hedge our exposure to foreign currency exchange rate fluctuations for forecasted product sales that are denominated in a non-functional currency. The derivative instruments we use to hedge this exposure are designated as cash flow hedges and have maturities of 18 months or less. Upon executing a hedging contract and quarterly thereafter, we assess prospective hedge effectiveness using regression analysis which calculates the change in cash flow as a result of the hedge instrument. On a quarterly basis, we assess retrospective hedge effectiveness using a dollar offset approach. We exclude time value from our effectiveness testing and recognize changes in the time value of the hedge in Other income (expense), net , on our Condensed Consolidated Statements of Income. The effective component of our hedge is recorded as an unrealized gain or loss on the hedging instrument in Accumulated other comprehensive income (AOCI) within Stockholders’ equity on our Condensed Consolidated Balance Sheets and the gains or losses are reclassified into product sales when the hedged transactions affect earnings. The majority of gains and losses related to the hedged forecasted transactions reported in AOCI at September 30, 2017 are expected to be reclassified to product sales within 12 months . The cash flow effects of our derivative contracts for the nine months ended September 30, 2017 and 2016 are included within Net cash provided by operating activities on our Condensed Consolidated Statements of Cash Flows. We had notional amounts on foreign currency exchange contracts outstanding of $3.4 billion and $6.2 billion at September 30, 2017 and December 31, 2016 , respectively. While all of our derivative contracts allow us the right to offset assets and liabilities, we have presented amounts on a gross basis. Under the International Swap Dealers Association, Inc. master agreements with the respective counterparties of the foreign currency exchange contracts, subject to applicable requirements, we are allowed to net settle transactions of the same currency with a single net amount payable by one party to the other. The following table summarizes the classification and fair values of derivative instruments on our Condensed Consolidated Balance Sheets (in millions): September 30, 2017 Asset Derivatives Liability Derivatives Classification Fair Value Classification Fair Value Derivatives designated as hedges: Foreign currency exchange contracts Other current assets $ 4 Other accrued liabilities $ (94 ) Foreign currency exchange contracts Other long-term assets 3 Other long-term obligations (5 ) Total derivatives designated as hedges 7 (99 ) Derivatives not designated as hedges: Foreign currency exchange contracts Other current assets 23 Other accrued liabilities (2 ) Total derivatives not designated as hedges 23 (2 ) Total derivatives $ 30 $ (101 ) December 31, 2016 Asset Derivatives Liability Derivatives Classification Fair Value Classification Fair Value Derivatives designated as hedges: Foreign currency exchange contracts Other current assets $ 225 Other accrued liabilities $ (1 ) Foreign currency exchange contracts Other long-term assets 20 Other long-term obligations — Total derivatives designated as hedges 245 (1 ) Derivatives not designated as hedges: Foreign currency exchange contracts Other current assets 81 Other accrued liabilities (34 ) Foreign currency exchange contracts Other long-term assets 10 Other long-term obligations (2 ) Total derivatives not designated as hedges 91 (36 ) Total derivatives $ 336 $ (37 ) The following table summarizes the effect of our foreign currency exchange contracts on our Condensed Consolidated Financial Statements (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Derivatives designated as hedges: Losses recognized in AOCI (effective portion) $ (78 ) $ (43 ) $ (289 ) $ (258 ) Gains (losses) reclassified from AOCI into product sales (effective portion) $ (26 ) $ (9 ) $ 4 $ 67 Gains recognized in Other income (expense), net (ineffective portion and amounts excluded from effectiveness testing) $ 10 $ 11 $ 32 $ 38 Derivatives not designated as hedges: Losses recognized in Other income (expense), net $ (2 ) $ (62 ) $ (112 ) $ (328 ) From time to time, we may discontinue cash flow hedges and, as a result, record related amounts in Other income (expense), net , on our Condensed Consolidated Statements of Income. There were no material amounts recorded in Other income (expense), net , for the three and nine months ended September 30, 2017 and 2016 as a result of the discontinuance of cash flow hedges. As of September 30, 2017 and December 31, 2016 , we held one type of financial instrument, derivative contracts related to foreign currency exchange contracts. The following table summarizes the potential effect of offsetting derivatives by type of financial instrument on our Condensed Consolidated Balance Sheets (in millions): Gross Amounts Not Offset on our Condensed Consolidated Balance Sheets Description Gross Amounts of Recognized Assets/Liabilities Gross Amounts Offset on our Condensed Consolidated Balance Sheets Amounts of Assets/Liabilities Presented on our Condensed Consolidated Balance Sheets Derivative Financial Instruments Cash Collateral Received/ Pledged Net Amount (Legal Offset) As of September 30, 2017 Derivative assets $ 30 $ — $ 30 $ (24 ) $ — $ 6 Derivative liabilities (101 ) — (101 ) 24 — (77 ) As of December 31, 2016 Derivative assets $ 336 $ — $ 336 $ (37 ) $ — $ 299 Derivative liabilities (37 ) — (37 ) 37 — — |
Other Financial Information
Other Financial Information | 9 Months Ended |
Sep. 30, 2017 | |
Other Financial Information [Abstract] | |
Other Financial Information | OTHER FINANCIAL INFORMATION Inventories Inventories are summarized as follows (in millions): September 30, 2017 December 31, 2016 Raw materials $ 1,701 $ 1,610 Work in process 673 626 Finished goods 797 928 Total $ 3,171 $ 3,164 Reported as: Inventories $ 1,144 $ 1,587 Other long-term assets 2,027 1,577 Total $ 3,171 $ 3,164 Amounts reported as other long-term assets primarily consisted of raw materials as of September 30, 2017 and December 31, 2016 . The joint ventures formed by Gilead Sciences, LLC and BMS, which are included on our Condensed Consolidated Financial Statements and described in Note 7 , Collaborative Arrangements, held efavirenz active pharmaceutical ingredient in inventory. This efavirenz inventory was purchased from BMS at BMS’s estimated net selling price of efavirenz and totaled $734 million and $1.1 billion as of September 30, 2017 and December 31, 2016 , respectively. Other Accrued Liabilities The components of other accrued liabilities are summarized as follows (in millions): September 30, 2017 December 31, 2016 Compensation and employee benefits $ 339 $ 398 Accrued interest 210 290 Branded prescription drug fee 189 481 Other accrued expenses 1,744 1,822 Total $ 2,482 $ 2,991 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS The following table summarizes our finite-lived intangible assets (in millions): September 30, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible asset - sofosbuvir $ 10,720 $ 2,680 $ 8,040 $ 10,720 $ 2,156 $ 8,564 Intangible asset - Ranexa 688 541 147 688 467 221 Other 455 300 155 455 269 186 Total $ 11,863 $ 3,521 $ 8,342 $ 11,863 $ 2,892 $ 8,971 Amortization expense related to finite-lived intangible assets, included primarily in Cost of goods sold on our Condensed Consolidated Statements of Income, totaled $209 million and $629 million for the three and nine months ended September 30, 2017 and $210 million and $630 million for the three and nine months ended September 30, 2016 . As of September 30, 2017 , the estimated future amortization expense associated with our finite-lived intangible assets is as follows (in millions): Fiscal Year Amount 2017 (remaining three months) $ 210 2018 850 2019 739 2020 713 2021 713 Thereafter 5,117 Total $ 8,342 |
Collaborative Arrangements
Collaborative Arrangements | 9 Months Ended |
Sep. 30, 2017 | |
Collaborative Arrangements [Abstract] | |
Collaborative Arrangements | COLLABORATIVE ARRANGEMENTS We enter into collaborative arrangements with third parties for the development and commercialization of certain products. Both parties 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 following is selected information related to our collaborative arrangements. Bristol-Myers Squibb Company North America In 2004, we entered into a collaboration arrangement with BMS to develop and commercialize a single-tablet regimen containing our Truvada and BMS’s Sustiva (efavirenz) in the United States. This combination was approved for use in the United States in 2006 and is sold under the brand name Atripla. We and BMS structured this collaboration as a joint venture that operates as a limited liability company named Bristol-Myers Squibb & Gilead Sciences, LLC, which we consolidate. We and BMS granted royalty-free sublicenses to the joint venture for the use of our respective company owned technologies and, in return, were granted a license by the joint venture to use any intellectual property that results from the collaboration. In 2006, we and BMS amended the joint venture’s collaboration agreement to allow the joint venture to sell Atripla in Canada. The economic interests of the joint venture held by us and BMS (including a share of revenues and out-of-pocket expenses) are based on the portion of the net selling price of Atripla attributable to Truvada and efavirenz. Since the net selling price for Truvada may change over time relative to the net selling price of efavirenz, both our and BMS’s respective economic interests in the joint venture may vary annually. We and BMS shared marketing and sales efforts. Starting in the second quarter of 2011, except for a limited number of activities that are jointly managed, the parties no longer coordinate detailing and promotional activities in the United States, and the parties reduced their joint promotional efforts since we launched Complera in August 2011 and Stribild in August 2012. The parties continue to collaborate on activities such as manufacturing, regulatory, compliance and pharmacovigilance. The daily operations of the joint venture are governed by several joint committees formed by both BMS and Gilead. We are responsible for accounting, financial reporting, tax reporting, manufacturing and product distribution for the joint venture. Both parties provide their respective bulk active pharmaceutical ingredients to the joint venture at their approximate market values. The agreement will continue until terminated by the mutual agreement of the parties. In addition, either party may terminate the other party’s participation in the collaboration within 30 days after the launch of at least one generic version of such other party’s single agent products (or the double agent products). The terminating party then has the right to continue to sell Atripla and become the continuing party but will be obligated to pay the terminated party certain royalties for a three-year period following the effective date of the termination. The loss of exclusivity in the United States for Sustiva is expected in December 2017. As of September 30, 2017 and December 31, 2016 , the joint venture held efavirenz active pharmaceutical ingredient which it purchased from BMS at BMS’s estimated net selling price of efavirenz in the U.S. market. These amounts were primarily included in Other long term assets and Inventories on our Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016 , respectively. Selected financial information for the joint venture was as follows (in millions): September 30, 2017 December 31, 2016 Total assets $ 1,499 $ 1,918 Cash and cash equivalents 100 92 Accounts receivable, net 197 229 Inventories 1,191 1,579 Total liabilities 512 772 Accounts payable 222 434 Other accrued liabilities 290 338 These asset and liability amounts do not reflect the impact of intercompany eliminations that are included on our Condensed Consolidated Balance Sheets. Although we consolidate the joint venture, the legal structure of the joint venture limits the recourse that its creditors will have over our general credit or assets. Similarly, the assets held in the joint venture can be used only to settle obligations of the joint venture. Europe In 2007, Gilead Sciences Ireland UC, our wholly-owned subsidiary, and BMS entered into a collaboration agreement which sets forth the terms and conditions under which we and BMS commercialize and distribute Atripla in the European Union, Iceland, Liechtenstein, Norway and Switzerland (collectively, the European Territory). The parties formed a limited liability company, which we consolidate, to manufacture Atripla for distribution in the European Territory using efavirenz that it purchases from BMS at BMS’s estimated net selling price of efavirenz in the European Territory. We are responsible for manufacturing, product distribution, inventory management and warehousing. Through our local subsidiaries, we have primary responsibility for order fulfillment, collection of receivables, customer relations and handling of sales returns in all the territories where we and BMS promote Atripla. In general, the parties share revenues and out-of-pocket expenses in proportion to the net selling prices of the components of Atripla, Truvada and efavirenz. Starting in 2012, except for a limited number of activities that are jointly managed, the parties no longer coordinate detailing and promotional activities in the European Territory. We are responsible for accounting, financial reporting and tax reporting for the collaboration. As of September 30, 2017 and December 31, 2016 , efavirenz purchased from BMS at BMS’s estimated net selling price of efavirenz in the European Territory is included in Inventories on our Condensed Consolidated Balance Sheets. The parties also formed a limited liability company to hold the marketing authorization for Atripla in the European Territory. We have primary responsibility for regulatory activities. In the major market countries, both parties have agreed to independently continue to use commercially reasonable efforts to promote Atripla. The agreement will terminate upon the expiration of the last-to-expire patent which affords market exclusivity to Atripla or one of its components in the European Territory. In addition, since December 31, 2013, either party may terminate the agreement for any reason and such termination will be effective two calendar quarters after notice of termination. The non-terminating party has the right to continue to sell Atripla and become the continuing party but will be obligated to pay the terminating party certain royalties for a three-year period following the effective date of the termination. In the event the continuing party decides not to sell Atripla, the effective date of the termination will be the date Atripla is withdrawn in each country or the date on which a third party assumes distribution of Atripla, whichever is earlier. |
Debt and Credit Facility
Debt and Credit Facility | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facility | DEBT AND CREDIT FACILITIES The following table summarizes our borrowings under various financing arrangements (in millions): Carrying Amount Type of Borrowing Issue Date Due Date Interest Rate September 30, 2017 December 31, 2016 Senior Unsecured September 2015 September 2018 1.85% $ 999 $ 998 Senior Unsecured September 2017 September 2018 3-month LIBOR + 0.17% 748 — Senior Unsecured September 2017 March 2019 3-month LIBOR + 0.22% 748 — Senior Unsecured March 2014 April 2019 2.05% 499 499 Senior Unsecured September 2017 September 2019 1.85% 996 — Senior Unsecured September 2017 September 2019 3-month LIBOR + 0.25% 498 — Senior Unsecured November 2014 February 2020 2.35% 498 498 Senior Unsecured September 2015 September 2020 2.55% 1,993 1,991 Senior Unsecured March 2011 April 2021 4.50% 995 994 Senior Unsecured December 2011 December 2021 4.40% 1,246 1,245 Senior Unsecured September 2016 March 2022 1.95% 497 497 Senior Unsecured September 2015 September 2022 3.25% 996 995 Senior Unsecured September 2016 September 2023 2.50% 745 744 Senior Unsecured March 2014 April 2024 3.70% 1,742 1,741 Senior Unsecured November 2014 February 2025 3.50% 1,744 1,743 Senior Unsecured September 2015 March 2026 3.65% 2,728 2,726 Senior Unsecured September 2016 March 2027 2.95% 1,244 1,243 Senior Unsecured September 2015 September 2035 4.60% 989 989 Senior Unsecured September 2016 September 2036 4.00% 740 739 Senior Unsecured December 2011 December 2041 5.65% 995 995 Senior Unsecured March 2014 April 2044 4.80% 1,733 1,732 Senior Unsecured November 2014 February 2045 4.50% 1,730 1,729 Senior Unsecured September 2015 March 2046 4.75% 2,215 2,214 Senior Unsecured September 2016 March 2047 4.15% 1,723 1,723 Floating-rate Borrowings May 2016 May 2019 Variable 221 311 Total debt, net 29,262 26,346 Less current portion 1,747 — Total long-term debt, net $ 27,515 $ 26,346 In connection with our acquisition of Kite Pharma, Inc. (Kite), we entered into the following financing arrangements. See Note 14 , Subsequent Event for additional information relating to the acquisition. September 2017 Issuance of Senior Unsecured Notes In September 2017, we issued $3.0 billion aggregate principal amount of senior unsecured notes consisting of $750 million principal amount of floating rate notes due September 2018, $750 million principal amount of floating rate notes due March 2019, and $500 million principal amount of floating rate notes due September 2019 (collectively, the Floating Rate Notes) and $1.0 billion principal amount of 1.85% senior notes due September 2019 (the Fixed Rate Notes and, collectively with the Floating Rate Notes, the 2017 Senior Notes), the terms of which are summarized in the table above. The Fixed Rate Notes may be redeemed at our option at a redemption price equal to the greater of (i) 100% of the principal amount of the Fixed Rate Notes to be redeemed and (ii) the sum, as determined by an independent investment banker, of the present values of the remaining scheduled payments of principal and interest on the Fixed Rate Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis at the Treasury Rate, plus 10 basis points, plus accrued and unpaid interest on the Fixed Rate Notes to be redeemed to the date of redemption. We do not have the option to redeem any series of the Floating Rate Notes, in whole or in part, prior to the maturity date. In the event of the occurrence of a change in control and a downgrade in the rating of the 2017 Senior Notes below investment grade by Moody’s Investors Service, Inc. and S&P Global Ratings, the holders may require us to purchase all or a portion of their notes at a price equal to 101% of the aggregate principal amount of the notes repurchased, plus accrued and unpaid interest to the date of repurchase. Term Loan Facilities In September 2017, we entered into a $6.0 billion principal amount term loan facility credit agreement consisting of a $1.0 billion principal amount 364-day senior unsecured term loan facility, a $2.5 billion principal amount three-year senior unsecured term loan facility and a $2.5 billion principal amount five-year senior unsecured term loan facility (collectively, the Term Loan Facilities). In October 2017, we drew $6.0 billion principal amount on the Term Loan Facilities and used the proceeds to finance our acquisition of Kite. The Term Loan Facilities bear interest at floating rates based on LIBOR plus an applicable margin which will vary based on our debt rating from Fitch Ratings, Inc, Moody’s Investors Service, Inc. and S&P Global Ratings. We may prepay loans under the Term Loan Facilities in whole or in part at any time without premium or penalty. The Term Loan Facilities contain customary representations, warranties, affirmative, negative and financial maintenance covenants and events of default. Cash Bridge Facility In August 2017, we entered into a $9 billion principal amount 90-day senior unsecured term loan facility (the Cash Bridge Facility). No amounts were drawn under the Cash Bridge Facility, which was terminated as a result of our issuance of the 2017 Senior Notes and entering into the Term Loan Facilities in September 2017. We are required to comply with certain covenants under our credit agreements and note indentures governing our senior notes. As of September 30, 2017 , we were not in violation of any covenants. Additionally, as of September 30, 2017 , there were no amounts outstanding under our revolving credit facility. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES We are a party to various legal actions. The most significant of these 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 loss is reasonably possible and the loss or range of loss can be estimated, we disclose the possible loss. Unless otherwise noted, it is not possible to determine the outcome of these matters, and we cannot reasonably estimate the maximum potential exposure or the range of possible loss. We did not recognize any accruals for litigation on our Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016 , as we did not believe losses were probable. Litigation Related to Sofosbuvir In January 2012, we acquired Pharmasset, Inc. (Pharmasset). Through the acquisition, we acquired sofosbuvir, a nucleotide analog that acts to inhibit the replication of the hepatitis C virus (HCV). In December 2013, we received approval from the U.S. Food and Drug Administration (FDA) for sofosbuvir, now known commercially as Sovaldi. In October 2014, we also received approval of the fixed-dose combination of ledipasvir and sofosbuvir, now known commercially as Harvoni. In June 2016, we received approval of the fixed-dose combination of sofosbuvir and velpatasvir, now known commercially as Epclusa. In July 2017, we received approval of the fixed-dose combination of sofosbuvir, velpatasvir and voxilaprevir, now known commercially as Vosevi. We have received a number of contractual and intellectual property claims regarding sofosbuvir. While we have carefully considered these claims both prior to and following the acquisition and believe they are without merit, we cannot predict the ultimate outcome of such claims or range of loss, except where stated otherwise herein. We own patents and patent applications that claim sofosbuvir (Sovaldi) as a chemical entity and its metabolites and the fixed-dose combinations of ledipasvir and sofosbuvir (Harvoni), sofosbuvir and velpatasvir (Epclusa) and sofosbuvir, velpatasvir and voxilaprevir (Vosevi). Third parties may have, or may obtain rights to, patents that allegedly could be used to prevent or attempt to prevent us from commercializing our HCV products. For example, we are aware of patents and patent applications owned by other parties that have been or may in the future be alleged by such parties to cover the use of our HCV products. We cannot predict the ultimate outcome of intellectual property claims related to our HCV products. We have spent, and will continue to spend, significant resources defending against these claims. If third parties successfully obtain valid and enforceable patents, and successfully prove infringement of those patents by our HCV products, we could be prevented from selling these products unless we were able to obtain a license under such patents. Such a license may not be available on commercially reasonable terms or at all. Interference Proceedings and Litigation with Idenix Pharmaceuticals, Inc. (Idenix), Universita Degli Studi di Cagliari (UDSG), Centre National de la Recherche Scientifique and L‘Universite Montpellier II In February 2012, we received notice that the U.S. Patent and Trademark Office (USPTO) had declared Interference No. 105,871 (First Idenix Interference) between our U.S. Patent No. 7,429,572 (the ‘572 patent) and Idenix’s pending U.S. Patent Application No. 12/131,868 to determine who was the first to invent certain nucleoside compounds. In January 2014, the USPTO Patent Trial and Appeal Board (PTAB) determined that Pharmasset and not Idenix was the first to invent the compounds. Idenix was acquired by Merck & Co. Inc. (Merck) in August 2014. Idenix has appealed the PTAB’s decisions to the U.S. District Court for the District of Delaware, which has stayed that appeal pending the outcome of the appeal of the interference involving Idenix’s U.S. Patent No. 7,608,600 (the ‘600 patent) as described below. In light of the decision in the Second Idenix Interference in our favor (as described below), we believe that the District Court will dismiss the First Idenix Interference with prejudice or enter judgment against Idenix and in our favor. In December 2013, after receiving our request to do so, the USPTO declared Interference No. 105,981 (Second Idenix Interference) between our pending U.S. Patent Application No. 11/854,218 and Idenix’s ‘600 patent. The ‘600 patent includes claims directed to methods of treating HCV with nucleoside compounds. In March 2015, the PTAB determined that Pharmasset and not Idenix was the first to invent the claimed methods of treating HCV. Idenix appealed this decision in both the U.S. District Court for the District of Delaware and the U.S. Court of Appeals for the Federal Circuit (CAFC). The CAFC heard oral arguments in September 2016 and affirmed the PTAB decision in June 2017. In November 2017, the CAFC denied Idenix’s petition for a rehearing. Idenix may file further petitions in the United States Supreme Court. We filed a motion to dismiss the appeal in Delaware, which was granted. Idenix appealed the dismissal to the CAFC, and that court had stayed this other appeal pending a decision in the Second Idenix Interference. We believe that the appeal from the Delaware dismissal should be dismissed in light of the recent decision of the CAFC affirming the PTAB’s prior decision in the Second Idenix Interference that Idenix is not entitled to its patent. We believe that the Idenix claims involved in the First and Second Idenix Interferences, and similar U.S. and foreign patents claiming the same compounds, metabolites and uses thereof, are invalid. As a result, we filed an Impeachment Action in the Federal Court of Canada to invalidate Idenix Canadian Patent No. 2,490,191 (the ‘191 patent), which is the Canadian patent that corresponds to the ‘600 patent. Idenix asserted that the commercialization of Sovaldi in Canada will infringe its ‘191 patent and that our Canadian Patent No. 2,527,657, corresponding to our ‘572 patent, is invalid. In November 2015, the Canadian court held that Idenix’s patent is invalid and that our patent is valid. Idenix appealed the decision to the Canadian Federal Court of Appeal in November 2015. In July 2017, the Canadian Federal Appeal Court affirmed the lower court’s decision in our favor. In September 2017, Idenix appealed the decision to the Supreme Court of Canada. We filed a similar legal action in Norway in the Oslo District Court seeking to invalidate Idenix’s Norwegian patent corresponding to the ‘600 patent. In September 2013, Idenix filed an invalidation action in the Norwegian proceedings against our Norwegian Patent No. 333700, which corresponds to the ‘572 patent. In March 2014, the Norwegian court found all claims in the Idenix Norwegian patent to be invalid and upheld the validity of all claims in our patent. Idenix appealed the decision to the Norwegian Court of Appeal. In April 2016, the Court of Appeal issued its decision invalidating the Idenix patent and upholding our patent. The decision revoking Idenix’s patent is now final. In January 2013, we filed a legal action in the Federal Court of Australia seeking to invalidate Idenix’s Australian patent corresponding to the ‘600 patent. In April 2013, Idenix asserted that the commercialization of Sovaldi in Australia infringes its Australian patent corresponding to the ‘600 patent. In March 2016, the Australian court revoked Idenix’s Australian patent. Idenix has appealed this decision. The appeal hearing was held in November 2016 and we are awaiting the decision. In March 2014, the European Patent Office (EPO) granted Idenix European Patent No. 1 523 489 (the ‘489 patent), which corresponds to the ‘600 patent. The same day that the ‘489 patent was granted, we filed an opposition with the EPO seeking to revoke the ‘489 patent. An opposition hearing was held in February 2016, and the EPO ruled in our favor and revoked the ‘489 patent. Idenix has appealed. In March 2014, Idenix also initiated infringement proceedings against us in the United Kingdom (UK), Germany and France alleging that the commercialization of Sovaldi would infringe the UK, German and French counterparts of the ‘489 patent. A trial was held in the UK in October 2014. In December 2014, the High Court of Justice of England and Wales (UK Court) invalidated all challenged claims of the ‘489 patent on multiple grounds. Idenix appealed. In November 2016, the appeals court affirmed the UK Court’s decision invalidating Idenix’s patent, and in April 2017, the UK Supreme Court refused Idenix’s application for permission to appeal. In March 2015, the German court in Düsseldorf determined that the Idenix patent was highly likely to be invalid and stayed the infringement proceedings pending the outcome of the opposition hearing held by the EPO in February 2016. Idenix has not appealed this decision of the German court staying the proceedings. Upon Idenix’s request, the French proceedings have been stayed. In December 2013, Idenix, UDSG, Centre National de la Recherche Scientifique and L’Université Montpellier II sued us in U.S. District Court for the District of Delaware alleging that the commercialization of sofosbuvir will infringe the ‘600 patent and that an interference exists between the ‘600 patent and our U.S. Patent No. 8,415,322. Also in December 2013, Idenix and UDSG sued us in the U.S. District Court for the District of Massachusetts alleging that the commercialization of sofosbuvir will infringe U.S. Patent Nos. 6,914,054 (the ‘054 patent) and 7,608,597 (the ‘597 patent). In June 2014, the court transferred the Massachusetts litigation to the U.S. District Court for the District of Delaware. Prior to trial in December 2016, Idenix committed to give us a covenant not to sue with respect to any claims arising out of the ‘054 patent related to sofosbuvir and withdrew that patent from the trial. In addition, Idenix declined to litigate the ‘600 patent infringement action at trial in light of the appeal then pending at the CAFC regarding who was the first to invent the subject matter claimed in the ‘600 patent. In January 2017, the District Court stayed Idenix’s infringement claim on the ‘600 patent pending the outcome of the appeal of the Second Idenix Interference. Unless Idenix is successful in persuading the United States Supreme Court to consider a further appeal to challenge the Federal Circuit’s June 2017 decision in our favor in the Second Idenix Interference, we will ask for dismissal of, or for judgment to be entered against Idenix on, the ‘600 infringement and interference claims. A jury trial was held in December 2016 on the remaining ‘597 patent. In December 2016, the jury found that we willfully infringed the asserted claims of the ‘597 patent and awarded Idenix $2.54 billion in past damages. The parties have filed post-trial motions and briefings, and the district judge heard oral arguments in September 2017. In September 2017, the judge denied Idenix’s motion for enhanced damages and attorney’s fees. We expect the judge to rule on outstanding motions in late 2017 or early 2018. Once the judge has issued these rulings, the case will move to the CAFC. Although we cannot predict with certainty the ultimate outcome of this litigation, we believe the jury verdict to be in error, and also believe that errors were also made by the court with respect to certain rulings before and during trial. We are confident in the merits of our case and will vigorously pursue this position in post-trial motions and on appeal. We expect that our arguments in the pending post-trial motions and on appeal will focus on one or more of the arguments that we made to the judge and jury, those being (i) when properly construed, we do not infringe the claims of the ‘597 patent, (ii) the patent is invalid for failure to properly describe the claimed invention and (iii) the patent is invalid because it does not enable one of skill in the art to practice the claimed invention. In assessing whether we should accrue a liability for this litigation on our Condensed Consolidated Financial Statements, we considered various factors, including the legal and factual circumstances of the case, the USPTO’s invalidation of an Idenix patent similar to the ‘597 patent in dispute in this case, the jury’s verdict, the court’s post-trial orders, the current status of the proceedings, applicable law, the views of legal counsel and the likelihood that the jury’s verdict will be upheld on appeal. As a result of this review, we have determined, in accordance with applicable accounting standards, that it is not probable that we will incur a loss as a result of this litigation, and therefore have not recorded a liability for this matter. While we believe a loss is not probable, it is reasonably possible that a loss could occur. If the jury’s verdict is not upheld on appeal, the loss will be zero. If the jury’s verdict is upheld on appeal, our estimated potential loss as of September 30, 2017 would include (i) the $2.54 billion determined by the jury, which represents 10% of our adjusted revenues from sofosbuvir-containing products from launch through August 2016, (ii) approximately $269 million , which represents 10% of our adjusted revenues from sofosbuvir-containing products from September 2016 through January 25, 2017, (iii) pre- and post-judgment interest and (iv) approximately $539 million , which represents going forward royalties yet to be assessed by the court, which we have estimated assuming 14% of our adjusted revenues from sofosbuvir-containing products from January 26, 2017 through September 30, 2017 based on post-trial briefings filed by Idenix with the court, and which would be payable based on adjusted revenues from sofosbuvir-containing products for the period from January 26, 2017 through expiry of the Idenix patent in May 2021. Therefore, we estimate the range of possible loss through September 30, 2017 to be between zero and $3.6 billion . The parties agreed to stay consideration of going forward royalties until the appeal from the jury verdict and post-trial motions has been resolved. Idenix may appeal the court’s denial of enhanced damages. If the jury’s verdict is upheld on appeal, the amount we could be required to pay could be material. The timing and magnitude of the amount of any such payment could have a material adverse impact on our results of operations and stock price. Litigation with Merck In August 2013, Merck contacted us requesting that we pay royalties on the sales of sofosbuvir and obtain a license to U.S. Patent No. 7,105,499 (the ‘499 patent) and U.S. Patent No. 8,481,712 (the ‘712 patent), which it co-owns with Ionis Pharmaceuticals, Inc. The ‘499 and ‘712 patents cover compounds which do not include, but may relate to, sofosbuvir. We filed a lawsuit in August 2013 in the U.S. District Court for the Northern District of California seeking a declaratory judgment that the Merck patents are invalid and not infringed. During patent prosecution, Merck amended its patent application in an attempt to cover compounds related to sofosbuvir. Initially, in March 2016, a jury determined that we had not established that Merck’s patents are invalid for lack of written description or lack of enablement and awarded Merck $200 million in damages. However, in June 2016, the court ruled in our favor on our defense of unclean hands and determined that Merck may not recover any damages from us for the ‘499 and ‘712 patents. The judge has determined that Merck is required to pay our attorney’s fees due to the exceptional nature of this case. In July 2017, the court issued a decision setting the amount of attorney fees awarded to us. Merck has filed notices of appeal to the CAFC regarding the court’s decision on our defense of unclean hands and its award of attorney’s fees. We appealed the issue relating to the invalidity of Merck’s patent. If the decision on our defense of unclean hands is reversed on appeal and Merck’s patent is upheld, we may be required to pay damages and a royalty on sales of sofosbuvir-containing products following the appeal. In that event, the judge has indicated that she will determine the amount of the royalty, if necessary, at the conclusion of any appeal in this case. Litigation with the University of Minnesota The University of Minnesota (the University) has obtained Patent No. 8,815,830 (the ‘830 patent), which purports to broadly cover nucleosides with antiviral and anticancer activity. In August 2016, the University filed a lawsuit against us in the U.S. District Court for the District of Minnesota, alleging that the commercialization of sofosbuvir-containing products infringes the ‘830 patent. We believe that the ‘830 patent is invalid and will not be infringed by the continued commercialization of sofosbuvir. In October 2017, the court granted our motion to transfer the case to California. We have also filed four petitions for inter partes review in the USPTO alleging that all asserted claims are invalid for anticipation and obviousness. Petitions for Inter Partes Review filed by Initiative for Medicines, Access & Knowledge In October 2017, we received notice that Initiative for Medicines, Access & Knowledge (I-MAK) submitted multiple petitions requesting inter partes review to the PTAB alleging that certain patents associated with sofosbuvir are invalid as either not novel or obvious. We strongly believe I-MAK’s petitions are without merit and that sofosbuvir, the only approved HCV drug of its kind, is both novel and not obvious. Accordingly, we will defend against these allegations. If the PTAB decides to initiate one or more inter partes reviews, a decision would be expected about a year later. Either party can appeal the PTAB’s decision to the CAFC. European Patent Claims In February 2015, several parties filed oppositions in the EPO requesting revocation of our granted European patent covering sofosbuvir that expires in 2028. In October 2016, the EPO upheld the validity of certain claims of our sofosbuvir patent. We have appealed this decision, seeking to restore all of the original claims, and several of the original opposing parties have also appealed, requesting full revocation. The appeal process may take several years. In April 2017, several parties filed oppositions in the EPO requesting revocation of our granted European patent relating to sofosbuvir that expires in 2024. In January 2016, several parties filed oppositions in the EPO requesting revocation of our granted European patent covering tenofovir alafenamide (TAF) that expires in 2021. In July 2017, the EPO upheld the validity of the claims of our TAF patent. We are awaiting a written decision from the EPO. The parties that filed the oppositions may appeal this decision. The appeal process may take several years. In July 2017, several parties filed oppositions in the EPO requesting revocation of our granted European patent relating to TAF hemifumarate that expires in 2032. In March 2016, three parties filed oppositions in the EPO requesting revocation of our granted European patent covering cobicistat that expires in 2027. While we are confident in the strength of our patents, we cannot predict the ultimate outcome of these oppositions. If we are unsuccessful in defending these oppositions, some or all of our patent claims may be narrowed or revoked and the patent protection for sofosbuvir, TAF and cobicistat in Europe could be substantially shortened or eliminated entirely. If our patents are revoked, and no other European patents are granted covering these compounds, our exclusivity may be based entirely on regulatory exclusivity granted by the European Medicines Agency. Sovaldi has been granted regulatory exclusivity that will prevent generic sofosbuvir from entering the European Union for 10 years following approval of Sovaldi, or January 2024. If we lose patent protection for sofosbuvir prior to 2028, our revenues and results of operations could be negatively impacted for the years including and succeeding the year in which such exclusivity is lost, which may cause our stock price to decline. Litigation Related to Axi-Cel In October 2017, we acquired Kite, which is now our wholly-owned subsidiary. Through the acquisition, we acquired axicabtagene ciloleucel (axi-cel), a chimeric antigen receptor T cell (CAR T) therapy. In October 2017, we received approval from FDA for axi-cel, now known commercially as Yescarta. We own patents and patent applications that claim axi-cel chimeric DNA segments. Third parties may have, or may obtain rights to, patents that allegedly could be used to prevent or attempt to prevent us from commercializing axi-cel or to require us to obtain a license in order to commercialize axi-cel. For example, we are aware that Juno Therapeutics, Inc. (Juno) has exclusively licensed Patent No. 7,446,190 (the ‘190 patent), which was issued to Sloan Kettering Cancer Center. In September 2017, Juno and Sloan Kettering Cancer Center filed a lawsuit against Kite in the U.S. District Court for the Central District of California, alleging that the commercialization of axi-cel infringes the ‘190 patent. In August 2015, Kite filed a petition for inter partes review in the USPTO alleging that the asserted claims of the ‘190 patent are invalid as obvious. In December 2016, the PTAB determined that the claims of the ‘190 patent are not invalid due to obviousness. In February 2017, Kite filed a Notice of Appeal to the CAFC. That appeal is currently pending. We cannot predict the ultimate outcome of intellectual property claims related to axi-cel. If Juno’s patent is upheld as valid and Juno successfully proves infringement of that patent by axi-cel, we could be prevented from selling Yescarta unless we were able to obtain a license to this patent. Such a license may not be available on commercially reasonable terms or at all. 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 product 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 earlier than 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. For sofosbuvir, this date falls in December 2017. Consequently, it is possible that one or more generics may file an ANDA for Sovaldi in December 2017. Current legal proceedings of significance with generic manufacturers include: HIV Products In June 2014, we received notice that Apotex Inc. (Apotex) submitted an abbreviated new drug submission (ANDS) to Health Canada requesting permission to manufacture and market a generic version of Truvada and a separate ANDS requesting permission to manufacture and market a generic version of Viread. In the notice, Apotex alleges that three of the patents associated with Truvada and two of the patents associated with Viread are invalid, unenforceable and/or will not be infringed by Apotex’s manufacture, use or sale of a generic version of Truvada or Viread. In August 2014, we filed lawsuits against Apotex in the Federal Court of Canada seeking orders of prohibition against approval of these ANDS. A hearing in those cases was held in April 2016. In July 2016, the court issued an order prohibiting Health Canada from approving Apotex’s generic version of our Viread product until the expiry of our patents in July 2017. The court declined to prohibit approval of Apotex’s generic version of our Truvada product. The court’s decision did not rule on the validity of the patents. The launch of Apotex’s generic version of our Truvada product would be at risk of infringement of our patents, including patents that we were unable to assert in the present lawsuit, and liability for our damages. Apotex has appealed the court’s decision. In February 2016, we received notice that Mylan Pharmaceuticals, Inc. (Mylan) submitted an ANDA to FDA requesting permission to manufacture and market a generic version of Tybost (cobicistat). In the notice, Mylan alleges that the patent covering cobicistat is invalid as obvious and that Mylan’s generic product cannot infringe an invalid claim. In March 2016, we filed lawsuits against Mylan in the U.S. District Court for the District of Delaware and U.S. District Court for the Northern District of West Virginia. The trial in Delaware is scheduled for January 2018, and the parties have agreed to dismiss the action in West Virginia. The patent in suit that covers Tybost is also listed in the Orange Book for Stribild and Genvoya. In May 2017, we received notice that Amneal Pharmaceuticals LLC (Amneal) submitted an ANDA to FDA requesting permission to manufacture and market a generic version of Truvada at low dosage strengths. In the notice, Amneal alleges that two patents associated with emtricitabine are invalid, unenforceable and/or will not be infringed by Amneal’s manufacture, use or sale of generic versions of Truvada at low dosage strengths. In July 2017, we filed a lawsuit against Amneal in the U.S. District Court for the District of Delaware for infringement of our patents. In June 2017, we received notice that Macleods Pharmaceuticals Ltd. (Macleods) submitted ANDAs to FDA requesting permission to manufacture and market generic versions of Truvada and Atripla. In the notices, Macleods alleges that two patents associated with emtricitabine, three patents associated with the emtricitabine and tenofovir disoproxil fumarate (TDF) fixed dose combination and three patents associated with the emtricitabine, TDF and efavirenz fixed dose combination are invalid, unenforceable and/or will not be infringed by Macleod’s manufacture, use or sale of generic versions of Truvada or Atripla. In July 2017, we filed a lawsuit against Macleods in the U.S. District Court for the District of Delaware for infringement of these patents. TAF Litigation In January 2016, AIDS Healthcare Foundation, Inc. (AHF) filed a complaint with the U.S. District Court for the Northern District of California against Gilead, Japan Tobacco, Inc. and Japan Tobacco International, U.S.A. (together, JT), and Emory University (Emory). In April 2016, AHF amended its complaint to add Janssen and Johnson & Johnson Inc. (J&J) as defendants. AHF claims that U.S. Patent Nos. 7,390,791; 7,800,788; 8,754,065; 8,148,374; and 8,633,219 are invalid. In addition, AHF claims that Gilead, independently and together with JT, Akros, Janssen and J&J, is violating federal and state antitrust and unfair competition laws in the market for sales of TAF by offering TAF as part of a fixed-dose combination product with elvitegravir, cobicistat and emtricitabine (Genvoya), a fixed-dose combination product with elvitegravir and rilpivirine (Odefsey) and in a fixed-dosed combination product with elvitegravir (Descovy). AHF sought a declaratory judgment of invalidity against each of the patents as well as monetary damages. In May 2016, we, JT, Janssen and J&J filed motions to dismiss all of AHF’s claims, which AHF opposed. In June 2016, a hearing was held on the motions to dismiss. In July 2016, the judge granted our and the other defendants’ motions and dismissed all of AHF’s claims. AHF subsequently appealed the court’s decision dismissing the challenge to the validity of our TAF patents. The appeal hearing was held in June 2017, and we are awaiting a decision. Department of Justice Investigations In June 2011, we received a subpoena from the U.S. Attorney’s Office for the Northern District of California requesting documents related to the manufacture, and related quality and distribution practices, of Complera, Atripla, Truvada, Viread, Emtriva, Hepsera and Letairis. We cooperated with the government’s inquiry. In April 2014, the U.S. Department of Justice informed us that, following an investigation, it declined to intervene in a False Claims Act lawsuit filed by two former employees. In April 2014, the former employees served a First Amended Complaint. In January 2015, the federal district court issued an order granting in its entirety, without prejudice, our motion to dismiss the First Amended Complaint. In February 2015, the plaintiffs filed a Second Amended Complaint and in June 2015, the federal district court issued an order granting our motion to dismiss the Second Amended Complaint. In July 2015, the plaintiffs filed a notice of appeal in the U.S. Court of Appeals for the Ninth Circuit. In July 2017, a three-judge panel of the Ninth Circuit reversed and remanded the case back to the U.S. District Court for the Northern District of California. We are appealing this decision to the Supreme Court of the United States. In October 2017, the Ninth Circuit granted our motion to stay the case pending the appeal. In February 2016, we received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts requesting documents related to our support of 501(c)(3) organizations that provide financial assistance to patients and documents concerning our provision of financial assistance to patients for our HCV products. Other companies have disclosed similar inquiries. We are cooperating with this inquiry. In October 2017, we received a civil investigative demand from the U.S. Attorney’s Office for the District of Massachusetts requesting documents related to our copay coupon program and Medicaid price reporting methodology. We intend to cooperate with this inquiry. Other Matters We are a party to various legal actions that arose in the ordinary course of our business. We do not believe that these other legal actions will have a material adverse impact on our consolidated business, financial position or results of operations. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY The following table summarizes the changes in stockholders’ equity (in millions): Gilead Stockholders ’ Equity Noncontrolling Interest Total Stockholders ’ Equity Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Shares Amount Balance at December 31, 2016 1,310 $ 1 $ 454 $ 278 $ 18,154 $ 476 $ 19,363 Net income (loss) — — — — 8,493 (13 ) 8,480 Other comprehensive loss, net of tax — — — (29 ) — — (29 ) Change in noncontrolling interest — — — — — (54 ) (54 ) Issuances under employee stock purchase plan 1 — 83 — — — 83 Issuances under equity incentive plans 9 — 95 — — — 95 Stock-based compensation — — 305 — — — 305 Repurchases of common stock (13 ) — (31 ) — (903 ) — (934 ) Dividends declared — — — — (2,055 ) — (2,055 ) Balance at September 30, 2017 1,307 $ 1 $ 906 $ 249 $ 23,689 $ 409 $ 25,254 Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in AOCI by component, net of tax (in millions): Foreign Currency Translation Unrealized Gains and Losses on Available-for-Sale Securities Unrealized Gains and Losses on Cash Flow Hedges Total Balance at December 31, 2016 $ 132 $ (16 ) $ 162 $ 278 Other comprehensive income (loss) before reclassifications (51 ) 311 (278 ) (18 ) Amounts reclassified from AOCI — (7 ) (4 ) (11 ) Net current period other comprehensive income (loss) (51 ) 304 (282 ) (29 ) Balance at September 30, 2017 $ 81 $ 288 $ (120 ) $ 249 The amounts reclassified for gains and losses on cash flow hedges are recorded as part of Product sales on our Condensed Consolidated Statements of Income. See Note 4 , Derivative Financial Instruments for additional information. Amounts reclassified for gains and losses on available-for-sale securities are recorded as part of Other income (expense), net , on our Condensed Consolidated Statements of Income. Stock Repurchase Program In the first quarter of 2016, our Board of Directors authorized a $12.0 billion stock repurchase program (2016 Program) under which repurchases may be made in the open market or in privately negotiated transactions. We started repurchases under the 2016 Program in April 2016. During the nine months ended September 30, 2017 , we repurchased and retired 12 million shares of our common stock for $848 million through open market transactions under the 2016 Program. As of September 30, 2017 , the remaining authorized repurchase amount under the 2016 Program was $8.2 billion . |
Net Income Per Share Attributab
Net Income Per Share Attributable to Gilead Common Stockholders | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Share Attributable to Gilead Common Stockholders | NET INCOME PER SHARE ATTRIBUTABLE TO GILEAD COMMON STOCKHOLDERS Basic net income per share attributable to Gilead common stockholders is calculated based on the weighted-average number of shares of our common stock outstanding during the period. Diluted net income per share attributable to Gilead common stockholders is calculated based on the weighted-average number of shares of our common stock outstanding and other dilutive securities outstanding during the period. The potentially dilutive shares of our common stock resulting from the assumed exercise of outstanding stock options and equivalents, the assumed conversion of our outstanding convertible senior notes and the assumed exercise of the warrants related to our outstanding convertible senior notes were determined under the treasury stock method. Both the convertible senior notes and the associated warrants were settled in 2016. We have excluded stock options and equivalents of 9 million for the three and nine months ended September 30, 2017 and 4 million for the three and nine months ended September 30, 2016 from the computation of diluted net income per share attributable to Gilead common stockholders because their effect was antidilutive. The following table summarizes the calculation of basic and diluted net income per share attributable to Gilead common stockholders (in millions, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net income attributable to Gilead $ 2,718 $ 3,330 $ 8,493 $ 10,393 Shares used in per share calculation - basic 1,306 1,322 1,307 1,347 Effect of dilutive securities: Stock options and equivalents 13 13 12 15 Conversion spread related to the convertible senior notes — — — 2 Warrants related to the convertible senior notes — 4 — 5 Shares used in per share calculation - diluted 1,319 1,339 1,319 1,369 Net income per share attributable to Gilead common stockholders - basic $ 2.08 $ 2.52 $ 6.50 $ 7.72 Net income per share attributable to Gilead common stockholders - diluted $ 2.06 $ 2.49 $ 6.44 $ 7.59 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | 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. Therefore, our results of operations are reported on a consolidated basis consistent with internal management reporting reviewed by our chief operating decision maker, our Chief Executive Officer. Total product sales on an individual product basis are summarized in the following table (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Antiviral products: Genvoya $ 988 $ 461 $ 2,614 $ 921 Harvoni 973 1,860 3,726 7,441 Epclusa 882 640 2,945 704 Truvada 811 858 2,337 2,698 Atripla 439 650 1,366 1,998 Descovy 316 88 853 149 Odefsey 296 105 781 174 Viread 274 303 834 862 Complera/Eviplera 237 411 744 1,160 Stribild 229 621 831 1,527 Sovaldi 219 825 847 3,460 Vosevi 123 — 123 — Other 56 19 122 56 Total antiviral products 5,843 6,841 18,123 21,150 Other products: Letairis 213 215 654 593 Ranexa 164 170 517 467 AmBisome 92 91 276 262 Zydelig 40 39 110 129 Other 50 49 145 136 Total product sales $ 6,402 $ 7,405 $ 19,825 $ 22,737 The following table summarizes revenues from each of our customers who individually accounted for 10% or more of our total revenues (as a percentage of total revenues): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 McKesson Corp. 25 % 23 % 23 % 22 % AmerisourceBergen Corp. 21 % 18 % 20 % 18 % Cardinal Health, Inc. 19 % 16 % 18 % 16 % |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Our effective income tax rates of 26.1% and 25.6% for the three and nine months ended September 30, 2017 , respectively, differed from the U.S. federal statutory rate of 35% primarily due to earnings from non-U.S. subsidiaries that operate in jurisdictions with lower tax rates than the United States and where the earnings are considered indefinitely reinvested, partially offset by state taxes, and our portion of the non-tax deductible branded prescription drug fee. We file federal, state and foreign income tax returns in the United States and in many foreign jurisdictions. For federal and California income tax purposes, the statute of limitations is open for 2010 and onwards. For certain acquired entities, the statute of limitations is open for all years from inception due to our utilization of their net operating losses and credits carried over from prior years. 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 the tax years from 2010 to 2014 and by various state and foreign jurisdictions. There are differing interpretations of tax laws and regulations and, as a result, significant disputes may arise with these tax authorities involving issues of 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. We record liabilities related to uncertain tax positions in accordance with the income tax guidance which 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. Resolution of one or more of these uncertain tax positions in any period may have a material impact on the results of operations for that period. We believe that in the coming 12 months, it is reasonably possible that audits in multiple jurisdictions will conclude or that the statute of limitations on certain state and foreign income taxes will expire, or both. Given the uncertainty as to ultimate settlement terms, the timing of payment, and the impact of such settlements on other uncertain tax positions, an estimate of the range of change to the unrecognized tax benefits cannot be made. |
Subsequent Event (Notes)
Subsequent Event (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENT Kite Pharma, Inc. On October 3, 2017 , the closing date, we acquired all of the outstanding common stock of Kite. As a result, Kite became our wholly-owned subsidiary. Kite uses a patient’s own immune cells to fight cancer. Kite has developed engineered cell therapies that express either a chimeric antigen receptor (CAR) or an engineered T cell receptor, depending on the type of cancer. Kite’s most advanced therapy candidate, axi-cel, is a CAR T therapy. In October 2017, axi-cel, now known commercially as Yescarta, was approved by FDA, making it the first to market as a treatment for refractory aggressive non-Hodgkin lymphoma, which includes diffuse large B-cell lymphoma (DLBCL), transformed follicular lymphoma (TFL) and primary mediastinal B-cell lymphoma (PMBCL). A marketing authorization application has also been filed for axi-cel for the treatment of relapsed/refractory DLBCL, TFL and PMBCL with the European Medicines Agency, representing the first known submission in Europe for a CAR T therapy. Kite has additional candidates in clinical trials in both hematologic cancers and solid tumors, including KITE-585, a CAR T therapy candidate that targets B-cell maturation antigen expressed in multiple myeloma. This transaction will be accounted for as a business combination. The acquisition price was approximately $11.2 billion , consisting of approximately $11.1 billion in cash and approximately $0.1 billion representing the portion of the replaced stock-based compensation attributable to the pre-combination period. In addition, approximately $0.7 billion was excluded from the acquisition price representing the portion of the replaced stock-based compensation attributable to the post combination period, which is expected to be recognized through 2021. Given the timing of the closing of this transaction, we are currently in the process of valuing the assets acquired and liabilities assumed in the business combination. As a result, we are not yet able to provide the amounts to be recognized as of the closing date for the major classes of assets acquired and liabilities assumed and other related disclosures. We will include this and other related information in our Annual Report on Form 10-K for the year ending December 31, 2017. We financed the transaction with $3.0 billion in senior unsecured notes issued in September 2017, a $6.0 billion term loan facility credit agreement entered into in September 2017 and drawn in October 2017, as well as cash on hand. See Note 8 , Debt and Credit Facilities for additional information. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. The financial statements include all adjustments, consisting of normal recurring adjustments that the management of Gilead Sciences, Inc. (Gilead, we, our or us) believes are necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period. The accompanying Condensed Consolidated Financial Statements include the accounts of Gilead, our wholly-owned subsidiaries and certain variable interest entities for which we are the primary beneficiary. All intercompany transactions have been eliminated. For consolidated entities where we own or are exposed to less than 100% of the economics, we record net income or loss attributable to noncontrolling interest in our Condensed Consolidated Statements of Income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. We assess whether we are the primary beneficiary of a variable interest entity (VIE) at the inception of the arrangement and at each reporting date. This assessment is based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or our right to receive benefits from the VIE that could potentially be significant to the VIE. As of September 30, 2017 , the only material VIE was our joint venture with Bristol-Myers Squibb Company (BMS), which is described in Note 7 , Collaborative Arrangements. The accompanying Condensed Consolidated Financial Statements and related Notes to Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the related notes thereto for the year ended December 31, 2016 , included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission. |
Significant Accounting Policies, Estimates and Judgments | Significant Accounting Policies, Estimates and Judgments The preparation of these Condensed Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an ongoing basis, we evaluate our significant accounting policies and estimates. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates are assessed each period and updated to reflect current information. Actual results may differ significantly from these estimates. |
Concentrations of Risk | Concentrations of Risk We are subject to credit risk from our portfolio of cash, cash equivalents and marketable securities. Under our investment policy, we limit amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. We are not exposed to any significant concentrations of credit risk from these financial instruments. The goals of our investment policy, in order of priority, are as follows: safety and preservation of principal and diversification of risk, liquidity of investments sufficient to meet cash flow requirements and a competitive after-tax rate of return. We are also subject to credit risk from our accounts receivable related to our product sales. The majority of our trade accounts receivable arises from product sales in the United States and Europe. To date, we have not experienced significant losses with respect to the collection of our accounts receivable. We believe that our allowance for doubtful accounts was adequate at September 30, 2017 . |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Balance Sheet Classification of Deferred Taxes.” We adopted this standard on a retrospective basis in the first quarter of 2017. ASU 2015-17 requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet. As a result, our Condensed Consolidated Balance Sheet as of December 31, 2016 was retrospectively adjusted, resulting in a reduction in Total current assets of $857 million and an increase in Long-term deferred tax assets of $857 million . The resulting reclassification of our deferred tax liabilities was not material. In March 2016, the FASB issued Accounting Standards Update No. 2016-09 (ASU 2016-09) “Improvements to Employee Share-Based Payment Accounting.” We adopted this standard in the first quarter of 2017. One aspect of the standard requires that excess tax benefits and deficiencies that arise upon vesting or exercise of share-based awards be recognized in the income statement on a prospective basis. Under previous guidance, the tax effects were recorded in additional paid-in capital. As a result, we recognized $27 million and $60 million of excess tax benefits in Provision for income taxes on our Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2017 , respectively. The resulting impact to the shares used in the calculation of diluted earnings per share for the three and nine months ended September 30, 2017 was not material. Additionally, as allowed by the standard, we elected to continue to estimate potential forfeitures. Another aspect of ASU 2016-09 amends the presentation of certain share-based payment items on the statement of cash flows, which we adopted on a retrospective basis. As a result, our Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2016 was adjusted to (a) reclassify $162 million of excess tax benefits from stock-based compensation from Net cash used in financing activities to Net cash provided by operating activities and (b) reclassify $163 million of employee taxes paid to tax authorities when we withheld shares to meet the minimum statutory withholding requirement from changes in Accrued liabilities within Net cash provided by operating activities to Other within Net cash used in financing activities. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09) “Revenue from Contracts with Customers.” The standard’s core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will become effective for us beginning in the first quarter of 2018. Early adoption is permitted in 2017. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. The FASB issued supplemental adoption guidance and clarification to ASU 2014-09 in March 2016, April 2016, May 2016 and December 2016 within ASU 2016-08 “Revenue from Contracts with Customers: Principal versus Agent Considerations,” ASU 2016-10 “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing,” ASU 2016-12 “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients” and ASU 2016-20 “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” respectively. We expect to adopt these standards using the modified retrospective approach. The cumulative effect of adopting these standards will be recorded to retained earnings on January 1, 2018. We have completed our initial assessment of the effect of adoption. Based on this assessment, we expect changes in our revenue recognition policy relating to royalty revenues and certain other revenues that are currently recognized on a cash basis or sell through method. Upon adoption of these standards, these revenues will be recognized in the periods in which the sales occur, subject to the constraint on variable consideration. We currently do not expect that adopting these standards will have a material impact on our Condensed Consolidated Financial Statements. In January 2016, the FASB issued Accounting Standards Update No. 2016-01 (ASU 2016-01) “Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 changes accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, it clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The guidance will become effective for us beginning in the first quarter of 2018 and must be adopted using a modified retrospective approach, with certain exceptions. Early adoption is permitted for certain provisions. We plan to adopt this guidance in the first quarter of 2018. We expect an impact primarily related to the recognition and measurement of our available-for-sale equity securities; however, the impact of the adoption of this standard on our Condensed Consolidated Financial Statements will depend on the fair value of our equity securities as of the date of the adoption. In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02) “Leases.” ASU 2016-02 amends a number of aspects of lease accounting, including requiring lessees to recognize almost all leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. The guidance will become effective for us beginning in the first quarter of 2019 and is required to be adopted using a modified retrospective approach. Early adoption is permitted. We are evaluating the impact of the adoption of this standard, and we anticipate recognition of additional assets and corresponding liabilities related to leases on our Condensed Consolidated Balance Sheets. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. This guidance will become effective for us beginning in the first quarter of 2020 and must be adopted using a modified retrospective approach, with certain exceptions. Early adoption is permitted beginning in the first quarter of 2019. We are evaluating the impact of the adoption of this standard on our Condensed Consolidated Financial Statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01 (ASU 2017-01) “Clarifying the Definition of a Business.” ASU 2017-01 clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. This guidance will become effective for us beginning in the first quarter of 2018 and is required to be adopted on a prospective basis. Early adoption is permitted. We anticipate that the adoption of this guidance will result in more transactions being accounted for as asset acquisitions rather than business acquisitions. In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04) “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment.” ASU 2017-04 simplifies the goodwill impairment test. Under the new guidance, goodwill impairment will be measured by the amount by which the carrying value of a reporting unit exceeds its fair value, without exceeding the carrying amount of goodwill allocated to that reporting unit. This guidance will become effective for us beginning in the first quarter of 2020 and is required to be adopted on a prospective basis. Early adoption is permitted. We currently do not expect that adopting this standard will have a material impact on our Condensed Consolidated Financial Statements. In February 2017, the FASB issued Accounting Standards Update No. 2017-05 (ASU 2017-05) “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU 2017-05 clarifies the scope of the derecognition of nonfinancial assets, defines in substance financial assets, adds guidance for partial sales of nonfinancial assets and clarifies the recognition of gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. This guidance will become effective for us beginning in the first quarter of 2018 and may be adopted using either a full retrospective or a modified retrospective approach. Early adoption is permitted. We are required to adopt the amendments in this standard at the same time that we adopt the amendments in ASU 2014-09. We plan to adopt this guidance in the first quarter of 2018 using a modified retrospective approach. We are evaluating the impact of the adoption of this standard on our Condensed Consolidated Financial Statements. |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Commitments and Contingencies, Policy | We are a party to various legal actions. The most significant of these 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 loss is reasonably possible and the loss or range of loss can be estimated, we disclose the possible loss. Unless otherwise noted, it is not possible to determine the outcome of these matters, and we cannot reasonably estimate the maximum potential exposure or the range of possible loss. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |
Summary of assets and liabilities measured at fair value | 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 (in millions): September 30, 2017 December 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Corporate debt securities $ — $ 14,845 $ — $ 14,845 $ — $ 12,603 $ — $ 12,603 U.S. treasury securities 4,125 — — 4,125 5,529 — — 5,529 Money market funds 9,025 — — 9,025 5,464 — — 5,464 Residential mortgage and asset-backed securities — 4,213 — 4,213 — 3,602 — 3,602 U.S. government agencies securities — 958 — 958 — 975 — 975 Certificates of deposit — 5,511 — 5,511 — 943 — 943 Non-U.S. government securities — 684 — 684 — 720 — 720 Municipal debt securities — 10 — 10 — 27 — 27 Equity securities 683 — — 683 428 — — 428 Foreign currency derivative contracts — 30 — 30 — 336 — 336 Deferred compensation plan 110 — — 110 84 — — 84 Total $ 13,943 $ 26,251 $ — $ 40,194 $ 11,505 $ 19,206 $ — $ 30,711 Liabilities: Deferred compensation plan $ 110 $ — $ — $ 110 $ 84 $ — $ — $ 84 Foreign currency derivative contracts — 101 — 101 — 37 — 37 Contingent consideration — — 16 16 — — 25 25 Total $ 110 $ 101 $ 16 $ 227 $ 84 $ 37 $ 25 $ 146 |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Available-for-Sale Securities at Estimated Fair Value | The following table summarizes our available-for-sale securities (in millions): September 30, 2017 December 31, 2016 Amortized Gross Gross Estimated Amortized Gross Gross Estimated Corporate debt securities $ 14,858 $ 10 $ (23 ) $ 14,845 $ 12,657 $ 7 $ (61 ) $ 12,603 U.S. treasury securities 4,147 — (22 ) 4,125 5,558 1 (30 ) 5,529 Money market funds 9,025 — — 9,025 5,464 — — 5,464 Residential mortgage and asset-backed securities 4,221 1 (9 ) 4,213 3,613 2 (13 ) 3,602 U.S. government agencies securities 963 — (5 ) 958 981 — (6 ) 975 Certificates of deposit 5,511 — — 5,511 943 — — 943 Non-U.S. government securities 687 — (3 ) 684 725 — (5 ) 720 Municipal debt securities 10 — — 10 27 — — 27 Equity securities 357 326 — 683 357 71 — 428 Total $ 39,779 $ 337 $ (62 ) $ 40,054 $ 30,325 $ 81 $ (115 ) $ 30,291 |
Summary of the Classification of Available-for-Sale Securities | The following table summarizes the classification of our available-for-sale securities on our Condensed Consolidated Balance Sheets (in millions): September 30, 2017 December 31, 2016 Cash and cash equivalents $ 9,519 $ 5,712 Short-term marketable securities 16,879 3,666 Prepaid and other current assets 683 — Long-term marketable securities 12,973 20,485 Other long-term assets — 428 Total $ 40,054 $ 30,291 |
Summary of Available-for-Sale Securities by Contractual Maturity | The following table summarizes our available-for-sale securities by contractual maturity (in millions): September 30, 2017 Amortized Cost Fair Value Within one year $ 26,408 $ 26,398 After one year through five years 12,867 12,827 After five years through ten years 106 105 After ten years 41 41 Total $ 39,422 $ 39,371 |
Summary of Available-for-Sale Securities in a Continuous Loss Position Deemed not to be Other-than-Temporarily Impaired | The following table summarizes our available-for-sale securities that were in a continuous unrealized loss position but were not deemed to be other-than-temporarily impaired (in millions): Less Than 12 Months 12 Months or Greater Total Gross Estimated Gross Estimated Gross Estimated September 30, 2017 Corporate debt securities $ (13 ) $ 5,990 $ (10 ) $ 1,654 $ (23 ) $ 7,644 U.S. treasury securities (13 ) 2,771 (9 ) 1,293 (22 ) 4,064 Residential mortgage and asset-backed securities (7 ) 2,802 (2 ) 151 (9 ) 2,953 U.S. government agencies securities (3 ) 664 (2 ) 247 (5 ) 911 Non-U.S. government securities (2 ) 462 (1 ) 222 (3 ) 684 Certificates of deposit — 12 — — — 12 Total $ (38 ) $ 12,701 $ (24 ) $ 3,567 $ (62 ) $ 16,268 December 31, 2016 Corporate debt securities $ (60 ) $ 8,685 $ (1 ) $ 155 $ (61 ) $ 8,840 U.S. treasury securities (30 ) 5,081 — — (30 ) 5,081 Residential mortgage and asset-backed securities (13 ) 2,180 — 42 (13 ) 2,222 U.S. government agencies securities (6 ) 897 — — (6 ) 897 Non-U.S. government securities (5 ) 714 — 5 (5 ) 719 Certificates of deposit — 15 — — — 15 Municipal debt securities — 11 — — — 11 Total $ (114 ) $ 17,583 $ (1 ) $ 202 $ (115 ) $ 17,785 |
Derivative Financial Instrume26
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of classification and fair value of derivative instruments | The following table summarizes the classification and fair values of derivative instruments on our Condensed Consolidated Balance Sheets (in millions): September 30, 2017 Asset Derivatives Liability Derivatives Classification Fair Value Classification Fair Value Derivatives designated as hedges: Foreign currency exchange contracts Other current assets $ 4 Other accrued liabilities $ (94 ) Foreign currency exchange contracts Other long-term assets 3 Other long-term obligations (5 ) Total derivatives designated as hedges 7 (99 ) Derivatives not designated as hedges: Foreign currency exchange contracts Other current assets 23 Other accrued liabilities (2 ) Total derivatives not designated as hedges 23 (2 ) Total derivatives $ 30 $ (101 ) December 31, 2016 Asset Derivatives Liability Derivatives Classification Fair Value Classification Fair Value Derivatives designated as hedges: Foreign currency exchange contracts Other current assets $ 225 Other accrued liabilities $ (1 ) Foreign currency exchange contracts Other long-term assets 20 Other long-term obligations — Total derivatives designated as hedges 245 (1 ) Derivatives not designated as hedges: Foreign currency exchange contracts Other current assets 81 Other accrued liabilities (34 ) Foreign currency exchange contracts Other long-term assets 10 Other long-term obligations (2 ) Total derivatives not designated as hedges 91 (36 ) Total derivatives $ 336 $ (37 ) |
Summary of effect of foreign currency exchange contracts | The following table summarizes the effect of our foreign currency exchange contracts on our Condensed Consolidated Financial Statements (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Derivatives designated as hedges: Losses recognized in AOCI (effective portion) $ (78 ) $ (43 ) $ (289 ) $ (258 ) Gains (losses) reclassified from AOCI into product sales (effective portion) $ (26 ) $ (9 ) $ 4 $ 67 Gains recognized in Other income (expense), net (ineffective portion and amounts excluded from effectiveness testing) $ 10 $ 11 $ 32 $ 38 Derivatives not designated as hedges: Losses recognized in Other income (expense), net $ (2 ) $ (62 ) $ (112 ) $ (328 ) |
Summary of potential effect of offsetting derivatives | The following table summarizes the potential effect of offsetting derivatives by type of financial instrument on our Condensed Consolidated Balance Sheets (in millions): Gross Amounts Not Offset on our Condensed Consolidated Balance Sheets Description Gross Amounts of Recognized Assets/Liabilities Gross Amounts Offset on our Condensed Consolidated Balance Sheets Amounts of Assets/Liabilities Presented on our Condensed Consolidated Balance Sheets Derivative Financial Instruments Cash Collateral Received/ Pledged Net Amount (Legal Offset) As of September 30, 2017 Derivative assets $ 30 $ — $ 30 $ (24 ) $ — $ 6 Derivative liabilities (101 ) — (101 ) 24 — (77 ) As of December 31, 2016 Derivative assets $ 336 $ — $ 336 $ (37 ) $ — $ 299 Derivative liabilities (37 ) — (37 ) 37 — — |
Other Financial Information (Ta
Other Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Financial Information [Abstract] | |
Schedule of Inventories | Inventories are summarized as follows (in millions): September 30, 2017 December 31, 2016 Raw materials $ 1,701 $ 1,610 Work in process 673 626 Finished goods 797 928 Total $ 3,171 $ 3,164 Reported as: Inventories $ 1,144 $ 1,587 Other long-term assets 2,027 1,577 Total $ 3,171 $ 3,164 |
Schedule of Other Accrued Liabilities | The components of other accrued liabilities are summarized as follows (in millions): September 30, 2017 December 31, 2016 Compensation and employee benefits $ 339 $ 398 Accrued interest 210 290 Branded prescription drug fee 189 481 Other accrued expenses 1,744 1,822 Total $ 2,482 $ 2,991 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Summary of Finite-Lived Intangible Assets | The following table summarizes our finite-lived intangible assets (in millions): September 30, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible asset - sofosbuvir $ 10,720 $ 2,680 $ 8,040 $ 10,720 $ 2,156 $ 8,564 Intangible asset - Ranexa 688 541 147 688 467 221 Other 455 300 155 455 269 186 Total $ 11,863 $ 3,521 $ 8,342 $ 11,863 $ 2,892 $ 8,971 |
Schedule of Estimated Future Amortization Expense | As of September 30, 2017 , the estimated future amortization expense associated with our finite-lived intangible assets is as follows (in millions): Fiscal Year Amount 2017 (remaining three months) $ 210 2018 850 2019 739 2020 713 2021 713 Thereafter 5,117 Total $ 8,342 |
Collaborative Arrangements (Tab
Collaborative Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Collaborative Arrangements [Abstract] | |
Schedule of Financial Information for Joint Venture | Selected financial information for the joint venture was as follows (in millions): September 30, 2017 December 31, 2016 Total assets $ 1,499 $ 1,918 Cash and cash equivalents 100 92 Accounts receivable, net 197 229 Inventories 1,191 1,579 Total liabilities 512 772 Accounts payable 222 434 Other accrued liabilities 290 338 |
Debt and Credit Facility (Table
Debt and Credit Facility (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Debt Carrying Amount | The following table summarizes our borrowings under various financing arrangements (in millions): Carrying Amount Type of Borrowing Issue Date Due Date Interest Rate September 30, 2017 December 31, 2016 Senior Unsecured September 2015 September 2018 1.85% $ 999 $ 998 Senior Unsecured September 2017 September 2018 3-month LIBOR + 0.17% 748 — Senior Unsecured September 2017 March 2019 3-month LIBOR + 0.22% 748 — Senior Unsecured March 2014 April 2019 2.05% 499 499 Senior Unsecured September 2017 September 2019 1.85% 996 — Senior Unsecured September 2017 September 2019 3-month LIBOR + 0.25% 498 — Senior Unsecured November 2014 February 2020 2.35% 498 498 Senior Unsecured September 2015 September 2020 2.55% 1,993 1,991 Senior Unsecured March 2011 April 2021 4.50% 995 994 Senior Unsecured December 2011 December 2021 4.40% 1,246 1,245 Senior Unsecured September 2016 March 2022 1.95% 497 497 Senior Unsecured September 2015 September 2022 3.25% 996 995 Senior Unsecured September 2016 September 2023 2.50% 745 744 Senior Unsecured March 2014 April 2024 3.70% 1,742 1,741 Senior Unsecured November 2014 February 2025 3.50% 1,744 1,743 Senior Unsecured September 2015 March 2026 3.65% 2,728 2,726 Senior Unsecured September 2016 March 2027 2.95% 1,244 1,243 Senior Unsecured September 2015 September 2035 4.60% 989 989 Senior Unsecured September 2016 September 2036 4.00% 740 739 Senior Unsecured December 2011 December 2041 5.65% 995 995 Senior Unsecured March 2014 April 2044 4.80% 1,733 1,732 Senior Unsecured November 2014 February 2045 4.50% 1,730 1,729 Senior Unsecured September 2015 March 2046 4.75% 2,215 2,214 Senior Unsecured September 2016 March 2047 4.15% 1,723 1,723 Floating-rate Borrowings May 2016 May 2019 Variable 221 311 Total debt, net 29,262 26,346 Less current portion 1,747 — Total long-term debt, net $ 27,515 $ 26,346 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Summary of Changes in Stockholders Equity | The following table summarizes the changes in stockholders’ equity (in millions): Gilead Stockholders ’ Equity Noncontrolling Interest Total Stockholders ’ Equity Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Shares Amount Balance at December 31, 2016 1,310 $ 1 $ 454 $ 278 $ 18,154 $ 476 $ 19,363 Net income (loss) — — — — 8,493 (13 ) 8,480 Other comprehensive loss, net of tax — — — (29 ) — — (29 ) Change in noncontrolling interest — — — — — (54 ) (54 ) Issuances under employee stock purchase plan 1 — 83 — — — 83 Issuances under equity incentive plans 9 — 95 — — — 95 Stock-based compensation — — 305 — — — 305 Repurchases of common stock (13 ) — (31 ) — (903 ) — (934 ) Dividends declared — — — — (2,055 ) — (2,055 ) Balance at September 30, 2017 1,307 $ 1 $ 906 $ 249 $ 23,689 $ 409 $ 25,254 |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in AOCI by component, net of tax (in millions): Foreign Currency Translation Unrealized Gains and Losses on Available-for-Sale Securities Unrealized Gains and Losses on Cash Flow Hedges Total Balance at December 31, 2016 $ 132 $ (16 ) $ 162 $ 278 Other comprehensive income (loss) before reclassifications (51 ) 311 (278 ) (18 ) Amounts reclassified from AOCI — (7 ) (4 ) (11 ) Net current period other comprehensive income (loss) (51 ) 304 (282 ) (29 ) Balance at September 30, 2017 $ 81 $ 288 $ (120 ) $ 249 |
Net Income Per Share Attribut32
Net Income Per Share Attributable to Gilead Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of the Calculation of Basic and Diluted Earnings Per Share | The following table summarizes the calculation of basic and diluted net income per share attributable to Gilead common stockholders (in millions, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net income attributable to Gilead $ 2,718 $ 3,330 $ 8,493 $ 10,393 Shares used in per share calculation - basic 1,306 1,322 1,307 1,347 Effect of dilutive securities: Stock options and equivalents 13 13 12 15 Conversion spread related to the convertible senior notes — — — 2 Warrants related to the convertible senior notes — 4 — 5 Shares used in per share calculation - diluted 1,319 1,339 1,319 1,369 Net income per share attributable to Gilead common stockholders - basic $ 2.08 $ 2.52 $ 6.50 $ 7.72 Net income per share attributable to Gilead common stockholders - diluted $ 2.06 $ 2.49 $ 6.44 $ 7.59 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Summary of Product Sales by Product | Total product sales on an individual product basis are summarized in the following table (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Antiviral products: Genvoya $ 988 $ 461 $ 2,614 $ 921 Harvoni 973 1,860 3,726 7,441 Epclusa 882 640 2,945 704 Truvada 811 858 2,337 2,698 Atripla 439 650 1,366 1,998 Descovy 316 88 853 149 Odefsey 296 105 781 174 Viread 274 303 834 862 Complera/Eviplera 237 411 744 1,160 Stribild 229 621 831 1,527 Sovaldi 219 825 847 3,460 Vosevi 123 — 123 — Other 56 19 122 56 Total antiviral products 5,843 6,841 18,123 21,150 Other products: Letairis 213 215 654 593 Ranexa 164 170 517 467 AmBisome 92 91 276 262 Zydelig 40 39 110 129 Other 50 49 145 136 Total product sales $ 6,402 $ 7,405 $ 19,825 $ 22,737 |
Summary of Revenue by Major Customers | The following table summarizes revenues from each of our customers who individually accounted for 10% or more of our total revenues (as a percentage of total revenues): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 McKesson Corp. 25 % 23 % 23 % 22 % AmerisourceBergen Corp. 21 % 18 % 20 % 18 % Cardinal Health, Inc. 19 % 16 % 18 % 16 % |
Summary of Significant Accoun34
Summary of Significant Accounting Policies Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total current assets | $ 35,317 | $ 35,317 | $ 19,588 | |
Increase (Decrease) in Accrued Liabilities, Operating Activities | (1,024) | $ 1,072 | ||
Other, Financing Activities | (141) | (249) | ||
Accounting Standards Update 2015-17 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total current assets | (857) | |||
Long-term deferred tax assets | $ 857 | |||
Accounting Standards Update 2016-09, Excess Tax Benefit Component | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Tax provision related to excess tax benefit | $ 27 | $ 60 | ||
Excess tax benefits from share-based compensation, operating activities | 162 | |||
Excess tax benefit from share-based compensation, financing activities | (162) | |||
Accounting Standards Update 2016-09, Withholding Taxes on Shares Withheld | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Increase (Decrease) in Accrued Liabilities, Operating Activities | 163 | |||
Other, Financing Activities | $ (163) |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of assets and liabilities measured at fair value (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Estimated fair value | $ 40,054 | $ 30,291 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Equity securities | 683 | 428 |
Foreign currency derivative contracts | 0 | 0 |
Deferred compensation plan | 110 | 84 |
Total | 13,943 | 11,505 |
Liabilities: | ||
Deferred compensation plan | 110 | 84 |
Foreign currency derivative contracts | 0 | 0 |
Contingent consideration | 0 | 0 |
Total | 110 | 84 |
Fair Value, Measurements, Recurring | Level 1 | Corporate debt securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. treasury securities | ||
Assets: | ||
Estimated fair value | 4,125 | 5,529 |
Fair Value, Measurements, Recurring | Level 1 | Money market funds | ||
Assets: | ||
Estimated fair value | 9,025 | 5,464 |
Fair Value, Measurements, Recurring | Level 1 | Residential mortgage and asset-backed securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. government agencies securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Certificates of deposit | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Non-U.S. government securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Municipal debt securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Equity securities | 0 | 0 |
Foreign currency derivative contracts | 30 | 336 |
Deferred compensation plan | 0 | 0 |
Total | 26,251 | 19,206 |
Liabilities: | ||
Deferred compensation plan | 0 | 0 |
Foreign currency derivative contracts | 101 | 37 |
Contingent consideration | 0 | 0 |
Total | 101 | 37 |
Fair Value, Measurements, Recurring | Level 2 | Corporate debt securities | ||
Assets: | ||
Estimated fair value | 14,845 | 12,603 |
Fair Value, Measurements, Recurring | Level 2 | U.S. treasury securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Money market funds | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Residential mortgage and asset-backed securities | ||
Assets: | ||
Estimated fair value | 4,213 | 3,602 |
Fair Value, Measurements, Recurring | Level 2 | U.S. government agencies securities | ||
Assets: | ||
Estimated fair value | 958 | 975 |
Fair Value, Measurements, Recurring | Level 2 | Certificates of deposit | ||
Assets: | ||
Estimated fair value | 5,511 | 943 |
Fair Value, Measurements, Recurring | Level 2 | Non-U.S. government securities | ||
Assets: | ||
Estimated fair value | 684 | 720 |
Fair Value, Measurements, Recurring | Level 2 | Municipal debt securities | ||
Assets: | ||
Estimated fair value | 10 | 27 |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Equity securities | 0 | 0 |
Foreign currency derivative contracts | 0 | 0 |
Deferred compensation plan | 0 | 0 |
Total | 0 | 0 |
Liabilities: | ||
Deferred compensation plan | 0 | 0 |
Foreign currency derivative contracts | 0 | 0 |
Contingent consideration | 16 | 25 |
Total | 16 | 25 |
Fair Value, Measurements, Recurring | Level 3 | Corporate debt securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. treasury securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Money market funds | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Residential mortgage and asset-backed securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. government agencies securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Certificates of deposit | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Non-U.S. government securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Municipal debt securities | ||
Assets: | ||
Estimated fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | ||
Assets: | ||
Equity securities | 683 | 428 |
Foreign currency derivative contracts | 30 | 336 |
Deferred compensation plan | 110 | 84 |
Total | 40,194 | 30,711 |
Liabilities: | ||
Deferred compensation plan | 110 | 84 |
Foreign currency derivative contracts | 101 | 37 |
Contingent consideration | 16 | 25 |
Total | 227 | 146 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Corporate debt securities | ||
Assets: | ||
Estimated fair value | 14,845 | 12,603 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | U.S. treasury securities | ||
Assets: | ||
Estimated fair value | 4,125 | 5,529 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Money market funds | ||
Assets: | ||
Estimated fair value | 9,025 | 5,464 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Residential mortgage and asset-backed securities | ||
Assets: | ||
Estimated fair value | 4,213 | 3,602 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | U.S. government agencies securities | ||
Assets: | ||
Estimated fair value | 958 | 975 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Certificates of deposit | ||
Assets: | ||
Estimated fair value | 5,511 | 943 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Non-U.S. government securities | ||
Assets: | ||
Estimated fair value | 684 | 720 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Municipal debt securities | ||
Assets: | ||
Estimated fair value | $ 10 | $ 27 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Carrying value of debt | $ 29,262 | $ 26,346 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Estimated fair value of debt | $ 31,100 | $ 27,000 |
Available-for-Sale Securities -
Available-for-Sale Securities - Summary of Available-for-Sale Securities at Estimated Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Available-for-Sale Securities | ||
Amortized Cost | $ 39,779 | $ 30,325 |
Gross Unrealized Gains | 337 | 81 |
Gross Unrealized Losses | (62) | (115) |
Estimated Fair Value | 40,054 | 30,291 |
Corporate debt securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 14,858 | 12,657 |
Gross Unrealized Gains | 10 | 7 |
Gross Unrealized Losses | (23) | (61) |
Estimated Fair Value | 14,845 | 12,603 |
U.S. treasury securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 4,147 | 5,558 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (22) | (30) |
Estimated Fair Value | 4,125 | 5,529 |
Money market funds | ||
Available-for-Sale Securities | ||
Amortized Cost | 9,025 | 5,464 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 9,025 | 5,464 |
Residential mortgage and asset-backed securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 4,221 | 3,613 |
Gross Unrealized Gains | 1 | 2 |
Gross Unrealized Losses | (9) | (13) |
Estimated Fair Value | 4,213 | 3,602 |
U.S. government agencies securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 963 | 981 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (5) | (6) |
Estimated Fair Value | 958 | 975 |
Certificates of deposit | ||
Available-for-Sale Securities | ||
Amortized Cost | 5,511 | 943 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 5,511 | 943 |
Non-U.S. government securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 687 | 725 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (3) | (5) |
Estimated Fair Value | 684 | 720 |
Municipal debt securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 10 | 27 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 10 | 27 |
Equity Securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 357 | 357 |
Gross Unrealized Gains | 326 | 71 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 683 | $ 428 |
Available-for-Sale Securities38
Available-for-Sale Securities - Summary of the Balance Sheet Classification of Available-for-Sale Securities (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Classification on Condensed Consolidated Balance Sheets | ||
Cash and cash equivalents | $ 9,519 | $ 5,712 |
Short-term marketable securities | 16,879 | 3,666 |
Prepaid and other current assets | 683 | 0 |
Long-term marketable securities | 12,973 | 20,485 |
Other long-term assets | 0 | 428 |
Total | $ 40,054 | $ 30,291 |
Available-for-Sale Securities39
Available-for-Sale Securities - Summary of Available-for-Sale Securities by Contractual Maturity (Details) $ in Millions | Sep. 30, 2017USD ($) |
Amortized Cost | |
Within one year | $ 26,408 |
After one year through five years | 12,867 |
After five years through ten years | 106 |
After ten years | 41 |
Total | 39,422 |
Fair Value | |
Within one year | 26,398 |
After one year through five years | 12,827 |
After five years through ten years | 105 |
After ten years | 41 |
Total | $ 39,371 |
Available-for-Sale Securities40
Available-for-Sale Securities - Summary of Available-for-Sale Securities in a Continuous Unrealized Loss Position Deemed not to be Other-than-Temporarily Impaired (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | $ (38) | $ (114) |
Less than 12 Months, Fair Value | 12,701 | 17,583 |
12 Months or Greater, Unrealized Losses | (24) | (1) |
12 Months or Greater, Fair Value | 3,567 | 202 |
Gross Unrealized Losses | (62) | (115) |
Total Estimated Fair Value | 16,268 | 17,785 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | (13) | (60) |
Less than 12 Months, Fair Value | 5,990 | 8,685 |
12 Months or Greater, Unrealized Losses | (10) | (1) |
12 Months or Greater, Fair Value | 1,654 | 155 |
Gross Unrealized Losses | (23) | (61) |
Total Estimated Fair Value | 7,644 | 8,840 |
U.S. treasury securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | (13) | (30) |
Less than 12 Months, Fair Value | 2,771 | 5,081 |
12 Months or Greater, Unrealized Losses | (9) | 0 |
12 Months or Greater, Fair Value | 1,293 | 0 |
Gross Unrealized Losses | (22) | (30) |
Total Estimated Fair Value | 4,064 | 5,081 |
Residential mortgage and asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | (7) | (13) |
Less than 12 Months, Fair Value | 2,802 | 2,180 |
12 Months or Greater, Unrealized Losses | (2) | 0 |
12 Months or Greater, Fair Value | 151 | 42 |
Gross Unrealized Losses | (9) | (13) |
Total Estimated Fair Value | 2,953 | 2,222 |
U.S. government agencies securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | (3) | (6) |
Less than 12 Months, Fair Value | 664 | 897 |
12 Months or Greater, Unrealized Losses | (2) | 0 |
12 Months or Greater, Fair Value | 247 | 0 |
Gross Unrealized Losses | (5) | (6) |
Total Estimated Fair Value | 911 | 897 |
Non-U.S. government securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | (2) | (5) |
Less than 12 Months, Fair Value | 462 | 714 |
12 Months or Greater, Unrealized Losses | (1) | 0 |
12 Months or Greater, Fair Value | 222 | 5 |
Gross Unrealized Losses | (3) | (5) |
Total Estimated Fair Value | 684 | 719 |
Certificates of deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | 0 | 0 |
Less than 12 Months, Fair Value | 12 | 15 |
12 Months or Greater, Unrealized Losses | 0 | 0 |
12 Months or Greater, Fair Value | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Total Estimated Fair Value | $ 12 | 15 |
Municipal debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | 0 | |
Less than 12 Months, Fair Value | 11 | |
12 Months or Greater, Unrealized Losses | 0 | |
12 Months or Greater, Fair Value | 0 | |
Gross Unrealized Losses | 0 | |
Total Estimated Fair Value | $ 11 |
Available-for-Sale Securities41
Available-for-Sale Securities - Additional Information (Details) | 9 Months Ended | ||
Sep. 30, 2017USD ($)position | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)position | |
Investments, Debt and Equity Securities [Abstract] | |||
Cash excluded from available-for-sale debt securities table | $ 2,000,000,000 | $ 2,500,000,000 | |
Securities in unrealized loss positions, number of positions (securities) | position | 2,181 | 2,709 | |
Other than temporary impairment losses, investments | $ 0 | $ 0 |
Derivative Financial Instrume42
Derivative Financial Instruments - Summary of Classification and Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | $ 30 | $ 336 |
Derivative liability fair value | (101) | (37) |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 7 | 245 |
Derivative liability fair value | (99) | (1) |
Designated as Hedging Instrument | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 4 | 225 |
Designated as Hedging Instrument | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | (94) | (1) |
Designated as Hedging Instrument | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 3 | 20 |
Designated as Hedging Instrument | Other long-term obligations | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | (5) | 0 |
Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 23 | 91 |
Derivative liability fair value | (2) | (36) |
Not Designated as Hedging Instrument | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 23 | 81 |
Not Designated as Hedging Instrument | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | $ (2) | (34) |
Not Designated as Hedging Instrument | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 10 | |
Not Designated as Hedging Instrument | Other long-term obligations | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | $ (2) |
Derivative Financial Instrume43
Derivative Financial Instruments - Summary of Effect of Foreign Currency Exchange Contracts (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Losses recognized in AOCI (effective portion) | $ (78) | $ (43) | $ (289) | $ (258) |
Gains (losses) reclassified from AOCI into product sales (effective portion) | (26) | (9) | 4 | 67 |
Gains recognized in Other income (expense), net (ineffective portion and amounts excluded from effectiveness testing) | 10 | 11 | 32 | 38 |
Losses recognized in Other income (expense), net | $ (2) | $ (62) | $ (112) | $ (328) |
Derivative Financial Instrume44
Derivative Financial Instruments - Summary of Potential Effect of Offsetting Derivatives (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative Asset [Abstract] | ||
Gross Amounts of Recognized Assets/Liabilities | $ 30 | $ 336 |
Gross Amounts Offset on our Condensed Consolidated Balance Sheets | 0 | 0 |
Amounts of Assets/Liabilities Presented on our Condensed Consolidated Balance Sheets | 30 | 336 |
Derivative Financial Instruments | 24 | 37 |
Cash Collateral Received/ Pledged | 0 | 0 |
Net Amount (Legal Offset) | 6 | 299 |
Derivative Liability [Abstract] | ||
Gross Amounts of Recognized Assets/Liabilities | (101) | (37) |
Gross Amounts Offset on our Condensed Consolidated Balance Sheets | 0 | 0 |
Amounts of Assets/Liabilities Presented on our Condensed Consolidated Balance Sheets | (101) | (37) |
Derivative Financial Instruments | 24 | 37 |
Cash Collateral Received/ Pledged | 0 | 0 |
Net Amount (Legal Offset) | $ 77 | $ 0 |
Derivative Financial Instrume45
Derivative Financial Instruments - Additional Information (Details) - USD ($) $ in Billions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Notional amounts on foreign currency exchange contracts | $ 3.4 | $ 6.2 |
Maximum | ||
Derivative [Line Items] | ||
Maturity on derivative instruments | 18 months | |
Derivative Instruments, Gains (Losses) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer | 12 months |
Other Financial Information - I
Other Financial Information - Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Other Financial Information [Abstract] | ||
Raw materials | $ 1,701 | $ 1,610 |
Work in process | 673 | 626 |
Finished goods | 797 | 928 |
Total | 3,171 | 3,164 |
Inventories | 1,144 | 1,587 |
Other long-term assets | 2,027 | 1,577 |
Total | $ 3,171 | $ 3,164 |
Other Financial Information - A
Other Financial Information - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Inventories | $ 1,144 | $ 1,587 |
Efavirenz | BMS & Gilead Sciences, LLC Joint Venture | ||
Inventory [Line Items] | ||
Inventories | $ 734 | $ 1,100 |
Other Financial Information - O
Other Financial Information - Other Accrued Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Other Financial Information [Abstract] | ||
Compensation and employee benefits | $ 339 | $ 398 |
Accrued interest | 210 | 290 |
Branded prescription drug fee | 189 | 481 |
Other accrued expenses | 1,744 | 1,822 |
Total | $ 2,482 | $ 2,991 |
Intangible Assets - Summary of
Intangible Assets - Summary of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 11,863 | $ 11,863 |
Accumulated Amortization | 3,521 | 2,892 |
Finite-Lived Intangible Assets, Net | 8,342 | 8,971 |
Intangible asset - sofosbuvir | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,720 | 10,720 |
Accumulated Amortization | 2,680 | 2,156 |
Finite-Lived Intangible Assets, Net | 8,040 | 8,564 |
Intangible asset - Ranexa | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 688 | 688 |
Accumulated Amortization | 541 | 467 |
Finite-Lived Intangible Assets, Net | 147 | 221 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 455 | 455 |
Accumulated Amortization | 300 | 269 |
Finite-Lived Intangible Assets, Net | $ 155 | $ 186 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
2017 (remaining three months) | $ 210 | |
2,018 | 850 | |
2,019 | 739 | |
2,020 | 713 | |
2,021 | 713 | |
Thereafter | 5,117 | |
Finite-Lived Intangible Assets, Net | $ 8,342 | $ 8,971 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Cost of Goods Sold | ||||
Intangible Assets [Line Items] | ||||
Amortization of Intangible Assets | $ 209 | $ 210 | $ 629 | $ 630 |
Collaborative Arrangements - Sc
Collaborative Arrangements - Schedule of Financial Information for Joint Venture (Details) - BMS & Gilead Sciences, LLC Joint Venture - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Total assets | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, assets | $ 1,499 | $ 1,918 |
Cash and cash equivalents | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, assets | 100 | 92 |
Accounts receivable, net | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, assets | 197 | 229 |
Inventories | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, assets | 1,191 | 1,579 |
Total liabilities | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, liabilities | 512 | 772 |
Accounts payable | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, liabilities | 222 | 434 |
Other accrued liabilities | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, liabilities | $ 290 | $ 338 |
Debt and Credit Facility - Summ
Debt and Credit Facility - Summary of Debt Carrying Amount (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Total debt, net | $ 29,262 | $ 26,346 |
Less current portion | 1,747 | 0 |
Total long-term debt, net | $ 27,515 | 26,346 |
Senior Unsecured Notes Due in September 2018 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.85% | |
Senior unsecured notes | $ 999 | 998 |
2017 Senior Unsecured Notes Due in September 2018 | ||
Debt Instrument [Line Items] | ||
Senior unsecured notes | $ 748 | 0 |
Debt Instrument, Basis Spread on Variable Rate | 0.17% | |
Debt Instrument, Description of Variable Rate Basis | 3-month LIBOR | |
2017 Senior Unsecured Notes Due in March 2019 | ||
Debt Instrument [Line Items] | ||
Senior unsecured notes | $ 748 | 0 |
Debt Instrument, Basis Spread on Variable Rate | 0.22% | |
Debt Instrument, Description of Variable Rate Basis | 3-month LIBOR | |
Senior Unsecured Notes Due in April 2019 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.05% | |
Senior unsecured notes | $ 499 | 499 |
2017 Senior Unsecured Notes Due in September 2019 with Fixed Rate | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.85% | |
Senior unsecured notes | $ 996 | 0 |
2017 Senior Unsecured Notes Due in September 2019 with Floating Rate | ||
Debt Instrument [Line Items] | ||
Senior unsecured notes | $ 498 | 0 |
Debt Instrument, Basis Spread on Variable Rate | 0.25% | |
Debt Instrument, Description of Variable Rate Basis | 3-month LIBOR | |
Senior Unsecured Notes Due In February 2020 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.35% | |
Senior unsecured notes | $ 498 | 498 |
Senior Unsecured Notes Due in September 2020 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.55% | |
Senior unsecured notes | $ 1,993 | 1,991 |
Senior Unsecured Notes Due in April 2021 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.50% | |
Senior unsecured notes | $ 995 | 994 |
Senior Unsecured Notes Due In December 2021 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.40% | |
Senior unsecured notes | $ 1,246 | 1,245 |
Senior Unsecured Notes Due in March 2022 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.95% | |
Senior unsecured notes | $ 497 | 497 |
Senior Unsecured Notes Due in September 2022 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.25% | |
Senior unsecured notes | $ 996 | 995 |
Senior Unsecured Notes Due in September 2023 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.50% | |
Senior unsecured notes | $ 745 | 744 |
Senior Unsecured Notes Due in April 2024 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.70% | |
Senior unsecured notes | $ 1,742 | 1,741 |
Senior Unsecured Notes Due in February 2025 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.50% | |
Senior unsecured notes | $ 1,744 | 1,743 |
Senior Unsecured Notes Due in March 2026 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.65% | |
Senior unsecured notes | $ 2,728 | 2,726 |
Senior Unsecured Notes Due in March 2027 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.95% | |
Senior unsecured notes | $ 1,244 | 1,243 |
Senior Unsecured Notes Due in September 2035 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.60% | |
Senior unsecured notes | $ 989 | 989 |
Senior Unsecured Notes Due in September 2036 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.00% | |
Senior unsecured notes | $ 740 | 739 |
Senior Unsecured Notes Due in December 2041 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 5.65% | |
Senior unsecured notes | $ 995 | 995 |
Senior Unsecured Notes Due in April 2044 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.80% | |
Senior unsecured notes | $ 1,733 | 1,732 |
Senior Unsecured Notes Due in February 2045 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.50% | |
Senior unsecured notes | $ 1,730 | 1,729 |
Senior Unsecured Notes Due in March 2046 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.75% | |
Senior unsecured notes | $ 2,215 | 2,214 |
Senior Unsecured Notes Due in March 2047 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.15% | |
Senior unsecured notes | $ 1,723 | 1,723 |
Floating-rate Borrowings Due in May 2019 | ||
Debt Instrument [Line Items] | ||
Floating-rate Borrowings | $ 221 | $ 311 |
Debt and Credit Facility - Addi
Debt and Credit Facility - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended |
Oct. 31, 2017 | Sep. 30, 2017 | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | $ 0 | |
2017 Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 3,000,000,000 | |
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 101.00% | |
2017 Senior Unsecured Notes Due in September 2018 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 750,000,000 | |
2017 Senior Unsecured Notes Due in March 2019 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | 750,000,000 | |
2017 Senior Unsecured Notes Due in September 2019 with Floating Rate | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | 500,000,000 | |
2017 Senior Unsecured Notes Due in September 2019 with Fixed Rate | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 1,000,000,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 1.85% | |
Debt Instrument, Redemption Price, Percentage | 100.00% | |
Derivative, Basis Spread on Variable Rate | 0.10% | |
Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Credit Facility, Maximum Borrowing Capacity | $ 6,000,000,000 | |
364-day Senior Unsecured Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Credit Facility, Maximum Borrowing Capacity | 1,000,000,000 | |
Three-year Senior Unsecured Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Credit Facility, Maximum Borrowing Capacity | 2,500,000,000 | |
Five-year Senior Unsecured Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Credit Facility, Maximum Borrowing Capacity | 2,500,000,000 | |
Cash Bridge Facility | ||
Debt Instrument [Line Items] | ||
Credit Facility, Maximum Borrowing Capacity | 9,000,000,000 | |
Draw from Credit Facility | $ 0 | |
Subsequent Event | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Draw from Credit Facility | $ 6,000,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 5 Months Ended | 8 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Jan. 25, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | |
Loss Contingencies [Line Items] | ||||||
Loss Contingency Accrual | $ 0 | $ 0 | $ 0 | |||
Idenix '597 patent | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingencies, Damages Awarded, Percentage of Past Revenue Impacted | 10.00% | 14.00% | 10.00% | |||
Idenix '597 patent | Minimum | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency, Estimate of Possible Loss | $ 0 | $ 0 | ||||
Idenix '597 patent | Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency, Estimate of Possible Loss | 3,600,000,000 | 3,600,000,000 | ||||
Idenix '597 patent | Loss related to revenues from sofosbuvir containing products from September 2016 through January 25, 2017 | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency, Estimate of Possible Loss | 269,000,000 | 269,000,000 | ||||
Idenix '597 patent | Loss related to revenues from sofosbuvir containing products from January 26, 2017 through June 30, 2017 | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency, Estimate of Possible Loss | $ 539,000,000 | $ 539,000,000 | ||||
Idenix '597 patent | Threatened Litigation | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency, Damages Awarded, Value | $ 2,540,000,000 | |||||
Merck '499 and '712 patents | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency, Damages Awarded, Value | $ 200,000,000 | |||||
Loss Contingency, Damages Awarded but Dismissed, Value | $ 200,000,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Changes in Stockholders' Equity (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance (in shares) | 1,310 | |||
Beginning Balance | $ 19,363 | |||
Net income (loss) | $ 2,712 | $ 3,325 | 8,480 | $ 10,389 |
Other comprehensive loss, net of tax | $ 129 | $ (62) | (29) | $ (196) |
Change in noncontrolling interest | (54) | |||
Issuances under employee stock purchase plan | 83 | |||
Issuances under equity incentive plans | 95 | |||
Stock-based compensation | 305 | |||
Repurchases of common stock | (934) | |||
Dividends declared | $ (2,055) | |||
Ending Balance (in shares) | 1,307 | 1,307 | ||
Ending Balance | $ 25,254 | $ 25,254 | ||
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance (in shares) | 1,310 | |||
Beginning Balance | $ 1 | |||
Issuances under employee stock purchase plan (in shares) | 1 | |||
Issuances under equity incentive plans (in shares) | 9 | |||
Repurchases of common stock (in shares) | (13) | |||
Ending Balance (in shares) | 1,307 | 1,307 | ||
Ending Balance | $ 1 | $ 1 | ||
Additional Paid-In Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 454 | |||
Issuances under employee stock purchase plan | 83 | |||
Issuances under equity incentive plans | 95 | |||
Stock-based compensation | 305 | |||
Repurchases of common stock | (31) | |||
Ending Balance | 906 | 906 | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 278 | |||
Other comprehensive loss, net of tax | (29) | |||
Ending Balance | 249 | 249 | ||
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 18,154 | |||
Net income (loss) | 8,493 | |||
Repurchases of common stock | (903) | |||
Dividends declared | (2,055) | |||
Ending Balance | 23,689 | 23,689 | ||
Noncontrolling Interest | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 476 | |||
Net income (loss) | (13) | |||
Change in noncontrolling interest | (54) | |||
Ending Balance | $ 409 | $ 409 |
Stockholders' Equity - Summar57
Stockholders' Equity - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | $ 19,363 | |||
Net current period other comprehensive income (loss) | $ 129 | $ (62) | (29) | $ (196) |
Ending Balance | 25,254 | 25,254 | ||
Accumulated Foreign Currency Adjustment Attributable to Parent | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 132 | |||
Other comprehensive income (loss) before reclassifications | (51) | |||
Amounts reclassified from AOCI | 0 | |||
Net current period other comprehensive income (loss) | (51) | |||
Ending Balance | 81 | 81 | ||
Accumulated Net Investment Gain (Loss) Attributable to Parent | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (16) | |||
Other comprehensive income (loss) before reclassifications | 311 | |||
Amounts reclassified from AOCI | (7) | |||
Net current period other comprehensive income (loss) | 304 | |||
Ending Balance | 288 | 288 | ||
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 162 | |||
Other comprehensive income (loss) before reclassifications | (278) | |||
Amounts reclassified from AOCI | (4) | |||
Net current period other comprehensive income (loss) | (282) | |||
Ending Balance | (120) | (120) | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 278 | |||
Other comprehensive income (loss) before reclassifications | (18) | |||
Amounts reclassified from AOCI | (11) | |||
Net current period other comprehensive income (loss) | (29) | |||
Ending Balance | $ 249 | $ 249 |
Stockholders' Equity - Repurcha
Stockholders' Equity - Repurchase Authorizations (Details) - USD ($) shares in Millions | 9 Months Ended | |
Sep. 30, 2017 | Jan. 28, 2016 | |
Equity, Class of Treasury Stock [Line Items] | ||
Repurchases of common stock, amount | $ 934,000,000 | |
2016 Stock Repurchase Program | ||
Equity, Class of Treasury Stock [Line Items] | ||
Authorized amount | $ 12,000,000,000 | |
Repurchases of common stock (in shares) | 12 | |
Repurchases of common stock, amount | $ 848,000,000 | |
Remaining authorized repurchase amount | $ 8,200,000,000 |
Net Income Per Share Attribut59
Net Income Per Share Attributable to Gilead Common Stockholders - Schedule of the Calculation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to Gilead | $ 2,718 | $ 3,330 | $ 8,493 | $ 10,393 |
Shares used in per share calculation - basic (in shares) | 1,306 | 1,322 | 1,307 | 1,347 |
Effect of dilutive securities: | ||||
Stock options and equivalents (in shares) | 13 | 13 | 12 | 15 |
Conversion spread related to the convertible senior notes (in shares) | 0 | 0 | 0 | 2 |
Warrants related to the convertible senior notes (in shares) | 0 | 4 | 0 | 5 |
Shares used in per share calculation - diluted (in shares) | 1,319 | 1,339 | 1,319 | 1,369 |
Net income per share attributable to Gilead common stockholders - basic (usd per share) | $ 2.08 | $ 2.52 | $ 6.50 | $ 7.72 |
Net income per share attributable to Gilead common stockholders - diluted (usd per share) | $ 2.06 | $ 2.49 | $ 6.44 | $ 7.59 |
Net Income Per Share Attribut60
Net Income Per Share Attributable to Gilead Common Stockholders Additional Information (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Additional Information [Abstract] | ||||
Antidilutive securities excluded from earnings per share computation (in shares) | 9 | 4 | 9 | 4 |
Segment Information - Summary o
Segment Information - Summary of Product Sales by Product (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | segment | 1 | |||
Product Sales [Line Items] | ||||
Product sales | $ 6,402 | $ 7,405 | $ 19,825 | $ 22,737 |
Total antiviral products | ||||
Product Sales [Line Items] | ||||
Product sales | 5,843 | 6,841 | 18,123 | 21,150 |
Genvoya | ||||
Product Sales [Line Items] | ||||
Product sales | 988 | 461 | 2,614 | 921 |
Harvoni | ||||
Product Sales [Line Items] | ||||
Product sales | 973 | 1,860 | 3,726 | 7,441 |
Epclusa | ||||
Product Sales [Line Items] | ||||
Product sales | 882 | 640 | 2,945 | 704 |
Truvada | ||||
Product Sales [Line Items] | ||||
Product sales | 811 | 858 | 2,337 | 2,698 |
Atripla | ||||
Product Sales [Line Items] | ||||
Product sales | 439 | 650 | 1,366 | 1,998 |
Descovy | ||||
Product Sales [Line Items] | ||||
Product sales | 316 | 88 | 853 | 149 |
Odefsey | ||||
Product Sales [Line Items] | ||||
Product sales | 296 | 105 | 781 | 174 |
Viread | ||||
Product Sales [Line Items] | ||||
Product sales | 274 | 303 | 834 | 862 |
Complera/Eviplera | ||||
Product Sales [Line Items] | ||||
Product sales | 237 | 411 | 744 | 1,160 |
Stribild | ||||
Product Sales [Line Items] | ||||
Product sales | 229 | 621 | 831 | 1,527 |
Sovaldi | ||||
Product Sales [Line Items] | ||||
Product sales | 219 | 825 | 847 | 3,460 |
Vosevi | ||||
Product Sales [Line Items] | ||||
Product sales | 123 | 0 | 123 | 0 |
Other antiviral | ||||
Product Sales [Line Items] | ||||
Product sales | 56 | 19 | 122 | 56 |
Letairis | ||||
Product Sales [Line Items] | ||||
Product sales | 213 | 215 | 654 | 593 |
Ranexa | ||||
Product Sales [Line Items] | ||||
Product sales | 164 | 170 | 517 | 467 |
AmBisome | ||||
Product Sales [Line Items] | ||||
Product sales | 92 | 91 | 276 | 262 |
Zydelig | ||||
Product Sales [Line Items] | ||||
Product sales | 40 | 39 | 110 | 129 |
Other | ||||
Product Sales [Line Items] | ||||
Product sales | $ 50 | $ 49 | $ 145 | $ 136 |
Segment Information - Summary62
Segment Information - Summary of Revenue by Major Customers (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
McKesson Corp. | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of total revenues | 25.00% | 23.00% | 23.00% | 22.00% |
AmerisourceBergen Corp. | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of total revenues | 21.00% | 18.00% | 20.00% | 18.00% |
Cardinal Health, Inc. | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of total revenues | 19.00% | 16.00% | 18.00% | 16.00% |
Minimum | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of total revenues | 10.00% |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 26.10% | 25.60% |
Federal statutory income tax rate | 35.00% |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Billions | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2017 | Sep. 30, 2017 | Oct. 03, 2017 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Subsequent event, date | Oct. 3, 2017 | ||
Acquisition price | $ 11.2 | ||
Cash consideration | 11.1 | ||
Replaced stock-based compensation attributable to the pre-combination period | $ 0.1 | ||
Business Combination, Provisional Information, Initial Accounting Incomplete, Reasons | Given the timing of the closing of this transaction, we are currently in the process of valuing the assets acquired and liabilities assumed in the business combination. | ||
2017 Senior Unsecured Notes | |||
Subsequent Event [Line Items] | |||
Proceeds from Issuance of Debt | $ 3 | ||
Term Loan Facilities | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Proceeds from Issuance of Debt | $ 6 | ||
Share Based Compensation Expense | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Stock-based compensation attributable to the post combination period | $ 0.7 |