Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
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 | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 1,300,260,832 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 7,643 | $ 7,588 |
Short-term marketable securities | 16,355 | 17,922 |
Accounts receivable, net of allowances of $554 at March 31, 2018 and $455 at December 31, 2017 | 3,775 | 3,851 |
Inventories | 885 | 801 |
Prepaid and other current assets | 1,600 | 1,661 |
Total current assets | 30,258 | 31,823 |
Property, plant and equipment, net | 3,415 | 3,295 |
Long-term marketable securities | 8,104 | 11,184 |
Intangible assets, net | 16,803 | 17,100 |
Goodwill | 4,159 | 4,159 |
Other long-term assets | 2,642 | 2,722 |
Total assets | 65,381 | 70,283 |
Current liabilities: | ||
Accounts payable | 711 | 814 |
Accrued government and other rebates | 5,048 | 4,704 |
Other accrued liabilities | 2,414 | 3,370 |
Current portion of long-term debt and other obligations, net | 2,497 | 2,747 |
Total current liabilities | 10,670 | 11,635 |
Long-term debt, net | 26,557 | 30,795 |
Long-term income taxes payable | 6,832 | 6,794 |
Other long-term obligations | 671 | 558 |
Commitments and contingencies (Note 10) | ||
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 March 31, 2018 and December 31, 2017; shares issued and outstanding of 1,300 at March 31, 2018 and 1,308 at December 31, 2017 | 1 | 1 |
Additional paid-in capital | 1,564 | 1,264 |
Accumulated other comprehensive income (loss) | (170) | 165 |
Retained earnings | 19,196 | 19,012 |
Total Gilead stockholders’ equity | 20,591 | 20,442 |
Noncontrolling interest | 60 | 59 |
Total stockholders’ equity | 20,651 | 20,501 |
Total liabilities and stockholders’ equity | $ 65,381 | $ 70,283 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for accounts receivable and chargebacks | $ 554 | $ 455 |
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) | 1,300,000,000 | 1,308,000,000 |
Common Stock Outstanding (in shares) | 1,300,000,000 | 1,308,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Product sales | $ 5,001 | $ 6,377 |
Royalty, contract and other revenues | 87 | 128 |
Total revenues | 5,088 | 6,505 |
Costs and expenses: | ||
Cost of goods sold | 1,001 | 957 |
Research and development expenses | 937 | 931 |
Selling, general and administrative expenses | 997 | 850 |
Total costs and expenses | 2,935 | 2,738 |
Income from operations | 2,153 | 3,767 |
Interest expense | (290) | (261) |
Other income (expense), net | 170 | 111 |
Income before provision for income taxes | 2,033 | 3,617 |
Provision for income taxes | 494 | 918 |
Net income | 1,539 | 2,699 |
Net income (loss) attributable to noncontrolling interest | 1 | (3) |
Net income attributable to Gilead | $ 1,538 | $ 2,702 |
Net income per share attributable to Gilead common stockholders - basic (usd per share) | $ 1.18 | $ 2.07 |
Shares used in per share calculation - basic (in shares) | 1,307 | 1,308 |
Net income per share attributable to Gilead common stockholders - diluted (usd per share) | $ 1.17 | $ 2.05 |
Shares used in per share calculation - diluted (in shares) | 1,320 | 1,320 |
Cash dividends declared (usd per share) | $ 0.57 | $ 0.52 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 1,539 | $ 2,699 |
Other comprehensive income (loss): | ||
Net foreign currency translation gain (loss), net of tax | 7 | (76) |
Available-for-sale securities: | ||
Net unrealized gain (loss), net of tax impact of $0 and $2, respectively | (36) | 184 |
Reclassifications to net income, net of tax impact of $0 and $0, respectively | 0 | 3 |
Net change | (36) | 187 |
Cash flow hedges: | ||
Net unrealized loss, net of tax impact of $0 and $(7), respectively | (61) | (87) |
Reclassifications to net income, net of tax impact of $0 and $(1), respectively | 48 | (42) |
Net change | (13) | (129) |
Other comprehensive loss | (42) | (18) |
Comprehensive income | 1,497 | 2,681 |
Comprehensive income (loss) attributable to noncontrolling interest | 1 | (3) |
Comprehensive income attributable to Gilead | $ 1,496 | $ 2,684 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Available-for-sale securities: | ||
Tax impact on net unrealized gains (losses) | $ 0 | $ 2 |
Tax impact of reclassifications to net income | 0 | 0 |
Cash flow hedges: | ||
Tax impact on net unrealized gains | 0 | (7) |
Tax impact of reclassifications to net income | $ 0 | $ (1) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities: | ||
Net income | $ 1,539 | $ 2,699 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 56 | 49 |
Amortization expense | 301 | 245 |
Stock-based compensation expense | 220 | 89 |
Deferred income taxes | 35 | 58 |
Other | 49 | 39 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 101 | 537 |
Inventories | (14) | (5) |
Prepaid expenses and other | 529 | 177 |
Accounts payable | (92) | (262) |
Income taxes payable | (618) | (24) |
Accrued liabilities | 164 | (677) |
Net cash provided by operating activities | 2,270 | 2,925 |
Investing Activities: | ||
Purchases of marketable securities | (397) | (3,482) |
Proceeds from sales of marketable securities | 221 | 3,173 |
Proceeds from maturities of marketable securities | 4,762 | 734 |
Capital expenditures | (212) | (118) |
Other | (20) | 0 |
Net cash provided by investing activities | 4,354 | 307 |
Financing Activities: | ||
Proceeds from issuances of common stock | 111 | 96 |
Repurchases of common stock | (1,039) | (565) |
Repayments of debt and other obligations | (4,500) | (30) |
Payments of dividends | (753) | (687) |
Other | (414) | (58) |
Net cash used in financing activities | (6,595) | (1,244) |
Effect of exchange rate changes on cash and cash equivalents | 26 | 68 |
Net change in cash and cash equivalents | 55 | 2,056 |
Cash and cash equivalents at beginning of period | 7,588 | 8,229 |
Cash and cash equivalents at end of period | $ 7,643 | $ 10,285 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
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 (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 the right to receive benefits from the VIE that could potentially be significant to the VIE. As of March 31, 2018 , we do not have any material VIEs. 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, 2017 , included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (SEC). 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 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 March 31, 2018 . Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09 (Topic 606) “Revenue from Contracts with Customers.” Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605) and requires entities to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled when promised goods or services are transferred to a customer. Entities adopting Topic 606 had the option of using either a full retrospective or a modified retrospective approach. On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. As such, results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under Topic 605. As discussed further in Note 2, Revenues, our product sales are recognized when control of the product transfers, generally upon shipment or delivery to the customer. Certain product sales that were deferred under the sell-through or cash basis methods of accounting because fees were not fixed or determinable prior to the adoption of Topic 606 are now recognized upon transfer of control. Royalty revenue is recognized in the period in which the corresponding sales by our corporate partners occur. Prior to the adoption of Topic 606, royalty revenue was generally recognized in the quarter following the quarter in which the corresponding sales by our corporate partners occurred. The cumulative effect of the changes made to our Condensed Consolidated Balance Sheets at January 1, 2018 for the adoption of Topic 606 was as follows (in millions): December 31, 2017 Adjustments Due to Topic 606 January 1, 2018 Prepaid and other current assets $ 1,661 $ 96 $ 1,757 Other long-term assets $ 2,722 $ 10 $ 2,732 Other accrued liabilities $ 3,370 $ (115 ) $ 3,255 Other long-term obligations $ 558 $ 31 $ 589 Retained earnings $ 19,012 $ 190 $ 19,202 For the three months ended March 31, 2018, the impact as a result of applying Topic 606 in place of Topic 605 was an increase to revenues of $5 million . 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. Additionally, ASU 2016-01 clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. On January 1, 2018, we adopted this standard using a modified retrospective approach. The standard requires that equity investments with readily determinable fair values are measured at fair value with any changes in fair value recognized in earnings. As a result of the adoption, we reclassified $293 million of unrealized net gain from accumulated other comprehensive income (AOCI) to retained earnings on January 1, 2018, which primarily consisted of $278 million unrealized gain from our equity investment in Galapagos NV. In August 2017, the FASB issued Accounting Standards Update No. 2017-12 (ASU 2017-12) “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities.” The amendments in ASU 2017-12 more closely align the results of hedge accounting with risk management activities. ASU 2017-12 also amends the presentation and disclosure requirements and eases documentation and effectiveness assessment requirements. Pursuant to the provisions of ASU 2017-12, we are no longer required to separately measure and recognize hedge ineffectiveness for highly effective hedges. On January 1, 2018, we early adopted this standard on a prospective basis. Upon adoption of ASU 2017-12, we no longer recognize hedge ineffectiveness in our Condensed Consolidated Statements of Income, but we instead recognize the entire change in the fair value of the hedge contract in AOCI. The adoption did not have a material impact on our Condensed Consolidated Financial Statements. The primary impact of adoption was required disclosure changes. See Note 5, Derivative Financial Instruments for additional information. In March 2018, the FASB issued Accounting Standards Update No. 2018-05 (ASU 2018-05) “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.” ASU 2018-05 amends Topic 740 by incorporating the SEC Staff Accounting Bulletin No. 118 (SAB 118) issued on December 22, 2017. SAB 118 provides guidance on accounting for the effects of the Tax Cuts and Jobs Act (Tax Reform) and allows a company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. See Note 14, Income Taxes for additional information. Recently Issued Accounting Pronouncements Not Yet Adopted 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 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. |
Revenues (Notes)
Revenues (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenues | REVENUES On January 1, 2018, we adopted Topic 606 using the modified retrospective method. As a result, we have changed our accounting policies for revenue recognition as detailed below. Product Sales We recognize revenue from product sales when control of the product transfers, generally upon shipment or delivery, to the customer. Upon recognition of revenue from product sales, provisions are made for various forms of variable consideration, which include government and other rebates such as Medicaid reimbursements, customer incentives such as cash discounts for prompt payment, distributor fees and expected returns of expired products, as appropriate. Our payment terms to customers generally range from 30 to 90 days. Royalty, Contract and Other Revenues Royalty revenue is recognized in the period in which the obligation is satisfied and the corresponding sales by our corporate partners occur. Policy Elections and Practical Expedients Taken • We account for shipping and handling activities that are performed after a customer has obtained control of a good as fulfillment costs rather than as separate performance obligations; and • If we expect, at contract inception, that the period between the transfer of control and corresponding payment from the customer will be one year or less, we do not adjust the amount of consideration for the effects of a significant financing component. Variable Consideration Rebates and Chargebacks We estimate reductions to our revenues for amounts paid to payers and healthcare providers in the United States, including Medicaid rebates, AIDS Drug Assistance Program rebates and chargebacks, Veterans Administration and Public Health Service chargebacks and other rebates, as well as foreign government rebates. Rebates and chargebacks are based on contractual arrangements or statutory requirements which may vary by product, payer and individual payer plans. Our estimates are based on products sold, historical utilization rates, and as available, pertinent third-party industry information, estimated patient population, known market events or trends, and for our U.S. product sales, channel inventory data obtained from our major U.S. wholesalers in accordance with our inventory management agreements. We also take into consideration, as available, new information regarding changes in programs’ regulations and guidelines that would impact the amount of the actual rebates and/or our expectations regarding future utilization rates for these programs. Government and other chargebacks that are payable to our direct customers are classified as reductions of Accounts receivable on our Condensed Consolidated Balance Sheets. Government and other rebates that are invoiced directly to us are recorded in Accrued government and other rebates on our Condensed Consolidated Balance Sheets. Cash Discounts We estimate cash discounts based on contractual terms, historical utilization rates and our expectations regarding future utilization rates. Distributor Fees Under our inventory management agreements with our significant U.S. wholesalers, we pay the wholesalers a fee primarily for compliance with certain contractually determined covenants such as the maintenance of agreed upon inventory levels. These distributor fees are based on a contractually determined fixed percentage of sales. Product Returns We do not provide our customers with a general right of product return, but typically permit returns if the product is damaged or defective when received by the customer, or in the case of product sold in the United States and certain countries outside the United States, if the product has expired. We will accept returns for product that will expire within six months or that have expired up to one year after their expiration dates. Our estimates for expected returns of expired products are based primarily on an ongoing analysis of our historical return patterns, historical industry information reporting the return rates for similar products and contractual agreements intended to limit the amount of inventory maintained by our wholesalers. Revenue Recognized from Performance Obligations Satisfied in Prior Periods During the three months ended March 31, 2018 , revenue recognized from performance obligations satisfied in prior periods was $10 million , consisting primarily of royalties for licenses of our intellectual property and revised estimates for variable consideration related to sales made in prior periods. Contract Assets Our contract assets, which consist of unbilled amounts primarily from arrangements where the licensing of intellectual property is the only or predominant performance obligation, totaled $117 million and $132 million at March 31, and January 1, 2018, respectively. Disaggregation of Revenues The following table disaggregates our product sales by product and geographic region and disaggregates our royalty, contract and other revenues by geographic region for the three months ended March 31, 2018 and 2017 . The information for the three months ended March 31, 2017 has not been adjusted in accordance with our modified retrospective adoption of Topic 606 and continues to be reported in accordance with our historical accounting under Topic 605. Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 (In millions) U.S. Europe Other International Total U.S. Europe Other International Total Antiviral products: Biktarvy $ 35 $ — $ — $ 35 $ — $ — $ — $ — Descovy 274 75 12 361 209 37 5 251 Genvoya 853 186 43 1,082 669 87 13 769 Odefsey 279 58 5 342 203 23 1 227 Atripla 228 51 35 314 316 94 42 452 Complera/Eviplera 67 109 14 190 112 125 16 253 Stribild 133 29 12 174 226 67 16 309 Truvada 507 97 48 652 464 189 61 714 Vemlidy 47 3 8 58 11 — — 11 Viread 7 30 60 97 117 71 72 260 Epclusa 269 198 69 536 735 138 19 892 Harvoni 234 56 58 348 926 243 202 1,371 Vosevi 86 16 5 107 — — — — Other antiviral 4 13 62 79 41 110 181 332 Other products: Yescarta 40 — — 40 — — — — Zydelig 14 18 1 33 15 19 1 35 Letairis 204 — — 204 211 — — 211 Ranexa 195 — — 195 153 — — 153 AmBisome 17 56 34 107 9 52 31 92 Other 34 10 3 47 33 11 1 45 Total product sales 3,527 1,005 469 5,001 4,450 1,266 661 6,377 Royalty, contract and other revenues 20 52 15 87 19 93 16 128 Total revenues $ 3,547 $ 1,057 $ 484 $ 5,088 $ 4,469 $ 1,359 $ 677 $ 6,505 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |
Fair Value Measurements | 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 short-term and long-term debt. Cash and cash equivalents, marketable debt and equity securities, and foreign currency exchange contracts are reported at their respective fair values on our Condensed Consolidated Balance Sheets. Short-term and long-term debt are reported at their 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): March 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Available-for-sale debt securities: Corporate debt securities $ — $ 11,972 $ — $ 11,972 $ — $ 14,747 $ — $ 14,747 U.S. treasury securities 3,884 — — 3,884 4,061 — — 4,061 Residential mortgage and asset-backed securities — 3,406 — 3,406 — 4,058 — 4,058 U.S. government agencies securities — 925 — 925 — 926 — 926 Certificates of deposit — 3,908 — 3,908 — 5,131 — 5,131 Non-U.S. government securities — 559 — 559 — 664 — 664 Marketable equity securities: Money market funds 4,674 — — 4,674 4,714 — — 4,714 Equity securities 680 — — 680 635 — — 635 Deferred compensation plan 126 — — 126 116 — — 116 Foreign currency derivative contracts — 4 — 4 — 13 — 13 Total $ 9,364 $ 20,774 $ — $ 30,138 $ 9,526 $ 25,539 $ — $ 35,065 Liabilities: Deferred compensation plan $ 126 $ — $ — $ 126 $ 116 $ — $ — $ 116 Foreign currency derivative contracts — 110 — 110 — 93 — 93 Total $ 126 $ 110 $ — $ 236 $ 116 $ 93 $ — $ 209 Our available-for-sale debt securities are classified as cash equivalents, short-term marketable securities and long-term marketable securities. See Note 4, Available-for-Sale Debt Securities for additional information. The following table summarizes the classification of our marketable equity securities on our Condensed Consolidated Balance Sheets (in millions): March 31, 2018 December 31, 2017 Cash and cash equivalents $ 4,674 $ 4,714 Prepaid and other current assets 681 637 Other long-term assets 125 114 Total $ 5,480 $ 5,465 For the three months ended March 31, 2018 , changes in the estimated fair values of the marketable equity securities resulted in unrealized gains of $45 million , which were included in Other income (expense), net, on our Condensed Consolidated Statements of Income. Cash and cash equivalents in the table above excludes cash of $2.8 billion and $2.4 billion , respectively, and cash equivalents of $195 million and $481 million as of March 31, 2018 and December 31, 2017, respectively. 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-based 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 short-term and long-term debt, determined using Level 2 inputs based on their quoted market values, were approximately $29.9 billion and $35.5 billion at March 31, 2018 and December 31, 2017 , respectively, and the carrying values were $29.1 billion and $33.5 billion at March 31, 2018 and December 31, 2017 , respectively. |
Available-for-Sale Debt Securit
Available-for-Sale Debt Securities | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-Sale Debt Securities | AVAILABLE-FOR-SALE DEBT SECURITIES The following table summarizes our available-for-sale debt securities (in millions): March 31, 2018 December 31, 2017 Amortized Gross Gross Estimated Amortized Gross Gross Estimated Corporate debt securities $ 12,044 $ 2 $ (74 ) $ 11,972 $ 14,790 $ 3 $ (46 ) $ 14,747 U.S. treasury securities 3,912 — (28 ) 3,884 4,090 — (29 ) 4,061 Residential mortgage and asset-backed securities 3,427 — (21 ) 3,406 4,072 1 (15 ) 4,058 U.S. government agencies securities 934 — (9 ) 925 934 — (8 ) 926 Certificates of deposit 3,908 — — 3,908 5,131 — — 5,131 Non-U.S. government securities 563 — (4 ) 559 668 — (4 ) 664 Total $ 24,788 $ 2 $ (136 ) $ 24,654 $ 29,685 $ 4 $ (102 ) $ 29,587 The following table summarizes the classification of our available-for-sale debt securities on our Condensed Consolidated Balance Sheets (in millions): March 31, 2018 December 31, 2017 Cash and cash equivalents $ 195 $ 481 Short-term marketable securities 16,355 17,922 Long-term marketable securities 8,104 11,184 Total $ 24,654 $ 29,587 The following table summarizes our available-for-sale debt securities by contractual maturity (in millions): March 31, 2018 Amortized Cost Fair Value Within one year $ 16,591 $ 16,550 After one year through five years 8,094 8,003 After five years through ten years 76 74 After ten years 27 27 Total $ 24,788 $ 24,654 The following table summarizes our available-for-sale debt 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 March 31, 2018 Corporate debt securities $ (25 ) $ 6,256 $ (48 ) $ 3,604 $ (73 ) $ 9,860 U.S. treasury securities (2 ) 547 (27 ) 3,337 (29 ) 3,884 Residential mortgage and asset-backed securities (7 ) 1,682 (15 ) 1,289 (22 ) 2,971 U.S. government agencies securities (1 ) 182 (8 ) 723 (9 ) 905 Non-U.S. government securities — 145 (3 ) 413 (3 ) 558 Total $ (35 ) $ 8,812 $ (101 ) $ 9,366 $ (136 ) $ 18,178 December 31, 2017 Corporate debt securities $ (14 ) $ 7,674 $ (32 ) $ 3,561 $ (46 ) $ 11,235 U.S. treasury securities (2 ) 821 (27 ) 3,240 (29 ) 4,061 Residential mortgage and asset-backed securities (4 ) 2,245 (11 ) 1,206 (15 ) 3,451 U.S. government agencies securities (1 ) 206 (7 ) 700 (8 ) 906 Non-U.S. government securities (1 ) 203 (3 ) 461 (4 ) 664 Total $ (22 ) $ 11,149 $ (80 ) $ 9,168 $ (102 ) $ 20,317 We held a total of 2,588 and 2,957 positions as of March 31, 2018 and December 31, 2017 , respectively, that were in an unrealized loss position. Based on our review of these securities, we believe we had no other-than-temporary impairments as of March 31, 2018 and December 31, 2017 , 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 not material for the three months ended March 31, 2018 and 2017 . |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
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. 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 hedge effectiveness using regression analysis. Prior to January 2018, we excluded time value from our effectiveness testing and recognized changes in the time value of the hedge in Other income (expense), net , on our Condensed Consolidated Statements of Income. Starting in January 2018, we include time value in our effectiveness testing and the entire change in the value of hedge contract is recorded as unrealized gains or losses in AOCI within Stockholders’ equity on our Condensed Consolidated Balance Sheets. The unrealized gains or losses in AOCI are reclassified into product sales when the respective hedged transactions affect earnings. The majority of gains and losses related to the hedged forecasted transactions reported in AOCI at March 31, 2018 are expected to be reclassified to product sales within 12 months . The cash flow effects of our derivative contracts for the three months ended March 31, 2018 and 2017 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 $2.5 billion and $2.8 billion at March 31, 2018 and December 31, 2017 , respectively. While all of our derivative contracts allow us the right to offset assets and liabilities, we have presented amounts on a gross basis. The following table summarizes the classification and fair values of derivative instruments on our Condensed Consolidated Balance Sheets (in millions): March 31, 2018 Asset Derivatives Liability Derivatives Classification Fair Value Classification Fair Value Derivatives designated as hedges: Foreign currency exchange contracts Other current assets $ 2 Other accrued liabilities $ (104 ) Foreign currency exchange contracts Other long-term assets 1 Other long-term obligations (5 ) Total derivatives designated as hedges 3 (109 ) Derivatives not designated as hedges: Foreign currency exchange contracts Other current assets 1 Other accrued liabilities (1 ) Total derivatives not designated as hedges 1 (1 ) Total derivatives $ 4 $ (110 ) December 31, 2017 Asset Derivatives Liability Derivatives Classification Fair Value Classification Fair Value Derivatives designated as hedges: Foreign currency exchange contracts Other current assets $ 2 Other accrued liabilities $ (89 ) Foreign currency exchange contracts Other long-term assets 1 Other long-term obligations (3 ) Total derivatives designated as hedges 3 (92 ) Derivatives not designated as hedges: Foreign currency exchange contracts Other current assets 10 Other accrued liabilities (1 ) Total derivatives not designated as hedges 10 (1 ) Total derivatives $ 13 $ (93 ) The following table summarizes the effect of our foreign currency exchange contracts on our Condensed Consolidated Financial Statements (in millions): Three Months Ended March 31, 2018 2017 Derivatives designated as hedges: Losses recognized in AOCI $ (61 ) $ (94 ) Gains (losses) reclassified from AOCI into product sales $ (48 ) $ 43 Gains recognized in Other income (expense), net $ — $ 13 Derivatives not designated as hedges: Losses recognized in Other income (expense), net $ (14 ) $ (135 ) 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 , on our Condensed Consolidated Statements of Income for the three months ended March 31, 2018 and 2017 as a result of the discontinuance of cash flow hedges. As of March 31, 2018 and December 31, 2017 , we held one type of financial instrument, which was 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 March 31, 2018 Derivative assets $ 4 $ — $ 4 $ (4 ) $ — $ — Derivative liabilities $ (110 ) $ — $ (110 ) $ 4 $ — $ (106 ) As of December 31, 2017 Derivative assets $ 13 $ — $ 13 $ (8 ) $ — $ 5 Derivative liabilities $ (93 ) $ — $ (93 ) $ 8 $ — $ (85 ) |
Acquisition (Notes)
Acquisition (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisition | ACQUISITION On October 3, 2017 (the acquisition date), we completed a tender offer for all of the outstanding common stock of Kite Pharma, Inc. (Kite) for $180 per share in cash. As a result, Kite became our wholly-owned subsidiary. The acquisition of Kite helps establish our foundation for improving the treatment of hematological malignancies and solid tumors. The consideration transferred for the acquisition was $11,155 million , consisting of $10,420 million in cash to the outstanding Kite common stockholders, $645 million cash payment to vested equity award holders, $15 million to warrant holders and $75 million representing the portion of the replaced stock-based awards attributable to the pre-combination period. In addition, $733 million was excluded from the consideration transferred, representing the portion of the replaced stock-based awards attributable to the post combination period, which is expected to be recognized through 2021. The acquisition of Kite was accounted for as a business combination using the acquisition method of accounting. This method requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date. The fair value estimates for the assets acquired and liabilities assumed in the acquisition have not yet been finalized as of March 31, 2018 and we did not make any measurement period adjustments to the preliminary acquisition date fair value estimates during the three months ended March 31, 2018. The following table summarizes the preliminary acquisition date fair values of assets acquired and liabilities assumed, and the consideration transferred (in millions): Cash and cash equivalents $ 652 Identifiable intangible assets: Indefinite-lived intangible assets - IPR&D 8,950 Outlicense acquired 91 Deferred income taxes (1,606 ) Other assets acquired (liabilities assumed), net 81 Total identifiable net assets 8,168 Goodwill 2,987 Total consideration transferred $ 11,155 We will be able to complete our valuation when we obtain additional information, primarily related to certain forecast assumptions used to perform our preliminary valuation of intangibles and estimates to record the benefit of certain tax attributes. Changes to these assumptions and estimates could cause an impact to the valuation of assets acquired, including intangible assets, goodwill and the related tax impacts of the acquisition. We expect to finalize these amounts as soon as possible but no later than one year from the acquisition date. |
Other Financial Information
Other Financial Information | 3 Months Ended |
Mar. 31, 2018 | |
Other Financial Information [Abstract] | |
Other Financial Information | OTHER FINANCIAL INFORMATION Inventories Inventories are summarized as follows (in millions): March 31, 2018 December 31, 2017 Raw materials $ 1,865 $ 1,880 Work in process 306 352 Finished goods 707 670 Total $ 2,878 $ 2,902 Reported as: Inventories $ 885 $ 801 Other long-term assets 1,993 2,101 Total $ 2,878 $ 2,902 Amounts reported as other long-term assets primarily consisted of raw materials as of March 31, 2018 and December 31, 2017 . Other Accrued Liabilities The components of other accrued liabilities are summarized as follows (in millions): March 31, 2018 December 31, 2017 Income taxes payable $ 66 $ 713 Compensation and employee benefits 324 455 Branded prescription drug fee 313 284 Other accrued expenses 1,711 1,918 Total $ 2,414 $ 3,370 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS The following table summarizes the carrying amount of our intangible assets, net (in millions): March 31, 2018 December 31, 2017 Finite-lived intangible assets $ 14,053 $ 14,350 Indefinite-lived intangible assets 2,750 2,750 Total intangible assets $ 16,803 $ 17,100 The following table summarizes our finite-lived intangible assets (in millions): March 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Adjustment Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible asset - sofosbuvir $ 10,720 $ (3,030 ) $ — $ 7,690 $ 10,720 $ (2,855 ) $ 7,865 Intangible asset - axicabtagene ciloleucel (DLBCL) 6,200 (158 ) — 6,042 6,200 (72 ) 6,128 Intangible asset - Ranexa 688 (594 ) — 94 688 (566 ) 122 Other 546 (323 ) 4 227 546 (311 ) 235 Total $ 18,154 $ (4,105 ) $ 4 $ 14,053 $ 18,154 $ (3,804 ) $ 14,350 Amortization expense related to finite-lived intangible assets, included in Cost of goods sold on our Condensed Consolidated Statements of Income, totaled $301 million for the three months ended March 31, 2018 and $210 million for the three months ended March 31, 2017 . As of March 31, 2018 , estimated future amortization expense associated with our finite-lived intangible assets is as follows (in millions): Fiscal Year Amount 2018 (remaining nine months) $ 902 2019 1,089 2020 1,064 2021 1,064 2022 1,064 Thereafter 8,870 Total $ 14,053 |
Debt and Credit Facilities
Debt and Credit Facilities | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | 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 March 31, 2018 December 31, 2017 Senior Unsecured September 2015 September 2018 1.85% $ 999 $ 999 Senior Unsecured September 2017 September 2018 3-month LIBOR + 0.17% 749 749 Term Loan October 2017 October 2018 Variable — 999 Senior Unsecured September 2017 March 2019 3-month LIBOR + 0.22% 749 748 Senior Unsecured March 2014 April 2019 2.05% 499 499 Senior Unsecured September 2017 September 2019 1.85% 997 997 Senior Unsecured September 2017 September 2019 3-month LIBOR + 0.25% 499 499 Senior Unsecured November 2014 February 2020 2.35% 499 499 Senior Unsecured September 2015 September 2020 2.55% 1,994 1,994 Term Loan October 2017 October 2020 Variable — 998 Senior Unsecured March 2011 April 2021 4.50% 996 995 Senior Unsecured December 2011 December 2021 4.40% 1,247 1,246 Senior Unsecured September 2016 March 2022 1.95% 498 497 Senior Unsecured September 2015 September 2022 3.25% 996 996 Term Loan October 2017 October 2022 Variable — 2,497 Senior Unsecured September 2016 September 2023 2.50% 745 745 Senior Unsecured March 2014 April 2024 3.70% 1,743 1,742 Senior Unsecured November 2014 February 2025 3.50% 1,744 1,744 Senior Unsecured September 2015 March 2026 3.65% 2,729 2,729 Senior Unsecured September 2016 March 2027 2.95% 1,244 1,244 Senior Unsecured September 2015 September 2035 4.60% 990 990 Senior Unsecured September 2016 September 2036 4.00% 740 740 Senior Unsecured December 2011 December 2041 5.65% 995 995 Senior Unsecured March 2014 April 2044 4.80% 1,733 1,733 Senior Unsecured November 2014 February 2045 4.50% 1,730 1,730 Senior Unsecured September 2015 March 2046 4.75% 2,215 2,215 Senior Unsecured September 2016 March 2047 4.15% 1,724 1,723 Total debt, net 29,054 33,542 Less current portion 2,497 2,747 Total long-term debt, net $ 26,557 $ 30,795 In March 2018, we fully repaid the $4.5 billion outstanding debt under our term loan facility credit agreement, at which time the term loan facility credit agreement terminated. We are required to comply with certain covenants under our credit agreement and note indentures governing our senior notes. As of March 31, 2018 , we were not in violation of any covenants. Additionally, as of March 31, 2018 , there were no amounts outstanding under our revolving credit facility. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
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 the actions described below on our Condensed Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017 , 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 U.S. Food and Drug Administration (FDA) for sofosbuvir, now known commercially as Sovaldi. Sofosbuvir is also included in all of our marketed HCV products. 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 are aware of patents and patent applications owned by third parties that have been or may in the future be alleged by such parties to cover the use of our HCV products. If third parties obtain valid and enforceable patents, and successfully prove infringement of those patents by our HCV products, we could be required to pay significant monetary damages. 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. 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 filed a Petition for Writ of Certiorari to the Supreme Court of the United States (U.S. Supreme Court) in March 2018. In April 2018, the U.S. Supreme Court denied certiorari; accordingly, the decision finding that Idenix is not entitled to the ‘600 patent is now final. We filed a motion to dismiss Idenix’s simultaneous appeal in the U.S. District Court for the District of Delaware, which was granted. Idenix appealed the dismissal to the CAFC, and that court has stayed this other appeal pending a decision from the U.S. Supreme Court. We believe that any pending actions concerning the ’600 patent will be dismissed. 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. In April 2018, the Supreme Court of Canada refused to hear Idenix’s appeal. The decision invalidating Idenix’s Canadian 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 appealed this decision, and in December 2017, the Federal Court of Australia dismissed Idenix’s appeal. In January 2018, Idenix applied for Special Leave to Appeal to the High Court of Australia and, in April 2018, the High Court of Australia refused to hear Idenix’s appeal. The decision revoking Idenix’s Australian patent is now final. 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. Since the U.S. Supreme Court denied Idenix’s petition for certiorari 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 ‘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. In September 2017, the judge invalidated Idenix’s ‘597 patent and vacated the jury’s award of $2.54 billion in past damages. Idenix has appealed this decision to the CAFC. We believe the Delaware court’s decision correctly found that, as a matter of law, the ‘597 patent is invalid, and we remain confident in the merits of our case on appeal. We believe that the possibility of a material adverse outcome on this matter is remote. 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. 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 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. I n April 2018, the CAFC affirmed the court’s decision on unclean hands. Merck may file further petitions for review before the CAFC and the U.S. Supreme Court. If the decision on our defense of unclean hands is reversed subsequently 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 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 with the PTAB alleging that all asserted claims are invalid for anticipation and obviousness. In March 2018, the District Court stayed the litigation until after the PTAB rules on our petitions for inter partes review. 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 are defending against these allegations, and the PTAB has already declined to institute on two of the pending inter partes review petitions. If the PTAB decides to initiate one or more of the remaining inter partes review petitions, a decision on the validity of the patent claims would be expected about a year later. Either party can appeal the PTAB’s decision regarding patent validity to the CAFC. European Patent Claims In February 2015, several parties filed oppositions in the EPO requesting revocation of one of our granted European patents 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. The EPO is scheduled to conduct an oral hearing for this opposition in September 2018. 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. Three parties have appealed 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. We have responded to these oppositions. The EPO has not yet sate a date for the oral hearing regarding this opposition. In March 2016, three parties filed oppositions in the EPO requesting revocation of our granted European patent covering cobicistat that expires in 2027. In December 2017, the EPO upheld the validity of the claims of our cobicistat patent. The parties that filed the oppositions may appeal this decision. The appeal process may take several years. 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 the European Union 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 Axicabtagene Ciloleucel In October 2017, we acquired Kite, which is now our wholly-owned subsidiary. Through the acquisition, we acquired axicabtagene ciloleucel, a chimeric antigen receptor (CAR) T cell therapy. In October 2017, we received approval from FDA for axicabtagene ciloleucel, now known commercially as Yescarta. We own patents and patent applications that claim axicabtagene ciloleucel 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 axicabtagene ciloleucel or to require us to obtain a license in order to commercialize axicabtagene ciloleucel. 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 axicabtagene ciloleucel infringes the ‘190 patent. In October 2017, following FDA approval for Yescarta, Juno filed a second complaint alleging that axicabtagene ciloleucel infringes the ‘190 patent. Juno subsequently moved to dismiss the September 2017 complaint and has maintained the October 2017 complaint. 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 axicabtagene ciloleucel. If Juno’s patent is upheld as valid and Juno successfully proves infringement of that patent by axicabtagene ciloleucel, 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 Related to Bictegravir In February 2018, ViiV Healthcare Company (ViiV) filed a lawsuit against us in the U.S. District Court of Delaware, alleging that the commercialization of bictegravir, now known commercially as Biktarvy, infringes ViiV’s U.S. Patent No. 8,129,385 (the ‘385 patent), which was issued to Shinogi & Co. Ltd. & GlaxoSmithKline LLC. The ‘385 patent is the compound patent covering ViiV’s dolutegravir. Bictegravir is structurally different from dolutegravir, and we believe that bictegravir does not infringe the claims of the ‘385 patent. To the extent that ViiV’s patent claims are interpreted to cover bictegravir, we believe those claims are invalid. The USPTO has granted us patents covering bictegravir. In February 2018, ViiV also filed a lawsuit against us in the Federal Court of Canada, alleging that our activities relating to our bictegravir product have infringed ViiV’s Canadian Patent No. 2,606,282 (the ‘282 patent), which was issued to Shinogi & Co. Ltd. and ViiV. The ‘282 patent is the compound patent covering ViiV’s dolutegravir. We believe that bictegravir does not infringe the claims of the ‘282 patent. To the extent that ViiV’s patent claims are interpreted to cover bictegravir, we believe those claims are invalid. We cannot predict the ultimate outcome of intellectual property claims related to bictegravir. If ViiV’s patents are upheld as valid and ViiV successfully proves infringement of those patents by bictegravir, we could be required by pay significant monetary damages. 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. Current legal proceedings of significance with generic manufacturers include: HIV Products 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 parties have agreed to dismiss the action in West Virginia, and the trial in Delaware was stayed. The patent in suit that covers Tybost is also listed in the Orange Book for Stribild and Genvoya. In November 2017, we received notice that Mylan submitted an ANDA to FDA requesting permission to manufacture and market a generic version of Evotaz (atazanavir/cobicistat) and challenging the validity of our cobicistat compound patent, citing the arguments it has made in the ongoing litigation involving Tybost. In December 2017, we filed a lawsuit against Mylan in the U.S. District Court for the Northern District of West Virginia. 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. HCV Products In February 2018, we received notices from Natco Pharma Limited (Natco) and Teva Pharmaceuticals (Teva) that they have each submitted an ANDA to FDA requesting permission to manufacture and market a generic version of Sovaldi. In Teva’s notice, it alleges that nine patents associated with sofosbuvir are invalid, unenforceable and/or will not be infringed by Teva’s manufacture, use or sale of generic versions of Sovaldi. In March 2018, we filed a lawsuit against Teva in the U.S. District Court for the District of New Jersey for infringement of these patents. In Natco’s notice, it alleges that two patents associated with sofosbuvir are invalid, unenforceable and/or will not be infringed by Natco’s manufacture, use or sale of generic versions of Sovaldi. Natco did not challenge all patents listed on the Orange Book for Sovaldi. In March 2018, we filed lawsuits against Natco in the U.S. District Court for the District of New Jersey and 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. 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. Government Investigations and Related Litigation 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 U.S. District Court for the Northern District of California 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 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 District Court. In October 2017, the Ninth Circuit granted our motion to stay the case pending an appeal to the U.S. Supreme Court. In December 2017, we filed a Petition for a Writ of Certiorari to the U.S. Supreme Court. We expect the U.S. Supreme Court to decide whether it will hear the case later this year. 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. We are cooperating with this inquiry. In October 2017, we received a subpoena 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 are cooperating with this inquiry. In September 2017, we received a voluntary request for information from the U.S. Attorney’s Office for the Eastern District of Pennsylvania requesting information related to our reimbursement support offerings, clinical education programs and interactions with specialty pharmacies for Sovaldi and Harvoni. We are cooperating with this voluntary request. In October 2017, we received a subpoena from the California Department of Insurance and the Alameda County District Attorney’s Office requesting documents related to our marketing activities, reimbursement support offerings, clinical education programs and interactions with specialty pharmacies. We are cooperating with this inquiry. In November 2017, Health Choice Advocates LLC served us with a complaint in the United States District Court for the Eastern District of Texas alleging violations of the False Claims Act and similar state statutes through our marketing activities, reimbursement support offerings and clinical education programs for Sovaldi and Harvoni. The lawsuit was unsealed after the United States and 31 plaintiff-states declined to intervene in the action. In February 2018, we filed two motions to dismiss the complaint, which are currently pending. In November 2017, we received a subpoena from the U.S. Department of Health and Human Services requesting documents related to our Frontlines of Communities in the United States (FOCUS) program. We are cooperating with this inquiry. In November 2017, we also received a subpoena from the U.S. Attorney’s Office for the Southern District of New York requesting documents related to our promotional speaker programs for HIV. We are cooperating 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 | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017 1,308 $ 1 $ 1,264 $ 165 $ 19,012 $ 59 $ 20,501 Net income — — — — 1,538 1 1,539 Other comprehensive loss, net of tax — — — (42 ) — — (42 ) Issuances under employee stock purchase plan 1 — 48 — — — 48 Issuances under equity incentive plans 5 — 64 — — — 64 Stock-based compensation — — 224 — — — 224 Repurchases of common stock (14 ) — (36 ) — (1,085 ) — (1,121 ) Dividends declared — — — — (752 ) — (752 ) Cumulative effect from the adoption of new accounting standards — — — (293 ) 483 — 190 Balance at March 31, 2018 1,300 $ 1 $ 1,564 $ (170 ) $ 19,196 $ 60 $ 20,651 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, 2017 $ 85 $ 194 $ (114 ) $ 165 Net unrealized gain (loss) 7 (36 ) (61 ) (90 ) Reclassifications to net income — — 48 48 Reclassifications to retained earnings as a result of the adoption of new accounting standards — (293 ) — (293 ) Net current period other comprehensive income (loss) 7 (329 ) (13 ) (335 ) Balance at March 31, 2018 $ 92 $ (135 ) $ (127 ) $ (170 ) The amounts reclassified to net income for gains and losses on cash flow hedges are recorded as part of Product sales on our Condensed Consolidated Statements of Income. See Note 5 , Derivative Financial Instruments for additional information. Amounts reclassified to net income for gains and losses on available-for-sale debt 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 three months ended March 31, 2018 , we repurchased and retired 13 million shares of our common stock for $1.0 billion through open market transactions under the 2016 Program. As of March 31, 2018 , the remaining authorized repurchase amount under the 2016 Program was $7.0 billion . |
Net Income Per Share Attributab
Net Income Per Share Attributable to Gilead Common Stockholders | 3 Months Ended |
Mar. 31, 2018 | |
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 were determined under the treasury stock method. We have excluded stock options and equivalents of 12 million and 9 million for the three months ended March 31, 2018 and 2017 , respectively, 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 March 31, 2018 2017 Net income attributable to Gilead $ 1,538 $ 2,702 Shares used in per share calculation - basic 1,307 1,308 Effect of dilutive securities: Stock options and equivalents 13 12 Shares used in per share calculation - diluted 1,320 1,320 Net income per share attributable to Gilead common stockholders - basic $ 1.18 $ 2.07 Net income per share attributable to Gilead common stockholders - diluted $ 1.17 $ 2.05 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
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, who is our chief executive officer. See Note 2 , Revenues, for a summary of disaggregated revenues by product and geographic region. 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 March 31, 2018 2017 AmerisourceBergen Corp. 21 % 20 % Cardinal Health, Inc. 21 % 18 % McKesson Corp. 20 % 20 % |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES On December 22, 2017, the Tax Reform was signed into law making significant changes to the Internal Revenue Code of 1986, as amended. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, implementation of a modified territorial tax system and a repatriation tax on deemed repatriated earnings of foreign subsidiaries. We included a provisional estimate of the impact from Tax Reform in our 2017 income tax provision in accordance with our interpretation of Tax Reform and SAB 118. The provisional estimates have not been finalized as of March 31, 2018 and we did not make any measurement period adjustments during the three months ended March 31, 2018. We may refine our estimates of these provisional amounts as further guidance is issued from the U.S. Treasury, the SEC and the FASB. Additionally, we are continuing to evaluate the accounting policy election required with regard to the tax on Global Intangible Low-Taxed Income (the Global Minimum Tax). The FASB allows companies to adopt a policy election to account for the Global Minimum Tax under one of two methods: (i) account for the Global Minimum Tax as a component of tax expense in the period in which a company is subject to the rules (the period cost method), or (ii) account for the Global Minimum Tax in a company’s measurement of deferred taxes (the deferred method). We have not elected a method and will only do so after our completion of the analysis of the Global Minimum Tax provisions. Our election method will depend, in part, on analyzing expected future U.S. taxable income inclusions related to Global Minimum Tax under both methodologies in order to determine the most appropriate method. Should we decide to elect the deferred method of accounting for the Global Minimum Tax, it is possible that our provisional estimate for re-measuring our deferred taxes may materially change. We will finalize the analysis for the accounting policy election during the measurement period. In February 2018, we repatriated $28.0 billion of cash, cash equivalents and marketable securities to our parent company headquartered in the United States. Prior to the enactment of Tax Reform, these earnings were considered indefinitely reinvested and no U.S. taxes had been provided. In 2017, U.S. taxes were provided on these earnings through the accrual of the Tax Reform transition tax. Our effective income tax rate of 24.3% for the three months ended March 31, 2018 differed from the U.S. federal statutory rate of 21% primarily due to settlement of a foreign tax examination, state taxes and our portion of the non-tax deductible branded prescription drug fee, partially offset by earnings from non-U.S. subsidiaries that operate in jurisdictions with lower tax rates than the United States. 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 IRS 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. As of March 31, 2018, we believe that it is reasonably possible that our unrecognized tax benefits will decrease by approximately $800 million in the next 12 months due to potential settlement of tax examinations and lapse of statute of limitations. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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 (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 the right to receive benefits from the VIE that could potentially be significant to the VIE. As of March 31, 2018 , we do not have any material VIEs. 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, 2017 , included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (SEC). |
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 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. |
Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09 (Topic 606) “Revenue from Contracts with Customers.” Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605) and requires entities to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled when promised goods or services are transferred to a customer. Entities adopting Topic 606 had the option of using either a full retrospective or a modified retrospective approach. On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. As such, results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under Topic 605. As discussed further in Note 2, Revenues, our product sales are recognized when control of the product transfers, generally upon shipment or delivery to the customer. Certain product sales that were deferred under the sell-through or cash basis methods of accounting because fees were not fixed or determinable prior to the adoption of Topic 606 are now recognized upon transfer of control. Royalty revenue is recognized in the period in which the corresponding sales by our corporate partners occur. Prior to the adoption of Topic 606, royalty revenue was generally recognized in the quarter following the quarter in which the corresponding sales by our corporate partners occurred. The cumulative effect of the changes made to our Condensed Consolidated Balance Sheets at January 1, 2018 for the adoption of Topic 606 was as follows (in millions): December 31, 2017 Adjustments Due to Topic 606 January 1, 2018 Prepaid and other current assets $ 1,661 $ 96 $ 1,757 Other long-term assets $ 2,722 $ 10 $ 2,732 Other accrued liabilities $ 3,370 $ (115 ) $ 3,255 Other long-term obligations $ 558 $ 31 $ 589 Retained earnings $ 19,012 $ 190 $ 19,202 For the three months ended March 31, 2018, the impact as a result of applying Topic 606 in place of Topic 605 was an increase to revenues of $5 million . 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. Additionally, ASU 2016-01 clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. On January 1, 2018, we adopted this standard using a modified retrospective approach. The standard requires that equity investments with readily determinable fair values are measured at fair value with any changes in fair value recognized in earnings. As a result of the adoption, we reclassified $293 million of unrealized net gain from accumulated other comprehensive income (AOCI) to retained earnings on January 1, 2018, which primarily consisted of $278 million unrealized gain from our equity investment in Galapagos NV. In August 2017, the FASB issued Accounting Standards Update No. 2017-12 (ASU 2017-12) “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities.” The amendments in ASU 2017-12 more closely align the results of hedge accounting with risk management activities. ASU 2017-12 also amends the presentation and disclosure requirements and eases documentation and effectiveness assessment requirements. Pursuant to the provisions of ASU 2017-12, we are no longer required to separately measure and recognize hedge ineffectiveness for highly effective hedges. On January 1, 2018, we early adopted this standard on a prospective basis. Upon adoption of ASU 2017-12, we no longer recognize hedge ineffectiveness in our Condensed Consolidated Statements of Income, but we instead recognize the entire change in the fair value of the hedge contract in AOCI. The adoption did not have a material impact on our Condensed Consolidated Financial Statements. The primary impact of adoption was required disclosure changes. See Note 5, Derivative Financial Instruments for additional information. In March 2018, the FASB issued Accounting Standards Update No. 2018-05 (ASU 2018-05) “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.” ASU 2018-05 amends Topic 740 by incorporating the SEC Staff Accounting Bulletin No. 118 (SAB 118) issued on December 22, 2017. SAB 118 provides guidance on accounting for the effects of the Tax Cuts and Jobs Act (Tax Reform) and allows a company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. See Note 14, Income Taxes for additional information. Recently Issued Accounting Pronouncements Not Yet Adopted 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 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. |
Revenue Recognition under Topic 606 | Product Sales We recognize revenue from product sales when control of the product transfers, generally upon shipment or delivery, to the customer. Upon recognition of revenue from product sales, provisions are made for various forms of variable consideration, which include government and other rebates such as Medicaid reimbursements, customer incentives such as cash discounts for prompt payment, distributor fees and expected returns of expired products, as appropriate. Our payment terms to customers generally range from 30 to 90 days. Royalty, Contract and Other Revenues Royalty revenue is recognized in the period in which the obligation is satisfied and the corresponding sales by our corporate partners occur. Policy Elections and Practical Expedients Taken • We account for shipping and handling activities that are performed after a customer has obtained control of a good as fulfillment costs rather than as separate performance obligations; and • If we expect, at contract inception, that the period between the transfer of control and corresponding payment from the customer will be one year or less, we do not adjust the amount of consideration for the effects of a significant financing component. Variable Consideration Rebates and Chargebacks We estimate reductions to our revenues for amounts paid to payers and healthcare providers in the United States, including Medicaid rebates, AIDS Drug Assistance Program rebates and chargebacks, Veterans Administration and Public Health Service chargebacks and other rebates, as well as foreign government rebates. Rebates and chargebacks are based on contractual arrangements or statutory requirements which may vary by product, payer and individual payer plans. Our estimates are based on products sold, historical utilization rates, and as available, pertinent third-party industry information, estimated patient population, known market events or trends, and for our U.S. product sales, channel inventory data obtained from our major U.S. wholesalers in accordance with our inventory management agreements. We also take into consideration, as available, new information regarding changes in programs’ regulations and guidelines that would impact the amount of the actual rebates and/or our expectations regarding future utilization rates for these programs. Government and other chargebacks that are payable to our direct customers are classified as reductions of Accounts receivable on our Condensed Consolidated Balance Sheets. Government and other rebates that are invoiced directly to us are recorded in Accrued government and other rebates on our Condensed Consolidated Balance Sheets. Cash Discounts We estimate cash discounts based on contractual terms, historical utilization rates and our expectations regarding future utilization rates. Distributor Fees Under our inventory management agreements with our significant U.S. wholesalers, we pay the wholesalers a fee primarily for compliance with certain contractually determined covenants such as the maintenance of agreed upon inventory levels. These distributor fees are based on a contractually determined fixed percentage of sales. Product Returns We do not provide our customers with a general right of product return, but typically permit returns if the product is damaged or defective when received by the customer, or in the case of product sold in the United States and certain countries outside the United States, if the product has expired. We will accept returns for product that will expire within six months or that have expired up to one year after their expiration dates. Our estimates for expected returns of expired products are based primarily on an ongoing analysis of our historical return patterns, historical industry information reporting the return rates for similar products and contractual agreements intended to limit the amount of inventory maintained by our wholesalers. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Effect of New Accounting Pronouncements | The cumulative effect of the changes made to our Condensed Consolidated Balance Sheets at January 1, 2018 for the adoption of Topic 606 was as follows (in millions): December 31, 2017 Adjustments Due to Topic 606 January 1, 2018 Prepaid and other current assets $ 1,661 $ 96 $ 1,757 Other long-term assets $ 2,722 $ 10 $ 2,732 Other accrued liabilities $ 3,370 $ (115 ) $ 3,255 Other long-term obligations $ 558 $ 31 $ 589 Retained earnings $ 19,012 $ 190 $ 19,202 For the three months ended March 31, 2018, the impact as a result of applying Topic 606 in place of Topic 605 was an increase to revenues of $5 million . |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table disaggregates our product sales by product and geographic region and disaggregates our royalty, contract and other revenues by geographic region for the three months ended March 31, 2018 and 2017 . The information for the three months ended March 31, 2017 has not been adjusted in accordance with our modified retrospective adoption of Topic 606 and continues to be reported in accordance with our historical accounting under Topic 605. Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 (In millions) U.S. Europe Other International Total U.S. Europe Other International Total Antiviral products: Biktarvy $ 35 $ — $ — $ 35 $ — $ — $ — $ — Descovy 274 75 12 361 209 37 5 251 Genvoya 853 186 43 1,082 669 87 13 769 Odefsey 279 58 5 342 203 23 1 227 Atripla 228 51 35 314 316 94 42 452 Complera/Eviplera 67 109 14 190 112 125 16 253 Stribild 133 29 12 174 226 67 16 309 Truvada 507 97 48 652 464 189 61 714 Vemlidy 47 3 8 58 11 — — 11 Viread 7 30 60 97 117 71 72 260 Epclusa 269 198 69 536 735 138 19 892 Harvoni 234 56 58 348 926 243 202 1,371 Vosevi 86 16 5 107 — — — — Other antiviral 4 13 62 79 41 110 181 332 Other products: Yescarta 40 — — 40 — — — — Zydelig 14 18 1 33 15 19 1 35 Letairis 204 — — 204 211 — — 211 Ranexa 195 — — 195 153 — — 153 AmBisome 17 56 34 107 9 52 31 92 Other 34 10 3 47 33 11 1 45 Total product sales 3,527 1,005 469 5,001 4,450 1,266 661 6,377 Royalty, contract and other revenues 20 52 15 87 19 93 16 128 Total revenues $ 3,547 $ 1,057 $ 484 $ 5,088 $ 4,469 $ 1,359 $ 677 $ 6,505 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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): March 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Available-for-sale debt securities: Corporate debt securities $ — $ 11,972 $ — $ 11,972 $ — $ 14,747 $ — $ 14,747 U.S. treasury securities 3,884 — — 3,884 4,061 — — 4,061 Residential mortgage and asset-backed securities — 3,406 — 3,406 — 4,058 — 4,058 U.S. government agencies securities — 925 — 925 — 926 — 926 Certificates of deposit — 3,908 — 3,908 — 5,131 — 5,131 Non-U.S. government securities — 559 — 559 — 664 — 664 Marketable equity securities: Money market funds 4,674 — — 4,674 4,714 — — 4,714 Equity securities 680 — — 680 635 — — 635 Deferred compensation plan 126 — — 126 116 — — 116 Foreign currency derivative contracts — 4 — 4 — 13 — 13 Total $ 9,364 $ 20,774 $ — $ 30,138 $ 9,526 $ 25,539 $ — $ 35,065 Liabilities: Deferred compensation plan $ 126 $ — $ — $ 126 $ 116 $ — $ — $ 116 Foreign currency derivative contracts — 110 — 110 — 93 — 93 Total $ 126 $ 110 $ — $ 236 $ 116 $ 93 $ — $ 209 |
Summary of the Classification of Marketable Equity Securities | The following table summarizes the classification of our marketable equity securities on our Condensed Consolidated Balance Sheets (in millions): March 31, 2018 December 31, 2017 Cash and cash equivalents $ 4,674 $ 4,714 Prepaid and other current assets 681 637 Other long-term assets 125 114 Total $ 5,480 $ 5,465 |
Available-for-Sale Debt Secur26
Available-for-Sale Debt Securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Available-for-Sale Securities at Estimated Fair Value | The following table summarizes our available-for-sale debt securities (in millions): March 31, 2018 December 31, 2017 Amortized Gross Gross Estimated Amortized Gross Gross Estimated Corporate debt securities $ 12,044 $ 2 $ (74 ) $ 11,972 $ 14,790 $ 3 $ (46 ) $ 14,747 U.S. treasury securities 3,912 — (28 ) 3,884 4,090 — (29 ) 4,061 Residential mortgage and asset-backed securities 3,427 — (21 ) 3,406 4,072 1 (15 ) 4,058 U.S. government agencies securities 934 — (9 ) 925 934 — (8 ) 926 Certificates of deposit 3,908 — — 3,908 5,131 — — 5,131 Non-U.S. government securities 563 — (4 ) 559 668 — (4 ) 664 Total $ 24,788 $ 2 $ (136 ) $ 24,654 $ 29,685 $ 4 $ (102 ) $ 29,587 |
Summary of the Classification of Available-for-Sale Securities | The following table summarizes the classification of our available-for-sale debt securities on our Condensed Consolidated Balance Sheets (in millions): March 31, 2018 December 31, 2017 Cash and cash equivalents $ 195 $ 481 Short-term marketable securities 16,355 17,922 Long-term marketable securities 8,104 11,184 Total $ 24,654 $ 29,587 |
Summary of Available-for-Sale Securities by Contractual Maturity | The following table summarizes our available-for-sale debt securities by contractual maturity (in millions): March 31, 2018 Amortized Cost Fair Value Within one year $ 16,591 $ 16,550 After one year through five years 8,094 8,003 After five years through ten years 76 74 After ten years 27 27 Total $ 24,788 $ 24,654 |
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 debt 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 March 31, 2018 Corporate debt securities $ (25 ) $ 6,256 $ (48 ) $ 3,604 $ (73 ) $ 9,860 U.S. treasury securities (2 ) 547 (27 ) 3,337 (29 ) 3,884 Residential mortgage and asset-backed securities (7 ) 1,682 (15 ) 1,289 (22 ) 2,971 U.S. government agencies securities (1 ) 182 (8 ) 723 (9 ) 905 Non-U.S. government securities — 145 (3 ) 413 (3 ) 558 Total $ (35 ) $ 8,812 $ (101 ) $ 9,366 $ (136 ) $ 18,178 December 31, 2017 Corporate debt securities $ (14 ) $ 7,674 $ (32 ) $ 3,561 $ (46 ) $ 11,235 U.S. treasury securities (2 ) 821 (27 ) 3,240 (29 ) 4,061 Residential mortgage and asset-backed securities (4 ) 2,245 (11 ) 1,206 (15 ) 3,451 U.S. government agencies securities (1 ) 206 (7 ) 700 (8 ) 906 Non-U.S. government securities (1 ) 203 (3 ) 461 (4 ) 664 Total $ (22 ) $ 11,149 $ (80 ) $ 9,168 $ (102 ) $ 20,317 |
Derivative Financial Instrume27
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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): March 31, 2018 Asset Derivatives Liability Derivatives Classification Fair Value Classification Fair Value Derivatives designated as hedges: Foreign currency exchange contracts Other current assets $ 2 Other accrued liabilities $ (104 ) Foreign currency exchange contracts Other long-term assets 1 Other long-term obligations (5 ) Total derivatives designated as hedges 3 (109 ) Derivatives not designated as hedges: Foreign currency exchange contracts Other current assets 1 Other accrued liabilities (1 ) Total derivatives not designated as hedges 1 (1 ) Total derivatives $ 4 $ (110 ) December 31, 2017 Asset Derivatives Liability Derivatives Classification Fair Value Classification Fair Value Derivatives designated as hedges: Foreign currency exchange contracts Other current assets $ 2 Other accrued liabilities $ (89 ) Foreign currency exchange contracts Other long-term assets 1 Other long-term obligations (3 ) Total derivatives designated as hedges 3 (92 ) Derivatives not designated as hedges: Foreign currency exchange contracts Other current assets 10 Other accrued liabilities (1 ) Total derivatives not designated as hedges 10 (1 ) Total derivatives $ 13 $ (93 ) |
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 March 31, 2018 2017 Derivatives designated as hedges: Losses recognized in AOCI $ (61 ) $ (94 ) Gains (losses) reclassified from AOCI into product sales $ (48 ) $ 43 Gains recognized in Other income (expense), net $ — $ 13 Derivatives not designated as hedges: Losses recognized in Other income (expense), net $ (14 ) $ (135 ) |
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 March 31, 2018 Derivative assets $ 4 $ — $ 4 $ (4 ) $ — $ — Derivative liabilities $ (110 ) $ — $ (110 ) $ 4 $ — $ (106 ) As of December 31, 2017 Derivative assets $ 13 $ — $ 13 $ (8 ) $ — $ 5 Derivative liabilities $ (93 ) $ — $ (93 ) $ 8 $ — $ (85 ) |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary acquisition date fair values of assets acquired and liabilities assumed, and the consideration transferred (in millions): Cash and cash equivalents $ 652 Identifiable intangible assets: Indefinite-lived intangible assets - IPR&D 8,950 Outlicense acquired 91 Deferred income taxes (1,606 ) Other assets acquired (liabilities assumed), net 81 Total identifiable net assets 8,168 Goodwill 2,987 Total consideration transferred $ 11,155 |
Other Financial Information (Ta
Other Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Financial Information [Abstract] | |
Schedule of Inventories | Inventories are summarized as follows (in millions): March 31, 2018 December 31, 2017 Raw materials $ 1,865 $ 1,880 Work in process 306 352 Finished goods 707 670 Total $ 2,878 $ 2,902 Reported as: Inventories $ 885 $ 801 Other long-term assets 1,993 2,101 Total $ 2,878 $ 2,902 |
Schedule of Other Accrued Liabilities | The components of other accrued liabilities are summarized as follows (in millions): March 31, 2018 December 31, 2017 Income taxes payable $ 66 $ 713 Compensation and employee benefits 324 455 Branded prescription drug fee 313 284 Other accrued expenses 1,711 1,918 Total $ 2,414 $ 3,370 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Intangible Assets | The following table summarizes the carrying amount of our intangible assets, net (in millions): March 31, 2018 December 31, 2017 Finite-lived intangible assets $ 14,053 $ 14,350 Indefinite-lived intangible assets 2,750 2,750 Total intangible assets $ 16,803 $ 17,100 |
Summary of Finite-Lived Intangible Assets | The following table summarizes our finite-lived intangible assets (in millions): March 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Adjustment Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible asset - sofosbuvir $ 10,720 $ (3,030 ) $ — $ 7,690 $ 10,720 $ (2,855 ) $ 7,865 Intangible asset - axicabtagene ciloleucel (DLBCL) 6,200 (158 ) — 6,042 6,200 (72 ) 6,128 Intangible asset - Ranexa 688 (594 ) — 94 688 (566 ) 122 Other 546 (323 ) 4 227 546 (311 ) 235 Total $ 18,154 $ (4,105 ) $ 4 $ 14,053 $ 18,154 $ (3,804 ) $ 14,350 |
Schedule of Estimated Future Amortization Expense | As of March 31, 2018 , estimated future amortization expense associated with our finite-lived intangible assets is as follows (in millions): Fiscal Year Amount 2018 (remaining nine months) $ 902 2019 1,089 2020 1,064 2021 1,064 2022 1,064 Thereafter 8,870 Total $ 14,053 |
Debt and Credit Facilities (Tab
Debt and Credit Facilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 December 31, 2017 Senior Unsecured September 2015 September 2018 1.85% $ 999 $ 999 Senior Unsecured September 2017 September 2018 3-month LIBOR + 0.17% 749 749 Term Loan October 2017 October 2018 Variable — 999 Senior Unsecured September 2017 March 2019 3-month LIBOR + 0.22% 749 748 Senior Unsecured March 2014 April 2019 2.05% 499 499 Senior Unsecured September 2017 September 2019 1.85% 997 997 Senior Unsecured September 2017 September 2019 3-month LIBOR + 0.25% 499 499 Senior Unsecured November 2014 February 2020 2.35% 499 499 Senior Unsecured September 2015 September 2020 2.55% 1,994 1,994 Term Loan October 2017 October 2020 Variable — 998 Senior Unsecured March 2011 April 2021 4.50% 996 995 Senior Unsecured December 2011 December 2021 4.40% 1,247 1,246 Senior Unsecured September 2016 March 2022 1.95% 498 497 Senior Unsecured September 2015 September 2022 3.25% 996 996 Term Loan October 2017 October 2022 Variable — 2,497 Senior Unsecured September 2016 September 2023 2.50% 745 745 Senior Unsecured March 2014 April 2024 3.70% 1,743 1,742 Senior Unsecured November 2014 February 2025 3.50% 1,744 1,744 Senior Unsecured September 2015 March 2026 3.65% 2,729 2,729 Senior Unsecured September 2016 March 2027 2.95% 1,244 1,244 Senior Unsecured September 2015 September 2035 4.60% 990 990 Senior Unsecured September 2016 September 2036 4.00% 740 740 Senior Unsecured December 2011 December 2041 5.65% 995 995 Senior Unsecured March 2014 April 2044 4.80% 1,733 1,733 Senior Unsecured November 2014 February 2045 4.50% 1,730 1,730 Senior Unsecured September 2015 March 2046 4.75% 2,215 2,215 Senior Unsecured September 2016 March 2047 4.15% 1,724 1,723 Total debt, net 29,054 33,542 Less current portion 2,497 2,747 Total long-term debt, net $ 26,557 $ 30,795 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017 1,308 $ 1 $ 1,264 $ 165 $ 19,012 $ 59 $ 20,501 Net income — — — — 1,538 1 1,539 Other comprehensive loss, net of tax — — — (42 ) — — (42 ) Issuances under employee stock purchase plan 1 — 48 — — — 48 Issuances under equity incentive plans 5 — 64 — — — 64 Stock-based compensation — — 224 — — — 224 Repurchases of common stock (14 ) — (36 ) — (1,085 ) — (1,121 ) Dividends declared — — — — (752 ) — (752 ) Cumulative effect from the adoption of new accounting standards — — — (293 ) 483 — 190 Balance at March 31, 2018 1,300 $ 1 $ 1,564 $ (170 ) $ 19,196 $ 60 $ 20,651 |
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, 2017 $ 85 $ 194 $ (114 ) $ 165 Net unrealized gain (loss) 7 (36 ) (61 ) (90 ) Reclassifications to net income — — 48 48 Reclassifications to retained earnings as a result of the adoption of new accounting standards — (293 ) — (293 ) Net current period other comprehensive income (loss) 7 (329 ) (13 ) (335 ) Balance at March 31, 2018 $ 92 $ (135 ) $ (127 ) $ (170 ) |
Net Income Per Share Attribut33
Net Income Per Share Attributable to Gilead Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 2017 Net income attributable to Gilead $ 1,538 $ 2,702 Shares used in per share calculation - basic 1,307 1,308 Effect of dilutive securities: Stock options and equivalents 13 12 Shares used in per share calculation - diluted 1,320 1,320 Net income per share attributable to Gilead common stockholders - basic $ 1.18 $ 2.07 Net income per share attributable to Gilead common stockholders - diluted $ 1.17 $ 2.05 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
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 March 31, 2018 2017 AmerisourceBergen Corp. 21 % 20 % Cardinal Health, Inc. 21 % 18 % McKesson Corp. 20 % 20 % |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Schedule of Effect of New Accounting Pronouncements (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Prepaid and other current assets | $ 1,600 | $ 1,757 | $ 1,661 |
Other long-term assets | 2,642 | 2,732 | 2,722 |
Other accrued liabilities | 2,414 | 3,255 | 3,370 |
Other long-term obligations | 671 | 589 | 558 |
Retained earnings | $ 19,196 | 19,202 | $ 19,012 |
Difference Between Revenue Guidance In Effect Before And After Topic 606 | Accounting Standards Update 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Prepaid and other current assets | 96 | ||
Other long-term assets | 10 | ||
Other accrued liabilities | (115) | ||
Other long-term obligations | 31 | ||
Retained earnings | $ 190 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect from the adoption of new accounting standards | $ 190 | ||
Unrealized gain of investment | $ 45 | ||
Galapagos | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Unrealized gain of investment | 278 | ||
Difference Between Revenue Guidance In Effect Before And After Topic 606 | Accounting Standards Update 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Revenues | $ 5 | ||
Accumulated Other Comprehensive Income (Loss) | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect from the adoption of new accounting standards | (293) | $ (293) | |
Accumulated Other Comprehensive Income (Loss) | Accounting Standards Update 2016-01 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect from the adoption of new accounting standards | (293) | ||
Retained Earnings | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect from the adoption of new accounting standards | 483 | ||
Retained Earnings | Accounting Standards Update 2016-01 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect from the adoption of new accounting standards | $ 293 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 5,088 | $ 6,505 |
U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 3,547 | 4,469 |
Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 1,057 | 1,359 |
Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 484 | 677 |
Biktarvy | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 35 | 0 |
Biktarvy | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 35 | 0 |
Biktarvy | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Biktarvy | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Descovy | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 361 | 251 |
Descovy | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 274 | 209 |
Descovy | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 75 | 37 |
Descovy | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 12 | 5 |
Genvoya | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 1,082 | 769 |
Genvoya | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 853 | 669 |
Genvoya | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 186 | 87 |
Genvoya | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 43 | 13 |
Odefsey | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 342 | 227 |
Odefsey | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 279 | 203 |
Odefsey | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 58 | 23 |
Odefsey | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 5 | 1 |
Atripla | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 314 | 452 |
Atripla | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 228 | 316 |
Atripla | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 51 | 94 |
Atripla | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 35 | 42 |
Complera/Eviplera | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 190 | 253 |
Complera/Eviplera | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 67 | 112 |
Complera/Eviplera | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 109 | 125 |
Complera/Eviplera | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 14 | 16 |
Stribild | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 174 | 309 |
Stribild | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 133 | 226 |
Stribild | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 29 | 67 |
Stribild | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 12 | 16 |
Truvada | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 652 | 714 |
Truvada | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 507 | 464 |
Truvada | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 97 | 189 |
Truvada | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 48 | 61 |
Vemlidy | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 58 | 11 |
Vemlidy | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 47 | 11 |
Vemlidy | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 3 | 0 |
Vemlidy | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 8 | 0 |
Viread | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 97 | 260 |
Viread | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 7 | 117 |
Viread | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 30 | 71 |
Viread | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 60 | 72 |
Epclusa | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 536 | 892 |
Epclusa | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 269 | 735 |
Epclusa | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 198 | 138 |
Epclusa | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 69 | 19 |
Harvoni | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 348 | 1,371 |
Harvoni | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 234 | 926 |
Harvoni | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 56 | 243 |
Harvoni | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 58 | 202 |
Vosevi | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 107 | 0 |
Vosevi | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 86 | 0 |
Vosevi | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 16 | 0 |
Vosevi | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 5 | 0 |
Other antiviral | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 79 | 332 |
Other antiviral | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 4 | 41 |
Other antiviral | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 13 | 110 |
Other antiviral | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 62 | 181 |
Yescarta | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 40 | 0 |
Yescarta | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 40 | 0 |
Yescarta | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Yescarta | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Zydelig | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 33 | 35 |
Zydelig | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 14 | 15 |
Zydelig | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 18 | 19 |
Zydelig | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 1 | 1 |
Letairis | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 204 | 211 |
Letairis | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 204 | 211 |
Letairis | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Letairis | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Ranexa | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 195 | 153 |
Ranexa | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 195 | 153 |
Ranexa | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Ranexa | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 0 | 0 |
AmBisome | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 107 | 92 |
AmBisome | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 17 | 9 |
AmBisome | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 56 | 52 |
AmBisome | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 34 | 31 |
Other | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 47 | 45 |
Other | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 34 | 33 |
Other | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 10 | 11 |
Other | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 3 | 1 |
Total product sales | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 5,001 | 6,377 |
Total product sales | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 3,527 | 4,450 |
Total product sales | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 1,005 | 1,266 |
Total product sales | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 469 | 661 |
Royalty, contract and other revenues | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 87 | 128 |
Royalty, contract and other revenues | U.S. | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 20 | 19 |
Royalty, contract and other revenues | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 52 | 93 |
Royalty, contract and other revenues | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 15 | $ 16 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Jan. 01, 2018 | |
Revenue Recognition [Abstract] | ||
Revenue earned from performance obligation satisfied in previous period | $ 10 | |
Contract assets | $ 117 | $ 132 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of assets and liabilities measured at fair value (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Available-for-sale debt securities | $ 24,654 | $ 29,587 |
Total | 5,480 | 5,465 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total | 9,364 | 9,526 |
Liabilities: | ||
Total | 126 | 116 |
Fair Value, Measurements, Recurring | Level 1 | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. treasury securities | ||
Assets: | ||
Available-for-sale debt securities | 3,884 | 4,061 |
Fair Value, Measurements, Recurring | Level 1 | Residential mortgage and asset-backed securities | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. government agencies securities | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Certificates of deposit | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Non-U.S. government securities | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Money market funds | ||
Assets: | ||
Marketable equity securities | 4,674 | 4,714 |
Fair Value, Measurements, Recurring | Level 1 | Equity securities | ||
Assets: | ||
Marketable equity securities | 680 | 635 |
Fair Value, Measurements, Recurring | Level 1 | Deferred compensation plan | ||
Assets: | ||
Marketable equity securities | 126 | 116 |
Liabilities: | ||
Deferred compensation plan | 126 | 116 |
Fair Value, Measurements, Recurring | Level 1 | Foreign currency derivative contracts | ||
Assets: | ||
Foreign currency derivative contracts | 0 | 0 |
Liabilities: | ||
Foreign currency derivative contracts | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total | 20,774 | 25,539 |
Liabilities: | ||
Total | 110 | 93 |
Fair Value, Measurements, Recurring | Level 2 | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt securities | 11,972 | 14,747 |
Fair Value, Measurements, Recurring | Level 2 | U.S. treasury securities | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Residential mortgage and asset-backed securities | ||
Assets: | ||
Available-for-sale debt securities | 3,406 | 4,058 |
Fair Value, Measurements, Recurring | Level 2 | U.S. government agencies securities | ||
Assets: | ||
Available-for-sale debt securities | 925 | 926 |
Fair Value, Measurements, Recurring | Level 2 | Certificates of deposit | ||
Assets: | ||
Available-for-sale debt securities | 3,908 | 5,131 |
Fair Value, Measurements, Recurring | Level 2 | Non-U.S. government securities | ||
Assets: | ||
Available-for-sale debt securities | 559 | 664 |
Fair Value, Measurements, Recurring | Level 2 | Money market funds | ||
Assets: | ||
Marketable equity securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Equity securities | ||
Assets: | ||
Marketable equity securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Deferred compensation plan | ||
Assets: | ||
Marketable equity securities | 0 | 0 |
Liabilities: | ||
Deferred compensation plan | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Foreign currency derivative contracts | ||
Assets: | ||
Foreign currency derivative contracts | 4 | 13 |
Liabilities: | ||
Foreign currency derivative contracts | 110 | 93 |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Total | 0 | 0 |
Liabilities: | ||
Total | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. treasury securities | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Residential mortgage and asset-backed securities | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. government agencies securities | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Certificates of deposit | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Non-U.S. government securities | ||
Assets: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Money market funds | ||
Assets: | ||
Marketable equity securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Equity securities | ||
Assets: | ||
Marketable equity securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Deferred compensation plan | ||
Assets: | ||
Marketable equity securities | 0 | 0 |
Liabilities: | ||
Deferred compensation plan | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Foreign currency derivative contracts | ||
Assets: | ||
Foreign currency derivative contracts | 0 | 0 |
Liabilities: | ||
Foreign currency derivative contracts | 0 | 0 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | ||
Assets: | ||
Total | 30,138 | 35,065 |
Liabilities: | ||
Total | 236 | 209 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt securities | 11,972 | 14,747 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | U.S. treasury securities | ||
Assets: | ||
Available-for-sale debt securities | 3,884 | 4,061 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Residential mortgage and asset-backed securities | ||
Assets: | ||
Available-for-sale debt securities | 3,406 | 4,058 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | U.S. government agencies securities | ||
Assets: | ||
Available-for-sale debt securities | 925 | 926 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Certificates of deposit | ||
Assets: | ||
Available-for-sale debt securities | 3,908 | 5,131 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Non-U.S. government securities | ||
Assets: | ||
Available-for-sale debt securities | 559 | 664 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Money market funds | ||
Assets: | ||
Marketable equity securities | 4,674 | 4,714 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Equity securities | ||
Assets: | ||
Marketable equity securities | 680 | 635 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Deferred compensation plan | ||
Assets: | ||
Marketable equity securities | 126 | 116 |
Liabilities: | ||
Deferred compensation plan | 126 | 116 |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | Foreign currency derivative contracts | ||
Assets: | ||
Foreign currency derivative contracts | 4 | 13 |
Liabilities: | ||
Foreign currency derivative contracts | $ 110 | $ 93 |
Fair Value Measurements - Sum40
Fair Value Measurements - Summary of Classification on Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | ||
Cash and cash equivalents | $ 4,674 | $ 4,714 |
Prepaid and other current assets | 681 | 637 |
Other long-term assets | 125 | 114 |
Total | $ 5,480 | $ 5,465 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Unrealized gain of investment | $ 45 | |
Cash | 2,800 | $ 2,400 |
Cash equivalents | 195 | 481 |
Carrying value of debt | 29,054 | 33,542 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Estimated fair value of debt | $ 29,900 | $ 35,500 |
Available-for-Sale Debt Secur42
Available-for-Sale Debt Securities - Summary of Available-for-Sale Debt Securities at Estimated Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Available-for-Sale Securities | ||
Amortized Cost | $ 24,788 | $ 29,685 |
Gross Unrealized Gains | 2 | 4 |
Gross Unrealized Losses | (136) | (102) |
Fair Value | 24,654 | 29,587 |
Corporate debt securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 12,044 | 14,790 |
Gross Unrealized Gains | 2 | 3 |
Gross Unrealized Losses | (74) | (46) |
Fair Value | 11,972 | 14,747 |
U.S. treasury securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 3,912 | 4,090 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (28) | (29) |
Fair Value | 3,884 | 4,061 |
Residential mortgage and asset-backed securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 3,427 | 4,072 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (21) | (15) |
Fair Value | 3,406 | 4,058 |
U.S. government agencies securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 934 | 934 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (9) | (8) |
Fair Value | 925 | 926 |
Certificates of deposit | ||
Available-for-Sale Securities | ||
Amortized Cost | 3,908 | 5,131 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 3,908 | 5,131 |
Non-U.S. government securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 563 | 668 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (4) | (4) |
Fair Value | $ 559 | $ 664 |
Available-for-Sale Debt Secur43
Available-for-Sale Debt Securities - Summary of the Balance Sheet Classification of Available-for-Sale Debt Securities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | $ 24,654 | $ 29,587 |
Cash and cash equivalents | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 195 | 481 |
Short-term marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 16,355 | 17,922 |
Long-term marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | $ 8,104 | $ 11,184 |
Available-for-Sale Debt Secur44
Available-for-Sale Debt Securities - Summary of Available-for-Sale Debt Securities by Contractual Maturity (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Amortized Cost | ||
Within one year | $ 16,591 | |
After one year through five years | 8,094 | |
After five years through ten years | 76 | |
After ten years | 27 | |
Amortized Cost | 24,788 | $ 29,685 |
Fair Value | ||
Within one year | 16,550 | |
After one year through five years | 8,003 | |
After five years through ten years | 74 | |
After ten years | 27 | |
Fair Value | $ 24,654 | $ 29,587 |
Available-for-Sale Debt Secur45
Available-for-Sale Debt Securities - Summary of Available-for-Sale Debt Securities in a Continuous Unrealized Loss Position Deemed not to be Other-than-Temporarily Impaired (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | $ (35) | $ (22) |
Less than 12 Months, Fair Value | 8,812 | 11,149 |
12 Months or Greater, Unrealized Losses | (101) | (80) |
12 Months or Greater, Fair Value | 9,366 | 9,168 |
Gross Unrealized Losses | (136) | (102) |
Total Estimated Fair Value | 18,178 | 20,317 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | (25) | (14) |
Less than 12 Months, Fair Value | 6,256 | 7,674 |
12 Months or Greater, Unrealized Losses | (48) | (32) |
12 Months or Greater, Fair Value | 3,604 | 3,561 |
Gross Unrealized Losses | (73) | (46) |
Total Estimated Fair Value | 9,860 | 11,235 |
U.S. treasury securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | (2) | (2) |
Less than 12 Months, Fair Value | 547 | 821 |
12 Months or Greater, Unrealized Losses | (27) | (27) |
12 Months or Greater, Fair Value | 3,337 | 3,240 |
Gross Unrealized Losses | (29) | (29) |
Total Estimated Fair Value | 3,884 | 4,061 |
Residential mortgage and asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | (7) | (4) |
Less than 12 Months, Fair Value | 1,682 | 2,245 |
12 Months or Greater, Unrealized Losses | (15) | (11) |
12 Months or Greater, Fair Value | 1,289 | 1,206 |
Gross Unrealized Losses | (22) | (15) |
Total Estimated Fair Value | 2,971 | 3,451 |
U.S. government agencies securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | (1) | (1) |
Less than 12 Months, Fair Value | 182 | 206 |
12 Months or Greater, Unrealized Losses | (8) | (7) |
12 Months or Greater, Fair Value | 723 | 700 |
Gross Unrealized Losses | (9) | (8) |
Total Estimated Fair Value | 905 | 906 |
Non-U.S. government securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Unrealized Losses | 0 | (1) |
Less than 12 Months, Fair Value | 145 | 203 |
12 Months or Greater, Unrealized Losses | (3) | (3) |
12 Months or Greater, Fair Value | 413 | 461 |
Gross Unrealized Losses | (3) | (4) |
Total Estimated Fair Value | $ 558 | $ 664 |
Available-for-Sale Debt Secur46
Available-for-Sale Debt Securities - Additional Information (Details) - position | Mar. 31, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Securities in unrealized loss positions, number of positions (securities) | 2,588 | 2,957 |
Derivative Financial Instrume47
Derivative Financial Instruments - Summary of Classification and Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | $ 4 | $ 13 |
Derivative liability fair value | (110) | (93) |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 3 | 3 |
Derivative liability fair value | (109) | (92) |
Designated as Hedging Instrument | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 2 | 2 |
Designated as Hedging Instrument | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | (104) | (89) |
Designated as Hedging Instrument | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 1 | 1 |
Designated as Hedging Instrument | Other long-term obligations | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | (5) | (3) |
Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 1 | 10 |
Derivative liability fair value | (1) | (1) |
Not Designated as Hedging Instrument | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 1 | 10 |
Not Designated as Hedging Instrument | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | $ (1) | $ (1) |
Derivative Financial Instrume48
Derivative Financial Instruments - Summary of Effect of Foreign Currency Exchange Contracts (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Losses recognized in AOCI | $ (61) | $ (94) |
Gains (losses) reclassified from AOCI into product sales | (48) | 43 |
Gains recognized in Other income (expense), net | 0 | 13 |
Losses recognized in Other income (expense), net | $ (14) | $ (135) |
Derivative Financial Instrume49
Derivative Financial Instruments - Summary of Potential Effect of Offsetting Derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative Asset [Abstract] | ||
Gross Amounts of Recognized Assets/Liabilities | $ 4 | $ 13 |
Gross Amounts Offset on our Condensed Consolidated Balance Sheets | 0 | 0 |
Amounts of Assets/Liabilities Presented on our Condensed Consolidated Balance Sheets | 4 | 13 |
Derivative Financial Instruments | (4) | (8) |
Cash Collateral Received/ Pledged | 0 | 0 |
Net Amount (Legal Offset) | 0 | 5 |
Derivative Liability [Abstract] | ||
Gross Amounts of Recognized Assets/Liabilities | (110) | (93) |
Gross Amounts Offset on our Condensed Consolidated Balance Sheets | 0 | 0 |
Amounts of Assets/Liabilities Presented on our Condensed Consolidated Balance Sheets | (110) | (93) |
Derivative Financial Instruments | 4 | 8 |
Cash Collateral Received/ Pledged | 0 | 0 |
Net Amount (Legal Offset) | $ (106) | $ (85) |
Derivative Financial Instrume50
Derivative Financial Instruments - Additional Information (Details) - USD ($) $ in Billions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||
Notional amounts on foreign currency exchange contracts | $ 2.5 | $ 2.8 |
Maximum | ||
Derivative [Line Items] | ||
Maturity on derivative instruments | 18 months | |
Estimate of time to transfer | 12 months |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) $ / shares in Units, $ in Millions | Oct. 03, 2017USD ($)$ / shares |
Business Acquisition [Line Items] | |
Total consideration transferred | $ 11,155 |
Replaced stock-based compensation attributable to the pre-combination period | 75 |
Payments to Outstanding Common Stockholders | |
Business Acquisition [Line Items] | |
Cash consideration | 10,420 |
Payments to Vested Equity Award Holders | |
Business Acquisition [Line Items] | |
Cash consideration | 645 |
Payments to Warrant Holders | |
Business Acquisition [Line Items] | |
Cash consideration | 15 |
Share Based Compensation Expense | |
Business Acquisition [Line Items] | |
Replaced stock-based compensation attributable to the post-combination period | $ 733 |
Kite Pharma, Inc | |
Business Acquisition [Line Items] | |
Share price (in dollars per share) | $ / shares | $ 180 |
Acquisition - Purchase Price Pr
Acquisition - Purchase Price Preliminary Allocations (Details) $ in Millions | Oct. 03, 2017USD ($) |
Business Combinations [Abstract] | |
Cash and cash equivalents | $ 652 |
Indefinite-lived intangible assets - IPR&D | 8,950 |
Outlicense acquired | 91 |
Deferred income taxes | (1,606) |
Other assets acquired (liabilities assumed), net | 81 |
Total identifiable net assets | 8,168 |
Goodwill | 2,987 |
Total consideration transferred | $ 11,155 |
Other Financial Information - I
Other Financial Information - Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Other Financial Information [Abstract] | ||
Raw materials | $ 1,865 | $ 1,880 |
Work in process | 306 | 352 |
Finished goods | 707 | 670 |
Total | 2,878 | 2,902 |
Inventories | 885 | 801 |
Other long-term assets | 1,993 | 2,101 |
Total | $ 2,878 | $ 2,902 |
Other Financial Information - O
Other Financial Information - Other Accrued Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Other Financial Information [Abstract] | |||
Income taxes payable | $ 66 | $ 713 | |
Compensation and employee benefits | 324 | 455 | |
Branded prescription drug fee | 313 | 284 | |
Other accrued expenses | 1,711 | 1,918 | |
Total | $ 2,414 | $ 3,255 | $ 3,370 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Carrying Amounts of Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets | $ 14,053 | $ 14,350 |
Indefinite-lived intangible assets | 2,750 | 2,750 |
Intangible assets, net | $ 16,803 | $ 17,100 |
Intangible Assets - Summary of
Intangible Assets - Summary of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 18,154 | $ 18,154 |
Accumulated Amortization | (4,105) | (3,804) |
Foreign Currency Translation Adjustment | 4 | |
Total | 14,053 | 14,350 |
Intangible asset - sofosbuvir | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,720 | 10,720 |
Accumulated Amortization | (3,030) | (2,855) |
Foreign Currency Translation Adjustment | 0 | |
Total | 7,690 | 7,865 |
Intangible asset - axicabtagene ciloleucel (DLBCL) | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6,200 | 6,200 |
Accumulated Amortization | (158) | (72) |
Foreign Currency Translation Adjustment | 0 | |
Total | 6,042 | 6,128 |
Intangible asset - Ranexa | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 688 | 688 |
Accumulated Amortization | (594) | (566) |
Foreign Currency Translation Adjustment | 0 | |
Total | 94 | 122 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 546 | 546 |
Accumulated Amortization | (323) | (311) |
Foreign Currency Translation Adjustment | 4 | |
Total | $ 227 | $ 235 |
Intangible Assets - Schedule 57
Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
2018 (remaining nine months) | $ 902 | |
2,019 | 1,089 | |
2,020 | 1,064 | |
2,021 | 1,064 | |
2,022 | 1,064 | |
Thereafter | 8,870 | |
Total | $ 14,053 | $ 14,350 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cost of Goods Sold | ||
Intangible Assets [Line Items] | ||
Amortization of Intangible Assets | $ 301 | $ 210 |
Debt and Credit Facilities - Su
Debt and Credit Facilities - Summary of Debt Carrying Amount (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Total debt, net | $ 29,054 | $ 33,542 |
Less current portion | 2,497 | 2,747 |
Total long-term debt, net | $ 26,557 | 30,795 |
Senior Unsecured Notes Due in September 2018 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.85% | |
Senior unsecured notes | $ 999 | 999 |
2017 Senior Unsecured Notes Due in September 2018 | ||
Debt Instrument [Line Items] | ||
Senior unsecured notes | $ 749 | 749 |
Basis Spread | 0.17% | |
Variable Rate Basis | 3-month LIBOR | |
2017 Senior Unsecured Notes Due in March 2019 | ||
Debt Instrument [Line Items] | ||
Senior unsecured notes | $ 749 | 748 |
Basis Spread | 0.22% | |
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 | $ 997 | 997 |
2017 Senior Unsecured Notes Due in September 2019 with Floating Rate | ||
Debt Instrument [Line Items] | ||
Senior unsecured notes | $ 499 | 499 |
Basis Spread | 0.25% | |
Variable Rate Basis | 3-month LIBOR | |
Senior Unsecured Notes Due In February 2020 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.35% | |
Senior unsecured notes | $ 499 | 499 |
Senior Unsecured Notes Due in September 2020 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.55% | |
Senior unsecured notes | $ 1,994 | 1,994 |
Term Loan Due October 2020 | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | $ 0 | 998 |
Senior Unsecured Notes Due in April 2021 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.50% | |
Senior unsecured notes | $ 996 | 995 |
Senior Unsecured Notes Due In December 2021 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.40% | |
Senior unsecured notes | $ 1,247 | 1,246 |
Senior Unsecured Notes Due in March 2022 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.95% | |
Senior unsecured notes | $ 498 | 497 |
Senior Unsecured Notes Due in September 2022 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.25% | |
Senior unsecured notes | $ 996 | 996 |
Term Loan Due October 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | $ 0 | 2,497 |
Senior Unsecured Notes Due in September 2023 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.50% | |
Senior unsecured notes | $ 745 | 745 |
Senior Unsecured Notes Due in April 2024 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.70% | |
Senior unsecured notes | $ 1,743 | 1,742 |
Senior Unsecured Notes Due in February 2025 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.50% | |
Senior unsecured notes | $ 1,744 | 1,744 |
Senior Unsecured Notes Due in March 2026 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.65% | |
Senior unsecured notes | $ 2,729 | 2,729 |
Senior Unsecured Notes Due in March 2027 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.95% | |
Senior unsecured notes | $ 1,244 | 1,244 |
Senior Unsecured Notes Due in September 2035 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.60% | |
Senior unsecured notes | $ 990 | 990 |
Senior Unsecured Notes Due in September 2036 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.00% | |
Senior unsecured notes | $ 740 | 740 |
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 | 1,733 |
Senior Unsecured Notes Due in February 2045 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.50% | |
Senior unsecured notes | $ 1,730 | 1,730 |
Senior Unsecured Notes Due in March 2046 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.75% | |
Senior unsecured notes | $ 2,215 | 2,215 |
Senior Unsecured Notes Due in March 2047 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.15% | |
Senior unsecured notes | $ 1,724 | 1,723 |
Term Loan Due October 2018 | ||
Debt Instrument [Line Items] | ||
Line of Credit, Current | $ 0 | $ 999 |
Debt and Credit Facilities - Ad
Debt and Credit Facilities - Additional Information (Details) | 1 Months Ended |
Mar. 31, 2018USD ($) | |
Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Amount outstanding | $ 0 |
Term Loan Facilities | |
Debt Instrument [Line Items] | |
Repayments of line of credit | $ 4,500,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 3 Months Ended | ||||
Dec. 31, 2016USD ($) | Mar. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2018USD ($) | Feb. 28, 2018Pending_Claim | Dec. 31, 2017USD ($) | |
Loss Contingencies [Line Items] | ||||||
Damages awarded | $ 2,540,000,000 | |||||
Motion invalidated past damages, amount | $ 2,540,000,000 | |||||
Damages awarded but dismissed | $ 200,000,000 | |||||
Litigation accrual | $ 0 | $ 0 | ||||
Number of pending claims with motions to dismiss | Pending_Claim | 2 | |||||
Merck '499 and '712 patents [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
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 | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance (in shares) | 1,308 | |||
Beginning Balance | $ 20,501 | |||
Net income (loss) | 1,539 | $ 2,699 | ||
Other comprehensive loss, net of tax | (42) | $ (18) | ||
Issuances under employee stock purchase plan | 48 | |||
Issuances under equity incentive plans | 64 | |||
Stock-based compensation | 224 | |||
Repurchases of common stock | (1,121) | |||
Dividends declared | $ (752) | |||
Cumulative effect from the adoption of new accounting standards | $ 190 | |||
Ending Balance (in shares) | 1,300 | |||
Ending Balance | $ 20,651 | |||
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance (in shares) | 1,308 | |||
Beginning Balance | $ 1 | |||
Issuances under employee stock purchase plan (in shares) | 1 | |||
Issuances under equity incentive plans (in shares) | 5 | |||
Repurchases of common stock (in shares) | (14) | |||
Ending Balance (in shares) | 1,300 | |||
Ending Balance | $ 1 | |||
Additional Paid-In Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 1,264 | |||
Issuances under employee stock purchase plan | 48 | |||
Issuances under equity incentive plans | 64 | |||
Stock-based compensation | 224 | |||
Repurchases of common stock | (36) | |||
Ending Balance | 1,564 | |||
Accumulated Other Comprehensive Income (Loss) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 165 | |||
Other comprehensive loss, net of tax | (42) | |||
Cumulative effect from the adoption of new accounting standards | (293) | $ (293) | ||
Ending Balance | (170) | |||
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 19,012 | |||
Net income (loss) | 1,538 | |||
Repurchases of common stock | (1,085) | |||
Dividends declared | (752) | |||
Cumulative effect from the adoption of new accounting standards | $ 483 | |||
Ending Balance | 19,196 | |||
Noncontrolling Interest | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 59 | |||
Net income (loss) | 1 | |||
Ending Balance | $ 60 |
Stockholders' Equity - Summar63
Stockholders' Equity - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | $ 20,501 | ||
Cumulative effect from the adoption of new accounting standards | $ 190 | ||
Ending Balance | 20,651 | ||
Foreign Currency Translation | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | 85 | ||
Net unrealized gain (loss) | 7 | ||
Reclassifications to retained earnings as a result of the adoption of new accounting standards | 0 | ||
Cumulative effect from the adoption of new accounting standards | $ 0 | ||
Net current period other comprehensive income (loss) | 7 | ||
Ending Balance | 92 | ||
Unrealized Gains and Losses on Available-for-Sale Securities | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | 194 | ||
Net unrealized gain (loss) | (36) | ||
Reclassifications to retained earnings as a result of the adoption of new accounting standards | 0 | ||
Cumulative effect from the adoption of new accounting standards | (293) | ||
Net current period other comprehensive income (loss) | (329) | ||
Ending Balance | (135) | ||
Unrealized Gains and Losses on Cash Flow Hedges | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | (114) | ||
Net unrealized gain (loss) | (61) | ||
Reclassifications to retained earnings as a result of the adoption of new accounting standards | 48 | ||
Cumulative effect from the adoption of new accounting standards | 0 | ||
Net current period other comprehensive income (loss) | (13) | ||
Ending Balance | (127) | ||
Accumulated Other Comprehensive Income (Loss) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | 165 | ||
Net unrealized gain (loss) | (90) | ||
Reclassifications to retained earnings as a result of the adoption of new accounting standards | 48 | ||
Cumulative effect from the adoption of new accounting standards | $ (293) | $ (293) | |
Net current period other comprehensive income (loss) | (335) | ||
Ending Balance | $ (170) |
Stockholders' Equity - Repurcha
Stockholders' Equity - Repurchase Authorizations (Details) - USD ($) shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Jan. 28, 2016 | |
Equity, Class of Treasury Stock [Line Items] | ||
Repurchases of common stock, amount | $ 1,121,000,000 | |
2016 Stock Repurchase Program | ||
Equity, Class of Treasury Stock [Line Items] | ||
Authorized amount | $ 12,000,000,000 | |
Repurchases of common stock (in shares) | 13 | |
Repurchases of common stock, amount | $ 1,000,000,000 | |
Remaining authorized repurchase amount | $ 7,000,000,000 |
Net Income Per Share Attribut65
Net Income Per Share Attributable to Gilead Common Stockholders - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Additional Information [Abstract] | ||
Antidilutive securities excluded from earnings per share computation (in shares) | 12 | 9 |
Net Income Per Share Attribut66
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 | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net income attributable to Gilead | $ 1,538 | $ 2,702 |
Shares used in per share calculation - basic (in shares) | 1,307 | 1,308 |
Effect of dilutive securities: | ||
Stock options and equivalents (in shares) | 13 | 12 |
Shares used in per share calculation - diluted (in shares) | 1,320 | 1,320 |
Net income per share attributable to Gilead common stockholders - basic (usd per share) | $ 1.18 | $ 2.07 |
Net income per share attributable to Gilead common stockholders - diluted (usd per share) | $ 1.17 | $ 2.05 |
Segment Information - Summary o
Segment Information - Summary of Revenue by Major Customers (Details) - segment | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 1 | |
Customer Concentration Risk | Sales Revenue, Net | AmerisourceBergen Corp. | ||
Revenue, Major Customer [Line Items] | ||
Percentage of total revenues | 21.00% | 20.00% |
Customer Concentration Risk | Sales Revenue, Net | Cardinal Health, Inc. | ||
Revenue, Major Customer [Line Items] | ||
Percentage of total revenues | 21.00% | 18.00% |
Customer Concentration Risk | Sales Revenue, Net | McKesson Corp. | ||
Revenue, Major Customer [Line Items] | ||
Percentage of total revenues | 20.00% | 20.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Feb. 28, 2018 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Amount of foreign earnings repatriated | $ 28,000 | |
Effective income tax rate | 24.30% | |
Reasonably possible decrease in unrecognized tax benefits | $ 800 |