Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is traded on the Nasdaq Global Select Market under the symbol “GILD.”
As of February 18, 2021, we had approximately 1,402 stockholders of record of our common stock.
Performance Graph (1)
The following graph compares our cumulative total stockholder return for the past five years to two indices: the Standard & Poor’s 500 Stock Index (“S&P 500 Index”) and the Nasdaq Biotechnology Index (“NBI Index”). The stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns.
Comparison of Cumulative Total Return on Investment for the Past Five Years (2)
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(1) This section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any of our filings under the Securities Act or the Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
(2) Shows the cumulative return on investment assuming an investment of $100 in our common stock, the NBI Index and the S&P 500 Index on December 31, 2015, and assuming that all dividends were reinvested.
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Equity Compensation Plan Information
The following table provides certain information with respect to our equity compensation plans in effect as of December 31, 2020:
(in millions, except per share amounts) Number of Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1)
Weighted-average Exercise Price of Outstanding Options, Warrants and Rights (1)
Number of Common Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Plan Category (a) (b) (c)
Equity Compensation plans approved by security holders:
2004 Equity Incentive Plan (2)
16.1 $ 69.43 85.9
Employee Stock Purchase Plan (3)
7.1
Total equity compensation plans approved by security holders 16.1 $ 69.43 93.0
Equity Compensation plans not approved by security holders (4)
0.5 $ 68.57 10.3
Total 16.6 $ 69.40 103.3
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(1) Does not take into account 20 million restricted stock units, performance share awards or units and phantom shares, which have no exercise price and were granted under our 2004 and 2018 Equity Incentive Plans.
(2) Includes awards and shares previously issuable under The Immunomedics, Inc. Amended and Restated 2014 Long-Term Incentive Plan (the “Immunomedics Plan”), which was assumed in connection with our acquisition of Immunomedics, Inc. and subsequently merged into the 2004 Equity Incentive Plan.
(3) Under our Employee Stock Purchase Plan, participants are permitted to purchase our common stock at a discount on certain dates through payroll deductions within a pre-determined purchase period. Accordingly, these numbers are not determinable.
(4) Includes awards and shares issuable under the Forty Seven, Inc. 2018 Equity Incentive Plan, which was assumed in connection with our acquisition of Forty Seven, Inc. (“Forty Seven”) and subsequently amended and restated as our 2018 Equity Incentive Plan.
Material Features of the Gilead Sciences, Inc. 2018 Equity Incentive Plan
The Forty Seven, Inc. 2018 Equity Incentive Plan was originally established by Forty Seven in June 2018. In connection with Gilead’s acquisition of Forty Seven in April 2020, Gilead assumed the Forty Seven, Inc. 2018 Equity Incentive Plan, and amended and restated it as the Gilead Sciences, Inc. 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any affiliate, and provide a means by which the eligible recipients may benefit from increases in value of Gilead common stock. From and after April 7, 2020, only employees and consultants of Forty Seven as of immediately prior to such date and employees and consultants of Gilead hired on or following such date are eligible to receive grants of new awards under the 2018 Plan.
The 2018 Plan provides for the award of incentive stock options and Nonstatutory stock options, each of which must generally have an exercise price equal to at least the fair market value of our common stock on the date of grant; stock appreciation rights; restricted stock awards; restricted stock unit awards; performance stock awards; other stock awards; and performance cash awards.
As of April 7, 2020, the aggregate number of shares of common stock issuable under the 2018 Plan (from and after such date) was 12,069,378. From and after April 7, 2020, Gilead has granted restricted stock units and stock options under the 2018 Plan, and these are the only types of equity awards outstanding under the plan. As of December 31, 2020, 10.3 million shares of Gilead common stock remained available for issuance under the 2018 Plan.
Issuer Purchases of Equity Securities
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 made repurchases under the 2016 Program starting in April 2016.
In the first quarter of 2020, our Board of Directors authorized a new $5.0 billion stock repurchase program (“2020 Program”), which will commence upon the completion of the 2016 Program. Purchases under the 2020 Program may be made in the open market or in privately negotiated transactions.
During 2020, we repurchased and retired 22 million shares of our common stock for $1.6 billion through open market transactions under the 2016 Program.
As of December 31, 2020, the remaining authorized repurchase amount from both programs was $6.8 billion.
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The table below summarizes our stock repurchase activity for the three months ended December 31, 2020:
Total Number
of Shares
Purchased (in thousands) Average
Price Paid
per Share (in dollars) Total Number of
Shares Purchased
as Part of a Publicly
Announced Program (in thousands) Maximum Fair
Value of Shares
that May Yet Be
Purchased Under
the Programs (in millions)
October 1 - October 31, 2020 27 $ 63.84 — $ 6,816
November 1 - November 30, 2020 171 $ 60.49 — $ 6,816
December 1 - December 31, 2020 34 $ 59.82 — $ 6,816
Total 232 (1) $ 60.78 — (1)
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(1) A total of 232 thousand shares were transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock units during the period. We did not purchase any shares of our common stock in the open market pursuant to our repurchase program.
ITEM 6. SELECTED FINANCIAL DATA
GILEAD SCIENCES, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
Year Ended December 31,
(in millions, except per share amounts) 2020 2019 2018 2017 2016
CONSOLIDATED STATEMENT OF INCOME DATA (1) :
Total revenues $ 24,689 $ 22,449 $ 22,127 $ 26,107 $ 30,390
Total costs and expenses (2)
$ 20,618 $ 18,162 $ 13,927 $ 11,983 $ 12,757
Income from operations $ 4,071 $ 4,287 $ 8,200 $ 14,124 $ 17,633
Income tax expense (benefit) (3)
$ 1,580 $ (204) $ 2,339 $ 8,885 $ 3,609
Net income (2)(3)
$ 89 $ 5,364 $ 5,460 $ 4,644 $ 13,488
Net income attributable to Gilead (2)(3)
$ 123 $ 5,386 $ 5,455 $ 4,628 $ 13,501
Net income per share attributable to Gilead
common stockholders - basic (2)(3)
$ 0.10 $ 4.24 $ 4.20 $ 3.54 $ 10.08
Shares used in per share calculation - basic 1,257 1,270 1,298 1,307 1,339
Net income per share attributable to Gilead
common stockholders - diluted (2)(3)
$ 0.10 $ 4.22 $ 4.17 $ 3.51 $ 9.94
Shares used in per share calculation - diluted 1,263 1,277 1,308 1,319 1,358
Cash dividends declared per share $ 2.72 $ 2.52 $ 2.28 $ 2.08 $ 1.84
December 31,
(in millions) 2020 2019 2018 2017 2016
CONSOLIDATED BALANCE SHEET DATA (1) :
Cash, cash equivalents and marketable debt securities (4)(5)
$ 7,910 $ 25,840 $ 31,512 $ 36,694 $ 32,380
Working capital (3)(4)(5)
$ 4,599 $ 20,537 $ 25,231 $ 20,188 $ 10,370
Total assets (4)(5)
$ 68,407 $ 61,627 $ 63,675 $ 70,283 $ 56,977
Other long-term obligations $ 5,128 $ 1,009 $ 1,040 $ 558 $ 297
Long-term debt, including current portion (4)
$ 31,402 $ 24,593 $ 27,322 $ 33,542 $ 26,346
Retained earnings (3)
$ 14,381 $ 19,388 $ 19,024 $ 19,012 $ 18,154
Total stockholders’ equity (3)
$ 18,221 $ 22,650 $ 21,534 $ 20,501 $ 19,363
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(1) See Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 of this Annual Report on Form 10-K for a description of our results of operations for 2020.
(2) In 2020, we recorded acquired in-process research and development (“IPR&D”) expenses of $5.9 billion primarily related to our acquisition of Forty Seven, Inc. (“Forty Seven”) as well as other collaborations and investments we entered into during the year. In 2019, we recorded acquired IPR&D expenses of $5.1 billion primarily due to $3.92 billion of upfront collaboration and licensing expenses related to our global research and development collaboration with Galapagos NV, and a pre-tax impairment charge of $800 million from assets obtained in our acquisition of Kite Pharma, Inc. (“Kite”).
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(3) In 2020, we recorded discrete tax benefits of $167 million related to settlements with taxing authorities. In 2019, we recorded a deferred tax benefit of $1.2 billion related to intangible asset transfers from a foreign subsidiary to Ireland and the United States. In 2018, we recorded a deferred tax charge of $588 million related to a transfer of acquired intangible assets from a foreign subsidiary to the United States. In December 2017, we recorded an estimated $5.5 billion net charge related to the enactment of the Tax Cuts and Jobs Act (“Tax Reform”). Tax Reform also lowered the corporate tax rate in the United States from 35% to 21% effective for tax years beginning after December 31, 2017.
(4) In 2020, in connection with the acquisition of Immunomedics, we issued $7.25 billion principal amount of senior unsecured notes and borrowed an aggregate principal amount of $1.0 billion under a three-year term loan facility. Also in 2020, we repaid $2.5 billion principal amount of our senior unsecured notes at maturity. In 2019, we repaid $2.8 billion principal amount of our senior unsecured notes at maturity. In 2018, we repaid $1.8 billion principal amount of our senior unsecured notes at maturity and repaid $4.5 billion of term loans borrowed in connection with our acquisition of Kite. In 2017, in connection with the acquisition of Kite, we issued $3.0 billion aggregate principal amount of senior unsecured notes and borrowed $6.0 billion aggregate principal amount term loan facility credit agreement, of which $1.5 billion was repaid in 2017. In 2016, we issued $5.0 billion principal amount of senior unsecured notes and repaid $285 million of principal balance of convertible senior notes and $700 million of principal balance of senior unsecured notes at maturity. See Note 12. Debt and Credit Facilities of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information.
(5) In 2020, we made cash payments of $25.7 billion primarily related to our acquisitions of Immunomedics in October 2020 and Forty Seven in April 2020. See Note 6. Acquisitions of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information.
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