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Gilead Sciences’ Expense Trajectory in Fiscal 2018

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Jan. 30 2019, Updated 7:32 a.m. ET

Expense guidance

In its third-quarter earnings investor presentation, Gilead Sciences (GILD) forecasted both of its non-GAAP research and development (or R&D) expenses and non-GAAP selling, general, and administrative (or SG&A) expenses to fall in the range of $3.4 billion–$3.6 billion for fiscal 2018. The company has projected its effective tax rate for fiscal 2018 to be in the range of 18%–20%.

In the third quarter of 2018, Gilead Sciences reported non-GAAP R&D and SG&A expenses of $844 million and $852 million, respectively. The company reported a YoY rise of 13% and 6% in its R&D and SG&A expenses, respectively. According to the company’s third-quarter earnings conference call, the rise in expenses was attributable to investments required to support growth after the completion of the acquisition of Kite Pharmaceuticals by Gilead Sciences.

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Wall Street projections

Wall Street analysts expect Gilead Sciences to report non-GAAP SG&A expenses of $951.92 million for the fourth quarter of 2018, a YoY rise of 3.13%. The company is also expected to report non-GAAP SG&A expenses of $3.66 billion for fiscal 2018, a YoY rise of 8.91%.

Wall Street analysts expect Gilead Sciences to report non-GAAP R&D expenses of $963.70 million for the fourth quarter of 2018, a YoY rise of 14.05%. The company is also expected to report non-GAAP R&D expenses of $3.71 billion for fiscal 2018, a YoY rise of 12.78%.

Gilead Sciences is expected to report non-GAAP SG&A expenses of $3.74 billion and $3.81 billion in fiscal 2019 and fiscal 2020, respectively. These estimates imply a YoY change of 1.96% and 2.08% in fiscal 2019 and fiscal 2020, respectively.

Gilead Sciences is expected to report non-GAAP R&D expenses of $3.76 billion and $3.83 billion in fiscal 2019 and fiscal 2020, respectively. These estimates imply a YoY change of 1.23% and 1.87% in fiscal 2019 and fiscal 2020, respectively.

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