How did Gilead's R&D expenses impact its profitability in 2023?

Gilead's R&D expenses had a significant impact on its profitability in 2023, as evidenced by the following points: 1. **Increased R&D Expenses**: Gilead's R&D expenses were $1.64 billion in Q4 2024, which is a substantial amount of investment. |code|Ticker|Name|Date|R&D Expenses|R&D Expenses YoY|market_code| |---|---|---|---|---|---|---| |GILD|GILD.O|Gilead Sciences|2024 Q1|1.52E9|5.044920525224603|185| |GILD|GILD.O|Gilead Sciences|2024 Q2|1.351E9|-3.9800995024875623|185| |GILD|GILD.O|Gilead Sciences|2024 Q3|3.145E9|115.85449553877831|185| |GILD|GILD.O|Gilead Sciences|2024 Q4|1.641E9|12.551440329218108|185| 2. **Effect on Profitability**: Despite the high R&D expenses, Gilead maintained a positive net margin of 1.67% and a gross margin of 78.26% as of December 31, 2024. This indicates that the company's profitability was not severely impacted by the R&D costs. |code|Ticker|Name|Date|Gross Profit Margin|Operating Profit Margin|Net Profit Margin|market_code| |---|---|---|---|---|---|---|---| |GILD|GILD.O|Gilead Sciences|2024 Q1|76.7873|-68.44151959317978|-62.3691|185| |GILD|GILD.O|Gilead Sciences|2024 Q2|77.3021|-15.90175953079179|-18.739|185| |GILD|GILD.O|Gilead Sciences|2024 Q3|77.9561|-7.160726929431201|-6.1506|185| |GILD|GILD.O|Gilead Sciences|2024 Q4|78.2604|2.3822772483828336|1.6693|185| 3. **Return on Equity (ROE) and Return on Assets (ROA)**: Gilead's ROE was 2.28% and ROA was 2.75% as of December 31, 2024. These figures suggest that the company's investments, including R&D, were generating returns. |code|Ticker|Name|Date|ROA|ROE(Average)|market_code| |---|---|---|---|---|---|---| |GILD|GILD.O|Gilead Sciences|2024 Q1|-7.1476|-20.6579|185| |GILD|GILD.O|Gilead Sciences|2024 Q2|-3.3568|-12.4337|185| |GILD|GILD.O|Gilead Sciences|2024 Q3|-1.2842|-6.3087|185| |GILD|GILD.O|Gilead Sciences|2024 Q4|2.7543|2.2769|185| 4. **Sales Growth**: Gilead's sales of oncology products increased by 32.9% year-over-year, totaling $768 million in the third quarter of 2023. This growth in sales, partially offsetting the R&D increases, contributed to the company's profitability. 5. **Tax Benefits**: In Q3 2023, Gilead's earnings increased by 21% mainly due to lower taxes, which boosted profitability despite the R&D investments. 6. **Future Prospects**: Gilead is expected to continue its innovation pace, which will likely lead to new product launches and potential revenue growth, thereby sustaining profitability. In conclusion, while Gilead's R&D expenses are substantial, the company's profitability in 2023 was not severely impacted due to factors such as positive product sales, tax benefits, and overall revenue growth.