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⚠ Amortisation Is the Hidden Cost of BuyingLow threat

Gilead Sciences (GILD) — threat to the moat

About eight points of Gilead's product margin go to amortising what it bought; intangible assets fell from $26.5 billion to $14.0 billion in two and a half years.

The gap between Gilead's GAAP product margin of 78.4% and its non-GAAP 86.4% in 202512 is eight points, and most of it is amortisation of acquired intangible assets. That is the accounting trace of buying products rather than inventing them.

Gilead intangible assets, net ($bn)26.5Dec 202319.9Dec 202417.0Dec 202514.0Jun 2026Gilead Forms 10-K FY2023, FY2025; Q2 2026 results release
The acquired portfolio is being written down quickly.

Intangible assets were $16,978 million at the end of 2025, down from $19,948 million a year earlier and $26,454 million at the end of 202334. Some of that fall is amortisation; some is impairment, such as the Trodelvy write-downs.

The 2026 acquisitions will add more. Gilead expensed $11.3 billion of acquired IPR&D in the first half5, which does not amortise, but any of those programmes that reaches market will bring new milestone payments and royalties.

The amortisation sits inside cost of goods sold, which was $6,234 million in 2025 against $6,251 million in 20246. That total also includes Janssen's share of revenues on products containing rilpivirine, $369 million in 2025 against $403 million and $430 million in the two prior years7, a partner payment that falls as Odefsey shrinks.

The balance sheet keeps the score: intangible assets were $14,032 million at 30 June 20268; if they fall below $10 billion without a large new product, the acquired portfolio will be running down faster than it is being replaced.

References
  1. ReportedThe gap between Gilead's GAAP product margin of 78.4% and its non-GAAP 86.4% in 2025 is eight points, and most of it is amortisation of acquired intangible assets.
    Gilead Sciences Form 10-K for 2025 - financial statements, MD&A and notes: income, margins, impairments, acquired IPR&D, cash flow, capital returns and debt. — FY2025 · publ. 24 February 2026 · source ↗
  2. ReportedThe gap between Gilead's GAAP product margin of 78.4% and its non-GAAP 86.4% in 2025 is eight points, and most of it is amortisation of acquired intangible assets.
    Gilead Sciences fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - non-GAAP measures, free cash flow, cash and 2026 guidance. — FY2025 · publ. 10 February 2026 · source ↗
  3. ReportedIntangible assets were $16,978 million at the end of 2025, down from $19,948 million a year earlier and $26,454 million at the end of 2023.
    Gilead Sciences Form 10-K for 2025 - financial statements, MD&A and notes: income, margins, impairments, acquired IPR&D, cash flow, capital returns and debt. — FY2025 · publ. 24 February 2026 · source ↗
  4. ReportedIntangible assets were $16,978 million at the end of 2025, down from $19,948 million a year earlier and $26,454 million at the end of 2023.
    Gilead Sciences Form 10-K for 2023 - revenue by product group for 2021-2023, wholesaler shares of total revenues and the 2023 balance sheet. — FY2023 · publ. February 2024 · source ↗
  5. ReportedGilead expensed $11.3 billion of acquired IPR&D in the first half, which does not amortise, but any of those programmes that reaches market will bring new milestone payments and royalties.
    Gilead Sciences second-quarter 2026 results release, Form 8-K exhibit 99.1 - revenue by product, income statement, cash flow, balance sheet, pipeline updates and 2026 guidance - income statement, EPS, cash flow, balance sheet and 2026 guidance. — Q2 2026 · publ. 4 August 2026 · source ↗
  6. ReportedThe amortisation sits inside cost of goods sold, which was $6,234 million in 2025 against $6,251 million in 2024.
    Gilead Sciences Form 10-K for 2025 - financial statements, MD&A and notes: income, margins, impairments, acquired IPR&D, cash flow, capital returns and debt. — FY2025 · publ. 24 February 2026 · source ↗
  7. ReportedThat total also includes Janssen's share of revenues on products containing rilpivirine, $369 million in 2025 against $403 million and $430 million in the two prior years, a partner payment that falls as Odefsey shrinks.
    Gilead Sciences Form 10-K for 2025 - revenue by product, product group and region (Note 2) and the MD&A discussion of product sales. — FY2025 · publ. 24 February 2026 · source ↗
  8. ReportedThe balance sheet keeps the score: intangible assets were $14,032 million at 30 June 2026; if they fall below $10 billion without a large new product, the acquired portfolio will be running down faster than it is being replaced.
    Gilead Sciences second-quarter 2026 results release, Form 8-K exhibit 99.1 - revenue by product, income statement, cash flow, balance sheet, pipeline updates and 2026 guidance - income statement, EPS, cash flow, balance sheet and 2026 guidance. — Q2 2026 · publ. 4 August 2026 · source ↗
Sources
Generated October 4, 2026