Net Income (Loss) per Share

12 Months Ended

Dec. 31, 2022

Note 7. Net income (loss) per share

The computation of basic net income (loss) per share is based on the weighted-average number of our common shares outstanding during the period. The computation of diluted net income (loss) per share is based on the weighted-average number of our common shares and dilutive potential common shares, which primarily include shares that may be issued under our stock option, restricted stock award, and ESPP programs (collectively, dilutive securities) as determined under the treasury stock method.

The following table sets forth the computation of basic and diluted net income (loss) per share (in millions, except per share data):


	Year Ended December 31,
	2022			2021			2020
Net income (loss) (Numerator):
Net income (loss)	$	(267	)	$	53		$	(123	)
Weighted-average shares (Denominator):
Outstanding		72.0			70.3			56.4
Less: Subject to vesting		-			(1.0	)		(1.6	)
Weighted-average shares for basic EPS		72.0			69.3			54.8
Effect of dilutive securities		-			4.7			-
Weighted-average shares for diluted EPS		72.0			74.0			54.8

Net income (loss) per share
Basic	$	(3.71	)	$	0.76		$	(2.24	)
Diluted	$	(3.71	)	$	0.71		$	(2.24	)

The following table summarizes potentially dilutive securities excluded from the computation of diluted net income (loss) per share calculations because they would have been antidilutive (in millions):


	At December 31,
	2022		2021		2020
Common stock options issued and outstanding		12.0		4.5		9.9
Restricted stock units issued		1.3		-		0.7
Unvested early exercised common stock options		-		-		0.2
Employee Stock Purchase Plan shares		0.2		0.1		-
Unvested restricted stock issued as part of collaboration agreement		-		-		1.3
Total		13.5		4.6		12.1

We have also excluded the effect of Gilead's right to purchase additional shares of our common stock from the calculation as these rights had no intrinsic value at either December 31, 2022, 2021 or 2020.