These companies use the creative forces of capitalism to solve big problems—and do well by doing good.

<p>Gilead is a longtime leader in HIV therapeutics and prevention, including antiretroviral treatment and pre-exposure prophylaxis (PrEP) medicines, which are drugs taken to lower the risk of contracting HIV. Gilead has worked with the government of South Africa and the Global Fund to accelerate access to lenacapavir, a long-acting prevention medication that the FDA approved in 2022 to treat drug-resistant HIV. Approximately 7.8 million people in South Africa live with HIV, with an estimated 170,000 new infections each year. 
</p>

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<p>Gilead’s drugs have helped change HIV infection from a death sentence to a manageable condition. In 2012, it launched the first pre-exposure prophylaxis (PrEP) preventive drug for HIV. In June, it won FDA approval for Yeztugo, a PrEP drug requiring only two doses a year—giving it far greater potential efficacy in preventing new infections.
</p>

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Although the southern United States represent only 33% of the U.S. population, they account for 51% of new HIV diagnoses and 47% of HIV-related deaths in the country. Gilead, which makes a variety of HIV drugs, has launched the Compass Initiative to tackle the factors fueling that disparity. In partnership with more than 390 community organizations across 16 states, Compass’s events and training programs focus on topics including stigma reduction and trauma-informed medical care, with the aim of helping those community groups do more to help combat the spread of HIV. To date, Compass has provided 300,000 people with services, trained 26,000 individuals in leadership development, and provided more than $106 million in grant funding to support outreach to those impacted by HIV.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

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Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

The biopharmaceutical company researches and develops antiviral drugs used in the treatment of life-threatening diseases, including HIV and hepatitis. Last October, its intravenous drug remdesivir became the first treatment for COVID-19 approved for emergency use by the FDA.

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California-based Gilead is a biopharmaceutical firm best known for its hepatitis C cures Sovaldi and Harvoni, though it's been making headlines more recently due to its experimental coronavirus treatment remdesivir.

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Impact Segment

Gilead Sciences is a biopharmaceutical company that researches, develops, and commercializes medicines. Gilead’s Veklury (remdesivir) was one of the first antiviral treatments authorized for COVID-19. Gilead also pioneered groundbreaking treatments for HIV that helped transform the fatal virus into a manageable chronic condition. The company continues to expand into oncology and other chronic conditions through acquisitions, such as CymaBay, which developed a treatment for a rare liver disease.

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Gilead Sciences (GILD): Company Profile, Stock Price, News, Rankings

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Gilead Sciences

gilead sciences

Good afternoon, everyone, and welcome to Gilead's First Quarter twenty twenty five Earnings Conference Call. My name is Rebecca, and I'll be today's host. In a moment, we'll begin our prepared remarks followed by our Q and A session. I'll now hand the call over to Jackie Ross, Senior Vice President of Treasury and Investor Relations.

Thank you, Rebecca. Just after market close today, we issued a press release with earnings results for the first quarter of twenty twenty five. The press release, slides and supplementary data are available on the Investors section of our website at gilead.com. The speakers on today's call will be our Chairman and Chief Executive Officer, Daniel O'Dea our Chief Commercial Officer, Joanna Mercier our Chief Medical Officer, Dietmar Berger and our Chief Financial Officer, Andrew Dickinson. After that, we'll open the call to Q and A, where the team will be joined by Cindy Paretti, the Executive Vice President of Kite.

Let me remind you that we will be making forward looking statements. Please refer to Slide two regarding the risks and uncertainties relating to forward looking statements that could cause actual results to differ materially. With that, I'll turn the call over to Dan.

Thank you, Jackie, and good afternoon, everyone. I'm pleased to share our first quarter results, which reflect strong commercial and clinical execution across the business. Our base business excluding VICLORY grew 4% from the first quarter of twenty twenty four, primarily driven by growth in our HIV business. HIV sales were up 6% year over year with Biktarvy up 7%, highlighting our demand led volume growth that was offset in part by the expected headwinds associated with the Part D redesign. Livedelzi continues its strong launch momentum with $40,000,000 in sales in its second full quarter since launch.

Year over year growth in our HIV and liver disease businesses was partially offset by softer than expected Trodelvy sales due to inventory dynamics that masked increase in demand as well as headwinds in cell therapy. Total product sales including VICLORY were down by 1% from last year reflecting fewer COVID-nineteen related hospitalizations. Beyond our commercial results, we also saw impressive operational execution with strong operating margin and earnings per share results that highlight our continued focus on expense management and leverage in our business model. Our diverse pipeline continues to deliver across HIV, oncology and inflammation. In HIV, we are now only weeks away from the anticipated FDA decision on twice yearly lenacapavir for PrEP.

We remain on track for the June 19 PDUFA date and the potential launch in The U. S. Immediately following. As a reminder, this is one of up to nine potential HIV product launches we are targeting before the February, building on Gilead's decades of leadership in HIV innovation. In oncology, earlier this week, we announced the positive results from the Phase three ASCENT-four study of Trodelvy in combination with pembrolizumab for first line PD L1 positive metastatic triple negative breast cancer.

The results showed a clinically meaningful and statistically significant improvement in progression free survival over the standard of care. This news represents an important potential benefit for patients. Metastatic TNBC is one of the most aggressive forms of breast cancer and has historically been very difficult to treat. We expect to share the ASCENT-four data at a medical congress in the near future and to file with global regulatory authorities as quickly as possible. We continue to expect an update later this quarter on the Phase three ASCENT-three study evaluating Trodelvy monotherapy in first line metastatic triple negative breast cancer patients who are not candidates for PD-one inhibitors.

Moving to cell therapy, we plan to provide an update on our registrational Phase two IMagine-one trial later this year and remain on track to potentially launch Anitosel in late line relapsedrefractory multiple myeloma in 2026. We believe that Anitosel's clinical profile combined with Kite's exceptional manufacturing capabilities and industry leading turnaround time puts us in a strong position to address the unmet need for patients with multiple myeloma. In inflammation, we are launching Libdelzi in additional markets following approval from the European Commission in February. We look forward to continued momentum as we bring Libdelzi to more people seeking to manage their primary biliary cholangitis with a differentiated option. As we wrap up a strong first quarter performance, we can look forward to continuing positive momentum.

We have multiple potential launches ahead including lenacapavir, a needle cell and now Trodelvy. As a reminder, we have no major LOEs until the February and expect to drive top line growth over time across all three of our therapeutic focus areas of virology, oncology and inflammation. The overall strength of our business means we are well positioned to adapt to a range of potential policy outcomes in The United States. It is worth noting that Gilead's average corporate tax rate of approximately 20% reflects the fact that the substantial majority of our intellectual property is already registered in The United States. The 2017 tax reform was instrumental in us bolstering our U.

S. Investment and Gilead is differentiated in that almost 100% of our R and D capital infrastructure is in The U. S. In addition, we have been increasing our investment in U. S.

Manufacturing over the last several years with two large scale cell therapy sites and we have additional investment projects underway that are expected to run through 2028. Our focus is on delivering on our multiple upcoming launches and advancing our diverse pipeline. And in the meantime, we continue to engage with the administration to encourage a balanced policy agenda that prioritizes innovation and the needs of patients. With that, I'll hand it over to Joanna.

Thanks, Dan, and good afternoon, everyone. We've had a solid start to the year with our commercial execution delivering strong year over year sales growth in our base business. Product sales excluding VICLORY of $6,300,000,000 were up 4% year over year, primarily driven by HIV and liver disease sales, partially offset by lower oncology sales. Sequentially, sales were down 12% as expected, mainly due to inventory dynamics, partially offset by higher sales in liver disease. Total product sales of $6,600,000,000 were down 1% year over year and 12% sequentially, reflecting lower Veclary sales.

Moving to Slide eight, our HIV business delivered sales of $4,600,000,000 up 6% year over year driven by higher average realized price and higher demand. Sequentially, sales were down 16% consistent with our guidance, reflecting normal first quarter seasonality, including lower average realized price and volume following a particularly strong fourth quarter as well as the impact of Medicare Part D redesign. As a reminder, quarterly HIV growth is generally more variable and less indicative of overall trends than full year results with normal first quarter impacts including inventory drawdown following a build in the fourth quarter and channel dynamics including the resetting of patient co pays and deductibles which result in lower average realized price. Beyond these typical first quarter dynamics, HIV revenues were also impacted by Medicare Part D redesign in the first quarter of twenty twenty five. This increased the manufacturer contribution and includes individuals on low income subsidy for the first time.

While we are still in the early stages of this implementation, our assumptions remain unchanged. In the meantime, we continue to expect robust demand led volume growth for the full year, though as shared back in February, this will be obscured this year due to Part D headwinds resulting in flat reported HIV sales overall for 2025 with a return to growth in 2026. On Slide nine, in HIV treatment, Biktarvy sales of $3,100,000,000 were up 7% year over year, primarily driven by higher demand. Sequentially, sales were down 17% as we expected, reflecting first quarter seasonality, including lower average realized price and volume. Biktarvy once again increased U.

S. Market share in the first quarter to 51%, outpacing the growth of alternative regimens and remains the regimen of choice across G9 markets. Overall, the HIV treatment market continues to grow in line with our expectations of two percent to three percent annually. Descovy sales of $586,000,000 increased 38% year over year, primarily driven by higher average realized price and higher demand. HIV prevention continues to represent the significant majority of Descovy sales and growth this quarter was driven by broader awareness, growing unrestricted access and associated pricing favorability as well as focused commercial execution that contributed to approximately 16% U.

S. Prep market growth year over year. Additionally, Descovy maintains over 40% market share and grew more than 2% year over year. Sequentially, sales were down 5% reflecting typical seasonal inventory dynamics partially offset by higher average realized price and higher demand. Growing awareness and adoption of HIV prevention is encouraging ahead of our upcoming potential U.

S. Launch of lenacapavir for PrEP. I'm excited to have our field teams across market access, commercial, medical, community, and our nurse educators mobilized to ensure we're ready for launch. Building on our deep expertise and success of HIV launches and with strong engagement across the ecosystem from community leaders to health care providers, our teams are ready to build awareness, drive adoption, and overall deliver a seamless customer experience. Additionally, we're working with health authorities, policymakers and other organizations outside of The U.

S. We look to bring lenacapavir for PrEP to more people globally once approved. Moving to liver disease on Slide 10. Sales of $758,000,000 were up 3% year over year, reflecting increased demand across PBC, HBV and HDV, partially offset by lower average realized price for HCV products in The U. S.

Sequentially, liver disease sales were up 5%, primarily driven by increased demand and inventory dynamics, partially offset by lower average realized price. For LibDelsey, first quarter sales of $40,000,000 reflect continued early momentum in the launch of PBC and we're proud of the market share we've achieved so far. We're also pleased that in February, the European Commission granted conditional marketing authorization for Libdelsi. We have just launched in Germany a few weeks ago and we expect to expand into other major European markets in the coming months. Moving to Slide 11, Veclari sales of $3.00 $2,000,000 were down 45% year over year and 10% quarter over quarter, reflecting lower rates of COVID-nineteen related hospitalizations due to a milder winter season.

VICLARI's consistently high share of over sixty percent of treated hospitalized patients in The U. S. Reinforces its clinical benefit and position as the standard of care, particularly among patients with renal and hepatic impairment. Despite the variability of the path of the pandemic, we expect VICLARI's important role to continue. On Slide 12, Trodelvy sales of $293,000,000 were down 5% year over year, reflecting inventory dynamics and lower average realized price partially offset by higher demand.

Sequentially sales were down 17% primarily driven by inventory dynamics and lower demand. Trodelvy remains the leading regimen in second line metastatic triple negative breast cancer in both The United States and Europe with stable share in pretreated HR positive HER2 negative metastatic breast cancer. We also look forward to potentially bringing the benefits of Trodelvy to triple negative breast cancer patients in earlier lines of treatment, given the clinically meaningful progression free survival benefits seen in ASCENT-four and with data from ASCENT-three expected later this quarter. These studies could further strengthen our position in triple negative breast cancer with almost double the addressable population compared to the second line setting. Moving to cell therapy on Slide 13.

Sales of $464,000,000 were down 3% year over year and 5% sequentially, reflecting accelerating competitive headwinds notably outside The U. S. And more specifically for TICARDA. Yescarta sales of $386,000,000 were up 2% year over year driven by higher average realized price and increased rest of world demand partially offset by lower demand in The U. S.

Sequentially, sales were down 1%, reflecting European pricing favorability in the prior quarter that did not repeat, partially offset by higher demand outside The U. S. TACARDA sales of $78,000,000 were down 22% year over year and 20% sequentially, reflecting increased in and out of class competition. Our work to increase CAR T class penetration is ongoing and we continue to make progress in breaking down barriers to adoption in the community setting, including in accreditation and commercial reimbursement. More broadly, we continue to raise awareness of the strength of our data, the advantages of a one time treatment and the potential benefits of earlier CAR T.

Notwithstanding the ongoing competitive headwinds that we continue to expect to extend through 2025, we remain very excited about the overall opportunity and future for cell therapy with the potential launch of an ETOcell in multiple myeloma in 2026 and exciting early stage data in our next generation products across lymphoma and solid tumors at ASCO. Before I hand over to Deepmar, I'd like to thank the commercialization teams for delivering a great start to the year. We remain focused on expanding the reach of our current portfolio, but are also very excited about the rich pipeline of near term launches over the next twelve to eighteen months. In addition to the ongoing launch of Libdelzi and the potential launch of Lenacapfir for PrEP in 2025, we're also looking forward to the potential launch of nidosel in multiple myeloma and Trodelvy in first line metastatic triple negative breast cancer in 2026. And with that, I'll hand the call over to Deepmar.

Thank you, Johanna, and good afternoon, everyone. We have made a lot of progress in the first quarter with some exciting lenacapavir updates at CROI and our first pivotal Phase three top line readout for Trodelvy in breast cancer since 2022. The quality of these readouts highlights the breadth and depth of clinical expertise across Gilead with the potential to support growth in our target therapeutic areas with new commercial launches in the years ahead. Starting with HIV on Slide 15, we shared 20 abstracts at CROI including data that showcase lanacapavir's potential even beyond the remarkable results we saw in purpose one and purpose two last year. For example, we shared our Phase one data that showed once yearly intramuscular injections maintained lenacapavir blood concentrations above those shown with twice yearly subcutaneous injections for more than 12.

The injections were generally well tolerated. These data were published in The Lancet and we look forward to initiating a Phase three study for once yearly lenacapavir for HIV prevention in the second half of this year. As a reminder, for our twice yearly subcutaneous injection of lenacapavir for HIV prevention, we have already submitted NDA, MAA and EU medicines for all applications with FDA and EMA. Further, we've submitted filings with regulatory bodies in South Africa and Brazil and continue to make good progress in all our discussions with the global regulatory bodies. In particular, we have not experienced any disruptions in our interactions with FDA and we continue to expect a regulatory decision by June 19.

In HIV treatment, we shared Phase II data at CROI evaluating twice yearly lanacapavir plus two broadly neutralizing antibodies or BNABs in virologically suppressed people with HIV genotypes that are highly susceptible to both BNABs. At week 26, the combination regimen maintained biologic suppression with high efficacy similar to the stable baseline regimen comparator. There were no infusion related reactions to the BNABs and no discontinuations due to injection site reactions. Lenacapavir plus BNABs has already received breakthrough therapy designation from FDA and these Phase II data further underscore the potential for this combination to be the first complete twice yearly treatment regimen for virologically suppressed people with HIV. Phase III planning is in progress.

Touching upon liver disease on Slide 16, we announced the European Commission granted conditional marketing authorization for LIVDELZI for the treatment of primary biliary cholangitis or PBC. The decision reflects LIVDELZI's clinical benefit across key biomarkers of PBC and related pruritus in the Phase III RESPONSE trial. In addition, we continue to make progress on our Phase III IDEAL trial, which is evaluating the efficacy of Livedelzi in PBC patients who are partial responders to UDCA, potentially doubling the addressable patient population. Overall, we are excited by the opportunities to bring this differentiated treatment to more patients across the world. Moving to oncology on Slide 17.

I'm very pleased to share Trodelvy plus pembro demonstrated highly statistically significant and clinically meaningful progression free survival benefit over standard of care in the Phase three ASCENT-four trial in first line PD L1 positive metastatic triple negative breast cancer. Triple negative breast cancer is the most aggressive type of breast cancer that disproportionately impacts younger and premenopausal women. We look forward to being able to potentially bring the benefits of Trodelvy to these metastatic triple negative breast cancer patients in the first line. We will be submitting these data for presentation at a future medical congress and will engage with global regulators as quickly as possible. Further, we expect to provide an update from the Phase three ASCENT-three trial evaluating Trodelvy monotherapy in first line metastatic triple negative breast cancer patients who are not candidates for PD-one inhibitors later this quarter.

We also remain focused on clinical execution of our seven other ongoing Phase three programs for Trodelvy and dombinalimab across six tumor types. Moving to Slide 18 and on behalf of Cindy and the Kite team, we are pleased to be sharing new data from our next generation products at the upcoming ASCO meeting in June, including Phase I data from KITE-three 63, our Bisistronic CD19CD20 CAR T for relapsed or refractory large B cell lymphoma and Phase I data from the Bicistronic EGFR IL-thirteen RA2 CAR T for glioblastoma in collaboration with the University of Pennsylvania Perelman School of Medicine. We believe KITE-three sixty three could offer deeper, more sustained responses with the potential to overcome certain resistance mechanisms given its ability to target both CD19 and CD20. Additionally, we believe its dual co stimulatory domains balance effects such as rapid tumor cell killing and CAR T cell proliferation and persistence in an optimal way. This could result in a potentially improved overall efficacy and safety profile in B cell malignancies.

Further, we believe many of these potential benefits could translate to B cell driven autoimmune diseases and have filed an IND to evaluate KITE-three 63 in this area as well. For Anido cel, our pivotal IMagine I study in fourth line plus relapsed or refractory multiple myeloma is ongoing and we look forward to providing an update in 2025. In the second line plus setting, we are pleased to announce the Phase III IMMagine three protocol has been amended to include minimal residual disease negativity as a dual primary endpoint in addition to progression free survival. We're excited for this positive step to potentially bring EnidroCell to patients in early line settings and remain confident in EnidroCell's profile across efficacy and safety combined with Kite's leading manufacturing capabilities. Finally, on Slide 19, we achieved several important milestones this year, including European Commission conditional approval of Libdelsi, positive Phase III top line readout from ASCENT-four and initiation of the Phase III EVOQUE small cell lung cancer study.

We anticipate an update from the Phase III ASCENT-three trial later this quarter. Additionally, in virology, we remain on track to provide an update on the data from our Phase twooneone trial, our wholly owned once weekly insti containing oral treatment for HIV at an upcoming medical meeting. And now I'll hand the call over to Andy.

Thank you, Deepmar, and good afternoon everyone. Our first quarter results reflect both strong operating and commercial execution. As shown on slide 21, our base business was up 4% year over year to $6,300,000,000 largely driven by growth in our HIV and liver disease business, partially offset by lower oncology sales. Vecluri sales were down 45% year over year, resulting in a 1% decline in our total product sales to $6,600,000,000 Moving to our non GAAP results on slide 22.

gross margin was flat year over year at 85% in line with our full year guidance expectation of 85% to 86%. R and D expenses were down 5% year over year primarily due to lower clinical manufacturing activities. Acquired IP R and D expenses were $253,000,000 primarily driven by the LEO Pharma STAT6 collaboration we announced in January. SG and A expenses were down 6% year over year reflecting lower corporate expenses partially offset by incremental selling and marketing spend in The United States. First Quarter operating margin was 43% highlighting our ongoing commitment to continue to operating expense discipline and delivering top quartile margins once again.

The non GAAP effective tax rate was 16% this quarter below our historic average largely driven by tax benefits from stock based compensation. And finally non GAAP diluted EPS was $1.81 Moving to our full year guidance on slide 23, we are not making any changes to our revenue expectations or non GAAP P and L guidance at this time. As we reflect on the tariffs that have been enacted to date, these could increase some of our indirect costs, but are expected to be manageable in 2025 in part due to potentially lighter FX headwinds than previously expected. For 2025 therefore, we continue to expect total product sales of approximately $28,200,000,000 to $28,600,000,000 product sales excluding Veclury of approximately $26,800,000,000 to 27,200,000,000 20 20 five HIV sales to be approximately flat compared to 2024 with demand driven growth offset by the impact of the Medicare Part D redesign and Vecluri sales of approximately $1,400,000,000 While the first quarter was lighter than expected, we know this can be a highly variable business. With that in mind and consistent with our approach last year, we do not expect to update our Becquery guidance until our third quarter earnings call.

Moving to other parts of the P and L for full year 2025 on a non GAAP basis, We continue to expect product gross margin to range between 85% to 86%, R and D expenses to be roughly flat from 2024, acquired IPR and D to be approximately $400,000,000 including the $253,000,000 of expenses in the first quarter as well as known commitments and expected milestone payments SG and A expenses to decline by a high single digit percentage compared to 2024 operating income to be between $12,700,000,000 to $13,200,000,000 effective tax rate to be approximately 19% and finally diluted EPS to be between $7.7 to $8.1 for the full year. Looking ahead, we will continue to monitor the macro landscape carefully and we expect that our disciplined approach to operating expense management positions us well to adapt as needed in the months ahead. Finally, on Slide 24, our capital priorities remain unchanged. We have already returned $1,700,000,000 to shareholders in the first quarter of twenty twenty five through dividends and share repurchases. And we will continue to pursue disciplined expense management and careful investment in the most promising pipeline opportunities both internally and externally.

I'm also pleased to note that S and P recently upgraded Gilead's long term debt rating from BBB plus with a positive outlook to A- with a stable outlook recognizing the outlook for our HIV franchise and other products combined with steady revenue growth and strong cash flow generation. Overall, Gilead is on track to continue delivering demand led volume growth, a disciplined operating model and strong cash flow that positions us well for the rest of 2025 and beyond. With that, I'll invite Rebecca to begin the Q and A.

Thank you, Andy. At this time, we'll invite your questions. Please be courteous and limit yourself to one question so we can get to as many analysts as possible during today's call. Question comes from Michael Yee at Jefferies. Go ahead.

Hey, great. Thanks. Congrats on the quarter and progress. We wanted to ask about your expectations for the prep launch. And assuming approval on time, how you think about the dynamics in the second half related to commercial reimbursement and Medicaid reimbursement and whether guideline changes and other factors also need to play a role?

Hi, Michael. It's Joanna. Thanks for the question. Yes. So we're excited about the opportunity with the PDUFA date around the corner.

We are counting, I think Dan referred to weeks, the team is counting days. And we are absolutely ready for the launch. From an access standpoint, what we've said is, we believe that around it was going to take a couple of months, right, as it builds access. We think about 75% or so access within the first six months to a peak covered lives at about 90% at a twelve month mark. And that's going to happen month after month.

It doesn't all happen in a bolus. We also believe at the beginning that they're going to go through medical exceptions, And they'll go through the process just like they do, for example, with Libdelvi as we're building access there as well. And we believe that just takes a little bit more time, but still could get through the process for those people that want lenacapavir. And so we'll work through that. And we're excited about that opportunity as we build out through 2025 and of course, into 2026 with much stronger access.

Our next question comes from Carter Gould at Cantor Fitzgerald. Carter, go ahead. Your line is open.

Great. Thank you. Good afternoon. I guess sort of following on the prior question, there have been, a number of cuts across HHS, CDC to start the year across various teams, divisions, raising uncertainty around potential disruptions to messaging, education, awareness. Can you help maybe frame some of these and specifically as they might impact the launch?

And are these sort of either roles or activities that Gilead can maybe step into to do some of the heavy lifting? And I guess really your confidence that we won't be pointing to these aspects as impacting the launch later in 2025 or into 2026? Thank you.

Thanks Carter. This is Dan. I'll start and then Joanna can add or others. But I just want to be clear that to date we haven't heard or seen anything that would cause us to alter our plans or expectations for the LEN for PrEP launch or adversely affect our HIV business. Obviously, we're staying very closely attuned to this.

And importantly, we're having discussions with policymakers to emphasize the importance of letacapavir from PrEP and in particular in relation to their stated goals of addressing chronic diseases in this country and the value of prevention, we think that LEN for PrEP is really well positioned there. So specifically relative to the government support and in particular you mentioned CDC, Carter. Obviously, their responsibilities include research and surveillance of HIV. They include supporting efforts around diagnosis and linkage to care. We're also involved in those activities.

But again, nothing we've seen so far suggests that those core services, are are in a position to change our approach to the launch. And maybe with that, I'll hand it over to Joanna if she has any other questions or, Deepak, if you want comment on FDA too.

add a point, Carter, around prep market growth and kind of what you asked, what Gilead can do. I think that Gilead has been incredibly focused on making sure we continue to have market development initiatives to ensure screening, diagnosis for treatment, but also to ensure awareness and within the PrEP market make sure there's education there as well. And I think you've seen that as you think about the PrEP market growth, we had a lot of activities in Q4 of last year and that's kind of playing out. We saw a nice uplift of the growth of the PrEP market in Q4 and you kind of see that come through again in Q1 at about 16% year over year. So really well positioned as you think about lenacapavir around the corner.

Yes. And on the FDA side, at this time, all our interactions with the FDA have been on track, been as expected without any surprises. So we've not experienced any impact to our LENFOR PREP filing or any of our clinical trials actually to date, right? And we continue to expect the lanacapavir decision by June 19.

Our next question comes from James Shinn at Deutsche Bank. James, go ahead. Your line is open.

question for Joanna. Joanna, the strength in Descovy for this quarter, is there any read through or implications on it looks like there were some price benefits to Descovy. But is there any read through or implications to Lens launch?

Yes, there is. Thanks for the question. So yes, we saw a really nice growth year on year about 38% growth for DESCOVY. That was driven by higher average realized price, as you mentioned, as well as higher demand. Those are the two big drivers.

And there's a couple of reasons behind that. One is definitely the prep market growth that I was referring to earlier, around 16% year on year, driven really by the market development that we've done, that we've been leading. And second was around focused commercial execution. We've actually grown the share of Descovy year on year by about just over three percentage point, which is really amazing. And that's driven by the commercial team, which have been doing an amazing job, but also supported by growing unrestricted access that we've seen even just in the last quarter, to be honest, as well as associated lower co pays, which also helps our pricing.

So all of those pieces together get you to that 38% year on year. And I do believe, actually, because of that prep market growth, because of this setup from an access standpoint, really supports the opportunity with lanacapavir in, hopefully, in June.

Our next question comes from Salveen Richter at Goldman Sachs. Salveen, go ahead. Your line is open.

Good afternoon. Thanks for taking my question. You touched on this a little earlier, but while Gilead seems fairly unexposed to tariff risk here, can you just share any details on how much of The U. S. Market is supplied by ex U.

S. Manufacturing, either API finished product? And to what degree you can shift this to The U. S? And is it fair to say limited risk to the business from a tax transfer pricing perspective?

And if I could also just get a clarification with regard to earnings earlier With regard to whether your assumptions are unchanged here and whether you could just comment on how this is taking shape relative to your 2025 guide, the dynamics to date? Thank you.

Great. Thanks, Helene. Let me just start at the high level and then I'll hand it over to Andy or Joanna to comment a little more deeply. Just to emphasize what you said around the tariffs, I think at the highest level, of course, we separate them into two different categories. One is kind of indirect tariffs, which are related to all businesses.

And for us, there are things like steel, lab supplies, chemicals, reagents. And obviously there we have some known understanding of what those tariffs will be. And what we see so far today we've absorbed into our guidance without changing our guidance for the rest of the year. And Andy can comment a little further on that. And then the other category of tariffs are obviously the pharmaceutical specific tariffs, which are not enacted today.

They've only been discussed and chatted about. We obviously haven't speculated on those nor included those. But to your point, I think that, there is a difference relative to Gilead's makeup and setup that is important when you consider those tariffs and that is that the vast majority of Gilead's IP is in The U. S. And what that suggests is lower value for its pharmaceutical imports at the end of the day, which is, the value on which tariffs would be placed.

In fact, more than 80% of Gilead's profits are recognized in The U. S. To your question around the supply chain, it's quite a complicated answer. We do have the strongest footprint we have is in The United States. Like most companies, we leverage both internal and external manufacturing on a global basis.

And we're always looking to adapt that to make sure that we have good continuity of supply across the world so that we can do that accordingly. I'd also say that we've invested significantly in our manufacturing infrastructure in The United States over the past many years and our R and D infrastructure including opening cell therapy manufacturing sites. And we have four large scale U. S. Investment projects in progress that are expected to run through 2028.

So it's difficult to get into the detail of every product and every supply chain, but I think we're well positioned overall. I would ask Andy to comment and maybe Andy or Joanna on the Medicare Part D reasons.

Sure. Hi, Salveen, it's Andy. Just to confirm what Dan said, our updated guidance does reflect the expected impact of the increase in indirect costs that we've seen from both announced tariffs and reciprocal tariffs as well as our general expectations for the inflationary environment that we may be moving into. And as you can expect there are a number of puts and takes in the P and L but as you look again at another very strong quarter of disciplined expense management that helps us absorb some of those additional costs. There's also a bit of a tailwind as you've heard from our peers in terms of the U.

S. Dollar has weakened for those of us that are based in The United States. There's a tailwind relative to our budgeted FX amount that will help offset some of those as well. So we're very confident today that with the strong growth you saw in the base business in the first quarter despite the Part D impact which Joanna can speak to, even with the tariffs we're happy to reconfirm our guidance for the year and we feel like we're in a good spot.

Great. And maybe just specific to your Part D redesign question, although still quite early in the stages of implementation, just important to note that Medicare claims will lag by a quarter. So still kind of looking for that data, and we'll get that sometime late Q2, for the first quarter of this year. Our assumptions haven't changed. We continue to expect about that $1,100,000,000 that we shared for total impact, of which about $900,000,000 or so is specific to HIV.

And in terms of phasing, we do expect some linear progression over the quarter. That's in part driven by the cost of our medicines. And then last but not least, we're really quite pleased with our Q1 results. If you think about our HIV business growing six points year over year, if you were to take out Part D redesign, you'd be looking at a 9% growth year over year. So we're really pleased with how HIV is playing out and being able to navigate those seasonal dynamics of inventory that we always see in Q1, but also the Part D redesign dynamic.

Our next question comes from Tyler Van Buren at TD Cowen. Tyler, go ahead.

Hey, guys. Thanks very much. For Trodelby, is the lower demand quarter over quarter due to bladder coming out or lower demand in breast? It'd be helpful if you could elaborate on that.

Sure. It's Joanna, I'll take that one. Yes. So quarter over quarter has to do with inventory and a little bit of lower demand just because Q4 was really strong performance. But if you look at our year on year at about minus 5%, that's really just inventory dynamic and lower average realized price due to channel mix and higher demand.

So we are trending nicely with Trodelvy and holding a really nice position both in second line metastatic triple negative breast cancer and as well as HR positive HER2 negative. So feel confident with what's to come in 2025, let alone with the great positive news on ASCENT-four that just reinforces the confidence for physicians in the second line setting with the data that we had originally showed with ASCENT.

Our next question comes from Dana Grebosch at Leerink Partners. Dana, go ahead. Your line is open.

Hi. Thanks for the question. I wonder if you can talk about the process to add lanacapavir to the USPSTF mandate for coverage about cost sharing. I'm assuming SCOTUS upholds the constitutionality in June. So what's the timing of that being added, and how much impact or uplift do you expect in revenue and growth in The US when it's added to the mandate?

Thanks, Dana, for your question. Joanna again. I I think what's important is that we are assuming that it's gonna take a little bit of time for USPSTF to to add lanacapavir as the process. Obviously, from a guideline standpoint, we've already kind of seen those guidelines play out when you think about IAS guidelines. We already have lenacapavir there prior to even approval.

But usually they wait for approval and then we kind of go forward with trying to get medical updates through including USPSTF. We do believe though that despite this, we feel we're incredibly well positioned because of the transformative nature of lenacapavir to, build access across the different channels that and we're prepared to do that. And that's, again again, gonna take a little bit of time over the next six to twelve months, but we feel that that would be in line with with what we've seen in the past with other other agents, including Descovy. And we're gonna be leveraging all the guidelines possible to make sure that there's a real value that's displayed for access to to go as quickly as possible. USPSTF would be nice to have, to be honest with you.

But in the first six to twelve months, we're assuming that that's not going to be in play, and we our plans are really based on our value proposition of lenacapavir.

Our next question comes from Geoff Meacham at Citigroup. Geoff, go ahead. Your line is open.

Great. Afternoon, guys. Thanks so much for the question. I have one for Deepmar. So on the HIV treatment, opportunity and looking to your long acting orals, I guess the question is what's the gating factor for selecting the the best phase three combo?

And related to that, you know, while we you haven't seen resistance with Landa, hasn't really been an issue, would it still make sense to have in the treatment setting a three drug versus a two drug combo just to mitigate the lower risk of resistance? Thank you.

Thank you, Geoff, for the question, right? That's really early in our development program here. I think the important piece is that we're looking for optionality. We're really looking for the breadth and depth of the portfolio to deliver for people basically with monthly and weekly and in the prep setting obviously once every six months and potentially also once every year options. In the immediate future, obviously, we're really looking forward as discussed right to the LENSOprep launch.

But then we also had data at CROI, right, where we were talking about the potential of lanacapavir for once every year prep and that of course are some of our focus areas. Obviously, we will look at the overall portfolio and see with the options that we want to develop, which ones we can take forward.

Our next question comes from Chris Schott at JPMorgan. Chris, go ahead. Your line is open.

Great. Thanks so much. Just was hoping to get a little bit more color on the LIVDELZIE launch so far. Maybe just elaborate a bit more on what you're seeing from a competitive standpoint and how that ramp is progressing relative to your internal expectations. Thank you.

Thanks, Chris. Joanna. Yes, we're really pleased with the progression of Lib DELFI, right? In our full second quarter, '40 million, but most importantly, it actually has to do with the share uptake that we've seen. We are looking at about a third of the market today out of the second line products that are currently indicated and growing incredibly rapidly.

We grew about 10 points share in one quarter. So we are really building that momentum with a lot of positive feedback that we're getting from our health care providers around the efficacy, both the AOP, the biochemical response and the pruritus. And coverage right now is in line with our expectations. So we're at about just over 80% or so coverage with commercial plans, and we think that's going to keep growing probably within the next couple of months to just well above 90. So I think right now, we're well on our way to continue to drive LibDelvy, and really differentiate it in PBC.

Our next question comes from Terence Flynn at Morgan Stanley. Terence, go ahead. Your line is open.

Great. Thanks for taking the question. I noticed and you mentioned that you added MRD negativity as a co primary endpoint in the ANITA cell Phase III trial. I'm just wondering what if you could comment on what the regulators would want to see there to approve that on an MRD negativity endpoint in terms of kind of like what delta you would need or if you'd also have to have other supportive data, to justify an approval? Thank you.

Last chance, it's Cindy Peretti. We're not we don't comment on the delta that they're looking for, but what I would share is that this is a dual primary endpoint. And so being able to use MRD, we know today that that correlates to PFS, and it also allows us to assess, you know, within months of the treatment if the patient is having a response. So our goal is to use the MRD negativity endpoint first and then follow that up with progression free survival, but the correlation between the two is what we're talking to regulators about.

Our next question comes from Tim Anderson at BofA. Tim, go ahead. Your line is open.

Thank you. On Descovy, how much will linacapavir for PrEP cannibalize? Could U. S. Descovy sales go ex growth as soon as 2026?

And then can you just give us any sort of ballpark estimate for how many patients could be on lenacapavir for PrEP by the end of the year?

Thanks for the question, Tim. Yeah. We don't give product specific guidance, but here's what I can say. I I do think that as you think about lenacapavir and its offering of twice a year, there really is an opportunity when you think about a switch strategy. Right?

Gilead Sciences (GILD) Q1 2025 Earnings Call Transcript

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