Summary of Gilead Sciences Conference Call Company Overview - **Company**: Gilead Sciences (NasdaqGS:GILD) - **Event**: Jefferies Healthcare London Conference - **Date**: November 19, 2025 Key Points Industry and Company Performance - Gilead has experienced significant growth in its base business over the past three years, with base revenues (excluding COVID antiviral) growing 7% in 2023 and 5% in the current year despite a $1.1 billion headwind from Medicare Part D reform, indicating a potential 9%-10% growth in the base business [3][4] - The company has diversified its portfolio into virology, HIV, oncology, and inflammation, with a notable increase in R&D spending, which has more than doubled since 2016 [2][3] Capital Allocation and M&A Strategy - Gilead is focused on building a commercial infrastructure around assets rather than pursuing bolt-on acquisitions, with an annual business development budget of over $1 billion for partnerships and small acquisitions [5][6] - Recent acquisitions include a STAT6 degrader for inflammation and an in vivo cell therapy company, Interius, for a couple hundred million dollars [6] - The company is prioritizing late-stage, de-risked assets that synergize with its existing commercial infrastructure, with no major patent cliffs until 2036 [7][8] Market Dynamics and Opportunities - Gilead is increasingly looking to China for partnerships and acquisitions, with over half of its business development priorities for 2025 coming from Chinese companies, a significant increase from 5% five years ago [9][10] - The launch of Yeztugo, a long-acting HIV prevention drug, is underway, with $54 million in sales reported and guidance of nearly $100 million for the fourth quarter [11][14] - The HIV prevention market is transitioning from daily oral medications to long-acting injectables, with over 75% of covered lives having unrestricted access to Yeztugo [15][16] Product Launch and Market Potential - Yeztugo is positioned to open a new chapter in HIV prevention, with groundbreaking studies showing 100% and 99.9% prevention rates in different populations [12][13] - The CDC has recently doubled its estimates for the addressable PrEP market from 1.2 million to 2.2 million, indicating significant growth potential [33] - Gilead expects the market to be split 50% oral and 50% injectables by 2030, with ongoing development of a once-yearly injectable version of Yeztugo [32][35] Future Pipeline and Innovations - Gilead is advancing multiple late-stage trials in its HIV treatment portfolio, including a new daily combination regimen and a six-month infusion treatment for patients not controlled on existing therapies [38][41] - The company is also developing anito-cel, a BCMA cell therapy for multiple myeloma, with plans to file for approval by the end of 2025 and launch by late 2026 [44][46] Manufacturing and Competitive Advantage - Gilead has built a robust manufacturing infrastructure for cell therapies, with the capacity to treat up to 24,000 patients by 2026, providing a competitive edge in reliability and speed compared to competitors [46][47] Additional Insights - The company emphasizes the importance of adherence in HIV prevention, noting that long-acting injectables guarantee adherence, which is a significant advantage over daily oral medications [36] - Gilead's approach to market growth is characterized by steady, durable, and consistent growth rather than rapid spikes, reflecting a long-term strategy for its product launches [27][28]

Core Insights - A new generic version of lenacapavir, an HIV prevention tool, is set to reach millions, priced at approximately $40 per patient annually, compared to Gilead's list price of over $28,000 [1][8] - The collaboration between Indian manufacturers and organizations like Unitaid and the Clinton Health Access Initiative aims to expand the supply of lenacapavir, potentially accelerating its availability to high-risk populations [2][8] - Despite advancements in HIV treatment, 1.3 million new infections occurred last year, with two-thirds of those living with HIV located in Africa, where prevention tools are limited [3][6] Group 1 - Lenacapavir offers a six-month protection with a single injection, which is particularly beneficial for women facing challenges with daily pill adherence [4][5] - The cost of lenacapavir previously limited access, especially for participants in clinical trials in South Africa, compounded by cuts to US foreign aid affecting African health systems [5][6] - Gilead's announcement to allow generic manufacturers to produce lenacapavir for 120 resource-limited countries marks a significant step towards improving access, although historical timelines for such arrangements have been lengthy [7][8] Group 2 - New agreements with Indian manufacturers could significantly reduce the time required to make lenacapavir widely available, with only 18% of those who could benefit from PrEP currently having access [8] - Gilead plans to complete regulatory submissions for lenacapavir for PrEP in 18 countries by the end of the year, with expectations for the first supplies to reach low and lower middle-income countries [8] - A modest rollout of lenacapavir could potentially prevent up to 20% of new HIV infections in high-burden countries, with distribution through national HIV programs and procurement channels like the Global Fund [9]

A twice-yearly injection described as the most promising HIV prevention tool in decades is poised to reach millions more people https://t.co/EX1ei15fDN ...

Core Insights - Gilead has reported an impressive second quarter with strong performance across all business units, leading to an increase in guidance for both revenue and profit for the year [2][3] - The company has experienced significant growth in its HIV prevention business and has launched a new therapy, Yeztugo, which is considered transformational for HIV prevention [2] Company Performance - Gilead has had a strong year, building on several previous successful years, indicating a positive trajectory for the company [3] - The overall performance reflects the company's strategic focus and operational effectiveness in the biopharma sector [2][3]

Financial Data and Key Metrics Changes - Gilead Sciences reported strong performance in Q2 2025, leading to an increase in guidance for both top-line and bottom-line growth for the year [3] - The HIV prevention business saw a significant growth with Descovy sales up 37% quarter over quarter [6] Business Line Data and Key Metrics Changes - The launch of the new HIV prevention therapy, YES2Go, has been described as the strongest execution seen in a launch, with 73% unaided awareness and 95% aided awareness [5][6] - The HIV treatment business is growing at 3%, despite expectations of flat growth due to Part D headwinds, with demand-led growth being the primary driver [36][38] Market Data and Key Metrics Changes - The HIV prevention market is currently underpenetrated, with only 50,000 to 400,000 patients on the drug, compared to a potential 1.2 to 3 million [27][31] - The market for HIV prevention is expected to evolve significantly, with a focus on patients already on other therapies transitioning to YES2Go [29][30] Company Strategy and Development Direction - Gilead is focused on expanding its HIV prevention market, emphasizing the need for broader access and coverage for its therapies [12][16] - The company is also investing in its oncology pipeline, with multiple launches expected, including a CAR T therapy for multiple myeloma and Trodelvy for breast cancer [63][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the HIV prevention business, driven by strong clinical data and payer recognition of the need for unrestricted access [25][57] - The company is preparing for potential macro headwinds but believes its strong clinical profile will help mitigate risks [56][58] Other Important Information - The J code for YES2Go was granted earlier than expected, which is crucial for reimbursement processes [12][13] - Gilead is committed to maintaining a strong pipeline with multiple late-stage programs expected to launch before the loss of exclusivity for Biktarvy in the mid-2030s [49][50] Q&A Session Summary Question: How is the launch of YES2Go performing? - The launch has been strong, with high awareness and early wins in payer negotiations, indicating a positive trajectory for the product [5][12] Question: What are the expectations for the HIV treatment market? - Despite headwinds, the HIV treatment business is growing, primarily driven by demand, with Biktarvy continuing to gain market share [36][38] Question: How does Gilead view potential changes in payer coverage? - Management is confident in achieving broad coverage for YES2Go and believes the clinical efficacy will drive payer acceptance [16][25] Question: What is the outlook for the oncology pipeline? - Gilead sees significant opportunities in oncology, particularly with the upcoming CAR T therapy and Trodelvy, which is expected to become a standard of care in breast cancer [63][72] Question: How is Gilead preparing for macroeconomic challenges? - The company is actively engaging with policymakers and believes its strong portfolio will help navigate potential changes in drug pricing and coverage [56][58]

Core Insights - Gilead Sciences, Inc. has received marketing authorization from the European Commission for its HIV prevention drug lenacapavir, branded as Yeytuo, which is administered twice a year [1][8] - The approval follows an accelerated review process by the European Medicines Agency, highlighting the drug's significance for public health [3][8] - Lenacapavir has shown superior efficacy in preventing HIV infections compared to daily oral Truvada, with clinical trial data supporting its effectiveness [5][10] Regulatory Approvals - Lenacapavir was also approved by the FDA in June 2025 for the same indication, branded as Yeztugo [2] - The European Commission's approval was based on positive recommendations from the CHMP and data from late-stage trials [3][4] Clinical Efficacy - In the phase III PURPOSE 1 study, lenacapavir demonstrated a 100% reduction in HIV infections among 2,134 participants [5] - The phase III PURPOSE 2 study reported only two HIV infections among 2,179 participants, indicating a 99.9% prevention rate [6] Market Position - The approval of lenacapavir strengthens Gilead's HIV portfolio, especially as its other prevention drug, Truvada, faces generic competition [10] - Gilead holds a leading market share in HIV treatments, with its flagship drug Biktarvy accounting for over 51% of the U.S. treatment market [12] Competitive Landscape - Lenacapavir is positioned as a long-acting injectable PrEP, addressing barriers associated with daily oral medications [11] - The competitive landscape includes ViiV Healthcare's Apretude, which is also a long-acting injectable approved for PrEP [13][14] Pricing and Coverage Issues - Gilead's Yeztugo has a U.S. list price exceeding $28,000 per year, and negotiations with CVS Health regarding coverage are ongoing [15]

Core Insights - Gilead Sciences, Inc. (GILD) shares fell 2.2% following CVS Health's decision not to include GILD's new HIV prevention drug, Yeztugo, in its commercial plans for the time being [1][8] - CVS Health's decision was influenced by clinical, financial, and regulatory factors, and Yeztugo will not be covered under its Affordable Care Act formularies [2] - GILD is negotiating with CVS regarding Yeztugo, which has a U.S. list price exceeding $28,000 annually [2] Gilead's Product Developments - Yeztugo received FDA approval in June 2025 for pre-exposure prophylaxis (PrEP) to reduce the risk of sexually acquired HIV-1 in adults and adolescents weighing at least 35kg, and it is the first and only twice-yearly HIV PrEP option available in the U.S. [3][5] - GILD aims to secure 75% insurer coverage for Yeztugo by year-end 2025 and 90% within 12 months [3] Market Context - Currently, GILD markets two FDA-approved daily oral medications for PrEP: Truvada and Descovy [4] - GILD's shares have increased by 25.7% year-to-date, outperforming the industry growth of 4% [5] Acquisition Activity - Gilead's subsidiary, Kite, announced an agreement to acquire Interius BioTherapeutics for $350 million, which focuses on developing in vivo CAR therapeutics [7][9] - This acquisition is expected to impact GILD's earnings per share by approximately $0.23-$0.25 [8][9] Competitive Landscape - Gilead currently holds a Zacks Rank 3 (Hold), while CorMedix (CRMD) and ANI Pharmaceuticals (ANIP) have better rankings with Zacks Rank 1 (Strong Buy) [10] - CorMedix's earnings per share estimates have increased significantly, and its shares have rallied 49.1% year-to-date [11] - ANI Pharmaceuticals has also seen a slight increase in earnings estimates and a year-to-date share increase of 29.4% [12]

Financial Data and Key Metrics Changes - The company reported base business sales of $6.9 billion, a 4% year-over-year increase, driven by growth in Biktarvy, Descovy, Libdelzi, and Trodelvy [6][42] - Total product sales reached $7.1 billion, reflecting a 2% year-over-year growth, with a notable decline in Vecluri sales by 44% due to fewer COVID-19 related hospitalizations [6][42] - Non-GAAP diluted EPS for the quarter was $2.01, with an operating margin of 46% [42][44] Business Line Data and Key Metrics Changes - HIV sales amounted to $5.1 billion, showing a strong 7% year-over-year growth, primarily driven by increased demand and higher average realized prices [14][42] - Biktarvy sales grew 9% year-over-year to $3.5 billion, while Descovy saw a remarkable 35% increase to $653 million, marking its strongest quarter ever [7][16] - Trodelvy sales increased by 14% year-over-year to $364 million, reflecting continued strength in metastatic breast cancer [24][42] Market Data and Key Metrics Changes - The U.S. PrEP market has expanded to over 5 million active users, growing in the mid-teens year-over-year, with Descovy capturing over 40% market share [17][21] - The company anticipates HIV sales to grow approximately 3% in 2025, up from a previous assumption of flat revenue year-over-year [21][44] - The company is experiencing strong demand for Libdelzi, with revenue almost doubling from $40 million in Q1 to $78 million in Q2 [22][42] Company Strategy and Development Direction - The company is focused on expanding its HIV product portfolio, targeting up to eight additional product launches by 2033, including five by 2030 [32] - The recent FDA approval of lenacapavir (YES2Go) for HIV prevention is seen as a transformative opportunity to address the epidemic [5][32] - The company is committed to facilitating access to lenacapavir globally, partnering with the Global Fund to reach approximately 2 million people in low-income countries over three years [20][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong performance in both HIV treatment and prevention, leading to an increase in full-year sales guidance [21][44] - The company remains cautious about potential impacts from the Medicare Part D redesign, which is expected to affect the HIV business by approximately $900 million in 2025 [21][44] - Management emphasized the importance of maintaining operational discipline and adapting to macroeconomic changes while driving forward with new product launches [44][49] Other Important Information - The company returned $1.5 billion to shareholders in Q2, including $527 million in share repurchases, and announced a new $6 billion repurchase program [48] - R&D expenses were up 9% year-over-year, reflecting investments in clinical manufacturing and study activities, with expectations for flat expenses for the full year [42][44] Q&A Session Summary Question: Early uptake of YES2Go and expected trends - Management reported over 25,000 customer calls executed in the field, with a target base of about 15,000, indicating strong early engagement [51][56] - The company anticipates achieving 75% access for YES2Go within six months of launch and 90% within twelve months [58][60] Question: Durability of Descovy's growth rate - Management noted that the PrEP market is growing at about 15% year-over-year, with Descovy's performance driven by favorable access and reduced co-pays [66][69] - There may be a slight decline in Descovy's growth as YES2Go gains traction, but overall market growth is expected to continue [66][70] Question: Impact of MFN proposal on Medicaid - Management acknowledged ongoing discussions regarding the MFN proposal and emphasized the importance of maintaining patient access to medications [74][76] - The company highlighted that HIV treatment has a strong safety net, ensuring coverage for patients even in changing legislative environments [78][79] Question: Changes in commercialization approach if PrEP is removed as a preventative medicine - Management expressed confidence in the current guidelines supporting prevention services and noted that the market has been growing robustly even before recent guidelines [82][84] Question: Confidence in the WONDERS program following clinical hold - Management expressed high confidence in the treatment pipeline, emphasizing a variety of approaches being explored [87]

Core Viewpoint - Gilead Sciences, Inc. (GILD) has demonstrated strong stock performance, gaining 27.2% over the past six months, significantly outperforming the industry and broader market indices [1][7]. Gilead's HIV Portfolio - The recent FDA approval of lenacapavir, branded as Yeztugo, introduces the first and only twice-yearly injectable option for HIV prevention in the U.S., enhancing Gilead's market-leading HIV treatment portfolio [2][4]. - Gilead's flagship drug, Biktarvy, holds over 51% market share in the U.S. treatment market, while Descovy maintains over 40% market share in the PrEP market [3][4]. - Yeztugo addresses barriers to PrEP adoption, such as adherence and healthcare access, and is expected to increase uptake among underserved populations [5][4]. Financial Performance and Growth - Gilead's stock has outperformed the industry, sector, and S&P 500 index, supported by the FDA approval of Yeztugo and rising earnings estimates [6][7]. - Earnings estimates for Gilead have increased, with the 2025 bottom-line estimate rising to $7.92 from $7.91, and the 2026 estimate improving to $8.48 from $8.39 [15]. Liver Disease Portfolio - Gilead's liver disease portfolio has been strengthened by the FDA approval of seladelpar for primary biliary cholangitis (PBC), which has shown encouraging initial uptake [9][10]. Oncology Business Challenges - Gilead's oncology portfolio faces challenges, particularly in the Cell Therapy franchise due to competitive pressures, but positive results from the ASCENT-03 study on Trodelvy may bolster future growth [11][12]. Strategic Positioning - Gilead's strategic collaborations and acquisitions, including a partnership with Merck for HIV treatment, position the company for continued growth despite competitive pressures from other firms like GSK [17][18]. - The company maintains a strong cash position of $7.9 billion, supporting its attractive dividend yield of 2.83%, which is sustainable [19].

Global Health Infrastructure Impact - Trump administration's actions have significantly weakened the global health infrastructure, impacting HIV prevention efforts [1] - Aid groups are struggling to maintain support for those already infected with HIV due to the weakened infrastructure [1]