Core Viewpoint - Gilead Sciences (GILD.US) reported a nearly 9% increase in stock price, reaching $120.07, following better-than-expected financial results for Q2 2025, driven by key products [1] Financial Performance - Gilead Sciences' revenue for Q2 2025 grew by 2% to $7.08 billion, surpassing market expectations of $6.98 billion [1] - Adjusted earnings per share (EPS) were reported at $2.01, exceeding the market forecast of $1.96 [1] Future Guidance - For the full year, Gilead expects product sales to range between $28.3 billion and $28.7 billion, with an upward adjustment of $100 million on both ends [1] - The company anticipates EPS to be between $5.85 and $6.15, an increase from the previous range of $5.65 to $6.05 [1] - On an adjusted basis, Gilead forecasts EPS between $7.95 and $8.25, up from the earlier estimate of $7.70 to $8.10 [1] Key Growth Drivers - The growth in revenue is attributed to the performance of products such as Biktarvy, Descovy, Trodelvy, and Livdelzi [1]

Core Insights - Gilead Sciences, Inc. reported better-than-expected Q2 2025 results, with adjusted EPS of $2.01 surpassing the Zacks Consensus Estimate of $1.95 and remaining flat year over year [1] - Total revenues reached $7.1 billion, exceeding the Zacks Consensus Estimate of $6.9 billion, marking a 2% year-over-year increase driven by higher sales in HIV, Livdelzi, and Trodelvy [1] Financial Performance - Product sales increased 2% year over year to $7.1 billion; excluding Veklury, product sales rose 4% to $6.9 billion [5] - HIV product sales grew 7% year over year to $5.1 billion, driven by increased demand and higher average realized prices, beating estimates [5][6] - Biktarvy sales increased 9% year over year to $3.5 billion, holding over 51% market share in the U.S. treatment market [6] - Descovy sales surged 35% year over year to $653 million, maintaining over 40% market share in pre-exposure prophylaxis (PrEP) [7] - Liver Disease portfolio sales decreased 4% to $795 million, primarily due to lower chronic HCV sales impacted by Medicare Part D redesign [9] - Veklury sales plummeted 44% to $121 million due to reduced COVID-19-related hospitalizations [9] - Cell Therapy product sales fell 7% to $485 million, missing estimates due to competitive pressures [10] - Trodelvy sales increased 14% year over year to $364 million, driven by higher demand [11] Cost and Guidance - Adjusted product gross margin improved to 86.9% from 86% year over year [12] - R&D expenses rose to $1.5 billion from $1.3 billion due to increased clinical manufacturing activities [12] - Gilead raised its 2025 product sales guidance to between $28.3 billion and $28.7 billion, with adjusted EPS now anticipated in the range of $7.95-$8.25 [14][15] Pipeline Developments - Gilead received FDA approval for lenacapavir (Yeztugo), a twice-yearly injectable HIV-1 capsid inhibitor for prevention, marking a significant addition to its HIV portfolio [16][20] - The company entered a partnership with Kymera Therapeutics to develop a novel molecular glue degrader program targeting CDK2, with potential payments up to $750 million [18] Market Position - Gilead's strong performance in the HIV segment is expected to continue, with projected growth of approximately 3% in 2025, driven by Biktarvy and Descovy [19] - The approval of Yeztugo addresses barriers to PrEP adoption, providing a competitive advantage over daily oral medications [21] - Gilead's breast cancer drug Trodelvy is gaining market share, while cell therapies face competitive challenges [22][23]

Financial Data and Key Metrics Changes - The company reported base business sales of $6.9 billion, growing 4% year over year, driven by strong performance in HIV products [6][41] - Total product sales reached $7.1 billion, reflecting a 2% year-over-year increase, partially offset by a 44% decline in Vecluri sales due to fewer COVID-19 related hospitalizations [6][41] - Non-GAAP diluted EPS for the quarter was $2.01, with a product gross margin of 87% [42][41] Business Line Data and Key Metrics Changes - HIV sales amounted to $5.1 billion, representing a 7% year-over-year growth, with Biktarvy and Descovy contributing significantly [14][41] - Biktarvy sales grew 9% year over year to $3.5 billion, while Descovy saw a remarkable 35% increase to $653 million [14][16] - Trodelvy sales reached $364 million, up 14% year over year, reflecting strong demand in metastatic breast cancer [24][41] 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 [17][20] - Descovy's market share for PrEP grew to over 40% in the U.S., with unrestricted access covering 88% of total lives [17][66] - The company anticipates a 3% growth in HIV sales for 2025, up from previous expectations of flat revenue [20][21] Company Strategy and Development Direction - The company is focused on expanding its HIV product portfolio, with plans for up to eight additional product launches by 2033 [32] - The recent FDA approval of lenacapavir (YES2Go) is seen as a transformative step in HIV prevention, with a strong commercial launch strategy in place [5][18] - The company aims to enhance its oncology pipeline, particularly with Trodelvy, which is expected to advance into first-line treatment settings [10][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance of the HIV portfolio and the potential of lenacapavir to significantly impact the HIV epidemic [8][20] - The company is closely monitoring the macroeconomic landscape and is prepared to adapt its strategies as needed [47] - Management highlighted the importance of maintaining operational discipline while pursuing growth opportunities [48] Other Important Information - The company returned $1.5 billion to shareholders in the second quarter, including $527 million in share repurchases [48] - A new $6 billion share repurchase program has been approved to support continued buybacks [48] Q&A Session Summary Question: Can you elaborate on the early uptake with YES2Go? - Management reported strong early uptake with over 25,000 customer calls executed, indicating high awareness and readiness for the launch [51][56] Question: How durable is the growth rate for Descovy? - 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 [63][66] Question: What is the potential impact of the MFN proposal on Gilead's business? - Management acknowledged ongoing discussions regarding the MFN proposal and emphasized the importance of maintaining patient access to medications [71][72] Question: How would changes in the USPSTF guidelines affect commercialization? - Management expressed confidence that even if guidelines change, the company could still ensure access to HIV prevention through strong payer relationships [80][82] Question: What updates should be expected regarding the WONDERS program? - Management indicated that updates on the WONDERS program would be forthcoming, particularly following the resolution of the clinical hold [85]

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]

Financial Performance - Total product sales excluding Veklury increased by 4% year-over-year (YoY) to $6.9 billion, driven by HIV, Livdelzi, and Trodelvy[8] - Total HIV product sales increased by 7% YoY to $5.1 billion[12] - Oncology product sales increased by 1% YoY to $849 million[12] - Veklury sales decreased by 44% YoY to $121 million[12] - Liver disease product sales decreased by 4% YoY to $795 million[12] - Cell Therapy product sales decreased by 7% YoY to $485 million[12] HIV Business - Biktarvy sales increased by 9% YoY[8] - Descovy sales increased by 35% YoY[8] - FY25 HIV revenue guidance updated to reflect year-to-date (YTD) strength, expecting >7% YoY growth[22] Oncology - Trodelvy sales increased by 14% YoY[8] - Cell Therapy saw a 7% YoY decrease due to evolving competitive landscape[8] Pipeline and Regulatory Updates - FDA approved Yeztugo (lenacapavir) as a twice-yearly injection for HIV prevention[8] - Phase 3 ASCENT-03 & -04 data for Trodelvy in 1L mTNBC showed clinically meaningful results, with FDA filings expected in ~2H 2025[8]

Industry Overview - The second-quarter earnings season for the drug and biotech sector is in full swing, with major companies like Pfizer, Eli Lilly, Amgen, Gilead Sciences, and Novo Nordisk set to announce results [1] - The earnings season began mid-July with Johnson & Johnson reporting strong results, exceeding estimates for both earnings and sales [1] Company Performance Pfizer (PFE) - Pfizer has consistently exceeded earnings expectations in the last four quarters, with an average earnings surprise of 43.49% [6] - The Zacks Consensus Estimate for second-quarter sales and earnings is $13.78 billion and 58 cents per share, respectively [6] - Higher sales from products like Vyndaqel and Padcev are expected to offset weaker sales from Prevnar and Ibrance [8] Eli Lilly (LLY) - Eli Lilly's performance has been mixed, exceeding earnings expectations in two of the last four quarters, with an average earnings surprise of 6.69% [11] - The Zacks Consensus Estimate for second-quarter sales and earnings stands at $14.75 billion and $5.61 per share, respectively [11] - Strong demand for Mounjaro and Zepbound is anticipated to drive top-line growth [12] Amgen (AMGN) - Amgen has shown strong performance, beating earnings estimates in each of the last four quarters, with an average earnings surprise of 8.34% [14] - The Zacks Consensus Estimate for second-quarter sales and earnings is $8.86 billion and $5.26 per share, respectively [14] - Sales growth is expected to be driven by products like Evenity and Repatha, despite price declines due to higher rebates [15] Gilead Sciences (GILD) - Gilead's performance has been mixed, with earnings beating estimates in three of the last four quarters, averaging a surprise of 16.48% [17] - The Zacks Consensus Estimate for second-quarter sales and earnings is $6.95 billion and $1.95 per share, respectively [17] - Increased demand for HIV therapies like Biktarvy is expected to boost sales [18] Novo Nordisk (NVO) - Novo Nordisk's performance has been mixed, with earnings beating estimates in one of the last four quarters, delivering an average surprise of 0.02% [20] - The Zacks Consensus Estimate for second-quarter sales and earnings is $11.79 billion and 93 cents per share, respectively [20] - The company lowered its 2025 sales and operating profit growth outlook due to weaker momentum in key markets for its semaglutide-based drugs [21]

Core Viewpoint - Gilead Sciences, Inc. is set to report its Q2 2025 results on August 7, with consensus estimates for sales at $6.95 billion and earnings per share (EPS) at $1.95, reflecting a positive trend in earnings estimates for 2025 and 2026 [1][4][6]. Financial Performance - The earnings estimate for 2025 has risen to $8.02 from $7.91 per share over the past 60 days, while the estimate for 2026 has increased to $8.53 from $8.39 [1]. - Gilead's earnings surprise history shows that the company has beaten estimates in three of the last four quarters, with an average surprise of 16.48% [2][3]. Sales Drivers - Strong sales from Gilead's HIV drugs, particularly Biktarvy and Descovy, are expected to support top-line growth in Q2, with estimates for Biktarvy at $3.4 billion and Descovy at $577 million [4][8]. - The company has recently received FDA approval for lenacapavir, a twice-yearly injectable HIV-1 capsid inhibitor, which is anticipated to enhance its HIV portfolio [8][16]. Market Dynamics - The introduction of a new Medicare Part D model may have impacted HIV sales due to increased cost-sharing obligations for low-income patients, which could affect overall sales [7][6]. - Gilead's liver disease portfolio is expected to benefit from higher demand for viral hepatitis medicines, with incremental sales from the newly approved drug Livdelzi [9][10]. Competitive Landscape - Gilead's cell therapy sales, particularly for Yescarta and Tecartus, are likely to have declined due to competitive pressures in both the U.S. and global markets [11][17]. - The oncology portfolio, including Trodelvy, is showing strong demand, although the cell therapy segment faces ongoing challenges [13][17]. Stock Performance and Valuation - Gilead's shares have increased by 22.5% year-to-date, outperforming the industry and the S&P 500 [14]. - The stock currently trades at a price/earnings ratio of 13.60x forward earnings, which is higher than its historical mean but lower than the large-cap pharma industry average [15]. Strategic Outlook - Gilead's strategic deals and acquisitions are seen as positive for diversifying its business, with ongoing collaborations to enhance its HIV treatment offerings [18][22]. - The company is viewed as a safe haven for investors in the biotech sector, with a strong dividend yield adding to its attractiveness [19][23].

Core Insights - Merck has initiated two late-stage clinical studies for MK-8527, a once-monthly oral pill for HIV pre-exposure prophylaxis (PrEP) [1][8] - The studies aim to enroll nearly 9,000 participants and will compare MK-8527 with Gilead's daily oral PrEP pill, Truvada [2][8] - The initiation of these studies is backed by positive Phase II results showing similar adverse event rates between treatment and placebo [3] Company Developments - Merck is expanding its HIV portfolio, focusing on both prevention and treatment, with MK-8527 being a key component [6][10] - The FDA has accepted a regulatory filing for Merck's once-daily, two-drug, single-tablet regimen of doravirine/islatravir (DOR/ISL) for treating HIV-1, with a decision expected by April 28, 2026 [7] - Merck is also collaborating with Gilead on a once-weekly, two-drug, single-tablet regimen of islatravir/lenacapavir (ISL/LEN) [9][10] Competitive Landscape - Merck's growing HIV portfolio positions it to compete with Gilead, which currently leads the market with its PrEP medications, Truvada and Descovy [11] - If approved, MK-8527 could challenge Gilead's dominance in the PrEP market [11] - Gilead's recent approval of lenacapavir, a twice-yearly injectable for HIV prevention, adds to the competitive pressure in the HIV therapeutic space [13] Market Context - GSK is another significant player in the HIV market, with strong sales driven by products like Cabenuva, Apretude, and Dovato [14] - The competitive dynamics in the HIV space are intensifying as companies innovate and expand their product offerings [11][14]

Core Insights - Merck (MRK) has received FDA acceptance for the new drug application (NDA) for its investigational two-drug regimen doravirine/islatravir (DOR/ISL) aimed at treating virologically suppressed adults with HIV-1 infection, with a decision expected by April 28, 2026 [1][7] Drug Efficacy and Studies - If approved, DOR/ISL would be the first non-integrase inhibitor-based two-drug regimen demonstrating comparable efficacy and safety to the current three-drug standard, BIC/FTC/TAF, in phase III studies [2] - The NDA is supported by data from two pivotal phase III studies (MK-8591A-051 and MK-8591A-052), which showed that DOR/ISL (100 mg/0.25 mg) was non-inferior to comparator antiretroviral therapies in adults with virologically suppressed HIV-1 [3] Ongoing Research and Collaborations - Merck is continuing its HIV research with additional trials, including MK-8591A-053 and MK-8591A-054, which evaluate DOR/ISL in treatment-naïve individuals and those from earlier studies, respectively [9][10] - The company is collaborating with Gilead Sciences (GILD) to evaluate islatravir in combination with GILD's lenacapavir in a phase II study for HIV treatment [10] Stock Performance - Year to date, Merck's shares have decreased by 15.5%, contrasting with a 0.2% rise in the industry [4]

Company Overview - Gilead Sciences is a pioneer in developing drugs for the treatment of human immunodeficiency virus (HIV) and has a broad portfolio that includes drugs for liver diseases, hematology/oncology diseases, and inflammation/respiratory diseases [12] - The company's flagship treatment, Biktarvy, is driving growth within its strong HIV franchise, which generated total sales of $19.6 billion in 2024, reflecting an 8% year-over-year increase [12] Investment Ratings - Gilead Sciences holds a 2 (Buy) rating on the Zacks Rank, indicating a favorable investment outlook [13] - The company has a VGM Score of A, suggesting strong overall performance across value, growth, and momentum metrics [13] Momentum and Earnings Estimates - Gilead has a Momentum Style Score of B, with shares increasing by 3.6% over the past four weeks [13] - Two analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate rising by $0.01 to $7.92 per share [13] - The company boasts an average earnings surprise of +16.5%, indicating a history of exceeding earnings expectations [13] Conclusion - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Gilead Sciences is positioned as a strong candidate for investors seeking potential growth opportunities [14]