Key Takeaways The EC approved Gileads lenacapavir, branded Yeytuo, as twice-yearly HIV prevention for at-risk groups.Approval followed accelerated EMA review, CHMP backing, and PURPOSE 1 and 2 trial data.Lenacapavir strengthens Gileads HIV portfolio as Truvada faces generic competition in prevention.Gilead Sciences, Inc. ((GILD) announced that the European Commission (“EC”) has granted marketing authorization to HIV prevention drug lenacapavir, under the brand name Yeytuo.The EC approved lenacapavir, GILD’s ...

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 - Gilead Sciences, Inc. (GILD) has announced that the FDA has placed a clinical hold on studies for pipeline candidates GS-1720 and GS-4182 for HIV treatment due to safety concerns regarding CD4+ T-cell and lymphocyte counts [1][3][4] - Following the announcement, GILD shares fell by 2.6%, although the stock has gained 20% year-to-date, contrasting with a 0.5% decline in the industry [1] Gilead's HIV Treatment Pipeline - The clinical hold affects two phase II/III studies comparing the combination of GS-1720 and GS-4182 with Biktarvy in both virologically suppressed and treatment-naive HIV-1 patients, as well as three additional phase I studies [4][7] - Despite the setback, Gilead remains a market leader in HIV treatments, with Biktarvy accounting for over 51% of the U.S. treatment market [5][6] Market Performance and Future Prospects - Biktarvy continues to be the leading prescribed regimen for HIV-1 infection, while Descovy maintains over 40% market share in the PrEP market [6][7] - Gilead's late-stage studies for lenacapavir, which is under priority review for HIV prevention, could further solidify its position in the market [8] - However, Biktarvy sales may face pressure due to changes in Medicare Part D, impacting overall HIV growth [9] Competitive Landscape - Gilead faces competition from GSK plc, which is seeing strong demand for its HIV portfolio, including Cabenuva and Apretude [9][10]

Summary of Gilead's Conference Call Company Overview - **Company**: Gilead Sciences - **Industry**: Biotechnology Key Points and Arguments Growth Strategy - Gilead is focusing on three core franchises: virology (HIV), oncology, and inflammation, with a strong emphasis on diversifying beyond virology [3][4] - The company has a robust balance sheet and cash flows, allowing for effective management of operating expenses and investment in growth opportunities [4][5] HIV and Lenacapavir Launch - The launch of lenacapavir for HIV PrEP is imminent, with a PDUFA date set for June 19 [7] - Gilead has been advocating for funding core HIV services, and discussions with the government have been positive regarding support for these programs [8] - Lenacapavir is reported to be 100% effective in preventing HIV, with high community awareness expected to drive uptake [9][10] - The target population for PrEP in the U.S. is approximately 1.2 million, with current users around 400,000, primarily men who have sex with men [13][14] - Gilead aims to improve compliance among current users and expand access to underserved communities [15][16] Reimbursement and Coverage - Gilead expects high insurance coverage for lenacapavir, similar to existing PrEP medications, with an anticipated 70-75% coverage within six months post-launch [22][23] - The company has various support systems in place for individuals with HIV, ensuring access to treatment [24][25] Pipeline and Innovation - Gilead has multiple long-acting HIV programs in development, including a once-a-year injection expected to be available by 2028 [27][28] - The company is also working on alternatives to its leading HIV treatment, Biktarvy, with several programs in various stages of development [32][34] Oncology Developments - Gilead presented significant data at ASCO for Trodelvy in treating triple-negative breast cancer, which could become the new standard of care [36][40] - The oncology business is currently generating over $3 billion annually, with Trodelvy contributing over $1 billion [44] - Gilead is expanding its oncology pipeline with ongoing trials in various cancer types, including lung cancer and multiple myeloma [45][46] Business Development and Future Outlook - Gilead plans to continue investing in late-stage research and development, with a focus on mid-stage acquisitions to complement its portfolio [55][57] - The company is committed to returning value to shareholders through dividends and share buybacks [58] Regulatory Environment - Gilead is actively engaging with the administration regarding potential policy changes, including the MFN executive order, emphasizing the need for a balanced approach to drug pricing [59][60] - The company believes it is less vulnerable to tariffs due to its significant U.S. presence and IP holdings [64][66] Additional Important Content - Gilead's long-term strategy includes exploring novel inflammation targets to complement its existing therapeutic areas [53] - The company is focused on maintaining a competitive edge in the biotechnology sector through innovation and strategic partnerships [54][66]

Core Insights - The FDA has accepted Gilead Sciences' New Drug Application for lenacapavir, an injectable HIV-1 capsid inhibitor for pre-exposure prophylaxis, with a target action date of June 19, 2025 [1] - Gilead's lenacapavir showed 100% efficacy in preventing HIV in cisgender women during the Phase 3 PURPOSE 1 trial, leading to a recommendation to offer the drug to all trial participants [2] - Gilead's stock has increased by approximately 74% since June of the previous year and around 21% year-to-date [3] Company Performance - Gilead is experiencing a turnaround in its stock performance, currently trading at 13.3 times forward earnings, which is below the pharmaceutical industry average of 14 [4] - Concerns exist regarding Gilead's past performance, where a previous stock surge due to hepatitis C treatment success was followed by a decline as demand waned [5] - The company aims to increase U.S. PrEP users to over one million by 2030 to achieve $4 billion in annual sales, with over 400,000 Americans currently using PrEP [6] Market Position - Gilead's HIV drug Biktarvy is protected from generic competition until 2033, positioning the company favorably compared to others facing patent expirations [6] - HIV product sales increased by 6% year-over-year to $4.59 billion in Q1 2025, indicating strong market performance [7] - Potential reductions in federal funding for HIV prevention programs could impact market dynamics, as noted by industry experts [8]

Core Viewpoint - Gilead Sciences, Inc. has demonstrated strong performance in a volatile market, with shares up 21.1% year-to-date, significantly outperforming the industry and the S&P 500 Index, which declined by 4.7% [1][8]. Group 1: HIV Market Leadership - Gilead is a dominant player in the HIV market, with its flagship drug Biktarvy accounting for over 51% of the treatment market share in the U.S. [4] - The company’s Descovy for pre-exposure prophylaxis (PrEP) maintains over 40% market share in the U.S. [5] - The FDA has accepted new drug applications for lenacapavir for HIV prevention, with a target action date of June 19, 2025, which could enhance Gilead's HIV franchise [5][6]. Group 2: Liver Disease Portfolio - The FDA approval of seladelpar (Livdelzi) for primary biliary cholangitis (PBC) strengthens Gilead's liver disease portfolio and validates its CymaBay acquisition [7][9]. Group 3: Oncology Business Challenges - Gilead's oncology portfolio, including the Cell Therapy franchise and Trodelvy, faces competitive pressures, particularly in the U.S. and Europe, which are expected to continue into 2025 [10]. - Despite challenges, positive results from the phase III ASCENT-03 study on Trodelvy indicate potential for improvement in the oncology business [11]. Group 4: Financial Performance and Estimates - Gilead's shares trade at a price/earnings ratio of 13.70x forward earnings, lower than the large-cap pharma industry's average of 14.62x but higher than its historical mean of 10.53x [12]. - Earnings estimates for Gilead have increased, with the 2025 bottom-line estimate rising to $7.91 from $7.87, and the 2026 estimate improving to $8.39 from $8.31 [14]. Group 5: Strategic Positioning and Dividends - Gilead's strategic deals and acquisitions are aimed at diversifying its business, although Biktarvy sales may face pressure due to Medicare Part D redesign [17]. - The company has a strong cash position of $7.9 billion as of March 31, 2025, and has consistently increased dividends, declaring a quarterly dividend of $0.79 per share for Q2 2025, indicating a sustainable yield of 2.91% [18].

Core Insights - Gilead Sciences is at a pivotal moment in its evolution, focusing on sustainable growth and leveraging its strengths in the biopharma sector [3]. Group 1: Company Overview - Dan O'Day has been with Gilead for over six years, emphasizing the importance of building a sustainable future for the company [3]. - The company has identified three major components for its growth strategy, with a particular focus on the HIV business [4]. Group 2: Product Development - The imminent launch of lenacapavir for PrEP (pre-exposure prophylaxis) is highlighted as a significant development for Gilead's HIV business [4].

Financial Data and Key Metrics Changes - The company has increased its R&D spending to around 20% of sales, up from approximately 13-14%, indicating a significant investment in future growth [12] - The operating margins remain in the top quartile of the industry, reflecting strong financial health and operational efficiency [13] Business Line Data and Key Metrics Changes - The oncology business has reached a run rate of over $3 billion, contributing more than half of the company's quarterly growth [6] - The company is preparing for multiple upcoming launches in oncology, including Trodelvy for breast cancer, which has shown promising clinical data [10][11] Market Data and Key Metrics Changes - The company is focusing on expanding its HIV treatment options, with lenacapavir for PrEP expected to significantly increase market penetration [49][50] - The company aims to address the approximately 40% of HIV patients who are not virologically suppressed, indicating a substantial market opportunity [46] Company Strategy and Development Direction - The company is diversifying its portfolio beyond HIV, with a focus on oncology and inflammation, aiming to develop innovative treatments in these areas [52] - The strategy includes a commitment to business development and potential acquisitions, targeting mid-single digit billion dollar deals for late-stage assets [60][61] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the pressures facing the biopharma sector, including tariffs and drug pricing reforms, but believes the company's strong portfolio and low patent exposure provide a competitive advantage [20][24] - The management is optimistic about the upcoming launch of lenacapavir, which is expected to change the landscape of HIV prevention [72][76] Other Important Information - The company is committed to maintaining its dividend policy and growing dividends in line with its strong financial base [13] - The management emphasizes the importance of understanding the HIV community and ensuring effective launch strategies for new products [83][84] Q&A Session Summary Question: How does Gilead rank the relative risks from tariffs and drug pricing reforms? - The management believes that the company's strong balance sheet and low patent exposure help mitigate risks associated with tariffs and drug pricing reforms [20][24] Question: What are the key factors for a successful launch of lenacapavir? - Key factors include ensuring payer coverage, provider education, and reaching new patient populations, with expectations of achieving 70-75% payer coverage within six months [84][85] Question: What is the long-term ambition for lenacapavir? - The management sees lenacapavir as a transformative product with the potential for once-a-year dosing, aiming to expand access globally through partnerships with generic manufacturers [73][76]

Core Viewpoint - Gilead Sciences, Inc. reported disappointing first-quarter 2025 results, with adjusted earnings per share (EPS) of $1.81 and total revenues of $6.7 billion, both missing consensus estimates [1][2][3] Financial Performance - Adjusted EPS of $1.81 missed the Zacks Consensus Estimate by a penny, compared to a loss per share of $1.32 in the same quarter last year [1] - Total revenues of $6.7 billion were flat year over year and missed the Zacks Consensus Estimate of $6.8 billion [1] - Total product sales decreased 1% year over year to $6.6 billion, while excluding Veklury, product sales increased 4% to $6.3 billion [3] Product Sales Breakdown - HIV product sales grew 6% year over year to $4.6 billion, exceeding both the Zacks Consensus Estimate and model estimate of $4.5 billion [3] - Biktarvy sales increased 7% year over year to $3.15 billion but missed the Zacks Consensus Estimate of $3.2 billion [4] - Descovy sales surged 38% year over year to $586 million, beating the Zacks Consensus Estimate of $479 million [5] - Liver Disease portfolio sales rose 3% to $758 million, driven by higher demand for HBV and HDV drugs [6] - Veklury sales plummeted 45% to $302 million, missing the Zacks Consensus Estimate of $387 million [7] - Cell Therapy product sales decreased 3% to $464 million, missing the Zacks Consensus Estimate of $491 million [7] Cost and Margin Analysis - Adjusted product gross margin slightly increased to 85.5% from 85.4% in the year-ago quarter [11] - Research and development expenses totaled $1.3 billion, down from $1.4 billion in the previous year [11] - SG&A expenses amounted to $1.2 billion, down from $1.3 billion [11] Dividend and Guidance - Gilead declared a quarterly dividend of $0.79 per share for Q2 2025, payable on June 27, 2025 [12] - The company reiterated its 2025 guidance, projecting product sales between $28.2 billion and $28.6 billion, with adjusted EPS anticipated in the range of $7.70-$8.10 [13] Pipeline Updates - The FDA accepted new drug application submissions for lenacapavir for HIV prevention, with a target action date of June 19, 2025 [14] - Gilead received conditional marketing authorization for seladelpar for the treatment of primary biliary cholangitis [14] Overall Performance Assessment - Gilead's first-quarter results were disappointing, particularly due to a decline in oncology drugs affecting revenue growth [15] - Despite challenges, Biktarvy maintained its dominant position in the HIV market, and Descovy showed strong performance [15] - The potential approval of lenacapavir could further strengthen Gilead's HIV franchise amid increasing competition [16]

Financial Data and Key Metrics Changes - The base business, excluding Veclury, grew 4% year over year, primarily driven by growth in the HIV business [6][50] - Total product sales, including Veclury, were down by 1% from last year, reflecting fewer COVID-19 related hospitalizations [8][50] - Non-GAAP diluted EPS was $1.81, with a product gross margin flat year over year at 85% [52][54] Business Line Data and Key Metrics Changes - HIV sales were up 6% year over year, with Biktarvy sales increasing by 7% [7][22] - Livedelzi achieved first-quarter sales of $40 million, reflecting early momentum in its launch [27] - Veclury sales were down 45% year over year, reflecting lower rates of COVID-19 related hospitalizations [28] - Trodelvy sales were down 5% year over year, impacted by inventory dynamics and lower average realized price [29][98] - Cell therapy sales were down 3% year over year, with Yescarta sales up 2% year over year [31] Market Data and Key Metrics Changes - The HIV treatment market continues to grow at an expected rate of 23% annually [22] - Descovy sales increased by 38% year over year, driven by higher average realized price and demand [23][78] - The liver disease segment saw sales of $758 million, up 3% year over year [26] Company Strategy and Development Direction - The company is focused on multiple upcoming launches, including lenacapavir, anetocel, and Trodelvy [13][34] - Gilead Sciences, Inc. has no major loss of exclusivity (LOE) until the end of 2033, positioning itself for top-line growth across therapeutic areas [14] - The company is increasing investment in US manufacturing and R&D infrastructure [15][89] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming FDA decision on lenacapavir for PrEP, with a potential launch immediately following [9][38] - The company remains well-positioned to adapt to potential policy outcomes in the US [14] - Management noted that the first quarter was lighter than expected but emphasized the variability of the business [54][93] Other Important Information - Gilead Sciences, Inc. received an upgrade in its long-term debt rating from BBB+ to A- [58] - The company returned $1.7 billion to shareholders in the first quarter of 2025 through dividends and share repurchases [58] Q&A Session Summary Question: Expectations for lenacapavir for PrEP and reimbursement dynamics - Management is excited about the upcoming PDUFA date and expects around 75% access within the first six months post-launch, reaching about 90% at the twelve-month mark [62] Question: Impact of HHS and CDC cuts on launch dynamics - Management has not seen anything that would alter plans for the lenacapavir launch and is actively engaging with policymakers [68] Question: Implications of COVID-19 on Descovy and lenacapavir - Descovy saw a 38% growth year over year, driven by market development initiatives, which supports the opportunity for lenacapavir [78] Question: Tariff risks and US market supply - Management indicated that the majority of Gilead's IP is in the US, which suggests lower value for pharmaceutical imports, and they have invested significantly in US manufacturing [86][89] Question: Cannibalization of Descovy by lenacapavir - Management believes lenacapavir will attract both switch patients from daily orals and naive patients, potentially accelerating market growth [124]