Gilead(GILD) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Gilead reported total product sales of $28.9 billion for 2025, a 1% increase from 2024, exceeding guidance due to strong HIV sales growth despite a $1.1 billion headwind from Medicare Part D redesign and a $900 million decline in Veklury revenue [33][34] - The base business revenue, excluding Veklury, was $28 billion, up 4% from 2024, also surpassing guidance [33] - Non-GAAP diluted EPS for 2025 was $8.15, in line with guidance, reflecting lower R&D expenses and higher revenues [36] Business Line Data and Key Metrics Changes - The HIV business grew 6% year-over-year to $20.8 billion, driven by strong demand for Biktarvy and Descovy, with Biktarvy sales reaching $14.3 billion, up 7% [34][11] - The liver business also grew 6% to $3.2 billion, primarily due to the strong performance of Livdelzi [34][17] - Oncology product Trodelvy saw a 6% increase in sales to $1.4 billion, driven by demand in metastatic breast cancer treatment [34][18] - Cell therapy sales declined 7% year-over-year to $1.8 billion, reflecting competitive pressures [34][20] Market Data and Key Metrics Changes - The HIV prevention portfolio, including Yes2Go, grew significantly, with fourth-quarter sales of Yes2Go at $96 million and full-year sales at $150 million [13][15] - The U.S. market for HIV prevention is expanding, with Descovy achieving over 45% market share [13] - Livdelzi's market share in the U.S. for second-line primary biliary cholangitis exceeded 50% [17] Company Strategy and Development Direction - Gilead is targeting four commercial launches in 2026, including Trodelvy for first-line metastatic triple-negative breast cancer and a new daily oral combination for HIV treatment [6][22] - The company aims to maintain expense discipline while investing in new product launches and expanding its pipeline, with up to 10 ongoing and potential new launches through 2027 [7][8] - Gilead's strategy focuses on diversifying its portfolio and enhancing its clinical pipeline, which is considered the strongest in its history [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering 2026 with a strong position, citing no major product losses expected until 2036 and a commitment to returning capital to shareholders [8][43] - The company anticipates a 2% headwind to growth in 2026 due to drug pricing agreements and changes to the Affordable Care Act, but expects underlying growth of 6% absent these factors [41][42] - Management highlighted the importance of ongoing clinical trials and product launches in driving future growth [24][32] Other Important Information - Gilead returned $5.9 billion to shareholders in 2025, including $1.9 billion in share repurchases [42] - The company plans to invest approximately $1 billion annually in early-stage pipeline development and partnerships [43] Q&A Session Summary Question: Can you elaborate on the assumptions driving the $800 million guidance for Yes2Go? - Management highlighted strong access with 90% payer coverage and ongoing direct-to-consumer campaigns to increase awareness and drive growth [45][48] Question: What type of share gains do you expect for Anito-cel in the fourth-line setting? - Management expects modest contributions in 2026 post-launch, with a goal to become the market leader over time due to its efficacy and safety profile [52][56] Question: Are you expecting cannibalization of Descovy PrEP sales by Yes2Go? - Management anticipates that while Yes2Go will grow, Descovy will also continue to perform well in 2026, with both products benefiting from increased awareness in HIV prevention [58][60] Question: Can you discuss the profile of the long-acting 6-month treatment drug GS-3242? - Management expressed excitement about GS-3242's potential, emphasizing its differentiated profile and the importance of its combination with lenacapavir [63][66] Question: What do you need to show in the PURPOSE 365 study for lenacapavir for PrEP? - The study aims to demonstrate effective prevention through pharmacokinetics and safety, with potential market expansion opportunities if successful [69][73]