Gilead(US:GILD)2023-02-03 03:04Financial Data and Key Metrics Changes - Full year 2022 sales of Biktarvy grew 20% year-over-year to $10.4 billion, exceeding $10 billion for the first time [8] - Total product sales for 2022 were $27 billion, flat compared to 2021, with growth in the base business offset by a decline in Veklury sales [14][39] - Non-GAAP diluted earnings per share was $1.67 in Q4 2022 compared to $0.69 in Q4 2021, impacted by a $0.25 charge from the termination of the Trodelvy collaboration [42] Business Line Data and Key Metrics Changes - HIV sales for Q4 2022 were $4.8 billion, a 5% year-over-year increase, driven by higher demand and favorable pricing dynamics [14] - Oncology sales, including Trodelvy, reached $680 million for the full year, up 79% year-over-year [23] - Cell therapy sales in Q4 were $490 million, up 75% year-over-year, driven by the uptake of Yescarta [25] Market Data and Key Metrics Changes - The U.S. PrEP market grew 18% year-over-year, with Descovy sales for Q4 at $537 million, up 13% year-over-year [15] - The overall HIV treatment market in the U.S. grew 1.5% year-over-year in Q4, with Europe seeing over 2% growth [15] - Veklury sales for 2022 totaled $3.9 billion, with Q4 sales at $1 billion, indicating a sustainable role in treating COVID-19 [22] Company Strategy and Development Direction - The company is focused on expanding its HIV portfolio and oncology business, with significant clinical progress expected in 2023 [7][9] - Gilead aims to enhance its market position with the recent approval of Sunlenca for multi-drug resistant HIV, targeting a small but significant patient population [20] - The company plans to continue investing in R&D, with expectations of 23 active Phase III trials by the end of 2023 [45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the base business's growth trajectory, despite the expected decline in Veklury sales [50] - The company anticipates total product sales in 2023 to range from $26 billion to $26.5 billion, with base business growth projected at 4% to 6% [44] - Management highlighted the importance of maintaining a strong pipeline and adapting to market dynamics, particularly in the COVID-19 treatment landscape [68] Other Important Information - Non-GAAP product gross margin was 86.8%, up more than 16 percentage points from the previous year, primarily due to a legal settlement charge in 2021 [40] - The company returned over $5 billion to shareholders in 2022, including a 2.7% increase in quarterly cash dividends [47][48] Q&A Session Summary Question: Expectations for earnings growth in the next few years - Management indicated that while the base business is performing well, the impact of Veklury's decline complicates earnings projections, but they expect growth to accelerate in the long run as new products are introduced [50][51] Question: Expected dynamics for lenacapavir following approval - Management noted that lenacapavir targets a specific patient population, and while it's early days, they are optimistic about its potential and the response from physicians [54][55] Question: Differentiation of Trodelvy against competitors - Management emphasized their established market presence and the absence of significant safety issues in their development program, which they believe will support their competitive position [59] Question: Study design for Trodelvy in HR-positive, HER2-negative breast cancer - Management stated that they are still finalizing the study design and will share more details as they progress [62] Question: Confidence in the Fc-silent construct for TIGIT - Management expressed confidence based on clinical data from the ARC-7 trial, which demonstrated benefits of their approach compared to competitors [66]