Go ahead and get started. Thank you all for being here. A pleasure to have Gilead management here. There's a lot of topics to go through-
Thank you.
- including some of the FDA updates today, Andy, and I realize it's very early into the update, but maybe let me turn it over to you to kick things off.
Yeah, great. Thank you. First of all, thank you for having us. It's great to be here. It's great to do a conference in November in Miami, so thank you for that, and appreciate everyone and spending time with us. Maybe just quickly to kick it off, I mean, 2023 has been a great year for Gilead. You see the continued strength in our base business. The HIV business has performed extraordinarily well. The oncology business, which is both the Kite business and TRODELVY, continue to grow, and it's just the beginning from our perspective.
I'd say the other thing, that we focus investors on is, we've been making significant investments as we've rebuilt the company over the last four or five years, and now we're moving into a period where you're going to see a lot of important Phase III data in the next 12 months. So we'll spend a lot of time talking about that, but a number of Phase III readouts across oncology and HIV, and the rest of the virology business, including our COVID oral antiviral, next year. So it's a pretty exciting time for us.
Excellent. So maybe, Andy, I think that might be a good place to start. You want to lay out for us... I know folks are aware of the TRODELVY lung readout, but can you lay out-
Sure
For us, the suite of readouts, the important ones, and we can start to go one by one?
Sure. Yeah, and we'll spend a lot of time talking about this early next year-
Mm-hmm
As you can imagine. But I mean, the readouts that I would really highlight, and there's a number of them, but first and foremost, TRODELVY, which is, for those of you that don't know Gilead as well, is our Trop-2-directed antibody drug conjugate that we acquired by acquiring Immunomedics. The product is approved in three different solid tumors already, two forms of breast cancer, and bladder cancer. We have a very extensive late-stage clinical development program underway in multiple tumor types, including earlier lines of breast cancer, earlier lines of bladder cancer, and lung cancer. Next year, there will be a lot of data, but two things that I would highlight in particular are EVOKE-01 study of TRODELVY in second-line non-small cell lung cancer.
This is a Phase III study that will read out in the first half of next year. The competitor, there's a competitor Trop-2 antibody that presented some data a month ago that really left the door open for us to demonstrate convincingly that our thesis that the Immunomedics construct and the TRODELVY construct is a better construct. You know, the door is wide open for us to demonstrate that. The other data set next year that is important is the second-line bladder cancer data set that's coming. Again, Phase III data set. I think if you look at recently, some of the PADCEV data, that was really very strong data in bladder cancer.
Our expectation is that PADCEV becomes kind of the standard of care in first line, and the door is wide open for TRODELVY to become the standard of care in second-line bladder cancer, which, again, I don't think is in a lot of models, and people haven't yet fully kind of made that leap. So it's an exciting time for TRODELVY. Maybe I'll transition then. There are two other... There, again, there's at least five or six Phase III data readouts next year. One other one that is incredibly important is lenacapavir, which is our novel. It's already approved. It's an HIV capsid inhibitor that's dosed subcutaneously every six months. We started our prevention, HIV prevention studies a couple of years ago.
At least the first of the two Phase III studies, if not both of them, will read out by the end of next year. HIV prevention is an extraordinary opportunity for Gilead and for people that are at risk of getting HIV. This could be a really transformative development. So that data will come next year. Then finally, one of the two studies that we had started with our oral broad-acting nuke that can be used in COVID and other emerging viruses will have a data readout next year in the ordinary risk or regular risk patients. So that's just the tip of the iceberg. There's a lot of Phase II data coming next year as well, and we continue to follow things like our Arcellx collaboration with ddBCMA.
There should be additional data next year, additional tidbit data. So really data-rich year for us.
Excellent. There's several of these to go through. Maybe let's start with EVOKE, on the lung cancer side. Non-squamous versus squamous, your thought process around whether you guys do think you should have a primary population laid out in non-squamous or not? I know it doesn't sound like that's not the direction you guys are going down.
No. Yeah.
Could you lay out for us how you're thinking about that in light of AstraZeneca readout?
Sure, yeah. So, what Umer is referring to is that the competitor data set showed a benefit, some benefit, in non-squam patients, but not in squamous cell patients. The primary endpoint of our study is overall survival on an intent-to-treat basis across all the patients, squams and non-squams. The study is fully enrolled already. You know, it's a data- or event-driven trial, so moving to, as I said, the readout on the Phase III study early or in the first half of next year. You know, we do pre-stratify, as I think the competitor did, that we'll look at the data on squams and non-squams. Our expectation is that we'll show a benefit in both.
So when we look at the existing TRODELVY data that's available, both from a Phase I study that Immunomedics did, as well as the Phase II study, basket study that we did, and we reported some of the study data earlier this year, we see responses in both squams and non-squams. So again, our expectation is that to get approved, especially in the United States, you have to show an overall survival benefit across the entire patient population. But we will look at it in terms of squams and non-squams. The other thing I would say is that this is a great point to kind of highlight again, that not all ADCs are the same.
Not all Trop-2-directed ADCs are the same, and I think our sense was that the market maybe assumed that one of the competitors, because of a related compound that's approved in breast cancer, that that construct would necessarily be a better construct. Our belief has always been, when we acquired Immunomedics, that there are four huge points of differentiation. So those are: our antibody has much higher binding affinity for Trop-2 than the lead competitor; our linker is different, it's hydrolyzable, which means that it's cleaved in the tumor microenvironment, so some of the toxin is internalized in the cell, but a good portion of the toxin is also released in the tumor microenvironment, which could also help in terms of efficacy, including in squamous cell patients.
The drug-antibody ratio is higher than the competitor, almost twofold, if I remember correctly. And then the toxin is different. We use an irinotecan derivative that's 1,000 times more potent than irinotecan. The competitor uses a different toxin. So these, you know, they're completely different constructs. You see that in the safety data, as you know, that the safety data between the two constructs is very different. We think you're now starting to see that in efficacy, too. Again, there's no head-to-head study, but when you look at the breast cancer data that the competitor shared last month, we look at that versus our breast cancer data in much more advanced, more heavily pretreated patients, we like the way our data looks on a relative basis.
And then the same thing's true in the squamous patients that we mentioned, where at least to date, we see responses in the squamous patients. We'll have to see what it looks like in the bigger data set.
Got it. Andy, is it just me, or I feel like another important read-out for you guys next year is the once-weekly next-gen integrase with your potential once-weekly capsid combination as well? I realize there's a bigger focus from a commercial perspective on capsid plus a bictegravir combination for pre-market.
Yeah.
But how important is that from a more life cycle management perspective?
Yeah, I think it's pretty important. It's a great, it's a great point. I think that there are a number of HIV products that we have in our pipeline that the market hasn't paid a lot of attention to and may be sleeping on. So we spend a lot of time talking about lenacapavir every six months for prevention. We spend less time, and I think investors spend less focus, on some of the other late-stage programs, and there's really three of them. One of them is, we've indicated in our third quarter call, that we're going to share data on our internally developed once-weekly integrase inhibitor that's co-formulated as a once-weekly pill with lenacapavir.
So many of you, you've heard this, but lenacapavir is a unique molecule in that, you know, we've been able to formulate it for once-weekly pills, once daily, once weekly, every three months' subcutaneous injections, and every six months, and then we can pair it with different agents. So what Umer's highlighting is that we have one of the a number of long-acting integrase inhibitors that we've developed. One of them is a once-weekly integrase inhibitor. We have Phase I data from that integrase inhibitor and lenacapavir that we're going to show or share early next year that could be really exciting to help people get the first, you know, the first data on a doublet combination for a long-acting oral.
The other two programs that I would just mention, again, last year, we shared Phase II data on two broadly neutralizing antibodies that were dosed in combination with lenacapavir. That's probably a smaller opportunity, but we do hear from KOLs that treat HIV patients, that there are a number of patients that tend not to take their pills, and that they would love to have this option of the infusion of this antibody together with lenacapavir injection every six months. And then the last thing I'd highlight is that we have a daily doublet that, where we now have the Phase II data that you'll see early next year. And so this is a daily combination of lenacapavir and bictegravir that could be used in switch patients.
So, I would remind everyone that BIKTARVY, which is the gold standard once daily oral combination that has three active drugs, is used in 62%, I believe, today, of treatment initiations in the United States. Some of those patients over time want to switch on to other therapies. This will give them another option to switch. So that's another exciting kind of part of the HIV growth story over time.
Andy, in one of our recent conversations, you mentioned you can see lenacapavir not approach, but not equal, but perhaps approach the size opportunity bictegravir became, meaning a multi-billion-dollar, very large product. Can you remind us what setting that is? Is it just PrEP, or is it more referring to this Dovato like-
Yeah
... and more HIV treatment?
Yeah. So, yeah, I mean, there's no doubt, lenacapavir, in our mind, is the new backbone of our HIV franchise kind of going forward, and has, you know, incredible utility across multiple combinations. But if you just start with prevention, I think what you're alluding to is the comment that we've made that you know, our belief in the size of the prevention opportunity is not yet reflected in street and investor models. And that the lenacapavir for prevention opportunity alone is a very, very substantial opportunity, that I describe it as BIKTARVY-like. That's not suggesting that it's a $12 billion drug in PrEP, but it's the market is vastly underestimating the size of the prevention opportunity.
So when Truvada went generic three years ago in the United States, the PrEP market, which was still in its infancy, was a $2 billion a year branded market. Today, it's much larger than that, because prevention has grown. Over 50% of the market is generic. Descovy, our other oral once daily pill for prevention, still has 40% market share, which is remarkable, but it's just the beginning of prevention. Prevention today is primarily used commercially in the United States, not outside of the United States. So when we talk about lenacapavir being a very large opportunity for us, we're highlighting that you should see not only an expansion of the market in the United States, and you're guaranteeing adherence to patients for six months, many-...
Patients that or people at risk of getting HIV that take the pills intermittently. Sorry. And then finally, it should open the markets outside of the U.S. So just in prevention, it's a really big market opportunity. Then, to your point, when you look at the multiple launches with lenacapavir in treatment, we expect them collectively to be really significant in terms of the additional growth that they can drive in the HIV business. I can't tell you today whether that's four or five launches in treatment in different combinations that collectively could look like BIKTARVY, or whether that's one or two different forms. We'll have a better sense of that as the data's developed over the coming years.
Got it. Okay, makes a lot of sense. I know, there's several additional ones to go through as well. One of the questions that's come up also is on, some of the data sets emerging for your, Arcellx collaboration. But before we go down that direction, do you want to hit up on the cell therapy news from today, Jessica?
Yeah. Today we heard news that the FDA received reports of T-cell malignancies across various BCMA and CD19 CAR -T, CAR-T therapies, and this was seen in clinical trials and also post-marketing data sources. So is this something that you've seen in the Arcellx data so far, and how should we think about, like, the read-across to ourselves?
Is it even BCMA-specific?
It's not BCMA-specific. I mean, I've read what the FDA put out. It's BCMA and CD19. Look, I mean, just to step back, to answer your question, maybe starting with Kite, you know, we've treated over 17,700 patients. You see very few, if any, like a handful of secondary malignancies, no indication that there's any causal relationship. And we update our data set and share our data with the FDA on a regular basis. So at a high level, we don't see this with our construct, is our belief, and we have a close relationship with the FDA. Remember, this has been in the labels from day one.
There's always been a theoretical risk of secondary malignancies with CAR-Ts, given the randomness of the insertion of the CAR-T vector into the genome. So it's always been a theoretical risk. We don't see it in the real world. Well, it remains to be seen, and by the way, I haven't talked to the Arcellx team. I'm not aware of us seeing anything with Arcellx. And reminder, that's, you know, that's relatively early, and it's Phase I/ II data set. I think there's 38 patients worth of data that will be updated on, if I remember correctly, at ASH in the coming weeks. So nothing that I'm aware of. You know, we'll get a better sense over the coming days of whether this is more something that's specific to a certain product or the products more generally.
But what I can say is, when we look at the Kite products, YESCARTA and TECARTUS, they've been used, as I said, in over 17,000 patients. You see, no causal relationship at all with secondary malignancies, and we look at this closely.
Andy, I feel like, and again, I'm just catching up myself on this. I was sitting here on the fireside when this came out, but I felt like FDA report was prompted by reports of some secondary malignancies. So this is not randomized data. This is observation of secondary malignancies in heme tumor patients to begin with. And I... The first thought in my head was, I remember many years ago, having the same conversation with Celgene management, and Schoenebaum was asking them about secondary malignancy risk on REVLIMID. It was a classic issue.
Yeah
... it went on for months and months and months, and in the end, it was sort of obvious that it's there, but it's also because it's in the context of a heme tumor setting, and those were just background rate of secondary malignancies that do in fact happen. And I couldn't tell if there was anything more specific regarding the cell therapy constructs that was driving this, or because people are trying to make much bigger the ramifications of this over to the constructs.
Yeah, it may be just that, actually. I had the same reaction. I think with the cell therapy constructs, given that there's always been this theoretical risk, given the insertion of the vector into the genome, in the T cells, that, you know, we'll get a better sense of where this is going. I think maybe the important thing is if you step back and look at the benefit, just using in heme malignancies, specifically in second-line plus, we and others are demonstrating this extraordinary benefit to patients. You see that in our ZUMA-7 data relative to stem cell transplant. As you know, stem cell transplant has enormous risk for patients in terms of the side effects and mortality from stem cell transplant.
So I think any which way you look at the risk-benefit equation here, I would expect, given what we've seen in all the patients that we've treated in clinical studies in the real world, that the benefit far outweighs any theoretical risk if... and, you know, whether there's, there is one at the end of the day or not, a practical risk. So we'll see. Yeah.
Just one follow-up question.
Sure.
Would this make you think twice before maybe thinking about bringing CAR-Ts into the autoimmune space?
Yeah, great question. I don't think so. Again, the data that we've seen, and we've seen all the data that you've seen that's publicly available in very severe lupus patients. We've also seen... We made an investment early in one of the private companies that is working in the autoimmune for CAR-T for autoimmune space. Their data, in a different indication, is equally stunning in a very small handful of patients. So, everything that we're seeing, granted you're talking about a dozen or two dozen patients, demonstrates that in very severely ill patients with advanced autoimmune disease, the benefit appears to be similar to the benefit that you see in hematological conditions.
So if that remains the case, and if you're focused on later-line advanced patients, the risk-benefit probably would weigh in favor of that from our perspective, and this is just my initial reaction. I need to talk to the Kite team. Of course, as you move up in earlier lines or in less severe patients in autoimmune disease, the calculus may be different. So we'll need to get a sense of what's really happening here, but it's a great question, and I think it's really more of in those autoimmune or neurological conditions, as you move up to less sick patients, you may have a different calculus, but too early to say.
Got it. Maybe just to wrap it up on the BCMA cell therapy side, there was some confusion in the marketplace recently that there were some comparisons being made by perhaps your partner, on the BCMA side, by Arcellx, on to Legend's prior trial, where the PFS was closer to 19 months.
Yeah.
Even though the perception of Legend is more like 35 months. Could you lay that into context? I know we spoke about that previously, too.
Yeah, yeah. I, I'm not sure exactly what they were referring to. I think the message they were trying to convey is that when, when you look at the, the ASH data that's coming up, soon, that, that the phase, I believe it was a Phase I study, I forget the name of it, but not the, the Phase III study of the competitor construct, but the Phase I/II study was more similar in the patient population to the patient population that, that we've studied in our fa-- they've studied, Arcellx has studied together with us in the Phase I/II study. In particular, you see more severe disease or more extramedullary disease, as I understand it. So I think they were trying to make the comparison in terms of the, the patient background characteristics, not the PFS expected benefit.
I mean, you see from the abstract for ASH that we still haven't reached kind of the median PFS after, if I remember correctly, 22 months of treatment. So, maybe I'll just say, I mean, we love the Arcellx partnership. We are really, you know, very bullish on the company, the construct, the potential for differentiation. It is a very big opportunity for us and for patients if we're just as good as the CARVYKTI. If, as the data suggests, we're, you know, we have the potential to be better. If we're better at the end of the day, either on safety, safety or efficacy, it's a, it's a really important opportunity for us and one that we're pretty excited about.
You do expect their PFS to be competitive in the end-
Yeah, yeah.
-versus the competitor?
Based on what we've seen so far, yes, absolutely. I think the other thing that we've seen that's interesting is that in the, the two approved BCMA CAR-Ts, you do see in the real world, 7%-8% of patients have pretty severe neurological side effects, including developing Parkinson's, Bell's palsy. It's more in the real world than you saw in the clinical studies, and we don't see that in-- with Arcellx in any of the patients yet. You'd expect with the 22 months of median, kind of duration of treatment, if I remember correctly, that you, you would have expected to see it. Many of the Parkinson's-like syndromes appear after a month or two. So more to come. Again, it's, you know, a relatively small number of patients, but it's an encouraging place to be, and, and we're excited about the partnership.
Excellent. Any questions on this broader cell therapy or BCMA topic just before we move on? Okay. Okay, so that makes sense. Maybe, I know another collaboration of yours, which gets a lot of interest as well, which is the Arcus collaboration. How are... Apparently, Roche put their data on their website. I'm curious, how are you guys thinking about TIGIT broadly and the direction that space is going?
Yeah. Look, first of all, we love this partnership as well. It's an important partnership. It's a little bit different. The Arcellx partnership is, you know, on one product. We've recently expanded it. Arcus is an all-in partnership where we have rights to everything that Arcus does. I think that with TIGIT, you know, we still believe that based on the data that we're seeing, TIGIT is additive to PD-1. It provides an additive benefit without any additional side effects from what we've seen in our data. We believe that we have a differentiated TIGIT construct. We spent a lot of time before we did the deal with Arcus, looking at a number of TIGITs out there that were available and really felt that they had the best construct and the best balance of potential for safety and efficacy.
There's nothing that we've seen from the competitors that leads us to believe that our thesis is wrong. I think the question on TIGIT, from our perspective, is how much of a benefit do you see and in which patients? And that's gonna be worked out over the coming years. But again, I think broadly, our sense is that TIGIT provides a very clear benefit to certain patients. You see us moving forward aggressively in non-small cell lung cancer, as well as upper GI malignancies, where the data is promising. And there's still more to work out, but you know, we think that TIGIT's gonna be an important mechanism of action down the road, and we recognize there's still some open questions.
Got it. And maybe if you could lay out for us, how's the recruiting going in this Phase III? 'Cause they had a first trial, which didn't recruit as strongly, but then now there's a new trial where KEYTRUDA is on board on the active arm. How's that going?
Yeah, I think in the two main studies, which is STAR-121, is an all-comers, non-small cell lung trial that we're running. Recruiting is going really well, from what I understand. They are running the STAR-221 study, which is the Phase III study in upper GI malignancies. That recruiting is the recruiting for that trial is going extraordinarily well as well. So both of them are, you know, full speed ahead. Which is not a surprise, again, I think, given the some of the excitement out there in these areas, there are a lot of KOLs that I think really want to test this hypothesis.
Got it. Okay, excellent. But these are not readouts before 2025 timeframe? Is that reasonable?
I don't know that we've given a specific timeframe. I think that they, they're certainly not in 2024, is what I'd say. I think that we will have additional data. There will be additional data with Arcus in 2024, including an updated ARC-7 data, if I remember correctly.
Okay.
But those Phase III studies would be 25 or 26. I don't remember off the top of my head.
Okay. Their HIF-2, is that something standing out in a big way, or... I know you're not opted in on that yet.
Yeah, we're watching it closely. I mean, again, the way the relationship works is that they take products through proof of concept, which is typically end of Phase II. So they're in the middle of their Phase II studies. Obviously, we followed the HIF-2 space, even before Merck did the Peloton acquisition. We know the market well. We really like their construct, and we're gonna follow it closely. So, you know, we will have the opportunity to look at the Phase II data set with them and decide what we wanna do then. But-
Got it.
Like everything that they're doing, we've expanded our collaboration there on the research side. I mean, we really have a strong relationship on the research and the chemistry side, and have a lot of respect for the quality of the programs that the Arcus team is developing.
Got it. Okay. I wanna sort of bring this all together towards a more bigger picture conversation on where things are really going on Gilead.
Right.
But just before that, I know this question around some of the near-term headlines on legal stuff come up as well.
Yeah.
How are you guys thinking about the recent California appeals court hearing on the negligence case for TAF?
Yeah, I think we feel pretty good about it. So when Umer refers to legal stuff, I think the vast majority of the significant litigation that we had to manage, just like any large company does, is behind us. There's one set of litigation that is unique, and this is kind of the first example of it in the United States, where there are plaintiffs that have filed suits alleging that we had a duty to bring TAF, which was a new form of tenofovir, to the market more quickly than we were able to. And so again, it's unique in that in the state court case, at least, you have, you know, thousands of patients who are claiming that...
Acknowledging that the product was not defective, and acknowledging that there was no failure of duty to warn, 'cause all of the potential side effects were in the label at launch, and clear in the clinical studies, but arguing that we had an obligation and were able to bring TAF out earlier than we were. You know, this is a classic case of kind of nuisance lawsuits from our perspective. We...
The California appellate courts for the California cases issued what's called a writ to show cause to the plaintiffs, basically saying: "Tell us why we shouldn't throw this out," given the novel nature of the claims and the implications they would have, not only for Gilead, but the rest of the industry and other industries, if you had this duty to bring out a next-generation product earlier than you could otherwise. So that, the rule on that, there was oral arguments a couple months ago.
Umer, as you've heard me say, I think that it became clear during the course of the oral arguments that the appellate panel finally started to understand that what the plaintiffs were claiming was very different than traditional product liability, and not at all like the product liability cases that you've seen in our sector or other sectors historically. Some of the challenges it would present to businesses as it moved forward, they asked for additional briefing documents, which we think is a good thing. So the court should rule no later than January on whether all these cases are dismissed. If not, we feel great about our cases.
I mean, to put it in the other, maybe update, two other updates for you, when you look at the cases in the state court and the federal court, if I remember correctly, 27% of the cases in the federal court have already been dismissed by the court because the plaintiffs, when they get into discovery, can't prove that there are any damages. They can't get, you know, expert witnesses, et cetera. In the state court, I think 14% of the cases have already been thrown out. So, you know, we will just stick to our knitting, continue to manage these individually, if we have to. Again, ideally, the California appellate court would throw the cases out.
The other thing I can mention is that the federal judge recently threw out a number of the claims in all the federal cases as well, so it substantially narrowed the claims that we're managing in the federal courts, which is a good thing for us. So again, you know, we, we have a great litigation team internally and externally. They've done an exceptional job on this and other cases. We have a lot of confidence. We have not taken any reserve for this, as you know, and believe that the cases are completely without merit, and that we'll work through it over time. It just, it's gonna take-
In a scenario where it doesn't go per plan, do you guys, how, what does the process look like? You go to California Supreme Court, or how does that work?
Yeah, if we don't win at the California appellate court, obviously, then we have the potential to appeal to the California Supreme Court, which you'd expect that we'd do. There's also, starting in 2024, there will be some bellwether trials that will be done to that will give both the judges, as well as both the parties, a sense of how these would play out. I think we picked two of the cases, the plaintiffs picked two of the cases. So, and we think that will help resolve this as well in terms of-
So just to be clear.
Yeah.
Let's say by January, we get the decision from California appeals court, and in a scenario, but if they dismiss it, it's moot. But in a scenario-
In the state, yeah.
... where they say there is negligence, you're gonna appeal that. But while that appeal is ongoing, would the bellwether trials start?
In the state, so one of the bellwether, one of the trials, I think the first trial that's scheduled to start is in April in the federal court. The federal court could stay it while they're waiting for the state court to resolve. They don't have to. I think in the state court, the same thing is true. While we're waiting for the Supreme Court, they could stay the trials, or you could move forward. So it's too early to say. But, either way, again, in whether we resolve this in the short run or the long run, we feel like we have the, you know, very strong case here, and, and we don't see any potential liability. But, you know, it's, it's an unfortunate part of being a large company, and we'll manage it.
Got it. So as we bring it all together to the big picture then, I know from a top-line perspective, you guys are growing, you believe mid-single digits. I know consensus model is low double digits. Can you remind us, are there any LOEs over the next eight-year timeframe?
No. I mean, that's one of the unique differences of Gilead, as you know, is that we don't have significant LOEs coming in our business. So just to kind of rewind, and the big picture is that, you know, Gilead, the last two years, since last year, we grew 8% in our base business year over year. This year, our updated guidance is that we'll grow 7.5%-8%. That's extraordinary. I mean, that's above the median growth in the pharma industry. Again, it's clouded a little bit by, as many of you know, by we have a drug, COVID antiviral, that is the standard of care for patients in the hospital. And that still is the standard of care. It's doing incredibly well.
Those sales have stepped down from $6 billion in 2021 to just less than $4 billion last year. We're projecting just less than $2 billion this year. Despite that, our base business has grown almost an equal amount. So when you look at our guidance for this year, the top end of our, of our guidance for revenue is close to $27 billion. You'll see Gilead kind of roughly, just, for purposes of illustration, $27 billion of sales three years in a row, but the, the COVID antiviral stepping down from $6 billion to $4 billion to just less than $2 billion, which underscores the growth in the base business. So we've really made the investments that are required to, to drive diversification of the portfolio, growth in the portfolio. We've significantly increased our investments on the R&D side.
That will start to plateau now, as will the sales and marketing expense growth, and you should see substantial acceleration of earnings growth when you get to the middle part of the decade and beyond.
Exactly the direction I want it to go. So if the top line is growing low- to mid-single digits, mid-single digits as the way you think about it, EPS could presumably grow higher than that. At what point do you think you're done with some of the oncology, OpEx and the R&D OpEx build-out?
I think we're getting there now. I mean, I, I do want to say, though, for the top line, just to be clear, when you look at our base business, we expect to grow above the median in the pharma industry. So like, you know, let's say the median is 4%-5% growth, we expect to grow north of that, and we expect that growth in our base business to accelerate with all of the Phase III data that's coming up. So if you just use the second-line lung cancer data as an example, that is a very large opportunity. The same thing's true for the second-line bladder with TRODELVY. These are big opportunities that, you know, will further inflect that growth trajectory.
So our target and expectation is that by the end of the decade, we'll be growing well above the median of the pharma industry and in the you know low double digits at least, and we think we have the portfolio today to do that. Then you kind of transition from that, you know, growing top line to really disciplined expense management now that we're at the right level of investment. So we already have line of sight on the increases in our expenses plateauing over the next 12-24 months, and then you'll see a continued strengthening of the operating margin again, as well as the EPS. We still have one of the stronger operating margins in the industry, and that operating margin should improve through the rest of the decade as the EPS grows as well.
Got it. And is it fair to say... So consensus has, I keep saying this, 2.5% growth CAGR, roughly, on top line. You're talking about 5%+. As I start to break down the drivers, I see two possible avenues.
Yeah.
One is TRODELVY is being modeled to go from $1 billion-$3 billion. I think you're referring to the lung and the bladder opportunities, meaning it could even go to $5 billion. That's one. The other one you're pointing out is lenacapavir, $5 billion+ type opportunity in PrEP setting and beyond. Are those the two main drivers in how you see the disconnect?
Yeah, I think those are two of the big drivers. I mean, again, just taking TRODELVY, right? You know, TRODELVY could be much bigger than a $5 billion a year drug. I mean, I think, again, just in bladder cancer and breast cancer, as you move up in earlier lines, it's a very big opportunity. What Umer's highlighting is that it's at a billion-dollar run rate today, and it's really just getting started. Obviously, you go into lung and earlier lines of bladder and breast, the opportunity is substantial. And then PrEP, as you mentioned, is also a big opportunity. But just the base business that exists today is growing. Again, when you look at just what we have today, growing 8% last year, 7.5%-8% this year.
We do have a couple of headwinds that we'll manage through in terms of the Part D part of the Inflation Reduction Act, as well as the potential for drug pricing negotiation on BIKTARVY. But any which way we look at it, when you look at the overall nature of growth, we think it's underappreciated in terms of where we're going. But to your point, yes, those are two of the big drivers, but they're not the only drivers. The BCMA is another. TIGIT could also drive things. And part of the disconnect, again, in our view, and the Street view, is that the Street oftentimes doesn't look at VEKLURY, the COVID antiviral, separately. So when we talk about our business, the vast majority of our sales now are in the base business. We really focus on VEKLURY as a different part of it.
I should say, and you and I have talked about this, that, you know, we expect that we are now guiding to approximately $1.9 billion in sales of VEKLURY this year. That may be the new normal. I mean, I think between 2023 and 2024, we'll have a sense of what the new normal for VEKLURY is. But what we do say is, VEKLURY has legs, and it's gonna continue to deliver revenue and cash flow. It's gonna be less of an overhang on our growth rate going forward, despite the fact that it'll be variable from year to year.
Got it. Okay, maybe, as we think about additional possibilities which are more inorganic in nature, I know what I remember when I spoke to you around this time last year, you were saying, "You know what? Biz dev, not really a plan right now. Maybe small upfronts for very early-stage stuff, but no real biz dev." It sounds like there might be more openness to that now. So what exactly is that?
Yeah.
What type of deal sizes would you think about? Any therapeutic areas of interest?
Yeah. Well, I think what we were trying to communicate last year is that we really weren't focused on large and medium-sized deals, that the focus was on what I call ordinary course business development, which is partnerships and as well as small acquisitions. So we did a number of small acquisitions. I think on average, you know, we will deploy, at any given year, $1 billion-$2 billion of capital on business development. I'll use an example. Recently, we partnered with a small company in the Bay Area called Assembly, where we took two of our antiviral programs that have a lot of potential, but probably didn't have room in our, in our P&L to move them forward, put them into Assembly with some cash. They had three other programs.
They can now take all of these forward, and we can share in the upside and the commercial rights going forward. That's a good example of kind of a small but important early, you know, ordinary course deal. I do think that as we get further along with TRODELVY and TIGIT, we now have, you know, more of an openness to thinking about additional late-stage programs that we could bring in. Those are still gonna be below the size of deals that we did with Immunomedics, certainly, which I think of as kind of a once-in-a-company's-lifetime-type deal, and even Kite. It's smaller deals than that. So, you know, anything that's kind of in that, you know, $1 billion-$4 billion or $5+ billion range, I think is fair game.
I think healthy companies in our sector add to their late-stage pipeline with deals like that every other year every couple years on average. So we will always look at these things, and the bar is really high, right? We feel great about our pipeline and where we are today, so we don't have the same need today that we had three years ago and six years ago when we did the Kite deal.
Got it. And is it immunology or oncology-
Oh, yeah
... or, any therapeutic area of focus?
No, we'll look at... I mean, it'll be virology, immunology, and oncology. It all depends on the quality of the opportunities and what's there. So I think over the last couple years, you've seen us do consistently a mix across all three of the areas of focus. Immunology, I think the focus is predominantly on building immunology from within. At Gilead, I think at Kite, we've said as we think about moving into immunology cell therapy, that's likely a partnering strategy, similar to what we did with Arcellx and BCMA. So time-
Immunology, you're saying partnering opportunity?
For Kite. For Gilead, it's more build it internally, and then we did, like, a small acquisition of a company called MiroBio in the U.K.-
Right
... that had a number of immune agonists. That's gets a BTLA and a PD-1 agonist that are exciting, but we'll continue to build that kind of in and build it out in more of an organic-
Yeah
... early stage to late internal development with immunology.
Do you see... I know you mentioned virology from a biz dev perspective as well. Are there standalone efforts in that space? 'Cause outside of COVID antivirals or vaccines, which are not something you guys have gone in the direction of-
Yeah, there aren't that many. You're absolutely right. There's... And, we know most of the companies that are working on it. I mean, the Assembly deal is a good example of that, or a couple of years ago, we acquired a number of virology programs from Novartis as they were deprioritizing virology. So there's always stuff for us to do in virology, but there are far fewer opportunities externally in virology than there are in oncology or immunology, and most of what we do in virology is developed internally.
Excellent. Anything from the audience? I know we're at time. I think you crushed it. There's no questions remaining.
Thank you. Appreciate everyone's time.
You've answered everything.
Thank you. Thank you very much.
Good seeing you.