Friends, my name's Jeff Meacham. I'm the senior biopharma analyst here. We're thrilled today to have Gilead Sciences, and with me on stage is CFO Andy Dickinson. Andy, good to see you.
Great. Thank you. Thank you for having us again. We're thrilled to be here.
So, we won't do any prepared remarks coming out of the quarter. Maybe just let's get right into the core HIV business.
Sure.
Biktarvy's done super, super well. You know, you do have some competitive dynamics playing out, but that's not, you know, unusual for you guys.
Yeah.
Give us kind of the look forward about the health of the business in the treatment setting, the HIV business driven by Biktarvy, and then we'll get into lenacapavir and the development.
Sure. Yeah. I'd be happy to. Yeah. We had a very strong first quarter, and the business has done great over, you know, for decades now, including the last couple of years. In the first quarter, you saw Biktarvy on a year-over-year basis take another 3 percentage points in terms of the overall HIV treatment market. It grew in terms of sales 10% year-over-year. You know, Biktarvy is used in, I think, 49% of HIV patients in the United States. Most of those get Biktarvy out of the gate as their, their first HIV treatment, and they tend to stay on for a very long time because it is the gold standard. And I'll talk a little bit about why it's such a special, combination product. But the overall business is doing great.
HIV treatment in all major markets, including the United States, is still growing 2%-3%, unfortunately. So, despite all of the education, efforts, despite the availability of HIV prevention therapies that Gilead helped to pioneer, we still see the HIV market in all major markets growing 2%-3% year over year in terms of volume, and then price has been reasonably stable. And you see that in our business. Biktarvy is a $12 billion a year drug and growing. I mean, it is the absolute gold standard. And the reason is they're really, you know, it's the perfect drug for HIV. It's a combination of three really special, active agents, all of which work against the virus in different ways. There is no resistance developing to Biktarvy, unlike many other therapies. You don't have to genotype patients before you start on Biktarvy.
After five years, 98% of patients that are treated on Biktarvy still have viral load reduction to the targeted level. So, it's a really, really incredible therapy and one that has patent protection through 2033, if not beyond. So, important part of our portfolio and a great product for HIV patients globally.
Andy, when you think about the OUS opportunity, particularly in Europe, you know, what is their share? Is it lower? Or is there more upside from that? You know, how do you build that with respect to awareness and guidelines and the like?
Yeah. There is. I mean, it's a good question. I mean, the market share in Europe is still very high, and it's still the leading regimen in almost all major markets for treatment and in many for switch. But there is more competition in Europe, and the European market is a little more price-sensitive.
Yep.
Biktarvy in most markets is priced at a premium to some of the competitive products. We think it's justified by its profile. It's doing really well in Europe and Asia, but there is a little bit more of a competitive dynamic, especially when you're kind of looking at price-sensitive markets.
Gotcha.
but it should continue to grow over time. I mean, the other thing that we should say about the HIV treatment business, kind of maybe transitioning to what comes next, is that we have a, you know, 9 programs in clinical development, for treatment, that, that will be next-generation HIV therapies. 8 of those 9 are long-acting therapies. So, those are once-weekly pill alternatives, maybe eventually once-monthly pills. That's not what those should be coming in the coming years, but we're not quite there yet. And then injectables that are either every 3 months or every 6 months, and the target is to have subcutaneous injections. So, you know, these 9 programs of the 9 programs that are in the clinic, some of them are advancing. Two of them ones, two of them are moving into phase 3 studies.
We expect to have at least four launches of new HIV therapies for treatment by the end of the decade. Those should all drive continued growth in our franchise. And again, they're not to replace Biktarvy. Biktarvy is such a great product, as we've said, but there are certain patients that would benefit from having other options. You've seen that historically in this space, and we think we'll offer that. So, you know, there is potential for us, even though 72% of patients in the United States that are treated for HIV are on a Gilead regimen, we think we can grow that again over time, especially with some of these new launches.
It's not a one-size-fits-all, though. When you think about long-acting, you know, with lenacapavir being the anchor asset, you know, in many of your long-acting regimens for treatment, what do you think could be the, you know, the preferred either mechanism or dosing frequency?
Yeah. It's a great question. So again, maybe just a step back for those of you that don't follow us as closely. lenacapavir is a novel oral HIV therapy that was approved for treatment in the most difficult-to-treat HIV patients. So, this is a capsid inhibitor, and patients that have developed resistance broadly now have this available as a therapy. It is an incredibly potent molecule. So, the existing approved formulation of lenacapavir is an every-6-month subcutaneous injection that can be used with other therapies that the physician chooses. We are developing multiple combinations, as Jeff is alluding to, of different formulations of lenacapavir. It can be formulated as a pill. It can be formulated as a 3 once-weekly pill, a once-monthly pill. It could be formulated as an every-3-month or an every-6-month subcutaneous injection.
The key for treatment and I'll come to prevention in a second, but the key for treatment is finding at least one other agent to pair with it that is equally potent. And that's those are the nine programs that I alluded to earlier. All of those are looking for partner agents with lenacapavir. So, it you know, it really is the market is different for people living with HIV. There are people that like the pills and really don't want an injection. So, even if you had an every-six-month subcutaneous regimen that they could get a simple injection at the same frequency that they tend to see their doctor every year, they would prefer to take a pill either every day, like Biktarvy, or every week or every month if those are made available.
Long-term, Jeff, to your question, we see at least half, if not more, and it could be substantially more, but at least half of the HIV market in the treatment setting moving to long-acting therapies over time. Again, we would expect to have at least 4 new launches, 3 of which should be long-acting therapies, if not more, between now and the end of the decade and more to come after that. Each patient living with HIV or person living with HIV may have a different preference, but overall, roughly half of the market should go to long-acting over the coming years.
Andy, you mentioned the PrEP setting, the prevention setting. So you guys have been successful with Descovy and then previously Truvada, but lenacapavir also could be a very viable regimen. And the data are gonna come out end of the year. So walk us through kind of, you know, that as a meaningful event for Gilead, but then the commercial piece of it kind of help bridge that gap.
Sure. A lot of people don't know that the HIV prevention market again, Gilead pioneered this with our first approval of Truvada for prevention over a decade ago now, if I remember correctly. And the market has grown at a much higher rate than the HIV treatment market. So, roughly three to four years ago now, when Truvada went generic, we had two approved products, Truvada and Descovy, for HIV prevention. They are both once-daily pills. And it was roughly $2 billion in sales at that time, for us. The market has continued to grow significantly at, you know, north of 20% for a period of time, more recently in the teens. In the first quarter, the HIV prevention market year-over-year, it grew at 11%. So, significant growth in the HIV prevention market.
The challenge in prevention is that even though the data shows that these pills are 99%+ effective at preventing the transmission of HIV, if you're at risk of getting HIV, people at risk of getting HIV tend not to take the pills on a daily basis. They will take them intermittently, so, you don't see the efficacy that you could see. This is why lenacapavir, as a single agent, every-six-month injection is so important as the potential to really be the first therapy that can make a significant dent in the growth of the HIV epidemic over time. So, we have two phase 3 studies running. There's a lot more follow-on studies running. PURPOSE 1, the first of the two phase 3 studies, reads out later this year in the second half. PURPOSE 2 reads out either later this year or early next year.
We expect approval of lenacapavir as an every-six-month subcutaneous injection for prevention at some point in 2025. Then, to your question, Jeff, I mean, this is an enormous market opportunity from our perspective when you think about the people at risk globally for HIV infection. In the United States alone, the CDC defines about 1.2 million people at being at risk of getting HIV, but it's a very narrow definition. The CDC only looks at men having sex with men and IV drug users. There is a dramatically higher number of people in the United States that have multiple sexual partners or that are diagnosed every year with a sexually transmitted disease. If you look at the market that way, you know, the opportunity over the long run in PrEP is really large.
You know, we talk about the opportunity for lenacapavir in PrEP to be Biktarvy-like over the long run. It's a significant opportunity if we do it right. We will, of course, segment it and focus first on the people that are already on PrEP that should logically move over to this therapy that gives them the, you know, the insured, assuming the data reads out the way that we expect, protection for six months and then expand the market from there.
Perfect. Okay. And then, let's switch gears to talk oncology. So, Trodelvy, in breast cancer has been commercially very successful therapy. Before we get into the investments and the pipeline, on the back of it, so give us kind of a, you know, the what, you know, what's driven the past couple of years and then look forward just in the core indications.
Sure. So, Trodelvy is an antibody-drug conjugate that targets Trop-2, which is a really important antigen that's preserved and, you see in most solid tumors. We acquired Trodelvy from a company called Immunomedics. I think it was roughly four years ago now, you know, large M&A transaction. And the drug is approved for three solid tumors, two in breast cancer, triple-negative breast cancer, where it's the absolute standard of care in second line plus, hormone receptor-positive HER2-negative breast cancer in later lines, and bladder cancer. We are also studying it in lung cancer and other cancers, including endometrial cancer. So this is a therapy that over a long period of time has the potential to be used in many solid tumors. And we have a broad development program underway. Later this year, we're gonna have two more sets of phase three data.
One is in first-line triple-negative breast cancer. Then the earlier set that's coming, either later this half or early next half is a confirmatory study in second-line bladder cancer. So, Trodelvy, just to back to your question in terms of the potential, it's $1 billion of sales today. It's very early in its life cycle. There's a lot of debate and discussion about the competitive landscape in breast cancer and lung cancer. I think it's fair to say that we believe that, despite the competition, we have a great molecule with very significant opportunity to grow over time, not only the approved indications but the indications that we're studying it in, including lung cancer.
Andy, when we look at the, you know, Trop-2 as a mechanism, you mentioned a few tumors. Help us with kind of the breadth of where Trop-2 could go or where that the modality could take you with respect to obviously, lung is one, but.
Yeah. Lung's the biggest. But when you look across, I mean, there's all these great studies that kind of look at tumor antigens across all the solid tumors. Trop-2 really stands out as one of the, the primary antigens that's expressed on the vast majority of solid tumors. And of course, it depends on, you know, it's different from tumor type to tumor type. It's also different, probably, from patient to patient as we're gaining experience in looking at it. You know, the other thing I would say here is that our construct there is a competitive construct.
Our construct is unique in that we have a much higher binding affinity to Trop-2 than the other molecule that's also in late stage, the other construct that's in late-stage clinical development, which means you might be able to show significant efficacy with less Trop-2 expression given the binding affinity. So again, ADCs are very complex therapies. You're talking about all these things with an antibody with the chemotherapy attached to it. So there's a lot of different variables that go into what makes an ADC, you know, work well, and people are still elucidating that.
Every which way we look at this construct, we think it gives us a chance to work not only in breast cancer and bladder cancer but also in lung cancer, endometrial, I mentioned, and then depending on kind of the data over the coming years, we could go further with it. We certainly will go up in lines of therapy, Jeff, in the approved indications, and we'll also look at combination alternatives. So if you know, in lung cancer, for instance, we're also studying a TIGIT antibody. In lung cancer, you know, if TIGIT ends up being a mechanism that provides a meaningful benefit to patients, of course, we have already started exploring combinations of TIGIT with Trodelvy as well. So a lot of ways to win over the coming years and a very long patent life and expected life cycle for Trodelvy as well.
Well, let's talk about TIGIT in just a second, but I wanna close with Trodelvy and lung and talk through kind of, you know, what, what, remind investors of, you know, what you guys saw recently and then what we may see at the upcoming ASCO meeting with respect to subgroups from, from EVOKE-01.
Sure. So, there are a number of data sets with Trodelvy that will be presented at ASCO. The two most important are the EVOKE-01 data set, which was a phase 3 study of Trodelvy in second-line lung cancer head-to-head against docetaxel. And what we've reported at top line, you'll see the full data set, and we can have a more robust discussion. While we didn't hit the primary endpoint in the study of showing a benefit in overall survival, we did see a very clear and significant trend in patients that did not that progressed and didn't do well, essentially, on PD-1 therapies. So, the patients that didn't respond to PD-1 or progressed from PD-1s, when you looked at them, and it's a large set of patients. We're talking about 45%-55% of patients in second-line lung.
You see a sizable response and a meaningful benefit relative to the standard of care. So, you'll see that data, and we'll be able to discuss it more openly. Obviously, we're in the process, as we've said historically, of working with regulatory bodies on discussing the data and trying to figure out whether there's a path forward. We may have to run another study in that patient population, but it's gonna take a while for us to work through all the data, talk to KOLs. But that's a big opportunity in the second line. And again, even if you're talking about roughly half of the second line in non-small cell lung cancer, it's a really sizable opportunity. There's not a lot for patients in that setting, as you know.
I mean, once patients in non-small-cell lung cancer progress through PD-1 therapies, there are not a lot of great options. And that's why we and other companies have spent so much time over the last many years working on new therapies. So, you're starting to see some encouraging signs, and we'll be able to kind of talk about it more comprehensively.
Yep.
On the EVOKE-02 study, this is a basket study that we will have additional data in front-line non-small cell lung cancer patients. We'll also have some other tumor type data that we'll continue to look at. That's a study that is still, you know, has been on for years, and we'll keep going as we look at different segments of patients, including in first-line non-small cell lung cancer. So, you'll see more of the cohort A data, which is, if I remember correctly, the PD-L1 high first-line non-small cell lung cancer patients. You'll see more of that data at ASCO as well. That's exciting. And then we have a whole wealth of data with our partner, Arcus, on the TIGIT as well.
Of course. Yeah. Yeah. And just on TIGIT, I mean, there's a number of them out there, but how does Gilead kind of view differentiation? I know you have a combination with the PD-1, but you know, if let's say in the next several years, you have, you know, Keytruda facing LOE, describe kind of, you know, Gilead's differentiation, investment in TIGIT, and maybe how it could potentially be used to mix and match really no matter what the PD-1 backbone is.
Sure. Yeah. We have an important partnership with a company called Arcus. It's a small mid-cap company based in the Bay Area close to us, that covers a number of molecules. One of them is a TIGIT antibody, called Dom, is our short form name for it. That's in a number of studies, including in lung cancer. And it's differentiated from the other late-stage TIGIT antibodies in that the Fc region of the antibody is null, or you know not functional. And as a result, the theory has been you could see better side effect profile. We believe that when you look at the wealth of TIGIT data across the late-stage companies that are working in it, that TIGIT is clearly additive to PD-1. The question so it's another immunotherapy that's additive to PD-1.
The question that needs to be answered is, how additive is it? Is it meaningful enough to be used broadly, and in what tumor types? And that's what we think will be elucidated over the coming years. There was some data recently from a, a competitor where they stopped a study in another tumor type. I think it was melanoma based on the side effect of their TIGIT, potentially because of the, the Fc competent region. We'll see. But again, the, the you know, there are a lot of theoretical attributes and benefits of our TIGIT that we think are special, and we have a lot of data coming over the next couple of years. We share all the costs of that 50/50 with Arcus, roughly.
So, it's been a good partnership for us to develop a TIGIT and to have that opportunity on a more P&L-efficient model. So, but again, you know, there's still risk in TIGIT, and time will tell whether there's a benefit, and if so, how big.
For Gilead, you have ADCs from the Immunomedics deal, but you now also have, you know, from years ago, from the Kite acquisition, you know, significant resources in a franchise in cell therapy. Talk a little bit about, you know, how strategically important that franchise is to Gilead, from a Yescarta perspective, and then we can get into kind of anito-cel in the next.
Sure.
You know, product.
Yeah. No, it's a great it's a great point. I mean, the cell therapy business is really important to us. So, we acquired a company called Kite in Los Angeles now six years ago. You know, they were one of the two or three companies that was pioneering CAR-T therapies in hematology. We are clearly Kite is clearly the world's leader in cell therapy today. We have $2 billion of sales and growing. CAR-T is really just starting to be used broadly outside of the United States. It's a pioneering therapy with incredible clinical data. I mean, again, just for those of you that aren't familiar with it, this is taking a patient's so, if a patient has a type of lymphoma, taking their T cells, separating them, putting a new gene in that expresses a receptor that identifies the cancer.
When you remove, you grow up these cells, you reinfuse them. They attack the cancer. And, you know, after five years, 43% of patients in this late-stage lymphoma that were almost certain to die within weeks or months before they got this therapy appear to be cured. I mean, it's remarkable clinical data, and it helps explain why there's so much excitement for cell therapy, not only in oncology and especially hematology but also in areas like autoimmune today. There's been a lot of, so, I mean, the business is doing great. We have three global manufacturing centers, which I think really differentiates us, Jeff, as you know. We have 14-day turnaround time in our manufacturing from when we take a patient's cells and we deliver it back to the patient for reinfusion. We have excess capacity in our manufacturing centers.
That's been a real bottleneck for the other competitors in the space, not only being able to manufacture it, but when we do it in 14-17 days, depending on how you're calculating it, many of our competitors are doing it or trying to do it in 35, 40, 45 days. And remember, many of these patients can't wait that long. They oftentimes have explosive disease when they're at that point. So, the Kite team has done an incredible job of executing. Again, it's $2 billion in sales and growing. The gross margin has improved significantly over the last six years since we've acquired Kite, and we have a great manufacturing team that is always working on improving, streamlining the manufacturing process, shortening it, taking costs out of the system. We expect that will continue over time.
And then on top of it, we have this partnership with another Bay Area company called Arcelix, on anito-cel, which is a BCMA CAR-T, that has some really extraordinary phase I, II data in multiple myeloma. We'll have the final readout of that data or an updated, much bigger data set of data on that from that iMMagine-1 study later this year. But we're already working with them, and they just announced last week that the phase III design for the iMMagine-3 study of in multiple myeloma. So, that's a really exciting opportunity 'cause the data today, to date for anito-cel suggests that you not only see the efficacy that you see in the currently approved leading BCMA CAR-T, but we're not seeing any of the side effects that you see from that therapy.
So, from that therapy, 8%-10%+ of patients appear to have significant neurological side effects like parkinsonism-type disease that seems to be lasting, and we're not seeing any of that in our studies yet. So, if that holds through, it's a pretty exciting development for us, for Arcelix, and for patients.
Andy, can you speak to the you know, manufacturing as a strategic asset when you think about anito-cel and the potential to pretty rapidly you know, you already started phase 3 as you were going to, but then?
Right.
Looking beyond that commercially.
Yeah. No, really, it's a great question. I should have mentioned that I mean, part of what we also announced last week is that we finished the tech transfer with Arcelix of anito-cel from their prior manufacturing platform to ours, which is great for both companies 'cause it really accelerates. As I said, we have world-leading manufacturing centers. These are large centers in three major global markets: L.A., Maryland on the East Coast, and the Netherlands that can serve the global market. We purposely built them up to have excess space to build out and excess capacity that we can very capital-efficiently expand into over time. And that's exactly what we're doing with Arcelix.
So, it's a huge benefit for Arcelix 'cause many of the companies trying to operate in this market, manufacturing is by far the biggest challenge in terms of both the capital required to build it out, which we've already done, and the technical know-how in terms of doing it. So, it's something that we really bring to the table. And so maybe, Jeff, where you're going is when we acquired Kite, part of the plan and the thesis was that we could become the partner of choice for other cell therapy companies. And that's exactly what we're seeing today.
So, we can add other partners over time when we see therapies that we think, like anito-cel, are really differentiated and best in class, add them in, and create a win-win situation for our partner in Gilead and patients with our incredible manufacturing know-how and technologies.
Well, in myeloma as well, I mean, it's one of the larger liquid tumors that, you know, very intensely competitive. You have a competitor, you know, who is capacity constrained. And so that.
Right.
Really underscores kind of the value for Gilead. But, you know, what does success look like, Andy, when you think about, you know, the end of the year, and the refractory data? How do you think in myeloma you know, you mentioned tolerability is one point of differentiation, but that's not the only.
Yeah. I mean, I think success, well, look, when we did the deal with a partnership with Arcelix, success to us, at a minimum, looks like being as good as the market-leading BCMA cell therapy today. And we certainly see both from efficacy and safety that we're on track towards that. Obviously, we need the phase 3 data to read out. We do with the data that's reading out later this year; we have the potential and the expectation for an accelerated approval in late-line, fourth-line plus multiple myeloma. So, you have the potential for an early approval. Then you have the new study, iMMagine-3, that would be in the earlier-line patients that we would work through as quickly as possible. And we expect we'll enroll pretty quickly given how much excitement there is for the program.
But what success looks like is being at least as good, if not better. And if you're better, the opportunity is even bigger. But again, you said it. I mean, the competitors cannot satisfy the demand from the market today. We don't expect that to change over time. And when you add our manufacturing know-how with this great product, we think it could substantially lift, you know, the revenues over time. Maybe the other way to think about it is, you know, multiple myeloma is almost twice as big as our approved indications in terms of market potential. So, you think about our $2 billion market today that's still growing and has a long way to go in lymphoma. Multiple myeloma is a much bigger opportunity for CAR-T. And then you start thinking about things like the autoimmune conditions for CAR-T over time.
It's a pretty exciting space to be a leader in.
Right. Yeah. And so on the topic in lymphoma, when you think about the success of Yescarta and it likely will apply to myeloma, you know, the I guess the commercial, you know, kind of piece, the unmet needs still in some of these markets, not just manufacturing but just the awareness. And so, I think one of the things we recently went to your manufacturing tour in Maryland, and you talked a lot about the Tennessee Oncology and the onboarding in the community setting of using cell therapies more broadly. Walk through that and how that could be.
Sure.
A model going forward with other, you know, in other community settings for commercial cell therapy.
Yeah. The treatment market for these hematological cancers is roughly split 80/20. 80% of the patients are in the community. 20% are in the large academic centers, large city hospitals, that are currently using CAR-T. So when you think about our $2 billion a year in sales today, it's growing. That's really limited almost exclusively to these large academic centers and large city hospitals. The key for patients and for CAR-T overall is getting CAR-T to the patients that need it in the community over time. And you know, it's harder to do that. Many of the community oncology practices, even the larger ones, don't have apheresis centers. They're not used to the reimbursement model here.
So, we've started and the team, the Kite team's done a great job of working with a number of these large academic community AIDS centers. But Tennessee Oncology was really the first where we worked with them to create a blueprint on how to bring CAR-T to the community that then we can learn from, you know, revise as needed, and move more broadly. And so we're making progress. It's not gonna happen overnight. It's gonna take some time. But it's critically important for these patients that would really benefit from CAR-T and for the business over time. I mean, the other thing to say is when we acquired Kite, we expected that this would be a business that would grow steadily for decades as physicians in the market became used to kind of CAR-T and adopted it more broadly. And that's exactly what we're seeing.
So, the learning curve, so to speak, and kind of the buildout phase is long, but so is the product lifecycle. It's very hard to envision, as you know, having biosimilars of these cell therapies given how incredibly difficult they are to design and manufacture.
Yeah.
So, we have a long way to kind of invest in this community buildout and get these therapies to the patients that need them in the community. But good progress. And again, a lot of lessons learned from that first buildout that we can now apply to the next set of large community treatment groups that we'll work with.
Yep. And then in the final minute, I know we talked about, you know, HIV. We talked about HemOnc. So moving to liver disease and with the CymaBay deal, talk a little bit about, you know, that in the context of, you know, a next leg of growth for or another leg of growth for Gilead and then maybe just BD and how you think about that going forward.
Sure. We acquired a company earlier this year called CymaBay, which has a product that has been filed for approval in the US and Europe for PBC, which is a liver condition. It's really an inflammatory condition. So, this will be a significant anti-inflammatory, you know, product for us that happens to be in liver disease where we already are the world's leader in terms of commercializing our viral hepatitis products. So we serve, you know, we cover 80% of the physicians that would treat these patients. This is a large orphan disease. So, I think of it like pulmonary hypertension, about 130,000 patients in the US with PBC, 125,000 in Europe, and really strong clinical data.
So, you know, the drug showed not only a benefit on all the markers of kind of liver injury that you use in these studies but also on pruritus, which is this incredible itching that these patients get that is like life-changing. They can't sleep at night. It causes, you know, significant mental distress for these patients 'cause they wanna itch uncontrollably. This drug was the first to really show a significant benefit in itch. So we expect that to be kind of part of the label.
Yeah.
The PDUFA date in the United States is August. This is something that should be break-even to our EPS next year, slightly diluted this year, and then significantly accretive in 2026 and beyond. And to your question on, on BD, it gives you pretty good insight on kind of how we think about BD going forward. This is a little over a $4 billion purchase price for a late-stage asset with significant both revenue growth and, and EPS accretion. We expect to do deals like this every two to three years on average, and we'll continue to do ordinary course BD licensing. But this gives you a really good sense of kind of where we are and where we're focused. Very excited about the, the approval and the launch of that, that product.
Perfect. Well, thank you, Andy. Great conversation.
Thank you for having us. Appreciate it.