Your Biotech Analyst at RBC Capital Markets. We're really pleased to have our next presenting company, Gilead, represented by their Chief Commercial Officer, Johanna Mercier. Johanna, thanks again for joining us.
Thanks, Brian, and hi, everybody. Good morning.
So maybe we can kick things off on the HIV franchise. I know, you've been in the space. You're the innovators in the space, you're the leaders. You've been there for such a long time. What are you seeing in terms of the intrinsic growth for the HIV franchise, and how should we think about go-forward growth contributors, with regards to the overall market growth in both therapeutics and maybe also in PrEP market share growth, and then pricing dynamics?
Anything else? So let's talk a little bit about HIV and take a step back, and I think the HIV market is a really interesting one. And at Gilead, as you said, you know, we've had the opportunity to be leaders because we've continuously innovated in this marketplace, and we will continue to do so. As I think about the market itself, I would split it between the treatment, the HIV treatment market, and then the HIV prevention market. And so let's start with treatment. Here's where we are today. Today, we are leaders in this marketplace with over 70% of the HIV market share. Most of that is driven by Biktarvy, which is the standard of care in the daily oral market. Continuing to grow that market, the market grows every year about two-three points.
We also are continuing to grow Biktarvy in that marketplace. Year-on-year in the first quarter, we announced a 3% market share growth, continuing to grow faster than any of our competitors, despite the volume that we already have established. So we're at about 49% share right now with Biktarvy. So that's the daily oral. I think your HIV treatment is going to expand, right?
Yeah.
It's going to look a little different in the future because we have opportunities, not only in the daily oral market, but you're going to see another, other players come in, and, and we expect to lead here as well in the long-acting oral market, which is something that is basically every week. So we have a couple of once-a-week pill for HIV treatment coming around the corner, namely with lenacapavir, islatravir combination, as well as a lenacapavir integrase inhibitor, which will be a fully owned combination. And then you think about the long-acting injectables, and in that marketplace, we're looking at kind of lenacapavir being the foundation with a whole bunch of clinical candidates that we're testing against it, whether it's every three months, every six months. We showed just recently at CROI phase I-B data with our bNAbs. That would be every 6 months with lenacapavir.
So a lot more to come, and as you think about the growth, think about growth in two ways in the treatment market. One is the market itself, how we differentiate and are competitive in the marketplace. And then there's another piece of the puzzle as you think about the longer- actings, which is adherence, right? Adherence is still pretty high in HIV treatment, but as you think about something every six months or even a weekly pill, you're going to get higher adherence, which also gives you additional growth.
Right.
That's the treatment market.
Yep.
So I think that's sustainable growth for HIV moving forward. And we've guided this year at about 4% year-on-year growth for HIV. As we think about prevention, which is another piece of the puzzle, it's about 10% of our total HIV market today as we think about prevention. It's a market that grows much faster, and it grows even faster when there's new entrants 'cause it increases the awareness in the marketplace. So right now, the market's growing at about low double digits, around 11% year-on-year. We've seen it in the 20s, high 20s in the past, when you have new market entrants. We expect lenacapavir for PrEP, which is a twice-yearly subcutaneous injection, to play out as early as late 2025. Now, this is an important piece of the puzzle because this is transformational.
So basically, people will go... So these are not patients. These are people that are at risk of HIV, so very different population. These are also people that don't want to take a pill every single day because they're not sick.
Right.
And so anything twice yearly SubQ is pretty much what people are waiting for to really make the difference. And how you look at the marketplace is going to be important, and this is where it's incredibly underestimated today, and we've talked about this before. The PrEP market today is, if you took it as a branded market, it's about a $3 billion opportunity, market opportunity. We own over 40% of that with Descovy. The rest of it is mostly generics. Those are all daily orals. We have an opportunity with something every six months to basically probably double that marketplace pretty quickly because we haven't penetrated. We've only penetrated about a third in that marketplace, versus I think we can get north of 50%- 60% in the marketplace itself.
Most of the people currently treated in PrEP are white men, so MSMs, affluent in the commercial marketplace. If you look at the incidence of HIV, that's not where it is. The incidence of HIV is often women. It's also Black, Latino, areas, and so we have a responsibility and an opportunity to truly expand this marketplace.
Yeah.
So that's one piece of the puzzle that we expect that will have some inroads with lenacapavir for prevention. In addition to that, I would also say that the CDC currently defines it as, about 1.2 million people. And then you look at the guidelines, and it's anybody who's sexually active with more than one sexual partner. I think that's more than 1.2 million people in the U.S., just saying. And an opportunity for, people that have been diagnosed or having discussions around STD testing or diagnosis.
Mm-hmm.
The number of STD diagnoses in 2023 was 13 million people, not 1.2 million. And so I think we have a real responsibility and opportunity to make sure that we expand this market and offer such a treatment. So that's where I think you're gonna see sustainable growth in HIV treatment-
Right.
And there's gonna be transformational growth in HIV prevention.
That, that's really helpful. And then Johanna, on the last earnings call, you spoke a little bit about the potential impact from the IRA, in 2025. Can you elaborate a bit more on that? I guess, what should we expect in terms of some offsets to growth, in 2025 and beyond from the IRA?
Yeah, sure. So what we talked about in our last earnings calls is giving a bit of direction around the impact for the Part D redesign in 2025. And what we've said is that our HIV growth, that we just talked about, right, in the treatment market, is going to offset the Part D impact. So roughly, we believe our growth then for HIV will be flat in 2025, and that's basically a reset to growth in 2026. Our total business, obviously, is not only HIV, it's also inclusive of oncology with cell therapy, Trodelvy-
Yeah.
... both growing at double-digit rates, as well as seladelpar launch coming out-
Right.
... later this year. And so all of that will continue to drive the total growth for our business in 2025. And so we believe 2025 is a bit of a reset for HIV, and then-
Yeah.
... continues on.
Okay.
So that's where we see-
So that's a one-time impact?
One time.
Effectively-
Effectively, yes.
... in terms of the impact to growth.
Exactly right.
Okay.
Now, we haven't really—we modeled just the math of the Part D redesign. We haven't modeled anything, you know, a lot of folks are talking about potential upside as you think about out-of-pocket costs being less, and maybe you'll have better adherence, so you'll have more persistency on drugs. So we haven't modeled any of those potential benefits for a potential upside. But at this point in time, that's kind of, you know-
Okay..
... at least general guidance.
Got it. Maybe we could shift gears and talk about solid tumor oncology and Trodelvy.
Sure.
As we continue to see the data roll out for that drug across multiple indications, including from some additional data for lung cancer and ASCO, what are the indications that you're most excited about? Where do you see the most growth opportunities, and what do you think are the highest likelihood shots on goal?
Okay. So in oncology, and I'm gonna touch on Trodelvy, right, specifically, we believe today we still have enormous opportunity in the indications that we are currently labeled for. So we have set the standard of care for second-line metastatic triple-negative breast cancer. We are by far the leading share here, but the, that's only about a third of the patients are getting Trodelvy in this line of setting. There's still two-thirds of patients that are not, and they're getting chemotherapies. We've clearly shown-
Yeah.
... overall survival data over chemo here, and so we still think we have a lot of room to grow just in triple-negative breast cancer.
Yeah.
Let alone as we move up earlier line setting, as you think about some of the data with ASCENT-03 and ASCENT-04
Mm-hmm.
... some of that playing out later this year. But right here and now, we still think we have a great opportunity in second line to continue that leadership there and unlock a little bit that chemo piece, that stickiness of chemo. In HR-positive, HER2-negative setting, our label is in later lines of therapy, and we are doing well in those later lines of therapy. We're also doing incredibly well in the IHC 0 status in patient population, and we assume that with other data like ASCENT-07-
Mm.
... that's in the next couple of years, we'll move up lines of therapy as well. So a lot of room to grow in HR positive, which is also a bigger market play versus TNBC. Then, you have bladder. We currently have a conditional approval in the U.S. for bladder. This is something we haven't spent a lot of time on, to be totally frank with you.
Sure.
Our focus has really been on the breast indications.
Yeah.
And the reason for that is the conditional approval is based on PFS, not OS, and so we were a little bit in more, although we have a second-line indication, we were kind of relegated a little bit to third-line. We believe that with TROPiCS-04, that data readout is basically in the next couple of months. We believe that if that reads out with OS, that's an opportunity to really, truly establish ourselves in the second-line setting for bladder, which right now is only about 10% of our total revenues and an opportunity for growth there as well. So that's the here and now to your question-
Mm
... let alone moving up earlier lines of therapy. And then we have lung cancer. We announced earlier this year with the EVOKE-01 data that we missed our primary endpoint, but we had some really interesting data in those PD-L1 non-responders, or fast progressors maybe is a better way to say it. And so that data will be shown at ASCO this year in June. And then, of course, we're looking forward to having discussions not only with our KOLs, but with regulatory agencies to see what kind of path forward does that look like.
Okay.
Either way, we believe there's a path forward in second-line lung, not necessarily with the EVOKE-01 data, but potentially another trial as well, as you think about kind of with a very specific patient population, which represents about 50%-60% of the second-line lung, non-small cell lung cancer setting. And so we think there's a real opportunity there for us to, to kind of grow.
Mm.
And then, of course, we have trials and other indications, whether it's endometrial, that's a little later out, and then we have a lot of combination trials with anti-TIGIT, with the Arcus collaboration, and, looking at that as well in lung and other indications.
... How do you foresee the competitive landscape playing out across some of these indications, especially considering Enhertu potentially moving into earlier and broader breast cancer lines and competitor Trop-2 ADC potentially coming out to the market?
Sure. So today we're the only Trop-2 ADC on the marketplace. I would also say that not all ADCs are alike, not all Trop-2 ADCs are alike. We've shown that already, with our safety profile being quite differentiated. And so I still think we are incredibly competitive in the marketplace. I think as new data comes out, you know, you were referring to some data that, you know, we'll see more at ASCO. I'd also say it's great for patients, it's great for women with breast cancer, as you see some of this data play out. So I think that's a good thing. I also think some of that data is in earlier lines, with which-
Right
- supports Trodelvy -
Right
moving up a little bit, right?
Yeah.
So it opens up the market. So I see this as opportunity, and this was something that was definitely part of our planning as well as we think about our studies in earlier line settings. So more data to come, with potentially a differentiated profile, namely on the safety front-
Okay
- that we've seen.
Good. Shifting gears, now that the CymaBay deal has closed, what's your latest view on the size and penetrability of the PBC market, where you're expecting seladelpar to be positioned, and how you can leverage your existing liver-focused sales force and infrastructure?
Yeah. So, so we're really thrilled to have the opportunity to work with, seladelpar. This is a compound that is basically for a disease called PBC. It's liver inflammation. It's right up our alley in light of our expertise in liver. We've obviously been more focused on liver within a virology setting. And from a virology setting, and then, this is inflammation, which is also we have a lot of expertise here, but although much earlier from a pipeline standpoint. Our footprint covers about 80% of total prescribers right now for PBC today, and so we have an opportunity to obviously expand that a little bit to make sure we cover all. Most of the additions are GI specialists, so that's something that we will be doing.
This is a rare disease, or an orphan drug, but it's a large disease. About 130,000 patients today in the U.S., about 125,000 in Europe. So we believe that unfortunately, URSO or UDCA, that currently is in first-line setting, many people don't respond, and unfortunately get to the second-line setting and have very limited options. We will be indicated, we hope, as our label comes through. PDUFA is expected this mid-August, so a couple of months. We assume a label in second line, for ALP normalization, which is basically cost of entry. We believe our label will be differentiated because our data is differentiated. The data clearly shows that, we have very positive impact on pruritus.
So pruritus is unfortunately a symptom of the disease of PBC, and unfortunately, some agents that have come to market are also showing exacerbation of pruritus. So you can appreciate, for anybody who's had it, this keeps you up at night, right? It impacts mental health, it impacts how you work. It's basically you want to scratch your skin off, is the impact of this. And so there's a real opportunity here to make a difference here with seladelpar. The opportunity that we see, and we've said it, basically modest for 2024, right? We're going to launch in Q3. We really realize that obviously from a payer standpoint, there will be, you know, it'll take a little bit of time for patients to get access to this drug.
We think really the uptake will happen more so in 2025. We believe that'll be a break-even proposition for us in 2025, and accretive in 2026. Very excited about the opportunity in second line, with opportunities potentially, that's really for inadequate responders-
Yeah
- to URSO, and with an opportunity with other studies like the IDEAL trial, to look at partial responses as well, and move into a little bit, a broader patient population. So more to come on that, but I think we're incredibly well-positioned with a differentiated profile to make a real difference for patients here.
Great. There have been some recent updates, in terms of the go-forward path for Anito-cel.
Mm-hmm.
And so I guess I was wondering if you could talk a little bit about what the market opportunity could be like for additional CAR-T entrants in the myeloma space, and where you see this drug potentially being most differentiated versus other approaches, where it might fit in.
Sure. So this market, the multiple myeloma market is quite a large market, right? You're talking about a $12 billion market opportunity. There are agents today, unfortunately, they can't serve everyone, and so this is a real nice opportunity with a collaboration with Arcellx to... We've just finalized actually the tech transfer, to really leverage the expertise from Kite Gilead from a manufacturing standpoint, as well as clinical development and commercial execution, to really make a difference here in this marketplace. iMMagine-1 data for later lines of therapy, so fourth line plus, should read out towards the end of this year with a launch in 2026, so that's around the corner.
Then we also just announced, I think you were referring to iMMagine-3 trial design, which is looking at earlier lines of treatment and second-line plus, and really looking at a broader patient population versus current agents to really make a difference here. We believe that, because of the leadership that we currently have in cell therapy, by far, and the manufacturing reliability as well as turnaround time, we're at about 14 days, we can really make a difference here for these patients. Both obviously still continuing the growth in lymphoma, in DLBCL with Yescarta, but also bringing that into play for multiple myeloma. So, excited about that opportunity to really make a difference here and accelerate the path, and I think that's what the whole intent of the acquisition of Kite some years ago was all about, right?
Yeah.
It's about leadership in cell therapy, which is tough to establish, and then playing that up to make sure we are the best partner of choice as well for future, opportunities.
Great, at the beginning of our discussion, you talked about just how robust the PrEP opportunity could be. We're gonna be coming up on this phase III, the initial phase III lenacapavir data, in PrEP by the end of this year.
Yep.
I know it's somewhat of a unique trial design. Can you maybe help us understand, I guess, exactly what we should be looking for in the study? What's the bar, and what are you hoping to show that would really enable you to capture this potential market opportunity if granted?
Sure. So let me take a step back. So lenacapavir for prevention is looking at two trials. It's called one of them is called PURPOSE 1 , the other one PURPOSE 2, very original, and we basically need those two trials to file for an approval, and that's how we're expecting approval by as early as late 2025. lenacapavir is currently on the market under the branding Sunlenca, for heavily treatment-experienced patients in twice yearly SubQ injections. So it has already been proven-
Yeah
... from an efficacy standpoint in the treatment setting, so these are very complex regimen. These are patients that have nothing else, have shown resistance to other classes, and because lenacapavir is a capsid inhibitor, comes in and plays. Very small market opportunity for us here, but, huge unmet medical need, first and foremost, and then secondly, it's an opportunity to get this drug on the marketplace and kind of understand kind of the ins and outs from the pathway.
Yeah.
So it gives us experience-
Yeah
... as we go into it. That's also why, in prevention, we believe monotherapy is where that, that'll be successful, but we also believe that our chances of success here are very high.
Yeah.
So the PURPOSE 1 trial, the counterfactual design that you were referring to, just think about it, this PURPOSE 1 trial is happening in sub-Saharan Africa. It would be unethical for us to have a placebo arm, right? We have to make sure that everybody gets protected from HIV, if appropriate. So the way it's designed, it's basically designed that you have an arm with lenacapavir for PrEP, you have an arm with Descovy once a day, and you have an arm with Truvada once a day, and all of that is going. The primary endpoints are lenacapavir for PrEP versus background HIV incidence, and that's the difference a little bit, right? It's almost like, think about it as a hypothetical placebo arm that you're comparing to.
The primary endpoint is superiority for len for PrEP versus that hypothetical arm, and also looking at Descovy versus that hypothetical arm. You'd ask, "Why Descovy? It's already approved." But right now, it's only approved in cisgender gay men, transgender men and women. We have post-marketing commitment for women, so this trial, PURPOSE 1, is with cisgender women, adolescent girls, and early and younger women, and so that's the focus there. So I see that as a two opportunity, 'cause those are the two primary endpoints. There's an opportunity, obviously, for lenacapavir for prevention. There's also an opportunity for Descovy. As I mentioned before, Descovy right now is really mainly used for MSMs, and so there's an opportunity to even grow that marketplace to expand to women who would need prevention as well. So that's the part of-
Okay
... the PURPOSE 1 trial. And the secondary endpoint to PURPOSE 1 is lenacapavir for PrEP superiority versus Truvada, so that's, that's how that plays out.
Okay.
The PURPOSE 2 trial is in cisgender men and transgenders, as well as, and only looking at len for PrEP, versus the background HIV incidence in a primary endpoint superiority, as well as secondary endpoint superiority to Truvada. So we believe, with those two trials, those two pivotal trials, we have an opportunity to file not only for lenacapavir for PrEP in a very broad patient population, but also, with a potential update of a label for Descovy.
Yeah.
Great opportunities.
Great. Well, in the last two minutes, would love to touch on sort of business development and capital allocation plans. I know you mentioned, you guys have mentioned recently, it's unlikely that you'll be doing any sort of major transformative acquisition this year. But I guess I'm curious, how are you thinking about external opportunities and deploying capital overall, and are there particular therapeutic areas or clinical development stages that you believe would fit in most with your current vision and go-forward strategy?
Well, you are talking to the commercial person, so clinical stage, I might have a bias. So we've been very clear at Gilead around our areas of focus. It's around virology, it's around inflammation, and oncology, and so we've been kind of agnostic to modalities and whatnot. But we have a real opportunity to continue to be opportunistic, and we will continue to do that. I think the CymaBay deal is a perfect example of what that could look like in the future. Those are the kind of things we're looking at. We continue to do, on a regular basis, early research and early development collaborations.
Yeah
... acquisitions, et cetera, and that, you'll continue to see that. I think where it gets a little more opportunistic is when you think about a later stage kind of play. But you know, we're always looking at them and what the right fit is, and the most important thing for us is not only you know obviously the molecule, the differentiation, the marketplace, but what expertise do we bring to that? And that's why those three areas of focus are really critical for us. The last piece I would say is the current pipeline that we have today is actually one that we're really excited about, right?
Yeah.
We've talked a lot of, not all the pieces, but many of the pieces that we have that'll play out in the next five years, but let alone ten years. We feel incredibly confident with our current pipeline and our growth opportunities that we have what we need today. We will always be looking, and we're always interested in opportunistic plays, and we'll continue doing that, but very specific to those three therapeutic areas.
Great. Well, this was super insightful, Johanna.
Thanks, Brian
Great to catch up, as always.
Thanks for having me.
Thanks so much for joining us.
Appreciate it.
Thanks, everyone.
Thank you, everyone.