Good morning, everybody. I'm Chris Schott from J.P. Morgan, and it's my pleasure to be introducing Gilead today. From the company, we're going to have a presentation from Dan O'Day, Chairman and CEO, and following that presentation, we're going to jump into a Q&A session with Dan and the broader management team. So with that, happy New Year. Dan, thanks for joining us, and looking forward to the comments.
Thank you, Chris. So good morning, everybody. It's an absolute pleasure to be here at JPMorgan with my team, which we'll get into in just a minute when we get into the Q&A. We're really in an exciting time right now at Gilead. I look forward to framing exactly where we stand in 2025. But after several years of high investments, which was really necessary to diversify the portfolio and strengthen our approach to HIV, we're really now in a period of time of consistent execution and at a point in time where that investment is turning into commercial benefits, and we're set to see those investments set to grow into the future. So in the year ahead, in summary, you're going to see a growing portfolio, growing revenues, and a significantly improved operational efficiency as a result of where we are in our financial discipline.
Before I get into the details, as always, I want to remind you that our presentation will include forward-looking statements. I refer you to the disclaimer in the presentation, as well as our SEC documents for a full discussion of the risks and uncertainties associated with these statements. Here's the three key points that I really would like to communicate with all of you today. Number one, our HIV business is secure and growing, not only today, but it's set to extend a long-term HIV leadership many years to come, well beyond the 2030s, which I'll speak about. And that unmatched portfolio is grounded in one of the most exciting things in science that's happened for about a decade or longer, and that's lenacapavir, and we'll talk about that.
Secondly, beyond diversifying within our HIV portfolio, our diversification strategy outside of HIV will enable additional growth beyond HIV, and I look forward to speaking to you more about that. And then finally, we're well positioned at this stage in our journey to drive top-line growth, and we're committed to bringing that through to the bottom line and growing shareholder returns over time. So let's dig into the first one, which is the HIV business and why we believe it's so sustainable and in a growing position today based upon the backbone of lenacapavir.
Let me start by making sure I do a call out to Biktarvy, which is the standard of care today in HIV treatment as of the third quarter of this year, greater than a 49% market share, and really helping so many patients out there with the standard, gold standard, one pill once a day oral. We had an analyst event not too long ago where we shared a lot of detail, but pulling some of those elements out today to really articulate why we believe that with all the long-acting programs we have, that we'll continue to be the global leader for many, many years to come. That's based upon lenacapavir as the foundation product. Now, just on the left-hand side of the slide, I just want to remind you on the treatment side that, first of all, Biktarvy still has a lot of growth to come.
And the patent expiry is not happening until the end of 2033, so nine years from now. In fact, at Gilead, we don't have any major LOEs, which is a bit unusual at this conference, until 2033, and that really is Biktarvy. And I'm going to be explaining to you why I believe the portfolio will diversify that Biktarvy presence in our portfolio. But if you stick on the treatment side, there are two key things as we talk about the long-acting. Number one is patients want options when it comes to HIV. And our long-acting portfolio, which I'll show in just a minute, provides those options. We also know that patients with HIV are always at the cutting edge of the next innovation in HIV. So that's one aspect of our portfolio growing to cover those patients that are currently treated today.
But there's a whole other segment of patients, around 40% of people that have HIV today that are not virally suppressed. Now, there's a lot of different reasons for why they're not virally suppressed, but many of them could be aided by long-acting treatments. And we think we can bring those into the market with these long-acting. So there's also market growth possibilities within HIV as well. We expect to have seven launches for new treatment options of long-acting before the Biktarvy LOE. Now, on the prevention side, I would say that lenacapavir is poised to transform the prevention market and help people that could benefit from PrEP and HIV. And let me just turn to the attention of what is lenacapavir for those of you that just need to be reminded of some of the key aspects of it.
First of all, it was the breakthrough of the year in Science magazine last year. At Gilead, our scientists have been working on this for more than 16 years now. It has so many firsts. It's the first capsid inhibitor, the first new mechanism within HIV for many years. It's the first and only twice-yearly injectable for HIV, already approved for treatment-experienced patients and now in FDA approval process for prevention. It's also the largest ever prevention series of studies that have been done around an HIV PrEP medicine. The first two of which that have read out, and you see the results there. PURPOSE 1 showing 100% of participants were infection-free at the end of the trial. PURPOSE 2 had 99.9% done in different populations in different countries, showing astonishingly similar and very really groundbreaking results. It's been granted breakthrough therapy designation.
We filed the NDA filing on December 19th, and we look forward to working with the agency and with agencies around the world to bring this medicine to the developed and to the developing world. So how do we think about this in a nutshell? There is significant untapped potential in the HIV prevention market today. It's important you note that HIV, sadly today, is growing not only in this country, but around the world in terms of incidence. So there's a great need still for more of those people with HIV to be virologically suppressed that aren't on treatment, but very importantly to address the many, many people that can benefit from PrEP. And this type of medicine allows us to kind of rethink what we thought about from PrEP in the past.
But today, as you may know, in this country alone, there's only about one out of four patients by CDC definition defined patients today, which we think is understated, that are on PrEP today. And that's where you get to around that 400,000 number. The market is waiting for the right catalyst, something that is not one pill once a day, something that is less frequent. These are people that don't have a disease, and they need a more convenient option that they can take and forget about and go about their daily life. And so what you see here is that we believe this market will have significantly improved adherence, which even for those 400,000 people on PrEP would make a difference. Many other markets outside the United States that have been reluctant so far to pursue and to reimburse PrEP.
Then you can see the number of users. We think that we can get to greater than a million PrEP users by the middle of 2033. We also see our share growing with lenacapavir and also Descovy for PrEP to greater than 60% over that period of time. This is really a transformational moment for HIV. I believe it will change the face of the epidemic. We feel the responsibility associated with that, both in terms of what we're doing in the developed world and some of the announcements you've seen us in the developing world, because at the end of the day, HIV doesn't know boundaries. We've got to make sure that everyone around the world has the access to this important new medicine.
Getting back to the broader HIV portfolio that the team has been doubling down on over the past five years, this gives you a sense of why we say this is without a doubt the most comprehensive HIV portfolio in the industry. There are a suite of options that you see here on both treatment and prevention to complement today's gold standards of Biktarvy for treatment and Descovy for prevention across multiple oral and injectable durations. For example, we have more than one shot on goal here because of the nature of this science, but two late-stage programs for a weekly oral, one for a monthly oral, and what we see here is that when we speak to people either that can benefit from taking a prevention medicine that are on treatment, they want options. They want options that fit into their daily lives.
Some people would prefer a less frequent oral, and some people would prefer subcutaneous injection much less frequently. So we see the market diversifying over the course between now and particularly the Biktarvy LOE, and we see the prevention market growing with these options that meet people where they are. And to play a little bit more detail on that, we showed this at the HIV Analyst Day, but this gives you a sense with the rapidity in which these things are being developed. In HIV, once we know a medicine works, has the right PK profile, can virally suppress, things move relatively quickly in late-stage development. And that's why you see here that of the nine potential options, seven of them are actually coming before the Biktarvy LOE.
So this provides a chance to treat more patients more effectively and also reduce the concentration risk on Biktarvy as we head towards the LOE. So we're set to both lead and expand the PrEP market and really transform the treatment market over this period of time. And that's why when we say that this HIV opportunity that Gilead has is grounded in success well into the late 2030s, this is what we're talking about from the standpoint of what we can do for HIV patients and what it means for our business. So the growth strategies, we've already said, counts on growing and sustaining the durable HIV business, but it also counts on diversifying our business beyond HIV.
Over the past five years, you've seen us put to work both investments internally at our company with new science and new innovation going on in our research and development groups, but also bringing new innovation into our organization. That's created, frankly, the most diversified portfolio that Gilead has ever had in its 35-plus year history. I want to talk a little bit about that as I head into this next segment. It's always been our intention to build this diverse portfolio. It has to be driven around the things that have made Gilead so successful in the past several decades. That's making sure, first of all, that we are keeping the bar high in terms of transformation. You can see the extent of what we've achieved here.
I'm not going to talk more about virology, but beyond HIV, we also have other programs in our virology. But in oncology, we now have 10 programs in phase 3, six are Trodelvy, four are across our Dom, Zim, and Yescarta cell therapy platform. And in inflammation, we've grown this very promising and growing early portfolio, which I'll show you a little bit more on a little bit later in the presentation. However, in inflammation, we now have kind of a lead program there in a medicine called seladelpar or Livdelzi for primary biliary cholangitis. Although it's a liver disease, it's really an inflammatory mechanism that helps patients with that liver disease. So when you think about it, all three of these franchises are growing at Gilead today.
Arguably, oncology and inflammation are at the very early stages of the development within our company, but sizable contributions on the oncology side are now beginning to enter into the inflammatory side as well. I've talked about lenacapavir. Let me say a few moments on some of our kind of lead programs on kind of the next step programs in our oncology and our inflammation. I had the chance to be at ASH this year. I'm sure many of you were at ASH, and I had the chance to see the phase 2 Imagine update for the Anito-cel program for multiple myeloma. I also had a chance to meet with several KOLs there. It's very well received.
I think the profile of this medicine is what many physicians are looking for, the type of efficacy that we're seeing in this phase 2 program, and the type of safety profile, which is extremely important with this type of a population of patients. So we're very enthusiastic about this. We believe that this is a potentially best-in-class cell therapy with a differentiated safety profile, and we could be launching this in 2026. This profile of this product, combined with our world-class Kite cell therapy manufacturing, which has the shortest turnaround time in the industry, strong manufacturing base, and a complete suite of services to support prescribers in getting these medicines to patients is very exciting. I just want to do a quick highlight on a new addition to our portfolio last year through an acquisition of CymaBay. We're very pleased to have this in our hands now.
It's been off to a very good launch. As we said, 2024 was going to be kind of the beginning of the launch. We had to establish it. It's been very well received by KOLs, but getting it into the payer system, to the insurer system, which has gone very well, means that the contribution in 2024 was just the beginning. We're going to see more of this in 2025. Certainly, we look forward to talking about the full year 2024 to year-end results coming up. This is really a transformative treatment for primary biliary cholangitis that has had very few options to date. We think the profile of this product, both in the safety, but also the efficacy, is something that is really in high demand out there. We also expect the EU approval of this in the coming weeks.
Now, don't worry, I'm not going to go over the entire slide here. This is going to be for you to also ask us some questions about or to dig into on our follow-up conversations. But when I say we have the strongest, most diverse pipeline in Gilead's history, this is essentially what I'm referring to. And it's across therapeutic areas, across stages, as you see. We have many mechanisms of action. It's important to know that many of these mechanisms of action have the potential to be used in combination and multiple indications as well. A lot of innovative targets here. I won't go through all of them due to time, but we're enthusiastic about a lot of these novel targets. A few I'll mention is CCR8, which is in a phase one program.
We have the CD19, CD20 bispecifics at Kite, which I think could play a role in a variety of disease states. We're very pleased to welcome the STAT6 protein degrader into our family from LEO Pharma that has the potential to really have us think about our inflammation strategy, both as a single agent and in combination. To put that into context, we now have more than 10 kind of potential first-in-class programs in phase two and phase three, and 15 potential first-in-class in the pre-IND and phase one. I hope you can see that what we've done is really focused on building this pipeline, both from the HIV perspective for long-range durability, but really first-in-class and best-in-class type compounds across oncology and inflammation.
In order to do that, we've had to really disproportionately invest over the past couple of years to a stage where we are now, where we're very comfortable with the overall level of investment, and you'll start to see leverage return to the model. That's really what I want to speak about in the third chapter here, which is our commitment to discipline, capital, and expense management at this stage in our journey. We're focused on execution. We're focused on maintaining operational expenses and making sure that we drive returns for shareholders as well. Just a couple of facts to bring us into the financial world here. Again, you see some of that accelerated investment in the 2022, 2023 timeline that allowed us to build up the portfolio that we've shown and make the progress on HIV.
But in 2024, you saw a moderating of the operating expense growth, which when combined with the top line growth from 2024 resulted in an operating margin expansion. In fact, in these figures you see here, we have in-process R&D expenses included, including the 2024 quarter three at 47%. Just to give you a feeling for the strength of this, if you were to exclude those expenses, the operating margin as of quarter three 2024 was around 50%. So leverage is returning into the model, and it's one important indicator of the health of our business for shareholders and our ability to reinvest for patients. The other indicator is clearly cash flow from operations. We've had another very strong cash flow year from operations this year. In fact, if you look back on our cash flow progression, we've averaged $9 billion a year since 2019.
This certainly ensures a very healthy balance sheet on the Gilead Sciences side. This year, we expect cash and cash equivalents to end the year at around $10 billion. Just to put that into context, at the end of the second quarter of this year, we had cash on hand of around $2.8 billion. That's because in the first half of this year, we had the CymaBay acquisition for $4.3 billion. So you can see that generation of cash from the second quarter of $2.8 to $10 billion at the end of the year allows us to do appropriate M&A and partnerships to bring on and to continue to supplement that portfolio that I spoke about before. With such a strong cash generation, we remain fully committed to the dividend at Gilead and to dividend growth.
Just to put that into context, we've paid more than $18 billion in dividends since 2020. Our dividend has grown 13% since that time, and we've been committed to growing that over time. We've grown at about $0.08 annually over the last three years or $0.02 a quarter, and we're going to be announcing our 2025 dividend increase in due course. Beyond the dividend, we also use share repurchases as another way to return capital to shareholders, at a minimum to offset equity dilution, of course. But we can also be opportunistic to ensure that at least 50% of our free cash flow goes to shareholders over time. In fact, since 2020, we've actually averaged around 57% of the return of free cash flow to shareholders on an annual basis. So we'll also use that cash, as I said before, to continue to build a portfolio.
Of course, investing in the ideas that come out of our own Gilead research and development, licensing agreements and partnerships, especially on earlier stage assets. We've been spending around $1 billion a year on earlier stage assets, keeping a keen focus on their contribution to our strategy. But we'll also be opportunistic about M&A. And I would say, in a general ordinary course business, you can expect us to do something like a CymaBay acquisition every couple of years. Of course, we'll look at other things, but we really have a very high bar in our portfolio right now. We're going to make sure we focus on our three therapeutic areas. And I'll remind you that the position we're in is such that we have very limited loss of exclusivity exposure until 2033, and we also believe that is very manageable when we get to 2033.
So the incentives that drive our view at M&A keep the bar very, very high for Gilead. And we do want to continue to support partnerships and M&A to support our portfolio over time. So with that, it leaves me with just kind of concluding on behalf of my colleagues and all the employees at Gilead. We feel exceptionally strong going into 2025. It's the most diversified pipeline in our history. No major LOE before December of 2033, and we believe that's manageable with all the innovation going on in HIV.
Operating margins in the industry top quartile, a healthy balance sheet, robust and growing cash flows, and product launches across a number of therapeutic areas that are expected to contribute to patient care and to growth and to shareholder return over the coming years to come. So we really feel good about where we are right now.
We'll look forward to keeping you informed throughout the year on our progress. And on behalf of the teams at Gilead, thank you for your interest in Gilead, and I'm looking forward to engaging with you with my team over the coming days. Thank you very much.
Great. Well, maybe to kick off the Q&A here, we'd love to start the conversation on the PrEP market, just given the upcoming lenacapavir launch. Maybe just to set the stage, what are the key considerations we should keep in mind as we think about second half 2025 and that initial phase of the lenacapavir rollout?
Hi, everyone. I think it's on. Yeah? Yes, it's on. Johanna Mercier, Chief Commercial Officer at Gilead. And thanks for the question, Chris. I think we have an incredible opportunity, as Dan mentioned, with lenacapavir.
It's an incredible profile, very much differentiated, and it gives us an opportunity to redefine the HIV prevention opportunity. And so as we consider a launch in the summer of 2025, which is around the corner, we are thinking, of course, how do we do this differently? How do we make sure we learn from other agents in the marketplace that have tried to enter an oral market with a subQ injection? Also looking at the HIV prevention and making sure we're getting ahead of some of those previous barriers. And so the team is looking at many different ways to make sure we create access and accessibility to this compound, to lenacapavir, as early as possible. And so we are thinking that probably within the first six months, we should have about 75% access, and within about 12 months post-launch, looking at about 90% access.
Obviously, we're going to leverage what we've already done with Descovy. We have an incredible opportunity to leverage a platform where we have the leading branded share at over 40-45% share of the total prevention market today, despite generics in the marketplace, and an opportunity to kind of leverage that and build on top of that, both for the number one oral in prevention, but also with the potential for the number one long-acting in prevention as well pretty shortly thereafter. We think that we'll expand our customer base as well as our consumer base over time. So maybe not in the first six months. I think it'll be a build as we go into 2026 as we get more access as well. And then, of course, really normalize prevention in the market as we know it today.
Just follow up on that launch dynamics.
And if we looked at the competitor launch here, I think they've had some; it's been a slower ramp than we would have expected. You mentioned access. What are the other factors that you're watching? Learnings, I guess, from others who've tried this?
Yeah, thanks. A lot of learnings, actually. Some of the learnings are just how offices are currently set up. So most people that currently prescribe HIV treatment actually prescribe HIV prevention. And so those offices are really set up for daily orals. They're not set up for long-actings. And so we realize that, and we need to make sure that we partner with offices, with plans to make sure that we create a seamless customer experience, both for physicians, providers, but also for consumers. And so we think we have a real opportunity to understand what's happened in the past and move it forward.
Another piece of the puzzle is the fact that people on prevention medicines actually have to get tested for HIV on a regular basis, and right now, the current medicines on the market that are long-acting don't match up with that STI and HIV testing that is currently required, so we believe something every six months really fits nicely in with that testing and also fits nicely in with how often they actually go see their physicians, so when somebody's on a prep medicine, usually they go see their physician twice a year, and so this would match up perfectly with lenacapavir's profile, so these are the kind of things that I think will help in addition to setting up the access piece of the puzzle.
So we're learning a lot from previous, but also looking externally outside of HIV prep, other markets where they've gone into with a subQ long-acting and getting learnings from that to make sure we get ahead of it.
The other question we get is the target market here. How much of this is just going after the Descovy patient base versus maybe that broader prep market where there's a lot of generic usage? Are you thinking initially this is more focused on Descovy or is the whole pool available to you?
The whole pool is available to us. Remember that people didn't switch necessarily from Descovy to a generic. Descovy got launched as generics were launching about 12 months prior. And so people that are currently on generic prep medicines right now are actually a switch from Truvada and not necessarily growth from other markets.
We've actually continued to grow Descovy despite generics in the marketplace because of the advantages of Descovy over Truvada generics. And so we believe there's a real opportunity to look at the overall prep opportunity. And as we're seeing it from our consumers and the market research that we've done, it's very clear that the whole market is available for a long-acting agent every six months.
Great. Maybe the last question on prep is you're talking about expanding the market to over a million patients by the mid-2030s. I guess what's the really critical factors from your perspective to kind of bridge from where we are today to that million patient target?
I think it's a phased approach, but we're going to kind of start all the phases at the same time. You might not see the results at the same time.
But the phased approach is basically today, as we think about our launch, focusing really on current prescribers of PrEP and current consumers of PrEP. But very quickly thereafter, the expansion has to include not only new consumers like Latino, Black, women. The percentage currently on PrEP is incredibly low versus the incidence of HIV. So there's a real opportunity here. I'm just talking in the U.S., but actually it's well beyond the U.S. borders that we're looking at. And then, of course, for women, if we normalize prevention, we have an opportunity here as well because very few women are currently on PrEP. And I do believe that there is an unmet medical need here as well. And so that's kind of the next step. But well beyond that is including increasing our prescriber base.
So if we only think about the HIV treaters that are currently prescribing PrEP, we're limiting the opportunity here. And we have an opportunity to make sure we're expanding. So think about OB-GYNs. Think about even pediatricians that see kids off to college. Think about primary care in certain areas of the country. So we're not going to go broad to all primary care, of course not. But I do think there are certain areas where there's an unmet medical need and we're going to be very targeted in our approach to make sure that we expand that prescriber base as well. So by doing all of those pieces, that's how we believe we can go well beyond the one million that we were talking about.
Maybe just pivoting over to the treatment market. I know you just had a big HIV analyst meeting.
Just when you look at the totality of what the company's developing, what do you think is a reasonable % of the market that could be on longer-acting treatments as we, let's say, look out 10 plus years once these assets come to market?
Sure. So as we think about it, treatment and prevention are very different markets. Prevention, it's a consumer. It's not a patient. They're not sick. They don't want to be reminded to take a pill every single day. So long-actings are going to play a really important role in prevention, probably even more so than in treatment. In treatment, you have a bit of a mixed here. You have a mix where people really want the long-acting because they don't want to be reminded that they have HIV. And so there's a real opportunity here to expand on that.
Having said that, you have others that really either don't like subQ or actually want to know they're taking something for their disease. And so we think, as the market research suggests, we're thinking about in treatment, probably more like a 50%-60% over the long term in the long-acting market versus daily oral. And then in prevention, probably a little bit higher than that in the long-acting, probably 70%-30%. And as Dan mentioned and shared a little bit, the life cycle program that we have in HIV, the reason why we have such a robust and diverse life cycle here is because as much as we are leaders today in HIV, both in treatment and in prevention, the opportunity is to sustain that leadership.
And so we believe that all the different weeklies, monthlies, every three months, twice a year, et cetera, even in treatment, really are opportunities for us to continue to grow that leadership.
Great. Maybe just pivoting over to the CAR T business. Maybe just start the conversation, the in-market portfolio. Just talk a little bit about how you think about the growth dynamics going forward as, I guess, balance on one hand, kind of maybe a broader prescriber base over time, and on the other hand, kind of some of the competitive dynamics that you're seeing.
Yeah. So what we're observing today is we shared last year that we're continuing to see competitive dynamics. Those are both in-class and out-of-class with CAR Ts and bispecifics, and we expect those to continue in 2025.
However, we do have a phase plan similar to Johanna using phases where we are looking at how we shape the market further. Part of that is ensuring centers don't have to be transplant centers to deliver CAR Ts. So we're working with the accreditation bodies to shift that so that there's a CAR T accreditation. We're also bringing national payers along on that journey as we're looking at accrediting further institutions beyond those transplant centers. And that's something that we're rolling out today and we'll continue rolling out into 2025. We want to build off of what we're seeing in our leadership with Yescarta and Tecartus. We have a Anito-cel coming in 2026. So really shaping that market further to enable more centers to be able to deliver these therapies closer to home is what we're most excited about.
And then just pivoting to Anito-cel, what's been the response from the data you presented at ASH?
I think Dan accurately captured this. He was in the meetings along with me. We had an opportunity to meet a number of KOLs over the course of that week at ASH. And there's a lot of enthusiasm for the data. Physicians see the efficacy and safety as something that's differentiated. You can imagine for a multiple myeloma patient, safety is really important. These patients can live with their disease for a number of years. And so having no long-term neurotoxicities like parkinsonism or any of the cranial palsies is something that's seen really as an advantage. And they're looking forward to us getting it to market as soon as possible.
And then just as you think about entering this market, you're going to have a somewhat entrenched competitor in there.
How do you think about that competitive dynamic playing out?
Yeah. So there's still a very large unmet need in multiple myeloma. We believe as we come to market, we're going to be able to address a number of things. First and foremost is our manufacturing capacity and our manufacturing presence. We are able to now, in our clinical trials, deliver an Anito-cel at the turnaround times we're delivering of our commercial products today with Yescarta and Tecartus. We are going to be bringing that to the commercial products. Today, what we're seeing in some of the products that are on market is that that turnaround time is not there. In addition, there is a lot of much higher out-of-spec rate with some of the existing constructs on the market today.
So we think our manufacturing is going to be something that's hugely additive in addition to the safety and efficacy that we're seeing.
Great. And just questions for you. In terms of, I think as Dan laid out, that seemed like the margin story is starting to come back in after a few years of investment. Just help us think about the margin story for Gilead going forward. How much leverage is there in the P&L as you think about the business?
Sure. Thanks, Chris. Hi everyone. I'm Andy Dickinson, Gilead's Chief Financial Officer. We have a very efficient structure, business model and structures. We're much smaller than most of our peers. Just to put it in context for those of you that don't know Gilead as well, we're guiding to about $28 billion in sales this year.
When you look at our base business, which excludes our COVID antiviral, that implies about $5 billion of growth in our base business over the last three or four years as we've invested in our portfolio. So as Dan highlighted in his presentation, we very purposefully invested to bring our investment levels up to a healthy level on par with our competitors. And what you see in the last couple of quarters is the moderation of that expense growth, the increase in the base sales, and a very quick expansion of our operating margin. So in terms of margins, our gross margin has already always been incredibly strong. We're guiding to 86% this year. As the business continues to grow, we expect to continue to have a very strong gross margin.
And then our operating margin, as you saw in Dan's slides, we very quickly moved to the last two quarters. If you adjust for one-time items, we had about a 47% operating margin, as Dan said. If you exclude IPR&D and the way that people historically in our industry thought about operating margins were north of 50%. So our ambition and the reality of where we are today is we expect to, we are in the top quartile and we expect to be in the top quartile going forward. But you will continue, we would expect to see leverage in the model going forward.
So as you think about that broad pipeline you're advancing and some of these launches, you feel like you can capture that and you can fund that in a way that is still margin accretive.
Absolutely.
I mean, actually, to put it in another way, I think the question that we get a lot is we generate so much cash. Our cash flow generation should increase over the coming years through the end of the decade and beyond, and then how are we going to deploy that cash? There are a lot of opportunities for us to further return that cash to shareholders, as Dan alluded to, so it's a pretty exciting time,
and maybe just building on that question or that topic, how are you thinking about the balance of, I guess, BD versus share repo given the stock recovered off the low? It still seems like a very attractive multiple though, so how are you thinking about it?
Yeah, I mean, I guess the simple way of thinking about it is we are now at what I call an ordinary core state of business development activity. We don't need to invest in business development to the same extent that we did the last five years as we were rebuilding the portfolio, which means we are going to have ample opportunity to look for other ways to deploy that capital or return the capital to shareholders. So whether that's a one-time dividend increase in share repurchases, further increases in the dividend, those are all things that our board and our management team will consider. But we really like the level of investment that we're at today, both in terms of R&D expense as well as SG&A and overall corporate development expense.
Great. Just the last couple of minutes, a few R&D questions.
You laid out a slide, a lot of earlier stage pipeline opportunities. What are the kind of two or three that you're most excited about, I guess, in that early stage portfolio?
Thanks, Chris. Flavius Martin, head of research at Gilead. It's a pleasure to be here. Thanks for the question, Chris. Look, as you've seen from Dan, we've been building an early portfolio of about 100 plus IND and earlier assets. There are a lot of those things on the list that we are super excited about starting with the HIV portfolio, where we had about seven to nine of those. We'll have launches if they pan out before Biktarvy goes off patent. But the bulk of the effort externally has been going and internally in oncology and inflammation.
And again, Dan already mentioned things like CCR8, PARP1, which we do think will read out very soon and could be transformational in our pipeline and for patients. And on the inflammation side, definitely the LEO Pharma collaboration we announced. I think STAT6 is a pathway that will be tested and be very successful in a number of large inflammatory diseases. And we have other assets like Alpha-4 beta-7 small molecule, which actually is going to be a bedrock probably in the inflammatory bowel disease for future combination for a larger effect side. So very, very rich pipeline across three therapeutic indications. And again, stay tuned.
Great. On the BD front, do you see within those verticals any particular area that there's more opportunity than others? Or how should we think about?
Yeah, I think we'll continue very, very aggressively in oncology and inflammation and obviously including cell therapy where we will add to what we do internally very aggressively in those therapeutic areas. And virology, definitely we are constantly searching, but again, we have such a strong internal pipeline, but we'll add as we see more.
Great. Maybe just the last question. I know you've got a new Chief Medical Officer coming on board. Just anything we should be expecting in terms of either a broader portfolio review or change in approach at all, or just how should we think about that?
I think it's a terrific transition. Merdad really built up a portfolio along with Flavius and Stacey and Johanna and Cindy and others.
And now I think having Dietmar come in with his deep experience in late-stage oncology and frankly, deep experience now in inflammation, particularly over the past six or seven years, it fits really nicely into where our portfolio is going. We do have the world leaders, I'm sorry to say that, in virology. So we're really quite strong there. And I think you can come along and learn from them. But bringing the inflammation and oncology expertise from a late-stage perspective combined with the early stage and early development experience we have in the company, I think is exactly right for the next chapter of Gilead.
Great. Well, thank you for spending the time. Really appreciate the time today. Thanks for joining us. Thank you.