Yeah, good. All right, wonderful. Thank you all for being with us here today. My name is Courtney Breen. I am the Bernstein U.S. Biopharma Analyst, and I'm very pleased to have with me Dan O'Day, CEO and Chairman of Gilead. I will begin by asking Dan to share a few words and a little bit about himself and a little bit about the business, and then we'll dive into Q&A. What I will ask is for all of you in the room and anyone online, please add questions that you have to the pigeonhole, and we'll work to integrate them into the conversation today because we want to make this as relevant as possible for everyone here. Dan, over to you for a few words.
Thanks, Courtney, and thanks very much for having me here. Thanks for your interest in Gilead. I'm delighted to be here. It's a particularly special time, I think, for the evolution of Gilead, which has had a lot of proud moments in its history. Just as Courtney asked me, I've been at Gilead now for a little over six years. Our mandate as a team when we came in was to use the strengths of Gilead, but build it in a sustainable way for the future. I think I'm sure we'll get into all these things, but there were really three major components to that. One was the HIV business and making sure we had a durable, sustainable, growing HIV business.
My message to you here today is that, particularly with the imminent launch now of Lenacapavir for PrEP, it is really the cornerstone of kind of the next generation of our HIV medicines in both treatment and PrEP. I know we will talk about that quite a bit, but we are unusual in that as a large biopharma company, we really only have one major or larger patent expiry. It is not until 2033. It is Biktarvy. Between now and then, we have up to nine potential launches in both treatment and PrEP for long-acting medicines that will kind of diversify our reliance upon Biktarvy by 2033. I think that setup is quite unique in biopharma these days and a tribute to what the team has done.
Really excited about, I'm sure we'll talk more about that, but the potential to have that be such an important growing business for us in the future well into the late 2030s. That was not enough, of course. The second thing we needed to do is diversify into other therapeutic areas as a company of our size. We did that through a strategic review about five years ago where we said with our immunology scientific background and base, we felt we could apply those skills differentially to oncology and to immunology/inflammation. I'm pleased to say that we really made some good progress there. In fact, we now have our oncology business at more than a $3 billion run rate, and it really accounts for more than half of our growth on a quarterly basis. We're just kind of getting going.
That is including both the cell therapy business of Kite, where we are the world global leader there, and our non-cell therapy business. I think particularly when I think about the, if you like, the non-HIV, we have a lot of really exciting launches coming up in the very near term. I already talked about one in virology, that is Len for PrEP or Lenacapavir for prevention. In addition to that, we have a recent launch that we just launched last year, a medicine called Livdelzi for a form of liver disease, but it works through an inflammatory mechanism, so it falls into that third bucket. We have a few exciting oncology or cancer launches coming up. We were just talking, Courtney and I, about ASCO.
We're going to be presenting data there on one of our two recent positive readouts for Trodelvy, a medicine that is used predominantly in breast cancer today. These are two frontline studies. Today, Trodelvy is approved in both hormone receptor positive breast cancer and triple negative breast cancer in the later line settings. This study that we're going to be presenting this coming Saturday is the first of two studies in the earlier line triple negative breast cancer setting. Although we haven't exposed the data yet, what we have said is it's very clinically meaningful, highly statistically significant, and we think it has the potential to change the standard of care. The reason that's important is, first of all, triple negative breast cancer is a devastating disease, largely afflicting women that are earlier in their lifespan. There are very few options.
The only option that's really been available in the frontline setting beyond chemotherapy is an immunotherapy. Our study with Trodelvy shows that both with and without immunotherapy, we have the potential to really advance on chemotherapy, which has really, as I said, been around for about 20 years. That is certainly exciting for patients. It is also exciting for the growth of our business because the frontline setting more than doubles the patient population for that and a longer durability. There is much more to the cancer story outside of cell therapy, but I will not go into that right now. The other eminent launch is a medicine in our cell therapy business. We are already in lymphoma and leukemia, but we have a very interesting late-stage product now in late-stage clinical trials for multiple myeloma, which has more than doubled the market of lymphoma and leukemia.
It looks like a very differentiated product in a late-stage trial right now that we'll have some more data on at EHA just after ASCO. It looks like it could really benefit from an enhanced safety profile and strong efficacy in that cell therapy segment. This all saying that in our second bucket of diversifying beyond HIV, we're really on a good path and a good cycle. The last bucket I would say is we've had to disproportionately invest in order to build this new muscle at Gilead outside of virology over the past three or four years. We're now at a level of investment that's commensurate with kind of a company our size. For instance, there's one metric in R&D spend that's around 20% of our sales, which used to be more around 13% or 14%. We've done that investment.
We have really strong both growth potential on the top line, but also we have very good operating margins. We are in the top quartile of the operating margins in the industry because of the areas that we work in, and we intend to keep it that way. In other words, leverage is coming back to our model after a time, a purposeful time of investment over the past couple of years. We remain committed to the dividend and our dividend policy and growing that dividend with this strong financial base. Finally, we will do more ordinary course business development moving forward because of the size and the strength of our portfolio. That is kind of in a nutshell, I think, why the Gilead story is interesting right now.
Wonderful. That's a great kind of summation of the business. I'd love to take a minute to zoom back out to the sector as a whole.
Sure, sure.
Because I think the sector is under real pressure at the moment.
Sure.
Arguably, the Gilead stock has actually stayed a little bit more buoyant than many of the other kind of peers in the industry.
Right.
There is a lot of pressure on the industry. You kind of think about tariffs, you think about MFN with drug pricing, potential Medicaid cuts as we look at the big beautiful bill, PBM reform, HHS changes, kind of strategies within the organization for the agencies changing in terms of what is acceptable now or what do they see as the bar, but also just straight cuts to those organizations too. As you think about Gilead specifically and your business, how do some of those kind of relative risks rank for you? Because it seems to show up quite differently for each company.
Yeah, I think you're right to point that out. I do think that everything I just said, for me, the best defense is a good offense, particularly in times of uncertainty. Having the type of portfolio we have with very low patent exposure, strong portfolio, strong fundamental balance sheet, and underlying dynamics help us regardless of what happens, I would say. I think that's the reason why we are performing better than the sector significantly over the past 12 months or so. Now, specifically, as we dig into these things, and of course, there's a lot of speculation here on many things, let me just take the tariff issue first. Always exciting news when you wake up in the morning on the tariff issues. Let me just say, we split it out into two different segments.
Here, I think we also have a bit of differentiation on one of the segments. We talk about non-sector specific tariffs. Those are the general tariffs associated with the construction that we do with steel or the chemicals that we buy for our labs. What we said at our first quarter results is that, while those may be under question after yesterday's announcement, we feel quite confident in being able to navigate those tariffs within the nature of our business, within our guidance for 2025. We can do that because of our balance sheet and our income statement. Also, we're getting a slight benefit on FX headwind or we have some FX tailwinds that also help us offset those. Those are, I think, less of a concern for us in the short term.
I mean, I would start by saying every dollar that goes to tariff is a dollar that could be spent in new innovation or returning back to shareholders. That is important that if we can avoid those, I think that would be important. Secondarily, for the sector specific tariffs, one of the reasons we have been called out in general by analyst reports and others is that while they are unknown right now, what they could be, we are likely less exposed. The reason we are less exposed is because we have, as opposed to a lot of our peers, the vast majority of our intellectual property in the United States. In fact, about 80% of our intellectual property is in the United States. The reason that is important is because when you transfer medicines from one country to another, it is based upon a transfer price calculation.
We transfer our medicines into this country at a relatively high price because our IP is held here. And we're also a good taxpayer in the United States compared to the large portion of our industry with a marginalized tax rate of around 20%, which is differentiated. So our structure is different. We benefited from the first Trump administration by repatriating quite a bit of our IP. I think in general, from a sector specific tariff, not that we're unexposed, but we're less exposed. I think that's also why we're working on those. We fundamentally believe that those are not a good idea and we'll continue to advocate for that. Then beyond that, I mean, let me just talk about the FDA quickly because I know there's been a lot of speculation around the FDA.
Some of our major products that I just spoke about, Lenacapavir for PrEP, for instance, we have not experienced the difference in the way the agency is reviewing our medicines. It is hard to tell whether that is just because of the nature of our medicines getting a priority status at the FDA, and they do have priority status because of the impact that they have for patients or something else. As of now, all I can say is that our review processes are going as expected. Lenacapavir for PrEP is one, just to put that on the table because it is the most eminent one. It has a so-called PDUFA date or approval date by June 19. Everything is on track for that approval by that date, and we will see how that goes. Other interactions we are having with the agency.
While a lot needs to unfold at the FDA and we're advocating, obviously, for good staffing there and transitioning, right now that's worked out quite well for us. Maybe the last thing I'll just touch on and then over to you, Courtney, is the so-called most favored nation. There have been two executive orders out of the White House that are really quite different. One was in favor of things like PBM reform and fixing what's called a PIL penalty, which for those of you, it's a technical aspect of the Inflation Reduction Act, which for a certain segment of products, there is Medicare negotiation. There are certain category products that are negotiated 13 years after launch, and there are certain categories that are nine years after launch. Small molecules are nine years and biologics are 13 years. It doesn't make any sense.
In fact, small molecules are some of the most efficient ways to deliver healthcare, particularly to underserved patients. We have very strong support within Congress for this, and thankfully also in the White House to try to take it nine years and convert it to 13 years. We'll see. That is kind of a positive executive order. Still, there's no certainty on any of those things yet because a lot of those things have to be in a month's legislation. There is a second executive order that came out that is on most favored nations. The concept of the U.S. paying higher drug prices than the rest of the world and how do you try to square that circle. It's a perennial issue. It's one that we've been dealing with for a long time.
Part of it has to do with the structure of our U.S. system that is very different than the rest of the world. We're the only country of the world where 50% of every dollar spent on medicines goes to people that don't invent the medicines. That's unusual. No other country has that structure. It is really an apples and oranges comparison. What I would say is that we want to be productive here. As both a company and as an industry, we want to lean into these discussions. We understand the topic. We have ideas for how we might be able to solve it. I fundamentally believe at the end of the day that the administration is not interested in penalizing one of the gems of American industry. I mean, we are clearly the envy of the world, biopharma in the United States.
More than 70% of global investment, my global peers that have headquarters in Europe or in Asia, more than 70% of the global investment in the industry goes in the United States today. Why would you want to disrupt that? There are also national security issues, obviously, associated with China and having drug supplies and other things. I think there is a lot to work on with the administration. We also have to be very clear about what is a bad idea.
Absolutely. I think kind of this notion of finding common ground seems to be something that the entire industry is behind when it comes to this administration.
Yes, very much so. We want to be at the table. We want to be a part of the solution.
Absolutely. In terms of, and this is a question that just comes through, and kind of everyone speculates on how big is that difference in price between U.S. versus ex-U.S.. I think we heard from Moderna this morning that on vaccines, it's often much more comparable than perhaps for other medicines. Is there anything you can share about your exposure relative to others? I know this is a difficult question to answer.
No, it is. It gets back to this kind of what do you compare? I think that's important. It is very different medicine to medicine. In some cases, it can be 10 times more in the U.S. on a pure face value, kind of if you like list price kind of perspective. In other cases, it can be five times. The important thing is I think that you need to correct some of those apples and oranges. We do provide discounts here in the United States, significant discounts to the government, to the 340B system. I think as a starting point, you have to start at kind of a net price in the United States. Likewise, I think when you go outside the United States, you do have to factor for different GDPs. I mean, let's just take France.
I mean, it has about half the GDP of the U.S. You need to kind of double that price to get. I think the differences are often conflated and confused. What I would say is that obviously there's little traction in Congress for a legislative approach to MFN. We can talk about that if you want to. Most things that could be done today could be done through kind of the administration or through administrative action. Those things are largely done through CMS or the Government Payer Association. They're largely done through things like demonstration projects. I would say that because, and back to Gilead, because we're in a launch phase, right?
We're launching so many products in the short to medium term that if you're launching a product into an environment where you may understand how MFN is to be applied, you can make different decisions about how you launch that product outside the United States to reduce the impact accordingly. We do that today, by the way. There are many medicines that we as a company and other companies don't launch in certain countries because we just can't get the level of value. It's unfortunate. We always put the patient first. There are some countries that make it impossible to launch. In a forward-looking basis with a young portfolio and a young product, that's how we think about being agile and adaptive, depending if anything does come out of the MFN.
That makes a lot of sense. A bit of optionality in terms of how you play things going forward if there is a new world order, perhaps. The next question I wanted to ask, and you touched on this a little bit in your opening, is kind of this diversification strategy. It feels like if we look back perhaps 12 months, two years ago, that was very focused on oncology. It feels like perhaps if we look back more over the last six to nine months, the conversation has been diversification within HIV, but also diversification outside. Perhaps the size or the quantum of the bets that you're making and the cash that you're having to outlay to make those bets is also changing.
Can you just talk a little bit about kind of how the strategy has evolved there and perhaps where you're at now and why it looks a little different today than it did two or three years ago?
Yeah, and I like that you articulated diversification within HIV and outside of HIV. It's hard to overstate the importance of diversifying within HIV. I mean, HIV is a disease that is still growing throughout the world, unfortunately, and particularly in certain parts of the world, but certain parts of this country too, which are really important. Why it's important to diversify within HIV, just to give you some of that dynamics, is that first of all, in the treatment side of the market, there's still about 40% of people in this country that have HIV that are not virologically suppressed. If you're not virologically suppressed with HIV, you can still pass the illness on to others.
There's opportunity within the treatment market, which is the vast majority of our revenue today, to not only give optionality to patients with Biktarvy, a one pill once a day, to less frequent options. We're working on everything from once- weekly pills to once- monthly pills to once every three and six months subcutaneous injections on the treatment side. I think that's important optionality for patients, but it also allows us to actually access a part of the market that we can't access today with a one pill once a day. That's important for the longevity of our business over time. On the prevention side, just to put this into context, we have a very effective—Gilead was the first company to have a prevention medicine. It's very effective if you take the pill once a day. It's 99% effective in preventing HIV.
The concept of people that do not have an illness in the prime of their life taking one pill once a day medicine, you can imagine that not a lot of people do that. People that do that are not very compliant. Of the somewhat conservative 1.3 million people that are identified by CDC today that could be at risk for HIV, there are only about 400,000 people today that are on some type of a PrEP regimen. Of that 400,000 people, if you do the averages, there is only about 50% compliance on that. There is a huge need here for finding a medicine that can really expand that. That is why diversification in HIV has been so important. Lenacapavir for PrEP is a medicine that has shown to be 99.9% effective at preventing HIV across two large studies with a twice a year injection.
I mean, and we just presented data at a medical conference this year that suggests that we can get to a once a year injection as well. Those studies are going on right now. We are about to launch the twice a year injection. The ability to expand that market over the next several years in comparison to where we were five or six years ago, that whole diversification within HIV has been fundamentally important for us. I think people now understand because there was always the question, well, Dan, Gilead, is your HIV business durable? That was a question that meant, could you continue to come up with innovation that would meet people where they are? Is your patent life long enough that it is durable? I think most people now understand why that is so durable, latent to the 2030s.
Beyond that, of course, I think your question was around the diversification beyond that. I think we've really come a long way. As I've said with both Livdelzi, Trodelvy, cell therapy, it's not just oncology, you're right. We also have now a really budding inflammation portfolio. Livdelzi is kind of the beginning of that. We have very interesting molecules in the phase two development on both oncology and inflammation mechanisms that could really provide significant advantage to a lot of inflammatory diseases like alpha-4 beta-7 or IRAK4 or STAT6 that I think are kind of the next wave of innovation for Gilead. Whereas HIV is the here and now and the future. Oncology is the here and now and the future, but growing slowly. Inflammation is kind of what could come in the next five years to the next 15 years.
Those are the cycle times we have to think about in our business on the portfolio side. We're not done yet. I mean, we'll continue both through our own research efforts, as I said, through normal ordinary course BD to continue to supplement that in those three therapeutic areas.
Absolutely. Perhaps on that BD point, kind of as you think about M&A, I think there's been an evolution of going from perhaps the Immunomedics deal and others that were kind of really sizable transactions to more of the business as usual that you're now talking about. Can you define what kinds of deals are interesting to Gilead at the moment? What are the parameters you're looking for? Does the policy uncertainty impact kind of what might be on the table or not? Does it raise the hurdle rate or anything along those lines? Can you give us a frame of reference there?
Yeah, absolutely. I mean, there's always risks from a regulatory perspective or an FTC perspective that you have to factor in. Maybe just to be clear, we had to put a lot of capital to work in the first five years of my tenure. In other words, you have to get a footing in some of these new therapeutic areas. You can't just grow it through internal mechanisms. That's why we put quite a bit of capital to work, and particularly in the oncology segment in deals like Immunomedics in the past. Fast forward five years, we're no longer in that world where we need to put that type of capital to work. We have a very robust portfolio. We draw on the line very high on our R&D spend. We're disciplined about that. I love that because that means there's things you aren't funding.
There's always got to be things you're not funding because otherwise you're funding things that aren't going to be transformational accordingly. That's where we're at right now. That means both the external BD and the internal innovation competes for each other at a high bar level within the organization. It also means you deploy less capital externally. The way we think about it is you always have to be feeding the early part of your pipeline. That's a relatively capital-efficient way to apply resources. We put a rough plus or minus $1 billion to work on things in late research or early development a year. Sometimes you may do a little bit more, a little bit less. Back to the dynamics associated with the administration or uncertainty.
When your cycle time on any of those things is 10 years, you can't be fixated on a current administration. Don't worry about that at all. Back to the later stage deals, as I've said, we do think it's healthy for a company our size to be putting capital to work. We've said if you find the right opportunities in late stage development or potentially even on market, that in the sweet spot of mid-single digit billions, every couple of years, if you find an asset like that, you bring it in. I mean, just to be tangible, one example of that is last year when we bought a company called CymaBay for about $4 billion. It was in liver. It fit really nicely into our commercial channels. We had a lot of synergies there. It's already off to a really good launch.
I think that's the way we think about putting late stage capital to work. I mean, back to are there opportunities or are there risks associated with what's going on in the internal environment? Obviously, biotech valuations are down. That presents an opportunity for us on the one hand. On the other hand, I don't think it's going to fundamentally change our bar for innovation. I mean, it may make things a little bit more cost-effective on that front. The innovation still has to succeed at a high level better than something you have internally. It's not like all of a sudden because valuations are down in biotech, we're going to do five mid-single digits. There aren't that many assets out there. There aren't that many assets that are interested out there.
I do not think fundamentally that the current environment, whether our cycle times really grossly affects our capital. I know it does to other participants in our industry, but not to a large biopharma like ourselves.
Absolutely. Certainly with that long duration, I think it makes sense, particularly if you're buying at the discovery or phase one phase. At phase one stage, you've got a long time to go.
Right. Usually those are launch products where if MFN does come into play, you have a chance to price it from the launch in a way that is commensurate with whatever is going on in the environment at the time.
Absolutely. I want to pitch a shift to Lenacapavir. I think we've touched on it a couple of times, but it's a particularly important part of the Gilead story at the moment and the next big launch. You mentioned the PDUFA date. Great to hear that everything's on track there with the SCA so far. Kind of we've had a question come in through here. What's the long-term ambition with Lenacapavir? And I've got a few other follow-ups that I'll follow on, but I think maybe start with that ambition.
Maybe just to put this into context, and I give credit completely to the Gilead scientists on this, but Lenacapavir was the breakthrough medicine of the year last year in Science magazine. If you do not have to believe me, you can believe a third-party reference. It is quite an extraordinary molecule, even for a company that has been working in HIV for three decades because this molecule has been worked on for 16 years. While most of the medicines we use in HIV attack the viral enzyme, not to get too scientific, this is a completely novel mechanism. It attacks the coding of where the viral enzymes are. It is a so-called capsid inhibitor. It is the first ever capsid inhibitor that has been created.
It was thought of as a non-druggable target, which is why it took 16 years to work on because the Gilead scientists said, "No, no, we don't believe that." Not only were they able to drug the target, which is one task of scientific, we call it a unicorn strategy sometimes, they were able to get it to this very long half-life. Again, it takes really talented chemists in this case because it's a small molecule to try to find a half-life that you could actually only dose a patient or a person in this case every six months and get the efficacy that we got.
I think the entire world was even stunned at the level of efficacy that we got last year with two very large studies with thousands of patients where we showed 100% of patients in one trial did not get HIV as compared to the control arms. It was about 95% in the others. The combined is about 99.9%. It is actually quite extraordinary. It is hard to overstate how important this is for people living with HIV or people that are at risk of HIV. I would just say, I do not know if I said this already because I have had so many conversations, the PK profile is such that we believe we can get this to a once a year medicine as well.
That was really exciting about it.
Yeah, it's really exciting. If you can imagine a medicine, and we don't equate it to a vaccine because vaccines are not 100% effective. I mean, it's a medicine that has extraordinary benefits in the developed world, in the developing world. We have a keen strategy to make sure that everybody in the world that wants access to this can get it, working through voluntary licensing and generic manufacturers for 120 low and middle-income countries because you never get to extinguishing a disease if you only extinguish it from one continent. We're quite clear on that. Yes, it's critically important to help all those people that are getting HIV today. In this country alone, 700 people get HIV every week. 100 people die. 53% of them are women. A lot of them are underserved communities in the rural South.
I mean, and because the one pill once a day has not been, it hasn't met people in the stigma and discrimination associated with this disease where it needs to meet it. It is critically important in preventing the disease, but it's equally important. It is the backbone to all of our long-acting treatments because this molecule is so unique that we're formulating it in once-weekly versions, once-monthly versions, and once every three and six-month versions. Now, the key in treatment is you need a partner molecule because you can't have a single agent like you can in prevention. You need a partner molecule because of the nature of HIV and resistance.
We have a very broad program, as I said, up to nine potential launches across those ranges of different conveniences for patients and things that will help those people that aren't on it today between now and 2033. It is the backbone of our conviction when we say that HIV business is durable well into the late 2030s. It's Lenacapavir-based.
Absolutely. It's very exciting. I think kind of the data is very, very compelling. As we think about this near-term launch for prevention after the June PDUFA date, what will be key to a successful launch, number one? Number two, Descovy is currently used in this segment for prevention, that one pill once a day, not in an adherent way, though. Will Descovy in this segment go down to zero?
I think Descovy will continue to have a role. Some people may prefer to take a once-a-day. We think the vast majority of the people would prefer to have it be less frequent. Back to the launch dynamic. This is important. I mean, this is disease-changing type therapy. And it's something new and different for people. I mean, oncologists are used to giving administration in their office. HIV physicians or general practitioners aren't. We've got to wrap around to make this as simple and as easy as possible. I mean, the first thing is it's a subcutaneous injection. It's not an intramuscular injection. It's a bit easier to administer. Secondly, we have teams of people that are designed to make sure the practice that administers this medicine has everything taken care of.
Insurance coverage, making sure they get the medicine at the right time for the injections, reminders for people to come back every six months. If there's one thing that Gilead is very good at, it's understanding the HIV community of practice, working with advocates, working with patient communities. I can tell you, I mean, getting that right is really, really important in launch. Of course, payer coverage is very important. As usual for, I mean, PrEP in general enjoys a very high payer coverage. Today, Descovy has more than a 90% payer coverage here in the United States because of the benefit it provides. We expect that to be the same for Lenacapavir. In the first couple of quarters, as usual, as you know, it takes a little while to get that payer coverage up and going.
Having said that, because of the extraordinary nature of this, we believe we'll be at about a 75% payer coverage within six months and probably 90% payer coverage in 12 months. Getting that payer piece fixed out, making sure providers understand what it is, and then eventually getting to new audiences that we haven't gotten to. I mean, the low-hanging fruit, as you point out, is to convert people that are perhaps non-compliant or they're one pill once a day to something they can be compliant on and be better protected on. Of course, we don't stop there. We go to new populations of people in this country. Some of the populations I've already mentioned here today. Globally, this is largely a U.S. market.
Globally, countries outside the U.S. are now very interested in this, even more so than they were with the one pill once, much more so because they see that they can actually reduce the incidence significantly in their market with this because they know adherence is more prescribed. They can achieve the adherence they need. If you achieve the adherence you need, you reduce the number of people in your country with HIV. For every person that's infected in this country, it's about $1.1 million of lifetime cost with HIV. If you protect somebody, perhaps not their whole life, but in the period of time where they have multiple sexual partners and you avoid that cost per patient, it's a very strong pharmaco-economic story for other countries as well where it hasn't been as strong with the one pill once a day.
We see the ability to expand this well beyond the United States as well.
Absolutely. I think the points that you made around the kind of practice-changing nature of this opportunity, I was quite impressed at the HIV day when kind of Johanna, I think, got up there and detailed all the different things that you're working on. It feels like this is a really reinforced plan. Perhaps there's a risk that you're slightly over-investing, but you'd rather over-invest than kind of face the risk.
Agreed. I think I was at the launch meeting last week. The team is ready. It's been the place for people to come and want to work in HIV. If we are slightly over-prepared, I'm okay with that.
Fantastic. Wonderful to hear. Another kind of HIV opportunity that does not get as much airtime is the Biktarvy plus Lenacapavir combination. This perhaps is not coming and bringing kind of necessarily the long-acting option, but it is your first doublet coming into that treatment space. Arguably, this could be used in many more patients than just the kind of clinical trial set that you are currently targeting. Can you talk a little bit about where else this could go?
Yeah, I think it's very exciting. It's the most nearest term of kind of our oral version of Lenacapavir. And Biktarvy, to be clear, is the standard of care today. It's a three-drug regimen. It's a three-drug regimen because those mechanisms require three different mechanisms to get the level of efficacy and the resistance that we have. Because Lenacapavir is a brand new mechanism and it works differently, we've seen in our data so far that a two-drug regimen can be as strong potentially as Biktarvy for some patients. I think the differentiation factor for us is we're running studies in both switch patient populations and naive patients.
This will give optionality, I think, for patients that either may prefer a two-drug regimen or may, for whatever reason, need to switch from Biktarvy to another Gilead regimen that is novel, that's new, that has strong data. We are expecting that data in the relatively near term. Obviously, moving from that to once-weekly to once-monthly pills is kind of the next generation of those Lenacapavir backbones.
Absolutely. I think something that I've heard throughout the conversation is it feels like you're really looking to provide that optionality for the patients that exist rather than pick an option and kind of run after that with your innovation.
Exactly. I mean, it's definitely not one-size-fits-all in HIV. There may be some people that really want to keep taking that daily pill. We think that's going to be lower and lower because if you can get into a mechanism where you're taking your pill once a week or once a month, I think compliance is still strong with that. It gives people optionality. Some people may like injections and less frequent, and some people may not like injections. The more optionality you can give, first of all, the more likely people are to stay on their medicines, stay virally suppressed, and not pass the disease on, which is really important. You can also get to patient populations that just aren't even taking a pill once a day. Both those things are critically important.
Absolutely. I want to pivot to the CAR-T space because this is another place where you are a leader as a company. You have kind of began in the lymphoma space and kind of mastered the manufacturing. Perhaps there hasn't been quite as much advancement in the pipeline yet, but we're beginning to see that come through. I would love to hear a little bit. We've got kind of anito-cel is kind of the next big thing on the horizon. There was an update last quarter with the MRD, which is the minimal residual disease endpoint being added to the trial because multiple myeloma tends to take a long time to read out, so potentially a faster path to market.
Do you think that still stands given kind of the changes we've seen at the FDA and perhaps differing perspectives evolving and what's acceptable as an endpoint for kind of trials to be approved under this particular administration?
We do. Again, we're starting in kind of fourth-line multiple myeloma setting where single-arm trials, particularly when you have an improved safety profile with at least as good efficacy. I think that's been a tried-and-true path at the FDA. We're not seeing anything there in this patient population that would adjust our thinking on that, nor are we hearing anything from the agency. When we go up in lines of therapy in multiple myeloma, those are randomized trials. I think, and you pointed out the potential advantage of having a minimal residual disease endpoint, which for those is an earlier approval endpoint that then is followed by other clinical manifestations of the disease later on to represent an ability to get a medicine sooner. No, I think we're really excited about it.
You're going to see some ongoing data from that as we go throughout the course of this year. It continues to be robust and hold up in our mind. We could have this approved as early as next year in the fourth-line setting. The other piece that's important is not just the medicine, but cell therapy. For those of you that may not be familiar with it, the infrastructure that you need for cell therapy is a competitive advantage and the ability to have turnaround time. What cell therapy is, it's really the ultimate personalized medicine. In other words, every medicine is an end of one from the patient. You literally take T cells from the body.
You ship them to one of our manufacturing facilities, of which we have four around the world, and then they're shipped back to that patient and infused back in the patient's body. We have a competitive advantage because we have the largest manufacturing network, the shortest turnaround time. You need to have a short turnaround time because people are put in immunocompromised state while they're waiting for their cells to come back. You want to make sure you get those back as quickly as possible so you get the best clinical benefit. We're world-leading there on our lymphoma and leukemia business. Our multiple myeloma asset, the anito-cel, will go right into that infrastructure and into that process, into that turnaround time that we continue to kind of decrease in time.
We think there are significant competitive advantages, both in terms of our ability to fulfill. I mean, today, in multiple myeloma, the demand cannot be fulfilled with the current incumbents out there. We really think that with our ability to come in with our world-class cell therapy position, we will be in good shape. Beyond that, we are not done with multiple myeloma or moving up the lines of therapy. We have some interesting data coming up in ASCO on kind of the next generation of leukemia and lymphoma assets, and also even some early data on a solid tumor in glioblastoma that is really interesting. We are doing work on autoimmune disease. Cell therapy, and the reason it is so important is because of the clinical benefit you get.
I mean, just on the approved product today, about 50% of patients are cured with one treatment, which is extraordinary when you go back to pre-cell therapy in that same disease state. You had, on average, about six months to live. These are important therapies. They are transformational. We believe we can bring these to different disease states and earlier lines of therapies to get even more cures out of this, not only in cancer, certainly hematologic malignancies and solid tumors, but potentially now, as we see the play out in other disease conditions like autoimmune.
Absolutely. There is lots of shared biology between kind of so many disease states out there as well. We have had a couple of questions come through that I want to make sure we hit on as well. One of them kind of comes back to a theme that I think we have seen through many of the conversations over the last couple of days is AI. The question here is, can you help us understand a little bit more about how AI is helping to improve either the timeline or cost of drug discovery? Certainly, the way that I think about it is you have got an efficiency opportunity because you have got an innovation opportunity as well. It feels like lots of companies are going after efficiency first. It is easier. Then there is innovation as well.
Maybe you can tell us a little bit about those two and what you're seeing with Gilead.
I agree with you, by the way. First of all, I mean, it affects every part of our business. I think there's a lot to do on the efficiency case. Most of our use case examples, as we call them in the company, are around efficiency. I mean, we're getting good leverage in our clinical trial placement and construct, going to those sites through AI and through merging databases that allow us to pick the right sites and therefore recruit faster. I mean, it is efficiency, but it's also innovation to a certain extent because if you get that medicine to patients six months or a year sooner, it's obviously better for patients. It's certainly better for shareholders. I think it's hard to tease those things apart. Those are what I would call not easy, but low-hanging fruit cases.
We do the same thing in our commercial organizations and some of our manufacturing processes. I think the holy grail of this is, can it help you discover medicines that you may not have been able to discover without the use of AI? I think we're still at the early stages there. Obviously, there's a lot of capital flowing into that area. We have a lot of partnerships. We're doing a lot with that. There's the tried-and-true things like, can you accelerate chemistry protein folding using AI? Which, again, I don't know whether you'd call that innovation or efficiency. In some cases, it could be both, but that could also shave six months off of a long cycle time. There's antibody engineering that can be inflected with AI.
There is just a lot of experimentation going on and whether it will help us more fundamentally identify new targets or find different ways to drug targets. That is still early. We still need humans and a lot of humans. The more we can enable humans to focus on the most intractable scientific problems, the better. There is the whole back office efficiency, which, of course, we are working on.
Every industry in the world is kind of treating it that way.
Exactly. Diffusion is the name of the day. We're diffusing those principles into our business as well.
Fantastic. Just because you were talking about six months here, six months there in terms of opportunity, kind of as you think about some of the things that you've deployed today, how much time do you think you're potentially saving on an average life cycle?
That's a good question. I don't know that we've actually done all that analysis. If you do it across a weighted average portfolio of probability of success, I don't know that we've run those numbers yet. It is probably hard to do on the aggregate basis. I think it's probably easier to point to examples. For sure, it's starting to reduce the time to market.
It certainly sounds like it's in the months to low years kind of range.
Yeah, I would think so. Yeah.
Fantastic. You also mentioned, and this is another question that's come up a couple of times, and it's come up in a couple of the different conversations I've been in, as you think about the comment you made earlier, 50% of drug spend in the U.S. doesn't go to manufacturers. I think different people quote different numbers, 51%, 60%. It's above 50%. We know that. Do you have any views on how that's split across different players, kind of where that gets distributed? Is there a way that kind of list price becomes net price and basically there are savings in the environment, but yet the pharma industry doesn't get hit from a revenue perspective?
No, yes. There are third-party published studies that break that more than 50% down to the different players. I think about a quarter goes to kind of the PBMs of the process. Other things go to other kind of government channels as well. Yeah, I think there are great sources on that. Again, that is aggregated information. Sometimes you can have 90% going to the middle man. Sometimes you can have 30-40%. What was the second half of your question?
The second half of the question is, is there an opportunity with kind of pulling list price down to net price where we get savings from drugs?
I think there are. There has to be cooperation in the whole healthcare system. In other words, let me just give you one example. I know other companies can point to examples like this. During the hepatitis C times, we had both a branded product and an authorized generic product. The authorized generic product was more priced at the net price. Because of the nature of our system, there was very little uptake of the branded generic, a different purchase price because there was much less margin to be made by that 50%. I mean, if it is 50% of $100 or 50% of $50, unfortunately, there are a lot of perverse incentives in our system that lead the folks in the middle to prefer the high-priced medicine. Obviously, that is not good for the healthcare system. It is not good for patients.
Could I perceive a world where you could get through a net price? Yes. There has got to be some type of, probably not cooperation, but regulation that allows those savings to be passed on to get us there. Again, we are very open to those types of concepts if it truly helps the fundamental system. Most importantly, the patients or employers that are paying for healthcare coverage, if it helps them, then yeah, we are all in.
I think this comes back to that comment you made earlier about finding kind of constructive ways to collaborate with the administration and finding opportunities to actually really set the healthcare system straight and find a path.
Yeah, I'll just leave on this note. I think I won't speak on behalf of all my peers, but I think there was a time when our industry was accused of only playing defense. I think we're very much leaning into solutions. Some of those solutions, like in the IRA, like what's affecting our company today, like Part D reform, cost the industry money. At the end of the day, that helps the patient out-of-pocket costs go down. As an industry, I think we're very into those impacts on our industry if it helps. What we're averse to is things that impact our industry that don't do anything to help patients. I think those things, that's not productive for the industry, and it's not productive for the problem we're trying to solve in this country.
Absolutely. Thank you so much. We really appreciate the conversation.
Thank you very much, Courtney. Good to be with you.