Used in about 45% of HIV prevention patients today. It's a once-daily pill with two medicines. The daily orals work really well. The challenge is that people that don't have HIV do not take the pills on a daily basis, so you don't get the benefit that you would get if people stayed on the pills every day. It's really challenging. The adherence is very low for the daily pills. That's where you see an incredible difference in the clinical data, which was actually a head-to-head study of the six-month injection versus the daily orals across all these different patient populations. The clinical data, as I said, is very strong. The pharmacoeconomic story is also very strong to promote the shift. Payers know that they're getting the benefit that they're paying for because you're ensuring compliance over the six-month period.
The last thing I'll say here is this is all about building the market and kind of changing prescriber habits, physician habits, getting them used to the new distribution of an injectable versus the orals. It takes time. The launch is off to a great start, to your point. We're really pleased with our progress. A couple of things that I'd highlight are J-code for reimbursement in the U.S. came as effective October 1. It came a couple of months earlier than expected. We hit 75% covered lives, and that's both across commercial as well as government payers a couple of months earlier than expected as well, which is great. We guided to roughly $150 million of sales for the first half of this year, including a little less than $100 million of expected sales for the fourth quarter. It's off to a great start.
This is just the beginning of what we expect to be kind of a steady, consistent, durable growth in this business and Sunlenca, in particular, over time. Not that different for me. I joined Gilead nine years ago. We were launching Biktarvy at the time. You look at Biktarvy today as we had $3.5 billion of sales in the third quarter. You have just seen steady, consistent, durable growth from the best-in-class HIV treatment. Sunlenca, it is a similar dynamic in HIV prevention where we think you have a best-in-class profile and expect very meaningful, consistent, durable growth over time.
YesTugo, obviously, it was twice a year by injection versus the oral options. You mentioned adherence, which leads to better clinical outcomes. Can you just walk us through your strategy on how you educate both patients as well as physicians on the benefits of a twice-yearly injection versus the once-daily? Because I think it's like in terms of convenience, yeah, anything you walk us through.
Yeah. I mean, the clinical data is so obvious. To your point, it takes time to change habits, both with the physicians and with people at risk of getting HIV. It is just starting. I mean, we have built out our sales force in HIV prevention. We have healthcare educators. We are working practice by practice with the physicians that treat people at risk of getting HIV. You have seen broad PrEP advertising. Over time, there is typically a six-month window under some of the guidelines in terms of direct-to-consumer marketing for new launches. At some point next year, you are likely to see Sunlenca specific advertising campaigns that should further increase awareness over time. It is all of those things. It is working practice by practice, raising awareness generally.
When you step back, I'll use the third quarter as an example of the progress because I think it's one thing to focus on Sunlenca. It's also important to look at the total HIV prevention business with an understanding that most of that should switch to the long-acting over time. If you look at the third quarter, Descovy grew 20% year over year. If you look at just HIV prevention, which is about 75% of Descovy sales, Descovy grew 32% year over year in HIV prevention. You add on Sunlenca, our HIV prevention business collectively grew 42% year over year. Again, that's in the first real quarter of Sunlenca launch.
It really underscores the incredible growth that you're seeing in the HIV prevention market, which even though there have been HIV prevention options for people at risk of getting HIV since 2012, the market is really just developing now that you have multiple options, including the long-acting therapy. It's in early days. We estimate that today there's maybe 500,000 people that are on HIV prevention therapy. The CDC just updated earlier this year their estimates to estimate that at least 2.2 million people in the United States would benefit from HIV prevention. Of course, we think the market opportunity could be much larger than that. When you look at in the United States, there's about 10-12 million people each year that are diagnosed with a sexually transmitted disease.
If you think about in that context, again, it underscores, I think, that we're at the beginning of building out the HIV prevention market.
Can you just talk us through, you updated your guidance for the full year for Sunlenca sales. I think it implies continued robust growth into the fourth quarter, building off of a strong third quarter. Maybe just zero in on where you're seeing that demand from in these early days of the launch. Is this patients switching over from the oral once-daily options or these patients that are new to PrEP? Where are you seeing these early wins?
Yeah. There have been a number of things in the launch that have surprised us to the upside. I mentioned kind of the earlier J-code and the 75% coverage of commercial lives or of all lives, covered lives, coming earlier than expected, at least close to three months earlier than expected. The other thing that's been encouraging is when you look at the mix of where patients are coming from. We've seen, in particular, more naive patients, so patients that are naive to HIV prevention starting on Sunlenca and more patients coming from generic Truvada than we expected at launch. The largest bucket are people switching from the other long-acting injectable option for HIV prevention. The second largest bucket is people switching from Descovy.
We have seen many more people that are naive to HIV prevention and coming from generic Truvada than we would have expected at this stage of launch, which bodes well for kind of the long-term transition of the market that you are highlighting. Again, it is early days in the launch. We are not even six months into it. We are encouraged by what we are seeing in terms of where patients are coming from. As I highlighted earlier, the market is really just beginning to kind of form and grow, not only in the United States, but then you have the opportunity to grow the market outside of the United States.
Just on that point, you mentioned about, I believe you said, 500,000 patients today in that PrEP market, but could expand by multiples years into the future. Kind of just bridge us. How do we get to where we are today to that aspirational target of, I think you said, over 2 million patients?
Yeah. It's really building awareness. To your point, when you think about launch strategy, what we've always highlighted, our Chief Commercial Officer has said repeatedly, is focus on, at first, the launch, the patients that are on HIV prevention therapy today. Again, the numbers vary. Today, most resources suggest 500,000 or more people are on HIV prevention. Those are the people that already have an identified need, that are already taking HIV PrEP. Some of them, about 5%, are on long-acting alternatives today. That's the primary focus. That switch market will be the primary focus for the early stages of launch. Over time, building awareness of the HIV prevention, the every six-month alternative, the clinical data for that broader patient population.
Using the CDC update, for instance, historically, in the United States, the CDC focused on men having sex with men and IV drug users. Their most recent update where they added another million people to their estimate that would benefit from HIV prevention now increased the number of people in those populations, but also added heterosexual women, for instance, identifying the fact that I think in the United States today, roughly one in every five HIV infections is in a heterosexual women population. There are a number of underserved populations, whether it's people of color in the Southeast, heterosexual women, where you see greater growth than people might expect. Again, we'll start with the people that are on PrEP today and work to expand awareness for people that would benefit in all of these different populations.
Maybe just switching gears to the other side of the HIV market that you're certainly well entrenched in treatment. Biktarvy, the patent settlement offers long-term stability. I guess, how does this extended exclusivity sort of influence your long-term long-range plannings? I know you're working on a lot of other combination options within treatment.
Yeah. I guess I would just step back. I mean, the update that you're alluding to is a patent settlement earlier this year that highlighted that the earliest we would expect to lose exclusivity to Biktarvy in the United States is now 2036. Previously, the expectation was 2033. We have a very deep pipeline of next-generation HIV treatment alternatives, most of which are long-acting alternatives for patients. We have eight programs in clinical development, including one yearly prevention alternative. When you look into your question on HIV treatment, there are seven different programs in clinical development today. Six of those seven are long-acting programs. I think six of the seven are also wholly owned. One is a partnership with Merck. All of them will give patients with HIV new alternatives. Biktarvy is an incredible medicine.
There's a reason that today 52% of people in the United States that are treated for HIV are on Biktarvy. I think it's 67% or 68% of new patients start on Biktarvy. It is absolutely the gold standard for a daily pill. Our belief is that we can replicate that efficacy and safety in weekly orals, monthly orals, every three months injectable, and every six months injectable. We are bringing forward the portfolio that'll do that. We were confident that we would bring up to those seven new launches in HIV treatment by 2033. That remains the case. We have an incredible research group that's bringing more molecules into the clinic so we can add to that over time. Of course, some of those may fall out over time.
A lot of confidence that we will have numerous launches coming that will support the further diversification and growth of the business prior to 2036. One of them that I'd highlight is not a long-acting, but it's a really important therapy that's Bictegravir, which is the same integrase inhibitor that's in Biktarvy and Lenacapavir that we talked about for prevention, an HIV capsid inhibitor that is a daily doublet, so two medicines. We had the first set of phase three data a couple of weeks ago in an important patient population. There's about 6%-8% of HIV patients in the United States that are on what we call complex regimens. For many of them, that means they're taking five-11 pills a day because they've developed resistance to some of the older alternatives that are available, typically protease inhibitors or nukes.
We see very little resistance with Bictegravir as an integrase inhibitor, which is why it's such an important cornerstone for HIV treatment. You add Lenacapavir, which also has a very high barrier to resistance. This is a great alternative. It is a big opportunity just in that 6%-8% of patients where you could imagine going from five-11 pills a day to a single pill once a day with very high barrier to resistance.
We have another phase three study reading out in the coming weeks before the end of the year in Switch, which will allow so if roughly 20% of patients will switch off their HIV therapy over time, this will give them another alternative of what we believe could be a very attractive switch candidate for patients to move to, whether they're switching off of Biktarvy or competitive regimens over time.
You mentioned some of these longer-acting options that you're developing in the treatment market. You've talked about sort of a monthly blister pack oral, longer-acting injectable, monthly, quarterly, biannually. Where's that sort of sweet spot in this patient population for what is maybe most convenient?
Yeah. That's a great question. I don't know that there is a sweet spot. This is like when people think of the HIV market with Biktarvy, we found the sweet spot for a once-daily oral pill. What's interesting is when we interview HIV patients, they will have different views on what works best for them. That's why we are really focused on bringing all of these different treatment options forward to meet patients where they are in terms of, for some, it's a weekly oral. For some, it's the every six-month injectable. I would say directionally, the monthly oral combination for treatment and an every six-month injection for treatment probably are the two biggest opportunities of all the things that are in development.
That doesn't mean that the other alternatives are not important and wouldn't have significant opportunity because every patient has a slightly different perspective on what would work best for them.
Gotcha. Maybe we switch gears to oncology, hem/onc, Anito-cel is a very important new product in the pipeline. We're going to get an update very soon at ASH. Maybe walk us through what we should expect to see you guys update us on.
Yeah. I mean, just again, to step back, Anito-cel is a cell therapy, BCMA-directed cell therapy for multiple myeloma. There are two approved BCMA cell therapies for multiple myeloma that have helped transform the second-line plus multiple myeloma market. Anito-cel so far, so you'll present an update on the phase three data, the pivotal data at ASH here in the coming days. I'm not going to, you'll see the data update. What you've seen to date suggests that Anito-cel has the potential to be best-in-class therapy, in particular on safety, potentially on efficacy too, as we see the data over time. In terms of safety, we don't see any of the neurological side effects from Anito-cel that you see with at least the leading competitive cell therapy where you can see Parkinsonism and similar CNS side effects.
There's another side effect that I'm forgetting off the top of my head that you see with some of the competitors. Anito-cel is a completely different construct. It has a different binder called the D-domain. There's less tonic signaling, meaning that the cell therapy doesn't stay on the cell and continue to signal for as long. It may be part of why you see lesser side effects. We're excited to present a data update together with our partners, Arcellx, here at ASH, and then we can talk more about it. We've highlighted the update by the end of the year. We expect to launch in fourth-line plus by the end of next year. It's a significant growth opportunity for our cell therapy business. It's very exciting for patients and really exciting for Gilead and Arcellx.
You mentioned potentially launching in later line. Can you talk to your efforts in clinical development in terms of moving up in the first line of therapy?
Yeah. We already have the second-line plus phase three study underway. We also have a first-line study either underway or expected that's in planning. Absolutely, the plan is to move Anito-cel up into earlier lines of treatment. You see a sizable opportunity. We've highlighted together with Arcellx, and I think this is consistent with what you've heard from the competitors, that if you look at fourth-line plus, it's probably a $3.5 billion+ market opportunity. Second-line plus multiple myeloma for cell therapy is about a $12 billion roughly opportunity. These are really important therapies for a large unmet hematological cancer. There's a lot of room.
If you get into some of the more severe first-line patients as well, it won't be used likely in all first-line patients, but there may be some first-line patients with really quickly moving disease or more advanced disease where cell therapy will be the best option. We will have to see how that develops as well.
Trodelvy, a big win in first-line metastatic triple- breast cancer. Can you just update us on the timeline for regulatory submissions? I guess, at what point can we see a real inflection in the franchise?
Yeah. I think that, first of all, we had two sets of pivotal data in first line triple-negative breast cancer earlier this year that continue to highlight the strength of Trodelvy in triple-negative breast cancer. It just validates the earlier data sets in later lines and helps people understand why Trodelvy today is the absolute standard of care in triple-negative breast cancer. I think we've treated over 60,000 patients in triple-negative breast cancer and then second line plus hormone receptor positive, HER2 negative. We expect the updated label expansion filings are in in the United States. We expect to receive an updated label next year. That is part of the overall when I talked earlier about the breadth of our portfolio and the launches, the launch is underway and the launch is coming. Anito-cel is one of the launches coming next year.
The label expansion with Trodelvy is another launch coming that should drive significant growth from where we are today. If you look at the third quarter, Trodelvy was roughly a $1.4 billion kind of run rate despite bladder coming out of the label last year. You should see Trodelvy continue to grow from here, especially as you get the label expansion. I'm not sure that you see a significant inflection point. I think the right way to think about Trodelvy is sustained durable growth over an extended period of time.
Shifting gears to capital allocation, BD, you're a company that we all know has been very active on the external business development front and bringing in new assets to the pipeline. You've also described yourself as being selective, right, on that front. Maybe can you just elaborate a little bit more on the sort of specific technology platforms or therapeutic modalities or areas that you're prioritizing for future deals?
Yeah. We do a lot of corporate development to your point. I would highlight that we do not have the same need as many of our peers today. We are active in the M&A market. We are active in regular partnering. I will break each of those apart. It is important to highlight that given where we are today with our portfolio, the launches that are either underway or coming, the strength of the existing portfolio, and the lack of any LOEs of substance between now and 2036, we have the ability to be selective. We will add to our portfolio over time with late-stage de-risked assets similar to Livdelzi, which we acquired last year or the year before from CymaBay. That was a $4 billion deal roughly of a late-stage de-risked asset that was a great synergistic fit with our liver disease franchise.
Those are the type of opportunities that we're looking at. We will continue to look for those things. We do not have the same need that we had when I joined the company nine years ago or when our CEO, Dan, joined the company six years ago where we had a much thinner pipeline than we have today. We have the luxury of being able to be disciplined. We generate a lot of cash flow from our business that allows us, and we can reinvest that in R&D. You have seen us increase the R&D investment in our internal research significantly over the last six years. That is really starting to pay dividends as the strategy is delivering now. We will do more M&A, but a very different situation than many of our peers.
In ordinary course business development, every year we do about $800 million-$1.2 billion of ordinary course BD, which is licensing, small acquisitions. We did, for instance, a licensing deal on a STAT6 degrader last year with Leo Pharma that we're very excited about. That's just a great example of the ordinary course stuff that we'll continue to do. We'll continue to be active, but we're disciplined. We have the luxury of making sure that something is both a strategic fit and that the value works for us and our shareholders.
Last May, we had you at our conference in Napa. I think you made some really interesting comments on BD in China. I believe, and we're talking about remembering the conversation in terms of your BD people spending more time on the ground in China and being very active on sort of your pursuit of assets outside of that region. We've seen a number of deals more so early this year than the first half of the year than the second half of the year in terms of some of your peers doing BD in the region. Can you just maybe give us a little update on that six months later on how you're feeling about China and this sort of time that you're spending in that region?
Yeah. I mean, we're still spending a lot of time there, and we're seeing a lot of really high-quality assets. What I highlighted is there's been this fundamental shift in the last five or six years from the assets that we used to see in China that were more follow-on, me-too assets, less innovation, more of kind of specialty pharma generic to really innovative assets. Anything that we are looking for, you can typically find a number of different permutations of that in China. Whether that's bispecific cell therapies, small molecules. I didn't answer your question earlier, by the way. We are looking across all of those areas. I'm sorry. We are absolutely focused on virology, oncology, and inflammation across small molecules, antibodies, bispecifics, degraders, cell therapies. We have all of those in our portfolio today.
We have experts that are really skilled scientists focused on all of those areas. We are seeing all those not only in the United States and Europe, but also in China. What I highlighted earlier this year is that five years ago, maybe 5% of what we would be prioritizing for corporate development would be out of China or Asia. Earlier this year, at the beginning of the year, when we were focused looking at kind of what we wanted to accomplish for the year in BD, 50% or more of what we were interested in was sourced in China. That will change from year to year. It highlights more the strength of what we are seeing there versus a lack of strength from the United States and Europe because we are seeing really interesting assets here and in Europe.
You've seen the renewed strength in the biotech markets here over the last six to seven months, which I think is great for us and the markets in the long run. It is for the larger companies like Gilead and many of our peers, it's great that we have a number of alternatives coming out of Asia that we didn't see before as well.
I just want to touch on financial profile. You have sort of outlined your roadmap and your guidance in terms of what you are expecting for top-line growth, but you are seeing significant leverage from an operational perspective that is taking your earnings growth significantly higher than that too. How can we expect that to progress beyond 2026? You mentioned even accelerating internal R&D spend, but how about in other areas of OpEx?
Yeah. We are really seeing the strategy that we laid out six years ago play out positively. That was always we needed to invest in our internal and external R&D to drive this new product cycle, which we've done. That included almost doubling our R&D expense year over year, which was a sizable investment. It meant taking down temporarily our operating margin. You saw it kind of trough at just below 40%, which is still very strong for most companies. In the third quarter, our operating margin was back up to roughly 50%. You see the strength in our model. I mean, we are a lean company relative to most of our peers. Not only have we focused on building out R&D, we've also focused on, as we grew the company, now pulling through efficiencies.
You have seen a very disciplined, sustained cost-focused fiscal focus over the last three years where our expenses have been roughly flat. The strategy was always to build out the pipeline and then to have top quartile revenue growth that would then translate into much stronger EPS growth. That is what you have started to see the last couple of years. It is very encouraging. I also think we are just at the beginning of this cycle. I mean, as you know, in our industry, these are long cycles.
Given that we do not have any major patent clips, as I said, until 2036 at the earliest, and all of these launches underway are coming, it gives us—we are really encouraged by the development of the strategy and the ability to have not only one of the best top-line growth profiles in the industry, but then to drop an increasing amount of that to the bottom line over time. You have seen healthy margin expansion. There is a point as you are developing a healthy company for the long term, we are happy to have that operating margin continue to expand. There is a limit to where you want that to go. You want to make sure that you are reinvesting enough in R&D and sales and marketing with the launches. I think we are really kind of hitting that sweet spot now. A lot of progress.
You're seeing the strategy play out. We're really pleased with where we are. I think it's just the beginning.
We're coming up on time. I'm going to borrow a frequently asked question of one of my colleagues at Citi. Hopefully, you'll be joining us next year at this conference one year from now. The question is, one year from now, what do you think we're going to be talking about today that relates to Gilead that maybe we're not talking much about right now?
Wow, that's a good question. I think it's the pipeline. I mean, to me, we spend a lot of time talking about the Sunlenca launch, which is incredibly important. As I said, off to a great start. The other launches that are underway, there's a growing appreciation for the diversification of the business both within HIV and outside of HIV. There's not a lot of focus paid on our mid-stage pipeline, whether it's the I&I pipeline, some of the mid-stage oncology programs, additional cell therapy programs. I think over time, the market will come to appreciate not only the launches that are underway and coming, but the pipeline that's coming behind it, which is all essentially a call option for shareholders today. That would be one of the things in particular I think people will focus on a year from now.
Great. Thanks for joining us.
Thank you. Thanks for having us. We appreciate it.