It's exciting. All right. Good morning, everyone. Tyler Van Buren here, Senior Biotech Analyst at TD Cowen. Thank you very much for joining TD Cowen's 46th Annual Healthcare Conference. For our next session, it's a privilege to have a fireside chat with Gilead management. From Gilead, it's my pleasure to introduce Johanna Mercier, Chief Commercial Officer of Gilead. Johanna, it's a privilege to have you here. Thank you very much for joining me.
Thanks for having me.
I figured we'd start at a high level with the 2026 guidance. Can you walk us through the key assumptions to the guidance that you all issued and the primary levers specifically as it pertains to product sales and earnings?
Question on guidance. The 2026 guidance this year.
Not yet. Yep. Give it two minutes so I can give you my mic. Is it me? Who is it? We'll figure this out in a minute. Bear with us.
Okay. I'm scared to move.
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Okay.
Sorry for the technical difficulties. That's our fault, not Gilead's fault.
Thanks for that. All right. Question around guidance. 2026 guidance. We gave guidance for our base business for 2026 in the mid-single digit, 4%-5% for our base business. Remember, we also have some impact from ACA and MFN. That's about 2%. If you excluded that would be about two points above that. Our guidance specific to HIV was a 6% growth year-over-year and that strong growth driven by Biktarvy, obviously with a bit of an impact offset by the legacy products because of MFN. We also have strong growth in HIV prevention. We were growing at about 55% HIV PrEP franchise for Gilead last year.
We believe HIV prevention franchise continues to grow through 2026. That's driven obviously by Descovy and the launch of Descovy and Descovy, our daily oral in PrEP. Descovy guidance was about $800 million. That's obviously, excuse me, strong growth off the $150 million volume that we delivered in 2025. The other piece of the puzzle is we believe Trodelvy is on a good growth trajectory right now, namely because of some of the data that's come through with ASCENT-03 and ASCENT-04. We believe continued growth through 2026 with cell therapy, a little bit on the decline, about 10% what we've said year-on-year, just because of in and out of class competition.
Of course, kind of back to growth in 2027 with an anito-cel launch in cell therapy. A lot going on. We have about four launches that we expect this year. Those are part of our guidance, and we're excited for what's to come. We feel that's a strong guidance and one that, you know, we're well poised to deliver against.
Wonderful. Thanks for that overview. We'll spend a good amount of time on PrEP here shortly, but, focusing on the overall HIV franchise-
Mm-hmm.
-kind of ex PrEP. Again, what are you seeing from Biktarvy? The overall franchise had a really you know, significant outperformance versus what was expected in 2025 despite the negative headwinds. What do you see as the major drivers for HIV treatment heading into 2026, and what are you looking forward to with respect to Biktarvy?
Yeah. Biktarvy is obviously behind all of what you just said. It's. It continues to deliver. I think Biktarvy has set the standard of care for HIV treatment, not just in the daily oral market, but has set the standard of care overall. One of the things that we are continuously focused on is continuing to update our labels, making sure the real-world evidence gets pulled through, and the data just gets stronger and stronger. It's a great place to be with Biktarvy. It is definitely by far the number one agent and both in the naive patient population as well as switch market patient population for most countries. We expect that to continue. Of course, we expect continued growth. The market grows at about two to three points every year.
We expect that to continue, as well as Biktarvy's growth offset partially, of course, by some of those legacy products eroding in the marketplace. Our focus in HIV treatment has really been on patient-centric options, and that's why there's been so much work going on around making sure we're continuously thinking about our lifecycle management of Biktarvy. BIC/LEN, for example, is one of those examples. That launch is expected in the second half of this year. This is a launch in virologically suppressed complex regimen. That's about 4%-5% of the total population of HIV people. Then you have the switch patient population as well, and that's about a 20% dynamic market or so. That's this year.
We also have the ISLAND 1 and 2 data coming through in the first half of this year with a potential launch for the weekly oral in collaboration with Merck of islatravir/lenacapavir sometime in 2027. There's a lot going on in the immediate term, let alone some of the data we've just shared at CROI to think about longer acting. The goal is to get to a Q6M, the in treatment setting, not just prevention. If you think about, you know, a lot of the market research has been very clear. Some people want to be on a daily oral in the treatment, and some people don't want to be reminded that they are on anything for HIV. Q6M is kind of the real goal that we're trying to attain.
Very patient-centric options, and a very strong lifecycle management plan behind Biktarvy. And of course, remember Biktarvy's LOE is out till 2036 at this point. We have a long runway ahead.
Maybe we'll turn to PrEP now with Yeztugo. You mentioned the $800 million annual guidance. I think most people feel that is conservative for the year, especially since prescriptions, as we update our weekly tracker, is up and to the right every single week. Maybe you could elaborate on that guidance, and also what may have caused the prescriptions to do what they're doing year to date. Obviously coverage is helping, but is there anything else that could be impacting?
Yeah, sure. We're very proud of the Yeztugo launch. This is a launch of an injectable Q6M in an oral market and we're very proud of what we're delivering against it. I think all the foundational pieces are well in place and that includes access at 90% +. That includes some of the incredible awareness that we have with physicians, but also with communities. We also have, you know, really good setup from a logistical standpoint to make sure we support with nurse educators, training, how do you do the injection, making sure you manage ISR, et cetera. All of those pieces are well into play. The access was a big piece of the puzzle, not just the 90% in January, but actually even the J-code in October, which is earlier than we had assumed.
When you get a J-code, it doesn't mean everything turns on overnight. It actually takes a while. Some people, some accounts will actually just update their, all their, J-code approvals on a quarterly basis or every six months. January was a big kind of play for us on that front. That also helped. We always said, and the guidance supports this, is we assume that this will be a consistent, steady, durable, multi-year build of growth for Yeztugo. You should expect to see that play out. A lot of folks have said, "Is it going to be a hockey stick?" The answer is no. It's going to build week over week, month over month, and for all the reasons we just talked about.
One of the key things that people need to realize is because we are an injectable in an oral market, we are working all of these pieces account by account. Now it's not access that we're working through because we have the access that we need, but what we are working through is all the logistics, the scheduling, the administration, the coordination. Remember, if somebody is now coming in, instead of every three months, they're coming in every six months. If they're coming in, they have to make sure that the specialty pharmacy, if they're not a buy-and-bill clinic, the specialty pharmacy has to coordinate that the product gets there at the same time as the patient. So all of those pieces are new to a lot of these clinics, and their systems don't necessarily support it.
It's important that we're working with our field teams to make sure we're supporting those efforts, and we're pulling them through account by account. That's why we think it's a steady, durable growth play. That's what we're seeing and what you're seeing as what you were referring to week on week. We're excited about what's to come. We feel confident in our guidance and I guess more to come. DTC is a big factor as well. I think you were asking about some of the factors that might influence the future. I think DTC, we just launched a couple of weeks ago our DTC. It's a broad DTC campaign. It is one that is meant to normalize HIV prevention and all of those pieces are now coming together.
DTC impact, we have no doubt we'll have, some impact with our DTC campaign. Having said that, it's gonna take a little while, right? 'Cause you've gotta activate the people that are interested in PrEP, get them in to see their physician, have that conversation, and get the Yeztugo script, from a specialty pharmacy or through buy-and-bill. All of those pieces take a little bit of time, but we think that'll be, a big, growth driver for us as well, not only for 2026, but well beyond.
As a follow-up, you're seeing increasing uptake in the buy-and-bill channel versus the specialty pharmacy channel?
We are. The J-code helps, for sure. When people know that they won't have to pay out of pocket, that is obviously a big deal. Both the J-code as well as the 90% access, those two pieces together come nicely together. We are seeing. We always knew that specialty pharmacy was gonna be the go-to, especially at launch, and that's exactly what we saw. We are seeing a nice pickup of buy-and-bill. We're by far not at steady state, so I think it's gonna take a little bit more time on that front, but we are seeing a nice uptake there.
Understood. On Descovy, you all mentioned that you expect growth this year as well with that franchise. I think people were surprised by what Descovy did last year as well. Obviously, increased promotion with the Yeztugo efforts.
For sure.
... benefited Descovy. Is there anything else in the last year that has benefited Descovy tactically just as you think about expanding that product? Over the long term, what's your outlook for Descovy relative to Yeztugo and the PrEP franchise?
Yeah, sure. So last year, as of January, there were a couple of plans that had always put a step edit or a prior auth of Truvada generic before Descovy, and they pulled that. They took that off, which allowed for our field teams to actually make sure that Descovy was being used in front line. You can imagine that if you have a prior auth or a step edit, that's a bit of a challenge because if they're on a generic, you know, to get to Descovy, they would have to fail, and if they fail, they might get HIV, and therefore they'll never get on Descovy. They might get on Biktarvy, which is not what we want, of course.
It was great to see those plans kinda change and evolve their thinking and put Descovy at the same level as other generics on the market. That really helped. Our shares were very low in those plans, probably in the low twenties, and the field teams did a great job. The product is very differentiated in the field, so physicians' offices were thrilled. Now we're at national shares, right? The mid-forties. That was a really nice lift. We also got some pricing favorability earlier last year. Some of that was channel mix, and so that was helpful as well. That kind of played out through the year.
Then you had exactly what you said, which is with PURPOSE 1, PURPOSE 2 , increased awareness of prevention and heightened awareness of all the work that we do. Gilead does a lot of work around education and awareness to make sure that we link people to care. That just means all the boats rise. Descovy is obviously benefiting a lot of the work that we've been doing behind Yeztugo to make sure that the PrEP market grows. The market today is growing about 12%-13% year on year. It's about 500,000 users in the PrEP market today and still growing at double-digit rates. That has to do a lot with the work that we've been doing against Descovy and of course now with Yeztugo to make sure that happens.
We believe that'll continue to play out in 2026. We think the PrEP franchise will continue to grow at similar levels that we saw in 2025. That was about 50% or so, 50%+ growth. That obviously driven mostly by Yeztugo, but also by Descovy, 'cause you can appreciate a lot of the work's happening, you're increasing awareness, some people might prefer a daily oral, or at least to start with, especially naive patients that are new to PrEP. All of those pieces are coming in nicely together. Over time, we do believe Descovy will erode, and that erosion will happen because of Yeztugo, whether it's Yeztugo Q6M or Yeztugo Q12M that we expect in this, in about 2028 timeframe. All of those pieces will come together.
I do think for now, we expect continued growth by both, driven first and foremost by Yeztugo, supported by Descovy.
Great. Since you mentioned Yeztugo Q12M and PURPOSE 365 study was on the earnings call. Can you just talk about, I guess success there with that trial is pretty obvious. You kinda wanna see what you saw with the Purpose results just with a longer dosing regimen. Can you talk about its positioning within the PrEP landscape, how you expect it to further expand your share or the market? Are there any longer-acting PrEP competitors out there or programs that keep you up at night?
Yeah, sure. I would just say the program for PURPOSE 365 is a little different, right? We don't have to redo what we did with PURPOSE 1 and PURPOSE 2 and the 9,000 people. It's a much condensed, and it's built more on PK data than anything else. That's why we think we can launch as quickly as 2028. I think that's one big piece of the puzzle. Yes, it's just showing basically non-inferiority and making sure that, for 12 months, people are protected. We're excited about that. For the population standpoint and what we think that can do, we think that's a market expansion strategy. We really do. Do we think, of course, some folks that are on Q6M will prefer Q12M? Sure. That'll be part of the planning.
I also think about it more as somebody getting a vaccine, and it's not a vaccine, but I'm just saying if you get it once a year, think about college kids. They get meningitis shots as they go to school. Why wouldn't they get an HIV prevention annual shot? That would be one area. For people with unstable housing, where it's difficult to get to them, something every 12 months is actually ideal that they would be protected. This is how you really work towards ending new HIV cases. Those are all the pieces that we're thinking about as a real opportunity.
Mm-hmm
for PURPOSE 365 , but more to come on that.
Okay. Just long-acting PrEP competition anytime soon?
Competition. Sorry. That was like 3 questions in one.
Yeah, my bad.
I mean, listen, I think our biggest competition, to be totally frank, is awareness and inertia and making sure that there are people out there that are at really high risk of HIV incidents or in areas of very high risk that would really benefit from HIV prevention. That's probably the biggest piece of the puzzle, and that's why we think that there's a really targeted approach to those folks that we are doing in our market expansion strategy, that we need to continue to really focus on. That's how we get to the million-plus people in this marketplace by mid-2030s. That's really the opportunity. We believe from the market research that we've seen, it is very clear that the longer acting in PrEP, the better.
A Q6M is and will be for some time, the longest acting until the Q12M comes through. We really do believe that that will be the leaders in the marketplace, whether it's Yeztugo Q6M or Yeztugo Q12.
Great. you know, following on, marketplace leadership, getting back to HIV treatment.
Mm-hmm.
You guys have been, again, dominant in HIV treatment for a long time now. I think in some respects, it's tough to think about, you know, actual expansion of that franchise. You mentioned BIC/LEN, the ISLAND trials, GS-3242, I believe, at CROI-
Yeah
which was the four, potentially six months-
Mm-hmm
Is it a matter of diversifying your revenues away from Biktarvy over the next decade? Or do you truly believe with all these options, you're gonna see further expansion?
I think it's a mix of the two. I think that, to your point, Biktarvy's LOE is out till 2036. Biktarvy has really set the standard, so we don't wanna go back from that. We really only wanna move forward, it's about patient-centric options. I think Gilead has been doing this for decades now, but they're really strong at life cycle management. They do it in HIV treatment. We are doing it today in HIV prevention. That has been the strength and a real core capability of this team. The opportunities lie in both diversification over time, which I think is important, we have time, right? You wanna make sure it's at the same standard. I think there's also opportunities to expand the market.
The market in HIV treatment today grows at about 2-3 points. There are still about 40% of people, and I'm talking these are U.S. numbers, 40% of folks that are not currently virologically suppressed appropriately. There's different mix of that. There are people that are HIV positive that haven't been diagnosed. There are people that have been diagnosed, not treated, right? They put their head in the sand and walked away. There are people that are diagnosed untreated, and there are people that are treated and are not virologically suppressed 'cause they're not either adherent to their medicine in the right way, or they're not taking the right medicines and there's resistance. A lot of people are still on many older drugs. We've seen that with the BIC/LEN trial.
When we talk about complex regimens, a lot of folks are still on PIs. There's a real opportunity here to make sure that people come to the newer, more innovative molecules, Biktarvy and others that might be supportive, and some of that has to do with adherence, and that might help if you're longer acting. A Q6M would be ideal in this setting. We do think it's both diversification and market expansion.
Great. Let's move to oncology.
Mm-hmm.
Recently announced the Arcellx acquisition, so why now? You know, how does owning 100% of an anito-cel here soon change how you plan to invest in and expand that program?
Sure. Yeah, we're really excited. We announced just last week the potential acquisition for Arcellx. This is a company that we were obviously collaborating with. We already owned about 11% of those shares and one that we knew very well. I would say the biggest reason for the why now has to do with the BLA acceptance from the FDA. That's, you know, when you're thinking about asset de-risking, you're probably at the most de-risk part as possible except for acceptance or approval, I should say. We got the acceptance. So that was one, you know, big piece of that puzzle. This is a company that we've obviously worked very closely with.
It's a company we're running clinical trials with, so due diligence-wise, it was limited because we are not just looking, watching from above, we're doing with and partnering with them incredibly closely. That was also a big piece of the puzzle. We have always believed in the value of anito-cel. We think it's incredibly differentiated. We think it has really strong efficacy and a very differentiated safety profile, which is what people are looking for, physicians are looking for in the multiple myeloma space. We believe this market could be up to $20 billion if you're thinking first- line plus. Obviously the indication launch later this year is in the fourth- line setting. All of those pieces are the why behind we did what we did. The timing was also a piece of the puzzle.
We are expecting a launch at the end of this year, when you have a collaboration, and this is not specific to Arcellx, this is just general collaboration, any partnership, you're always kind of managing the balance between speed and alignment, that alignment can slow you down. The one thing you don't wanna do is slow down or dilute any of your decisions prior to a launch. You only get to launch once. We believe it's really important. We have an incredible commercial team ready to go, we think that we can do this incredibly well and independently makes it a little bit easier to go forward and deliver against that.
We're excited about what's to come and to deliver against both anito-cel in the fourth- line setting, let alone with the second- line setting with iMMagine-3. That trial is enrolling incredibly quickly. I think it has a lot to do with what they see in iMMagine-1 and kinda pulling that through. We're excited about what's to come, and we think that just adds to the franchise for oncology at 100% of both revenues and profit.
Now moving to the non-cell therapy franchise in oncology, Trodelvy. You all managed through, bladder being removed from the label quite well. The growth in breast cancer, you know, more than offset that, right?
Yeah.
Can you talk about the first-line opportunity? Are you seeing early adoption or uptake given the NCCN listing?
Yeah.
What do you expect that launch and that opportunity to look like?
We're excited. We have the opportunity with ASCENT-03 and ASCENT-04 to have a potential launch in the first- line setting regardless of PD-L1 by the second half of this year. This is something that obviously has been building, right? We've been Category 1 with NCCN guidelines for second- line triple-negative breast cancer. We are the standard of care in second- line and we are now also Category 1 in first- line setting, both PD-L1 positive and PD-L1 negative. Really in good shape to actually change the current standard of care to Trodelvy with the data that we've shared at ASCO and at ESMO last year. The piece that I would say that's been interesting and oncology data lags a little bit more than some of our HIV data, but there's about a quarter lag or so.
What we saw post-ASCENT-04, that was presented at ASCO, what we saw is a really nice uptake, and the uptake was we were being used in second- line, of course, and we're the standard of care, but we're also being used a lot in third- and fourth-line . What we saw that is move up into second, and so less in fourth and third, but much more in second, which is where you want to be used. That's where the data really shows that overall survival that's so powerful for these women. This is such an aggressive disease.
We're also seeing some spontaneous use in the first- line setting too, and obviously that's not something we promote, that's not something that we talk about, but just from the presentations and the publications in the New England Journal, that's kind of what we've seen pick up. We're excited about the potential to pull it through with an approval and pull it through in the field to make sure that people are aware both in the academic centers, but also in community to make sure Trodelvy is their first choice.
Great. Let's move to kinda the third franchise, inflammation.
Mm-hmm
you know, maybe younger than the others, but growing.
Yeah.
Trodelvy.
Mm-hmm.
I'm pretty sure I did a triple take when I saw that it was exiting the year at $600 billion annual run rate.
Million, right?
Yeah, $600 million.
Okay.
Yeah.
I heard something else.
Yep, and can you just talk about the early launch experience there?
Sure.
What have been the early successes and also the IDEAL study?
Mm-hmm
and how that could expand the opportunity.
For sure. The seladelpar launch, the CymaBay acquisition is a great example of a perfect strategic fit, right. It's inflammation, but it's really leveraging all of the liver expertise that we have built over the last 10 years at Gilead, all of the network and all the field personnel that we have as well. The seladelpar, the seladelpar launch has been a very successful one. We launched late in 2024, so August 2024, last year was our first full year, to your point. The strategy has always been, since day one, twofold. 1 is differentiation. This is a product in second- line that is incredibly well-differentiated, not only on its efficacy, but also on surrogate endpoints like pruritus, fatigue, et cetera.
That has been a real important play. The second piece of the puzzle is market expansion. The market expansion strategy has been one that there's a lot of inertia in the first- line setting. They haven't had options before. People that are on UDCA think there is nothing else and suffer with the fatigue, with the pruritus, and it's quite debilitating and there's an opportunity to activate those patients. That's what we believe is the longer term play for Seladelpar. Last year was a really good year for us. We continued that differentiated. Q4 was accelerated a little bit just because of the Ocaliva withdrawal from the FDA. Patients had to go to something else, and there was an opportunity there.
That was a one-time opportunity, but of course those patients are now on Livdelzi. The persistency with Livdelzi is very high. The reason for that, we believe, and from the insights that we've gotten from patient research, is really because of the incredible data and efficacy against pruritus, which is really helping patients live with PBC. We think that's gonna continue and continue to build. The IDEAL trial is really interesting, what you mentioned, and that should read out in the second half of this year. That is a trial that's studying not for inadequate responders from UDCA, which is what we currently have a label for, but actually incomplete responders.
It's ALP above 1,167, which is about the same size of the population that we're currently addressing today with our label. It's doubling the potential addressable patient population if this IDEAL trial was to play out. That's very much in line with what we've been talking about with market expansion. That fits in nicely with our messaging. That's an opportunity, obviously in the second half and of course bringing it into the label in 2027.
Great. Maybe briefly on business development, how are you guys thinking about business development following the Arcellx transaction? Do you still have more dry powder to do deals? How are you balancing growth opportunities versus financial discipline?
Yeah. I think all of those are important. We still have a good, really good, strong cash flow. Arcellx is just one deal, and we think that we need to keep our eyes and ears open, be proactive, be disciplined, be strategic about how we do it. We're in a maybe a little bit of a different situation than many others. We're ready to definitely, do deals that make sense for Gilead and are strategic and are creative, right? Value creating. At the same time, I think we're in a situation where we're also not in a need to do it, which is a great situation to be in. We think we're gonna continue. We're very active and have been. Arcellx was one piece of the puzzle. We continue to look for opportunities.
We continue to do about $1 billion or so in early development deals on an annual basis. We'll continue to do that, plus or minus, depending on the opportunities. Of course, looking at later stage assets as well to feed both our organic pipeline that is very strong, but also with inorganic opportunities as well. We're always on the lookout. We'll continue to do that. On the OpEx discipline, that's something that, you know, from a company culture standpoint, we think is really important. It's about managing that, you know, when you need to do a little bit more in one area, you can manage it through other means. So we are, you know, we've showed in our guidance that we are taking a little bit of an increase when it comes to sales and marketing expenses.
Well, that makes a lot of sense. You have a Yeztugo full year launch. You also have a couple of, I believe, four other launches this year. We wanna make sure that we are fueling our launches appropriately. At the same time, it means that we're gonna be a little tighter on our G&A functions and making sure that we can kinda partially offset that. That's how we're thinking about OpEx discipline, and that will continue.
Great. We're out of time, but maybe just quickly to wrap up, Johanna, what do you believe is the most underappreciated aspect of the Gilead story by investors?
Yeah. If you had asked me about two years ago, that would have been Yeztugo. I think that's clear now. I think we, I think the one area I would say is we have an interesting inflam pipeline that's not really on the radar yet. It's one that we have a couple of products in phase II right now that'll read out. Namely, we have an oral alpha-4 beta-7 for UC. We also have IRAK4, both a degrader and an inhibitor. We also have STAT6. That's a little bit earlier. Our pipeline in inflam is really interesting. Yes, of course, it's later launch, early 30s, potentially, but we do think that that's kind of the third leg of our stool, right? Between our HIV, our virology business, our oncology business, and now inflammation.
We're excited for what's to come, and we're really well-positioned to deliver against both clinical and commercial execution.
Great
more to come.
With that.