Hi, everybody. Thanks for coming. My name is Emily Field. I am the U.S. Large Cap Pharma Biotech Analyst here at Barclays, and we're so fortunate to have Andrew Dickinson, who's the CFO of Gilead, joining us today.
Thank you.
Thanks for coming, everybody.
Of course. Yeah, thanks for having us again. We appreciate it.
Yeah. I mean, let's just get into it. I mean, obviously very important year for Gilead, with the YEZTUGO launch, but also, having done the Arcellx deal. Maybe I'll just, like, open it up to you and let you talk about how you're looking at the financial picture for Gilead in 2026.
Sure. Yeah. I mean, maybe to start overall, we had an extraordinary 2025 in terms of our base business, our clinical results, the launches. We had two major launches in YEZTUGO, and the first full year of the LIVDELZI launch in liver disease PBC. Great financial performance. You also saw very strong operating expense control, discipline, significant growth in EPS, and we feel like we're at the beginning of a long cycle with a number of product launches underway, more product launches coming and, the strongest pipeline we've ever had in the history of Gilead. It's an exciting period.
Yeah. Maybe a good place to start would be that obviously Gilead had done a number of deals sort of a few years ago, and then the Arcellx deal that was done relatively recently. What was the reasoning behind that in terms of maybe just to control sort of the launch process of anito-cel? 'Cause the data was fantastic. How are you thinking about?
The deal?
Yeah, exactly.
Yeah. Maybe just to step back, for those of you that don't know Arcellx or anito-cel, Arcellx is a company that was our partner. We entered into a partnership three years ago on what we believe is very clearly a best-in-class BCMA cell therapy for multiple myeloma. It also has potential in other indications. But as Emily said, really extraordinarily strong data in fourth line plus multiple myeloma. We're you know we have a study, a phase three study underway in second line plus multiple myeloma that enrolled very, very quickly. So we're really excited. We announced a couple weeks ago that we're acquiring the rest of the company that we don't already own for approximately $8 billion.
At its core, I mean, again, we see a very significant commercial opportunity. The total multiple myeloma market by our estimates as well as competitor estimates for cell therapy is greater than $20 billion. You know, anito-cel brings a very differentiated safety profile. At a minimum, it looks like we have efficacy that's on par with the other approved BCMA CAR T, but a very significant difference in the safety profile, and that means that we don't see the neurotoxicity with anito-cel in hundreds of patients now across both the fourth line plus study as well as the second line plus study that at least one of the competitors sees in approximately 10% of the patients, which is really encouraging.
This is a one and done therapy, and as you see in the lymphoma area of cell therapy, you know, the patients and physicians will always want to choose the cell therapy that they see as both the most efficacious and the safest. There was a significant difference between our view of peak sales potential and the street. There was kind of a unique window.
The CVR.
Yeah. Well, the CVR is part of that, but, you know, your question was why now? At its core is that, you know, we see this as a blockbuster therapy for multiple myeloma. You look at drugs like REVLIMID historically for Celgene, DARZALEX more recently in the multiple myeloma space. We think this is the next blockbuster in multiple myeloma that has broad applicability. For those of you that don't follow this market, multiple myeloma is by far the biggest hematological oncology market. Again, the data is really incredible. At its core, this is about the disconnect between our view of peak sales and the street view of peak sales and our ability to kind of to you know have complete ownership and all of the upside for our shareholders on this product.
It's actually in many ways analogous to the CymaBay transaction that we did a couple years ago, where we acquired a drug that's now called LIVDELZI for primary biliary cholangitis. That was another example of a company that we knew incredibly well. We have the largest liver disease franchise. We had a differentiated view of the peak sales opportunity versus the market. You've seen that play out in the first six quarters of launch, where the drug is off to just a fantastic start. It's really similar. The last thing I'll say is that to your point, there were other benefits of doing the transaction with Arcellx that weren't core to the financial model but actually provide you know additional sources of value for our shareholders in the company.
One is we will control the launch now, you know, outside of a partnership, which will actually streamline things. Oftentimes in partnerships where you share commercial launch and commercial responsibility, at times it may slow you down or slow down decision-making. We now have the ability to just move forward in a very competitive market with our commercial organization, and that could actually provide some upside on the revenue side. The other piece of this for us is, you know, significant opportunity to use both anito-cel in other indications where we did not have the right to do that in the partnership and to use their platform technology and binders.
For instance, the BCMA binder that is part of the anito-cel construct can now be used in our in vivo CAR T efforts, and we can use their other binders as well. There's a whole host of reasons, but at its core we see a blockbuster product that we have very different views of kind of peak sales potential versus where the market was.
You know, that's super helpful. Actually, it's a great point in terms of like the clinical data, in terms of relative to the competitor. Maybe taking a step back and thinking about oncology more broadly, you have some endeavors in solid tumors and obviously need to sell in liquid tumors. How are you thinking about Gilead in a longer way in terms of, just the oncology business and, building out the franchise between both liquid tumors and solid tumors?
Yeah. Yeah, it's a really important question. Look, we are really pleased with the progress that we've made in terms of building out our oncology business across both Gilead and Kite. To put it in context, like, you know, last year we had approximately $3 billion in revenues, oncology revenues, which is a relatively modest portion of Gilead's total revenues. It was, I believe, roughly 12% of our total revenues. That was, you know, starting from zero seven years ago or eight years ago, and it's just the beginning. The really nice thing about Gilead now is you see our core HIV business, which I know we'll talk about doing incredibly well, and you see significant growth. You see now meaningful pockets of growth in our oncology business with both TRODELVY.
We have some upcoming launches in TRODELVY as well as anito-cel and the rest of the cell therapy business, and I expect that we'll add to that over time. Then in the liver disease business, with LIVDELZI and the rest of our viral hepatitis products. It's a really exciting time. I expect, to your question, that the non-HIV part of the company will grow consistently, steadily over time, not at the expense of the HIV business, but to further diversify and help grow the top line.
Well, speaking of the HIV business, of course, so many investors are focused on the YEZTUGO launch $800 million guidance for this year. Maybe you could walk us through sort of what are the moving parts in terms of what could be maybe more conservative about that guidance or I know some investors are thinking that perhaps it could do quite in excess of that.
Yeah. Well, the launch is off to a great start. Again, to step back, YEZTUGO is our once every six month subcutaneous HIV prevention medicine that had really extraordinary data that was presented, I think now roughly 18 months ago, if I remember correctly, in the PURPOSE 1 and 2 studies where you saw in one study 100% prevention of HIV transmission in a population that was at very high risk. And in another study, 99.9% effectiveness. Really extraordinary data. The launch is off to a great start. The launch started at the very end of the second quarter of last year. You really had the third quarter and the fourth quarter as the first two full quarters of launch.
We had $150 million in sales for the year, which was absolutely tracking to kind of our expectation. All of the launch metrics that we look at are either, you know, on target or ahead of schedule. I'd highlight in particular, we have greater than 90% payer coverage of YEZTUGO today, which came much earlier than expected. Of that 90% payer coverage, 90% of patients have no step edits or prior auth, so it's largely unrestricted coverage. You know, we didn't have to leverage discounts in order to open up that access, which again, is a great sign. Then there's two other things in the launch that are really interesting, and I'll get to your question on $800 million guidance for the year.
We're seeing more patients that are starting on YEZTUGO that are naive to HIV prevention than we expected, which is a great sign for the HIV prevention market and for our business. The low-hanging fruit, so to speak, were the 500,000-600,000 patients or people in the United States, I should say, that are already on HIV prevention therapies, which is two oral therapies that Gilead developed, one of which is now generic, and then another long-acting competitor.
Then the second thing is when we look at the source of business for the majority of patients that are coming from existing HIV treatments, you're seeing an equal amount of patients coming from the other long-acting competitor, which is an every two-month intramuscular injection, generic Truvada and DESCOVY, which is our branded daily oral as well. We're seeing more people coming from generic Truvada, just like more naive patients coming than we would've expected, all of which bodes well for the launch. To your question on the $800 million in sales, again, that implies significant growth from the $150 million for the first couple quarters of 2025.
You know. Again, as I said, we're really pleased with what we're seeing in the launch script data, all the trends. The big question is the persistence. How often will people come back for their next injection? The early data that we're seeing is quite encouraging, but it's a limited number of patients because, you know, as I said, we just really launched at the end of the second quarter. You're really just starting to see the first couple waves of people that can come back in. You know, for the injectable generic, our data suggests that their persistence rate is about 50%. At a minimum, that would be kind of our target.
You know, we'll have a better sense of the launch and the progression of the launch over the coming quarters. As I said, we really like what we're seeing so far, and we have very high expectations for YEZTUGO in the long run.
Yeah. That's super helpful. Yeah, 'cause I have heard some investors kind of questioning whether in terms of the guidance and relative to the script data, which is just phenomenal, that maybe there's like an early bolus given like increased coverage, as you mentioned.
Right.
You know, tracking well on target. That maybe there's like a bolus in the first half of the year and then the second half of the year could be a lot of just sort of.
Yeah.
Tracking whether the patients come back.
Yeah. I mean, the interesting thing is the bolus that you're seeing, extraordinary growth in the HIV prevention market overall. The bolus is really going to the daily orals to start. To put this in context, if you look at the total HIV prevention market, 2024-2025, our HIV prevention business, which is DESCOVY, our daily oral, and yes, YEZTUGO, the injectable drug that was approved in the middle of last year, grew roughly 50% from 2024-2025. A lot of that growth was in the daily oral DESCOVY. You saw the same thing from the fourth quarter of 2024 to the fourth quarter of 2025, where we saw even greater than 50% growth in our HIV prevention business overall.
We believe that significant growth, again, it's just early innings for the HIV prevention market overall, which should continue to develop and grow for many, many years to come. You should slowly see patients moving from the oral therapies to the long-acting therapies, given that you see much better efficacy with the long-acting therapies, and payers know that they're getting what they're paying for in terms of the very high levels of protection. The oral pills have low-much lower levels of compliance, as you would expect.
Of course. Yeah.
We have seen a bolus in the overall market. The last thing to your question is our expectation for LIVDELZI and YEZTUGO and our HIV prevention business overall is steady, durable, consistent growth quarter after quarter, year after year. You've seen that in the rest of our HIV business. That is what we're expecting over the long run. You know, we have many, many years of growing the prevention market ahead of us, we believe.
Okay. Well, that's super helpful. Well, maybe, you know, pivoting to the other side of the HIV market, which would be treatment. I know that you had a lot of data at the CROI Conference, and we've been getting a lot of questions about the once weekly option that's oral. Maybe, you know, aside from the prep market, what are you guys focused on in terms of what could be the best thing that we could be looking for in the treatment market going forward?
Well, we do expect that like the HIV prevention market, the HIV treatment market will move to a predominantly long-acting market over time. That will be a combination of either weekly oral pill combinations, monthly oral combinations, or longer-acting injectables, which would typically mean every three or four months or every six months, either intramuscular or subcutaneous injections. I think all of those will be on offer over time. We have programs in all of those areas. We have backup programs in all those areas. We have a lot of confidence in our portfolio that we're moving forward. I think just like the prevention market, you'll see the treatment market move to that.
What maybe is less well understood and appreciated is that in all major markets, including the United States today, you know, roughly 40+% , I think it's 44% of patients that have HIV in the United States today are either not diagnosed, not drug-treated or not virally suppressed, which is shocking, right?
That's horrible. Yeah.
It's incredible. I think of that 44%, roughly 13% of those patients are not diagnosed, which again, is shocking. You know, in that 30% of patients in the United States that are either not drug-treated or not virally suppressed, many of those would really benefit from a long-acting therapy. I think when we think about long-acting therapies, it's not only serving the, you know, roughly 56%-60% of the market that is currently drug-treated and virally suppressed and giving them a better option. It's also opening up the large segment of all the major markets that are not well treated by the daily oral pills today. Again, we see the market moving to long actings.
How it actually breaks down over time will depend on both what we bring to market, and then the profile of those versus today's daily orals. You know, the expectation is that a significant portion of the market will move to those long-acting therapies.
Yeah. On the other hand, you know, we have seen some headlines about, you know, certain Medicaid coverage being restricted in some states. Like, how are you guys expecting coverage for those that are just coverage for the treatment market in general evolving?
Yeah.
In just a politically dynamic environment in the United States?
Yeah. We're really not seeing, you know, restrictions that are impacting our business.
Okay.
You may be referring to some of the ADAP restrictions.
Yeah.
We're not seeing in Medicaid. I mean, even in Medicaid, for instance, we, you know, with our HIV prevention medicine, we had broad uptake of that by the state Medicaid agencies very quickly, including in all the largest states, which is encouraging. The AIDS Drug Assistance Program, ADAP, are a government-funded subsidy that help those at the greatest need that aren't able to get HIV therapies to get those therapies. Those are very, very heavily discounted therapies for us.
Mm-hmm.
You're reading about some of the states having funding crises, removing funding. Florida, for instance, took two of our therapies, BIKTARVY and DESCOVY, off formulary. Because that segment is so heavily discounted, it's not free drug, but it's close to free drug. It's not expected to have a material impact on our business. It does present, you know, an issue because if you don't have these safety nets for people that have HIV and the virus is not, you know, kept at bay, you will see an increase in infections, and you'll see.
Yeah
increased healthcare costs over time. It's, it is concerning and, you know, at the same time, from a financial perspective, it's not expected to impact our business in any way that's material.
Yeah, since you mentioned it like that, in terms of our research and getting a driver's seat in the company, one thing that was surprising is that you know, overall infections have continued to decrease, but new infections are obviously in populations that are you know, historically not necessarily what you would expect with HIV.
Right.
How are you thinking of reaching out to, you know, new populations or the treatment market that might not have been what was historically affected?
Yeah. You know, part of what Emily's referring to is that we're actually seeing in the U.S., for instance. The HIV treatment market's growing 2%-3% in most major markets, including in the United States. What you're seeing today that's really interesting is, you know, I believe 20% of new infections in the U.S. are heterosexual women.
Mm-hmm.
A significant portion of infections. There's a disproportionate number of infections in the southeastern part of the United States, especially in African American Black populations.
Mm-hmm
Hispanic populations. Those are all populations that we are really working to get to those communities, raise awareness, reduce stigma. That comes through working, you know, through other organizations. That includes working, in some cases, with church organizations, for instance, social media, very targeted awareness campaigns. You know, our commercial team is really doing a great job, I think, of trying to, you know, fully understand that and then reaching people that are at greatest need of both HIV treatment and HIV prevention. We are shifting. As the market is shifting, our team is shifting kind of our priorities and how we're raising awareness, in particular, and making sure that people are aware of either therapies if they do have HIV or HIV prevention alternatives.
Okay. Fantastic. Well, maybe I know we're getting close to time, but so maybe just like taking a step back. Obviously, you know, BIKTARVY is driving such a strong growth in the infectious disease area for Gilead. Anito-cel launching later this year, but maybe thinking about terms in terms of Gilead becoming, you know, a broader company in terms of therapeutic area. Immunology is something we haven't really talked about.
Yep.
How are you thinking about, you know, maybe what could be future growth drivers, you know, outside of infectious disease? Then I know we have anito-cel in oncology, outside of oncology, just in that specific category.
Sure
... just as Gilead is becoming a more diversified company.
Yeah. No, as I mentioned earlier, we have the strongest pipeline that the company's ever had. Many more programs, much greater diversification across both virology as well as liver disease, oncology, inflammation. If you look, for instance, I mentioned that we have two launches underway in YEZTUGO and LIVDELZI, which both are going incredibly well, that will drive growth. We have up to eight additional product launches coming this year and next year. Two of those product launches are in HIV. The remaining six product launches are outside of HIV, including TRODELVY which is our antibody drug conjugate in first-line metastatic triple-negative breast cancer, you know, all comers, kind of PD-L1 high, you know, low. Anito-cel, which we talked about, the BCMA CAR T.
I do expect that, you know, we have a lot of growth drivers. We have, you know, the overall core business is doing great. We have the two launches. We have up to eight additional launches coming, and we will continue to add things to it over time. When we look at the profile, it's just Gilead is a very different company than it was when I joined 10 years ago. We have, you know, far more diversified, far bigger pipeline. We're at the beginning of kind of a long cycle with no major patent cliffs until 2036 at the earliest and numerous launches that we'll add to.
You're also starting to see the, you know, with the expense discipline as well, after we grew the company in the research phase, you're really seeing strong EPS growth, which I think is really encouraging as well. It really is the beginning of an exciting new cycle.
Yeah. As a CFO, it must be a very exciting time, given the leverage that you're getting from the business.
Absolutely.
Okay. Well, this is pretty much right on time. Thanks everybody for joining, and thanks, Andy, for coming.
Of course. Thank you.
Hope everyone has a great rest of the conference, and hope to see you all soon.
Thank you. Have a good one.
Thank you.