GILEAD SCIENCES, INC. Q3 FY2024 earnings call

• The company had a strong third quarter with robust commercial and operational execution across segments. - Lenacapavir for HIV prevention received breakthrough therapy designation from the FDA and is on track for filing by year-end. - Livdelzi launched for PBC with patient demand ahead of internal expectations. - In Oncology, preliminary data from the Anito-Cel study was shared, and the program is being prioritized for promising initiatives. - All clinical milestones targeted for 2024 were completed, with key presentations upcoming at ASH and the HIV Analyst Event in December.

Total product sales excluding Veklury in the third quarter were $6.8 billion, up 7% year-over-year. Including Veklury, total product sales were $7.5 billion, up 7% year-over-year. HIV sales were $5.1 billion, a 9% year-over-year increase. Biktarvy sales were $3.5 billion, up 13% year-over-year. Descovy sales were $586 million, up 15% year-over-year. Liver Disease sales were $733 million, up 4% year-over-year. Veklury sales were $692 million, up 9% year-over-year, with year-to-date sales at $1.5 billion. Oncology sales were $860 million, up 6% year-over-year, with Trodelvy sales $332 million, up 17% year-over-year, and cell therapy sales $485 million, flat year-over-year. Revenue contributions: HIV was a significant segment with strong growth, Liver Disease showed steady growth, Veklury saw increased sales, and Oncology had mixed performance with Trodelvy growth offset by cell therapy flatness.

• Gilead is increasing guidance for 2024 across multiple metrics including revenue, non-GAAP gross margin, operating income, and EPS. - Product sales excluding Veklury are guided to $26 billion to $26.3 billion. - Full-year Veklury revenue is expected to be approximately $1.8 billion. - Total product sales for 2024 are projected to be in the range of $27.8 billion to $28.1 billion. - Operating income is expected to be between $8 billion and $8.3 billion. - Earnings per share guidance is raised to $4.25 to $4.45.

• Competition in various segments such as cell therapy and HIV prevention poses challenges. - Regulatory and market uncertainties could impact the launch and adoption of new products like Lenacapavir and Livdelzi. - Potential effects of Medicaid cutbacks on access and reimbursement for HIV patients are a concern.

Q: Discuss the in-class versus out-of-class impacts on Yescarta and commercial strategy pivot.

A: Cindy Perettie stated in-class competition includes new indications and manufacturing capacity, while out-of-class competition comes from bispecifics. She emphasized no need to pivot strategy, focusing on maintaining class and brand share.

Q: Thoughts on the launch of lenacapavir for PrEP next year.

A: Johanna Mercier expressed excitement about the launch, highlighting market expansion opportunities, with well underway commercialization plans.

Q: Anito-cel and delayed neurotoxicity.

A: Cindy Perettie noted the construct is likely the reason for no observed delayed neurotoxicity, confident with over 100 patients' data.

Q: Scaling Anito-cel upon launch.

A: Cindy Perettie said learnings from Yescarta and Tecartus were applied, with tech transfer completed and production ongoing.

Q: Seladelpar payer coverage and launch insights.

A: Johanna Mercier mentioned initial launch exceeded expectations, with payer coverage in line with rare disease, and progress in access.

Q: Anito-cel regulatory filing and market building.

A: Cindy Perettie said regulatory filing will discuss 12 months' data, and work is ongoing to build market access for multiple myeloma.

Q: Expectations for the HIV analyst event.

A: Daniel O’Day said the event will provide qualitative and quantitative market insights, including updates on long-acting treatment combinations.

Q: HIV PrEP market growth and oral vs injectable.

A: Johanna Mercier and Merdad Parsey discussed a patient-centric approach, mixed preferences, and intent to remain a leader in HIV.

Q: ASCENT-03 triple negative breast cancer opportunity.

A: Johanna Mercier said there is a larger frontline opportunity, potentially doubling the market size.

Q: iMMagine-3 study and anito-cel outpatient use.

A: Cindy Perettie said clinical sites are being worked on, with an outpatient profile designed due to short CRS onset.

Q: Impact of Medicaid cutbacks on the HIV franchise.

A: Johanna Mercier mentioned mid to high 20% Medicaid exposure, with focus on monitoring channel mix and access parachutes.