Gilead Sciences, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights:

• FDA approved lenacapavir (Yeztugo) for twice yearly HIV prevention, with strong commercial execution and high awareness at launch.
• Strong clinical results with Trodelvy showing positive Phase III data in first-line metastatic triple-negative breast cancer.
• Cell therapy expects pivotal update from iMMagine-1 trial.
• Liver disease sales affected by Medicare Part D redesign but Livdelzi showing growth in PBC.
• Continued R&D efforts in HIV with multiple trials ongoing, including PURPOSE-365 for once yearly PrEP and ARTISTRY trials for BIC/LEN combination.

Segment Performance:

• HIV: Sales of $5.1 billion, up 7% year-over-year. Biktarvy grew 9% year-over-year to $3.5 billion, and Descovy grew 35% year-over-year to $653 million.
• Liver Disease: Sales of $795 million, down 4% year-over-year.
• Oncology: Trodelvy sales $364 million, up 14% year-over-year.
• Cell Therapy: Sales $485 million, down 7% year-over-year.
• Veklury: Sales $121 million, down due to fewer COVID-19-related hospitalizations.

Guidance:

• Increased full year 2025 revenue and EPS guidance.
• Product sales excluding Veklury expected to be $27.3 billion to $27.7 billion.
• Veklury sales expected to be approximately $1 billion, a $400 million reduction from prior expectations.
• Base business expectations increased by $0.5 billion, with HIV growth of ~3% year-over-year.
• Operating income expected between $13 billion and $13.4 billion, and diluted EPS between $7.95 and $8.25.

Risks:

• Potential impact of Medicaid MFN proposals on revenue.
• Uncertainty around policy outcomes affecting HIV business, including Medicare Part D redesign.
• Challenges in broadening adoption of cell therapy due to competitive headwinds and regulatory barriers.

Q: Tyler Van Buren at TD Cowen asked about early uptake with Yeztugo and if it's on an exponential launch curve.

A: Johanna Mercier responded that it's early days, but teams are ready, with over 25,000 customer calls, high awareness, and progress in access.

Q: Terence Flynn at Morgan Stanley asked about Descovy's growth durability and Yeztugo IQVIA data.

A: Johanna Mercier said PrEP market is growing, Descovy's growth is due to access, and Yeztugo IQVIA data is directional but early.

Q: Umer Raffat at Evercore asked about impact of MFN proposal on Gilead's Medicaid revenue.

A: Daniel P. O'Day and Johanna Mercier discussed MFN discussions and Medicaid support for HIV patients.

Q: Evan Seigerman at BMO Capital Markets asked about PrEP removal from preventative medicine and impact.

A: Johanna Mercier said USPSTF guidance supports prevention, and Gilead could work through changes.

Q: Chris Schott at JPMorgan asked about WONDERS program and treatment pipeline.

A: Dietmar Berger said they're analyzing WONDERS program and have other molecules in pipeline.

Q: Geoff Meacham at Citibank asked about OUS contribution for Yeztugo.

A: Johanna Mercier said there's broader opportunity outside US with Yeztugo.

Q: Mohit Bansal at Wells Fargo asked about Yeztugo logistics and safety.

A: Johanna Mercier discussed logistics with cross-functional teams and education for prescribers.

Q: Courtney Breen at Bernstein asked why Yeztugo launch expectations weren't raised.

A: Johanna Mercier said it's early, and access is critical, waiting to see covered lives increase.

Q: Carter Gould at Cantor asked about anito-cel approvability.

A: Unidentified representative said continuing conversations with FDA and looking to launch in 2026.