Gilead Sciences, Inc. (GILD) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial metrics, increased revenue and EPS guidance, and promising product developments like Yeztugo and lenacapavir. The Q&A section provides additional confidence, with positive feedback on Yeztugo's launch and growth in HIV treatment. Despite some management evasiveness on specific dates, the overall sentiment is optimistic with robust product performance and strategic expansions, suggesting a positive stock price movement.
Key Financial Performance
Biktarvy sales $3.7 billion, up 6% year-over-year and 4% sequentially due to higher demand, reflecting continued market growth of 2% to 3% and strong commercial execution.
Descovy sales $701 million, increasing 20% year-over-year, primarily due to higher demand for Descovy for PrEP. Sequentially, sales were up 7%, driven by higher demand and average realized price due to channel mix, partially offset by inventory dynamics.
Livdelzi sales $819 million, up 12% year-over-year and 3% sequentially, driven almost entirely by Livdelzi for primary biliary cholangitis. Livdelzi grew 35% sequentially, driven by strong commercial execution, including some new launches outside the U.S. and withdrawal of a competitor's product in the U.S.
Trodelvy sales $357 million, up 7% year-over-year, primarily due to higher demand and down 2% sequentially with higher demand offset by unfavorable inventory dynamics and lower ex U.S. average realized price.
Cell therapy sales $432 million, down 11% both year-over-year and sequentially with continued competitive headwinds from in and out of class therapies.
HIV sales $5.3 billion, represented 4% growth versus prior year and prior quarter, primarily driven by higher demand and favorable inventory dynamics, partially offset by lower average realized price.
Total product sales (excluding Veklury) $7.1 billion, up 4% year-over-year and up 2% sequentially, driven by strength across the HIV portfolio, offset in part by lower oncology revenue.
Veklury sales $277 million, down 60% year-over-year, reflecting fewer COVID-related hospitalizations.
Non-GAAP EPS $2.47 for the quarter. Excluding the $400 million nonrecurring other revenue, non-GAAP diluted EPS would have been $2.22 for the third quarter.
Operating margin 50%, reflecting the continued focus on operating expense discipline and leverage.
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Operating Highlights
HIV therapies: 6% year-over-year growth for Biktarvy, 20% year-over-year growth for Descovy, and 35% sequential growth for Livdelzi. Yeztugo for HIV prevention delivered third quarter sales of $39 million or $54 million including the first few weeks of launch in June.
Liver portfolio: 12% year-over-year growth driven by Livdelzi, which exceeded $100 million in quarterly sales for the first time and became the #1 treatment for second-line PBC in the U.S.
Oncology: Progress with Trodelvy for first-line metastatic triple-negative breast cancer patients, targeting a commercial launch in 2026. Anito-cel for multiple myeloma also targets a 2026 launch.
HIV market: Increased full-year HIV revenue growth expectations to approximately 5% despite a $900 million headwind from Medicare Part D redesign. Yeztugo achieved 75% payer coverage in the U.S. nearly 3 months ahead of target.
Liver disease market: Filed for FDA approval of bulevirtide for chronic hepatitis delta virus, expected to launch in the U.S. in 2026.
Oncology market: Trodelvy's potential launch in first-line metastatic TNBC in 2026 could expand its leadership in breast cancer. Anito-cel for multiple myeloma also targets a 2026 launch.
Financial performance: 22% year-over-year growth in non-GAAP EPS, with disciplined operating expense management. Total product sales excluding Veklury were $7.1 billion, up 4% year-over-year.
R&D and pipeline: Progressed 56 clinical programs, including advancements in HIV prevention and treatment, liver disease, and oncology. ARTISTRY-1 and ARTISTRY-2 studies for next-generation HIV treatments are on track for updates.
Portfolio diversification: Several just launched or soon-to-be launched products across HIV, oncology, and liver disease. No major loss of exclusivity (LOEs) until 2036.
In vivo cell therapy: Acquired Interius team and entered a collaboration with Pregene Biopharma to accelerate exploration of in vivo cell therapies.
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Risk or Challenges
Medicare Part D redesign impact: The company faces a $900 million headwind for its HIV business in 2025 due to the Medicare Part D redesign, which could impact revenue growth.
Cell therapy competitive headwinds: Cell therapy sales declined by 11% year-over-year and sequentially due to competitive pressures from in-class and out-of-class therapies, with these headwinds expected to persist in the near future.
Lower oncology revenue: Oncology revenue was lower, partially offsetting growth in other areas, which could indicate challenges in maintaining or growing market share in this segment.
Veklury sales decline: Sales of Veklury were down 60% year-over-year due to fewer COVID-19-related hospitalizations, impacting overall revenue.
Regulatory and market access challenges: The company is working to expand payer coverage for new products like Yeztugo, but achieving full market access remains a challenge, with 90% coverage targeted by mid-2026.
Supply chain and manufacturing hurdles: Efforts to lower hurdles for community adoption of cell therapies and improve manufacturing processes for in vivo therapies indicate ongoing operational challenges.
Economic and pricing pressures: Lower average realized prices in the HIV segment and unfavorable inventory dynamics in oncology suggest economic pressures and pricing challenges.
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Guidance & Outlook
HIV Revenue Growth: Full year HIV revenue growth expectations increased to approximately 5%, despite a $900 million headwind associated with the Medicare Part D redesign. The company is confident in continued growth in 2026, supported by strong product leadership and an innovative pipeline.
Yeztugo Launch and Growth: Yeztugo for HIV prevention achieved $39 million in third-quarter sales and $54 million including the first few weeks of launch. Payer coverage has reached 75%, ahead of schedule, with a target of 90% by mid-2026. The product is expected to contribute significantly to growth in 2026.
Next-Generation HIV Treatments: Phase III ARTISTRY-1 and ARTISTRY-2 studies for a single-tablet regimen of bictegravir and lenacapavir are progressing, with a product launch targeted for early 2027.
Liver Disease Portfolio: Livdelzi sales exceeded $100 million in the quarter, becoming the #1 treatment for second-line PBC in the U.S. FDA approval for bulevirtide for chronic hepatitis delta virus is expected in 2026.
Oncology Developments: Trodelvy is targeting a commercial launch in 2026 for first-line metastatic triple-negative breast cancer, supported by positive Phase III ASCENT-03 and ASCENT-04 data. Anito-cel for multiple myeloma is also targeting a 2026 launch, with updates from the pivotal iMMagine-1 study expected by year-end.
Cell Therapy: Anito-cel for multiple myeloma is targeting a commercial launch in 2026. Efforts to expand cell therapy adoption and next-generation pipeline development are ongoing.
Financial Guidance: Total product sales for 2025 are expected to be between $28.4 billion and $28.7 billion, with non-GAAP EPS guidance raised to $8.05-$8.25. HIV franchise growth is expected to be approximately 5% year-over-year, while cell therapy revenue is forecasted to decline by 10%.
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Shareholder Return Plan
Share Repurchase: We returned $1.4 billion to shareholders in the third quarter, which included $435 million of share repurchases. These repurchases are intended to offset equity dilution at a minimum, but can also be used opportunistically as you've seen in the first 3 quarters of 2025.
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Key Q&A
Q:On Yeztugo, are there any insights on patients switching from Descovy versus new PrEP patients? What are the demand drivers for the rest of the year?
A:Yeztugo's launch is progressing as expected, with a mix of switches from long-acting injectables, oral branded drugs like Descovy, and oral generics. The naive patient population is expected to grow as awareness increases.
Q:Can you clarify the $39 million sales number for Yeztugo in Q3 and the patient numbers?
A:Year-to-date Yeztugo sales are $54 million, with $15 million from initial inventory stocking in June. The company expects full-year sales of around $150 million. Access coverage has reached 75%, and conversion rates from script to approval have improved significantly.
Q:How is HIV treatment growth progressing, especially with the 5% year-over-year growth guidance?
A:HIV treatment growth is driven by Biktarvy (6% growth) and Descovy (20% growth). PrEP products like Descovy are seeing over 30% growth, and overall HIV prevention at Gilead is growing over 40%. Without the Part D redesign impact, growth would be around 8%-9%.
Q:What was the inventory impact for Yeztugo in Q3, and how are CVS pricing discussions progressing?
A:There was no inventory buy-in during Q3; the $39 million reflects true demand. CVS pricing discussions are ongoing, and the company is confident in reaching 90% access coverage within the first year of launch.
Q:What is the appetite for additional business development (BD) in liver-focused indications like NASH?
A:Gilead is actively exploring opportunities across liver disease, oncology, cell therapy, virology, and immunology. The company aims to add late-stage, derisked assets every 2-3 years to its portfolio.
Q:What is the expected sales trajectory for Yeztugo in Q4 and heading into 2026?
A:Yeztugo's sales are expected to gradually ramp up as access coverage and J-code integration improve. The company is focusing on setting up a strong platform for growth in 2026.
Q:What is the current mix of Yeztugo's buy-and-bill and white bagging?
A:Currently, 70%-80% of Yeztugo prescriptions are white bagging, with the rest being buy-and-bill. This mix is expected to evolve as practices integrate the J-code.
Q:What are the restrictions on Yeztugo's access, such as prior authorizations or co-pays?
A:Most plans have added Yeztugo with zero co-pays and minimal prior authorizations. The quality of access is high, with goals aligned to Descovy's 99% coverage and 88% unrestricted access.
Q:What is the patient journey for Yeztugo, and what are the barriers to switching?
A:The time from prescription to injection has improved significantly, with approval times reduced by more than half. Logistics, such as aligning drug delivery with patient appointments, remain a challenge but are improving monthly. Buy-and-bill is expected to further streamline the process.
Q:What is causing the week-to-week variability in Yeztugo's prescription data?
A:The variability is due to differences in IQVIA reporting and the merging of specialty pharmacy and buy-and-bill data. It will take a few quarters for the data to stabilize.
Q:What is the expected growth rate for the overall PrEP market?
A:The PrEP market is expected to grow at a rate of 14%-15%, driven by increased awareness and advertising.
Q:What is the status of the anito-cel filing and its expected efficacy and safety?
A:The anito-cel filing is on track for a second-half 2024 launch. The safety profile remains consistent with previous data, and the company looks forward to sharing more details at ASH.
Q:What is the feedback on Yeztugo from patients and physicians?
A:Feedback has been positive, with a 98% satisfaction rate among trained healthcare providers. Education on injection techniques and post-treatment care has been effective in ensuring a smooth experience.
Q:How is Gilead preparing for potential drug pricing changes in the U.S.?
A:Gilead is engaged in constructive discussions with the U.S. administration, emphasizing its role in innovation and addressing patient costs. The company has a strong U.S. footprint, with 80% of its IP and 90% of its taxes in the U.S.
Q:What gives Gilead confidence in Hepcludex's approval for HDV, and what is the market opportunity?
A:Additional data from Europe and real-world settings support Hepcludex's approval prospects. The market opportunity is smaller but strategically fits Gilead's hepatitis B footprint, addressing a significant unmet need.
Q:Review of Unclear Management Responses
A:Management avoided providing specific filing dates for anito-cel and did not comment on subsectors like NASH in detail. They also used broad language when discussing potential drug pricing changes in the U.S., focusing on general principles rather than specifics.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ARTISTRY
ASCENT
Biktarvy Descovy
ESMO
GS
Phase III
Slide
access
anito cel
breast cancer
bulevirtide
cell therapy
chemotherapy
date HIV
demand
development
disease
end
launch
lenacapavir
liver
market
month
opportunity
patient
payer
potential
prevention
product
program
regimen
result
sale
study
treatment line
trial
update
zimberelimab
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Frequently Asked Questions
Where does this earnings call transcript come from?
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