Gilead Sciences Q2 Earnings Call Highlights

Key Points

• Base business sales rose 10% year over year to $7.6 billion, led by HIV, oncology and liver treatments. Gilead raised its full-year base business sales outlook to $29.8 billion–$30.1 billion and increased expected HIV sales growth to 9%–10%.
• The HIV prevention business more than doubled to over $1 billion in quarterly sales, with Yeztugo generating $232 million and Descovy PrEP about $801 million. Gilead expects an FDA decision on BIC/LEN by Aug. 27 and is targeting a potential 2027 launch for a once-weekly islatravir/lenacapavir regimen.
• Reported non-GAAP EPS was negative $6.75 because of $11.2 billion in acquisition-related research and development charges tied primarily to Arcellx, Tubulis and Ouro Medicines. Excluding specified acquisition effects, illustrative EPS was $2.27, while lower Veklury sales led Gilead to cut its full-year Veklury forecast to approximately $300 million.

Gilead Sciences NASDAQ: GILD reported second-quarter 2026 base business sales growth of 10% year over year to $7.6 billion, supported by HIV treatments and prevention products, Trodelvy in oncology and Livdelzi in liver disease. The company raised its full-year base business sales outlook and increased its expected HIV growth rate, while reporting a quarterly non-GAAP loss driven by acquisition-related research and development charges.

Chairman and Chief Executive Officer Daniel O’Day said the company’s base business delivered its strongest second-quarter growth in three years. “This was also an exciting quarter of clinical execution with positive updates across our core therapeutic areas,” O’Day said.

HIV Growth Drives Raised Outlook

Second-quarter HIV sales rose 12% from a year earlier to $5.7 billion. Gilead increased its expectation for full-year HIV sales growth to 9% to 10%, compared with prior guidance for 8% growth.

Biktarvy sales increased 7% year over year to $3.8 billion. Chief Commercial and Corporate Affairs Officer Johanna Mercier said growth reflected higher average realized prices, inventory build and demand. Sequential sales growth was partly offset by lower demand tied to market dynamics, including a greater-than-expected impact from Affordable Care Act-related changes.

Mercier said HIV treatment market growth slowed during the quarter as some patients navigated changes in insurance coverage, though Gilead expects the market to return to its typical annual growth rate of 2% to 3%.

Gilead’s HIV prevention, or PrEP, business more than doubled year over year and exceeded $1 billion in quarterly sales for the first time. The company said its total PrEP business is now operating at an annual run rate of $4 billion.

• Yeztugo recorded second-quarter sales of $232 million, up 40% sequentially. Gilead maintained its expectation for about $1 billion in full-year Yeztugo sales.
• Descovy PrEP sales were approximately $801 million, up 60% year over year, driven by demand and higher realized prices related to channel mix.
• Gilead said more than 70% of Yeztugo users returned for reinjection at six months, extending their protection for a full year.

Mercier said Yeztugo had become the leading long-acting PrEP option for treatment-naive users and the leading option in the PrEP switch market across oral and injectable products. The company recently introduced a patient-support program, called Ready to Go, that includes text-message reminders, education, patient-support links and nurse call-center services intended to support persistence.

Gilead expects an FDA decision by Aug. 27 on bictegravir plus lenacapavir, or BIC/LEN, a once-daily oral regimen for virally suppressed people with HIV. The company also plans global filings for its once-weekly islatravir plus lenacapavir regimen, developed with Merck, and sees a potential launch in 2027 following positive Phase III ISLEND-1 and ISLEND-2 results.

Oncology Expansion and Cell Therapy Preparations

Trodelvy sales rose 26% year over year to $457 million, driven by demand in triple-negative breast cancer and pretreated HR-positive, HER2-negative metastatic breast cancer. During the quarter, the FDA approved Trodelvy in first-line metastatic triple-negative breast cancer across PD-L1 status.

Mercier said the first-line metastatic triple-negative breast cancer population is nearly twice the size of the second-line setting and has a longer median treatment duration. Gilead expects the approvals and updated NCCN guidelines to broaden adoption of the drug.

The company also closed its acquisition of Tubulis, adding an antibody-drug conjugate platform and clinical-stage candidates. Chief Medical Officer Dietmar Berger highlighted Phase I data for GS-8824, formerly TUB-040, in platinum-resistant ovarian cancer. Across selected doses, the NaPi2b-directed antibody-drug conjugate showed a confirmed objective response rate of 61%, median progression-free survival of 11 months and a low rate of hematological toxicity, according to Berger.

Gilead expects to enter registrational development of GS-8824 in platinum-resistant ovarian cancer as early as 2027. It has also added early-stage programs in platinum-sensitive ovarian cancer and other advanced tumors.

Cell therapy sales were $417 million, down 14% year over year amid competition across regions. Sales rose 2% sequentially, reflecting increased Yescarta demand that was partly offset by competitive pressure on Tecartus.

Gilead is preparing for a potential launch of anito-cel in fourth-line or later relapsed or refractory multiple myeloma, with a Dec. 23 PDUFA date. The company completed its acquisition of Arcellx in April, giving it full ownership of anito-cel and the D-domain binder platform. Berger said enrollment in the iMMagine-3 second-line multiple myeloma trial was completed during the quarter, with a potential filing in that indication as early as 2027.

Liver Business Gains Momentum

Livdelzi sales more than doubled year over year to $167 million, supported by U.S. demand and uptake in Europe. Gilead said Livdelzi remains the leading second-line treatment for primary biliary cholangitis.

The company also reported positive top-line Phase III IDEAL results in patients with inadequately controlled primary biliary cholangitis and lower alkaline phosphatase levels. Berger said the study showed statistically significant composite alkaline phosphatase normalization, with detailed findings expected at a medical conference later this year.

Total liver disease sales increased 10% year over year to $877 million. Gilead launched Hepcludex in the U.S. after the FDA granted accelerated approval in May, making it the first and only FDA-approved treatment for chronic hepatitis delta virus infection. The company expects Hepcludex to be a modest growth contributor.

Acquisition Charges Affect Reported Earnings

Total product sales were $7.6 billion, up 8% year over year, as base business growth was partly offset by lower Veklury sales. Gilead reduced its full-year Veklury sales forecast to approximately $300 million from approximately $600 million, citing fewer COVID-19-related hospitalizations.

Chief Financial Officer Andrew Dickinson said second-quarter acquired in-process R&D expenses were $11.2 billion, largely related to the Arcellx, Tubulis and Ouro Medicines acquisitions. As a result, Gilead reported non-GAAP diluted earnings per share of negative $6.75 and a non-GAAP operating margin of negative 94%.

Excluding acquisition-related IPR&D expenses and nonrecurring other revenue, Dickinson said illustrative non-GAAP diluted EPS was $2.27 for the quarter. Gilead raised its full-year base business sales outlook to $29.8 billion to $30.1 billion, representing growth of about 6% to 7% year over year. It forecast full-year non-GAAP EPS of negative $0.65 to negative $0.30, while illustrative EPS excluding specified acquisition-related effects and nonrecurring other revenue was projected at $8.50 to $8.85.

The company returned nearly $1.4 billion to shareholders in the second quarter, including $355 million in share repurchases. Dickinson said Gilead does not currently anticipate pursuing additional sizable acquisitions this year as it focuses on integrating the businesses and platforms acquired during the first half.

About Gilead Sciences (NASDAQ:GILD)

Gilead Sciences, Inc, founded in 1987 and headquartered in Foster City, California, is a biopharmaceutical company focused on the discovery, development and commercialization of medicines in areas of high unmet medical need. The company initially built its reputation in antiviral therapies and has since expanded into oncology, cell therapy and inflammatory diseases. Gilead operates a global research and commercial organization, conducting clinical development and selling medicines in markets around the world.

Gilead's product portfolio is anchored by antiviral therapies for HIV and viral hepatitis.

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