Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2020 Gilead Sciences Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Douglas Maffei, Senior Director of Investor Relations. Thank you. Please go ahead, sir.

Thank you, Dillon, and good afternoon, everyone. Just after market closed today, we issued a press release with earnings results for the third quarter of 2020. The press release and detailed slides are available on the Investors section of our website. The speakers on today's call will be Daniel O'Day, Chairman and Chief Executive Officer; Johanna Mercier, Chief Commercial Officer; Merdad Parsey, Chief Medical Officer; and Andrew Dickinson, Chief Financial Officer. Also on the call and available for question-and-answer will be Christi Shaw, Chief Executive Officer of Kite; and Diana Brainard, SVP and Head of our Virology Therapeutic Area. Before we begin with our prepared remarks, let me remind you that we will be making forward-looking statements, including risks and uncertainties related to the impact of the COVID-19 pandemic on Gilead's business, financial condition and results of operations, plans, and expectations with regard to products, product candidates, corporate strategy, financial projections and the use of capital, and 2020 financial guidance, all of which involve certain assumptions, risks, and uncertainties that are beyond our control and could cause actual results to differ materially from these statements. A description of these risks can be found in the earnings press release and our latest SEC disclosure documents. All forward-looking statements are based on information currently available to Gilead, and Gilead assumes no obligation to update any such forward-looking statements. Non-GAAP financial measures will be used to help you understand the Company's underlying business performance. The GAAP to non-GAAP reconciliations are provided in the earnings press release, as well as on the Gilead website. I will now turn the call over to Dan.

Thank you, Doug, and good afternoon, everyone. This has really been a pivotal quarter for Gilead. With last week’s closing of the Immunomedics acquisition, we’ve effectively transformed our near and long-term growth story. Trodelvy, an approved medicine for third-line metastatic triple-negative breast cancer has tremendous potential for patients today and significant pan-tumor potential for the future. We're all excited to deliver on that potential along with the teams from Immunomedics who became a part of the Gilead family last week. I want to take this opportunity to thank everyone at Immunomedics for the extraordinary work that you've done on Trodelvy to date. It's an honor to work with all of you now to build on those efforts to the benefit of patients with cancer around the world. The acquisition is undoubtedly an inflection point in terms of our growth and adds to the growing pipeline of transformational medicines that we've been strengthening over the course of the year. All of this is building on the strong foundation of our core business. We've seen the strength and durability of our HIV business once again in the past quarter, and we're confident in our long-term leadership. I'd like to briefly talk about the changing nature of our growth prospects, driven primarily by the acquisition of Immunomedics. I'll also touch on our core business and I'll share a few words about Veklury, or remdesivir, which just gained FDA approval, and then Johanna and Merdad will pick up with more details. I'll start with Immunomedics and Trodelvy. The acquisition of Immunomedics is the largest transaction in Gilead's history and undoubtedly marked a turning point for the Company. As you know, Trodelvy is already approved in the U.S. for third-line metastatic triple-negative breast cancer. The recent data at ESMO underscored its transformative potential for this particularly challenging form of cancer, as well as the potential for treating bladder cancer. We will explore expansion into earlier lines of therapy in the short term, and overall we see Trodelvy as a pipeline and a product. The prevalence of Trop-2 in multiple cancer types means Trodelvy has pan-tumor potential. Secondly, in addition to its extensive potential as a monotherapy, Trodelvy stands out because of the way it lends itself to combinations. The early data are promising, and we look forward to exploring combinations with various types of agents going forward. The acquisition gives us an immediate presence in the field of solid tumors and brings us a significant expertise from the teams at Immunomedics. We're complementing our existing strengths in hematologic cancers through our combined Kite and Gilead pipelines, and building on the important progress we've already made this year in building our oncology pipeline. Including Immunomedics, we've completed a total of 10 transactions in oncology so far this year. I'll just mention two of the significant opportunities that are the results of those transactions. Magrolimab is now in Phase 3 for MDS and offers a potential first-in-class option utilizing the CD47 pathway to activate the innate immune system. Our partnership with Arcus is progressing well. We are particularly excited by the potential of the TIGIT compound, as well as other work that's coming out of that collaboration. In cell therapy, we're now the only company with two FDA approved therapies, Yescarta and Tecartus from Kite. Earlier this month, we received a positive opinion for KTE-X19 from the European Medicines Agency, the Committee for Medicinal Products for Human Use. I'm also pleased to announce that the FDA has accepted the Yescarta sBLA for relapsed/refractory follicular lymphoma and marginal zone lymphoma after two or more lines of systemic therapy. The agency also granted priority review for this application. ZUMA-7, the industry's first-ever randomized trial in cell therapy and the only cell therapy in second-line with overall survival as an endpoint will be delayed slightly due to the slowdown in the rates of events. However, we expect the data in the first half of 2021, and based upon that data, we're ready to submit quickly after. In summary, we made great progress in building out and advancing our pipelines to drive growth this year. And Trodelvy represents a true growth inflection point, changing our outlook significantly, and positioning Gilead as an important contributor in the field of oncology. The foundation for all this additional growth is our durable core business. In HIV, we saw a solid rebound in the third quarter with 14% quarterly sequential growth in the global franchise. While COVID-19 continued to impact our business, there were clear signs of recovery in the third quarter. Moreover, the underlying demand is strong as Biktarvy continues to be the treatment of choice for patients and providers. On the prevention side, we exceeded the goal we set at the beginning of the year of switching 40% to 45% of clinically appropriate at-risk individuals on PrEP to Descovy. As of October 1st, we were at 46%. Johanna will share more perspectives on our third quarter sales in a few moments. Finally, I'd like to briefly comment on remdesivir, what we now refer to by its brand name of Veklury. Veklury received full FDA approval this month for treating hospitalized patients with COVID-19. It’s the only FDA approved therapy for COVID-19 in addition to being authorized or approved for use in more than 50 countries worldwide. We are also now in a position to meet global demand because of the work we've done since January to ramp up our supply. It's worth stepping back for just a moment to recognize how remarkable it is that we are in this position today. At the start of the year, most of the world had not even heard of COVID-19. The scientific community knew very little about the virus or its devastating potential. Today, less than 10 months later, we have an FDA approved therapy that is helping patients around the world to recover faster, and for some groups of patients, Veklury is lowering the risk of death. All of this comes at a time when the rates of hospitalization sadly in many places are increasing. We have repeatedly seen the clinical benefits of Veklury across multiple clinical trials. In the past quarter, these benefits have been unequivocally demonstrated by the gold standard of global clinical trials. The definitive results from the fully powered double-blind placebo-controlled and randomized NIAID ACTT-1 trial showed an average reduction in recovery time of five days. I sometimes imagine how I would feel if a family member was hospitalized for COVID-19. And I'm sure many of you think of this as well. I'm extremely grateful that a therapy exists that has been validated with all of the rigor required for an FDA approval and whose benefits have been demonstrated in peer-reviewed data from a trial that is without question the pinnacle of clinical studies today. Merdad will talk about all the recent data on Veklury, including what we've seen from the WHO study and the ongoing development program, shortly. Johanna will talk about the recent move to a commercial distribution model in the U.S., which is going very well. I'd just like to close on Veklury by expressing my gratitude once again to all the Gilead employees who've put their hearts and souls into this work since January, along with our many partners. On behalf of all of us, I want to say how privileged we feel to play a role in helping with the pandemic and be able to put our antiviral expertise to work for patients with COVID-19. I also want to emphasize that we will continue to do all it takes to fulfill our responsibility with Veklury. To wrap up my prepared remarks, I want to emphasize that our portfolio and pipeline are much stronger going into the fourth quarter and 2021. By executing on our strategy in a disciplined way throughout the past 12 months, we have significantly changed the nature of our growth process, especially following the acquisition of Immunomedics, and we have maintained the long-term durability of our core HIV franchise. We're not done, of course, but we made significant progress. And for that, I want to thank all the teams at Gilead and Kite, and our many partners worldwide. With this, I'll hand the call now over to Johanna.

Thanks, Dan, and good afternoon, everyone. I want to begin by building on Dan's comments about our durable core business. Our results through Q3 amid the ongoing COVID-19 pandemic have been strong. And as anticipated, we continue to see signs of recovery during the quarter in underlying demand trends across our core franchises in U.S. and Europe. Looking at our HIV business. We continue to make great progress in both treatment and prevention. Biktarvy in treatment and Descovy for prevention continue to gain share quarter-over-quarter. In treatment, Biktarvy remains the number one regimen across key global markets. In the U.S., one in two new patients start on Biktarvy and roughly one in two patients switching to Biktarvy do so from a non-Gilead single tablet regimen, growing overall Gilead share. In PrEP, despite COVID dynamics, we continue to make progress with Descovy, with a 46% conversion of clinically appropriate individuals at risk at the end of September, exceeding our stated goal of 40% to 45%. Our overall HIV revenue in Q3 was very strong with 14% sequential growth over Q2 and 8% year-over-year growth, driven by both strong demand fundamentals and normalized inventory dynamics. The unique quarterly phasing of inventory dynamics this year and the recent Truvada loss of exclusivity will impact our sequential quarterly revenue dynamics in the fourth quarter. With 91% of Gilead's U.S. patients having converted to TAF-based regimens, we will continue to build on our strength in HIV, including long-acting formulations for both treatment and prevention. Now, briefly on HCV. Our HCV business showed 4% sequential growth over Q2 while down 31% from Q3 last year due to lower patient starts year-on-year. As markets started to reopen in the U.S. and Europe, we saw an increase in diagnosis and patient starts in Q3. Our stock market share across core markets puts us in a position of strength as patients return through the rest of the year and into 2021. I'd like to now highlight some specifics on the initial commercialization of Veklury, which began in the third quarter. As our teams have begun reaching out to physicians and hospital systems, it has been incredibly inspiring to hear their stories of how they have used this medication and what it meant to patients as well as their loved ones. As a reminder, the commercial model in the third quarter was governed by an agreement with the U.S. government to allocate 90% of our supply to patients in the U.S. through a partnership with the U.S. Department of Health and Human Services. During the quarter, we recorded Veklury sales of $873 million. A portion of inventory that will be consumed in Q4 was recognized as revenue in the third quarter. As Dan mentioned, we have now pivoted beginning October 1st to a more traditional commercial model, working directly with AmerisourceBergen to provide Veklury directly to U.S. hospitals. AmerisourceBergen will remain our sole distributor of Veklury through the end of the year to ensure consistency and continuity. In Europe, we signed a joint procurement agreement with the European Commission on October 8th that enables participating countries in the EU, the European Economic Area and UK to purchase Veklury to meet both real-time demand and stockpiling needs, coordinated by the European Commission. This agreement temporarily removes the need for country-by-country reimbursement processes that typically follow marketing authorization, recognizing the urgency of the current health crisis. It encompasses purchases of Veklury over the next six months and can be extended if needed. Predicting the underlying demand of core Veklury continues to be challenging, given so many variables, including incidence rates, hospitalization rates as well as future vaccines and emerging treatments. Now, turning to Trodelvy. As you know, the Immunomedics deal closed less than a week ago, and we're already working closely with the joint team to ensure the continuity of Trodelvy's strong launch in third-line metastatic triple-negative breast cancer and accelerate its future potential. It is a true catalyst for growth, and the joint team is energized as we continue to accelerate the work on this transformational therapy together as one team. While not part of our third-quarter results, I'd like to highlight Immunomedics Q3 results for Trodelvy in the U.S. Trodelvy achieved $53 million in net sales in Q3, the first full quarter of commercial availability. Total net sales were $73 million in the first five months of commercial launch in the midst of the pandemic. Over 1,000 accounts ordered Trodelvy in the first five months of commercial launch, and of those, about 488 were new and unique in Q3. We've seen robust adoption continue in Q3 in both community and academic centers. We look forward to expanding commercialization to Europe and other markets around the world as quickly as possible, starting with an EU submission in Q1 of next year. And to close, a few words on Jyseleca, which is the brand name for filgotinib. Jyseleca has now launched in Germany, and launch planning is well underway across Europe as well as Japan. We anticipate sales in both regions during the fourth quarter. Despite a crowded and competitive marketplace, the teams are well-prepared to differentiate Jyseleca. We look forward to updating you on our progress in the future. Merdad will provide a little bit more color on the ongoing regulatory considerations and our thinking there. And so, with that, I'd like to turn the call over to Merdad.

Thank you, Johanna, and good afternoon, everyone. I am happy to discuss several updates and progress regarding our clinical pipeline. To begin with Veklury, we are excited about its recent full approval by the FDA. Veklury is now approved in the U.S. for treating hospitalized patients with COVID-19 based on solid evidence from three rigorous, randomized, controlled clinical trials conducted over the past six months. It is the first antiviral treatment shown to help hospitalized patients with COVID-19 recover more quickly and leave the hospital sooner, which is a significant advantage for patients, their families, and society. The results of these trials include the double-blind, placebo-controlled NIAID Phase 3 ACTT-1 trial, which was published recently in the New England Journal of Medicine. This study achieved its primary endpoint of time to clinical recovery through day 29, showing that Veklury plus standard care reduced recovery time from 15 days to 10 days compared to placebo plus standard care, with a P-value of less than 0.001. The key secondary endpoint was also achieved, with patients receiving Veklury being 50% more likely to show improvement by day 15 compared to those receiving placebo, and this effect continued through day 29. Although the secondary mortality endpoint only suggested reduced mortality with a P-value of 0.07, early trials were initiated with limited knowledge about the disease and which patients might benefit from Veklury. Since clinical outcomes are closely linked to patients' oxygen needs at baseline, a post-hoc analysis was performed to explore mortality differences based on their requirement for oxygen support. This analysis found that in patients needing low-flow oxygen at baseline, the largest subgroup in the trial, over 40% of those who received Veklury experienced a 72% reduction in mortality at day 15 and a 70% reduction at day 29, with confidence intervals that do not cross one. These results align with our expectations for an antiviral therapy intended to be most effective when administered early in the disease, before critical illness develops. This data strengthens the evidence from two additional randomized controlled trials that established Veklury as a standard of care for treating hospitalized COVID-19 patients. All three Phase 3 trials have been published in peer-reviewed journals, and the raw data was provided to the FDA for their independent analysis as part of the NDA review process. We are actively looking for ways to expand the use of remdesivir as a central treatment, including exploring combination therapies that could enhance effectiveness and alternative administration routes that do not require intravenous delivery. Recently, interim results from the World Health Organization Solidarity trial were shared through a preprint server. These results do not change the efficacy demonstrated by remdesivir in the previously mentioned studies. The trial was designed to be pragmatic, allowing participation across various healthcare settings. However, there are aspects of the study design and data that require further clarification during the peer review process. Until we have received and examined the peer-reviewed data, it's challenging to discuss the findings in detail. Some concerns we and others have noted in the WHO study include the absence of PCR confirmation of COVID-19 at enrollment, the lack of differentiation between patients needing low-flow or high-flow oxygen in the results, unmonitored data, and 20% of the preliminary data being reported as missing. We can only speculate that these issues may have contributed to the study's negative outcomes. It is crucial to highlight that the total body of data available for Veklury indicates that antivirals are most effective when administered early in the disease process. As patients become sicker, complications such as inflammation, ARDS, fibrosis, and other issues may arise. The NIAID data suggest that patients on low-flow oxygen benefit the most in terms of discharge time and reduced mortality. An antiviral treatment cannot resolve existing inflammation or blood clots. Thus, it is logical that sicker patients on high-flow oxygen or mechanical ventilation may still require antiviral treatments, but they would also need additional therapies like dexamethasone to manage inflammation, as supported by WHO data. We look forward to gaining more insights into the Solidarity trial results and sharing this information with regulators when we receive the data. At this moment, it is imperative to acknowledge that the world is still battling a persistent pandemic. With infection rates rising again in the U.S. and Europe, it is vital for physicians to have all available treatment options and for patients to be encouraged to seek care for what we know can progress rapidly and be life-threatening. We are proud of Veklury's role during this pandemic, and I am deeply thankful for the dedicated team that has worked tirelessly to advance this treatment for patients, including our collaborators at the NIAID and the investigators and patients who have been essential in conducting these studies. We often receive letters of appreciation from Veklury recipients, and we are grateful to provide this important treatment during these challenging times. Now, I would like to shift our focus to oncology. As Dan mentioned, we are thrilled to have brought the Trodelvy program in-house following the Immunomedics transaction. We are excited to welcome the talented Immunomedics team to Gilead. Trodelvy represents a pivotal growth opportunity for the company, and I would like to highlight recent advancements that excite us about this medicine's full potential. At the recent ESMO conference, Immunomedics presented data from the confirmatory Phase 3 ASCENT study. In this study, despite patients having a median of four previous anticancer treatments, those treated with Trodelvy showed a statistically significant and clinically meaningful improvement in overall survival, with a median of 12.1 months compared to 6.7 months for chemotherapy, and a hazard ratio of 0.48 with a P-value of less than 0.0001. Trodelvy also demonstrated a statistically significant improvement in overall response rate and clinical benefit rate when compared to chemotherapy. These impressive results should position Trodelvy as a new standard of care for patients with third-line metastatic TNBC. In the area of urothelial cancer, as reported at ESMO last month, Immunomedics shared positive results from cohort one of the pivotal Phase 2 TROPHY U-01 study of Trodelvy in cisplatin-eligible patients with metastatic urothelial cancer. These results confirm the findings from previous Phase 1/2 studies, indicating that Trodelvy shows significant activity and is well tolerated in patients with heavily pretreated metastatic urothelial cancer who progressed despite platinum-based chemotherapy and checkpoint inhibitors. We believe Trodelvy has the potential to be an important new treatment for patients with metastatic urothelial cancer. Based on these promising results, we plan to submit a supplemental BLA to expand Trodelvy's label to include the ASCENT results in Q4 to the FDA under the RTOR program. We also expect to submit an sBLA for accelerated approval of Trodelvy in metastatic urothelial cancer in Q4. Additionally, the MAA for Trodelvy in metastatic TNBC in Europe is planned for submission to the EMA in the first quarter of 2021. We are looking forward to exploring Trodelvy's potential in earlier lines of therapy and additional tumor types. Results from studies involving combinations with PARP inhibitors and checkpoint inhibitors give us even more opportunities to investigate this new treatment for patients. Beyond Trodelvy, I would also like to highlight other exciting opportunities in our oncology pipeline. With magrolimab, our anti-CD47 asset, we are pursuing options for an accelerated approval pathway in combination with azacitidine for MDS in 2021 based on ongoing single-arm study results. As with any single-arm studies, there are risks, and the FDA will evaluate the total data to determine if there is sufficient evidence of substantial benefits over existing standards of care. The recent breakthrough designation for magrolimab recognizes its potential and allows for more frequent interactions with the FDA. We have also secured prime designation for magrolimab, further acknowledging its potential. We have initiated an enhanced randomized Phase 3 study comparing magrolimab plus azacitidine against azacitidine alone in higher-risk MDS patients to confirm earlier Phase 1 results for potential full approval. We are eagerly awaiting updates from our partner, Arcus, regarding their emerging data. As for antivirals, we are enthusiastic about lenacapavir, our investigational long-acting HIV-1 capsid inhibitor administered as an injection every six months. The study evaluating lenacapavir in highly treatment-experienced HIV patients is progressing, and we are on schedule for a planned filing in 2021. We recently announced a new study arm of lenacapavir within the existing women’s HIV prevention study, evaluating Descovy and Truvada for women at risk of HIV. Concurrently, we will initiate a study of lenacapavir for HIV prevention among men and transgender individuals who have sex with men. Regarding filgotinib, we are excited about the launch of Jyseleca for rheumatoid arthritis in Europe. Over the quarter, we shared data from the Phase 2b/3 selection trial in ulcerative colitis, which showed that filgotinib 200 milligrams induced remission by week 10 and achieved endoscopic, histologic, and six-month corticosteroid-free remission at week 58 while maintaining a consistent safety profile. We plan to file for filgotinib for ulcerative colitis in Europe before the year ends and in Japan early next year. As previously mentioned, in August the FDA issued a complete response letter regarding filgotinib in rheumatoid arthritis, requesting data from the MANTA and MANTA-RAy studies and raising concerns about the benefit-risk profile of the 200-milligram dose. We have met with the FDA for a Type C meeting to discuss MANTA and will have another Type A meeting in Q4 to further address the CRL. Meanwhile, we are pausing the screening and enrollment for ongoing trials in psoriatic arthritis, ankylosing spondylitis, and uveitis, as we believe the FDA meeting will provide important insights for the broader filgotinib development program. We continue to advocate for the benefit-risk profile of filgotinib. Additionally, we remain dedicated to studying inflammation and our long-term partnership with Galapagos. Lastly, I want to emphasize our focus on a strategic portfolio review and disciplined prioritization of our overall pipeline. We have provided a summary of key upcoming milestones across the pipeline in the materials shared. Now, I will pass the call to Andy.

Thanks, Merdad, and good afternoon, everyone. Our third-quarter performance was strong, and it reflects the solid underlying fundamentals in our core HIV franchise and the start of the post-donation phase for Veklury. It also reflects the ongoing and dynamic impact of the COVID-19 pandemic. You will find our detailed Q3 results in the press release and materials we have posted. In my following remarks, I will review elements of our Q3 performance and provide you with an update on our full year guidance. Turning now to the financial highlights. Total revenues for the third quarter of 2020 were $6.6 billion, with non-GAAP diluted earnings per share of $2.11. This compares to total revenue of $5.6 billion and non-GAAP diluted earnings per share of $1.64 for the same period last year. Non-GAAP diluted earnings per share for the third quarter of 2020 increased 29% year-over-year, primarily due to higher operating income driven by growth in HIV product sales and our initial Veklury sales as well as lower non-GAAP tax rate. As noted in the earnings press release, on a GAAP basis, the third quarter diluted earnings per share was $0.29, primarily due to $1.2 billion in charges related to our collaborations and equity investments in building out our oncology pipeline as well as a $900 million loss from unfavorable changes in the fair value of our equity investment in Galapagos. Product sales for the third quarter of 2020 were $6.5 billion, up 28% sequentially and up 18% year-over-year, primarily due to Veklury sales and our core HIV products driven by stronger demand as well as higher volume as channel inventory continues to normalize in the United States. HIV revenues grew sequentially 14%, driven by a continued patient uptake of Biktarvy and Descovy for PrEP and increased channel inventory purchases in the United States. HIV revenues increased 8% year-over-year, primarily due to higher demand driven by Biktarvy, and as I said earlier, the normalization of inventory purchases in the U.S., partially offset by lower sales of Truvada. HCV revenues grew 4% sequentially, primarily due to higher patient starts in the United States and Europe, but the revenues were down 31% year-over-year, primarily due to the COVID-19 pandemic and its impact on patient starts. Cell therapy revenues were down 6% sequentially due to COVID-19 and up 25% year-over-year, driven by continued patient uptake and expansion of Yescarta in Europe. Now, turning to our expenses. Non-GAAP R&D expense was $1.2 billion for the quarter, down 3% sequentially and up 12% year-over-year. The sequential decrease was primarily driven by lower investments in remdesivir in the third quarter. The year-over-year increase was primarily driven by higher investments in remdesivir, partially offset by pauses or deferrals of certain clinical trials due to the COVID-19 pandemic. Non-GAAP SG&A expense was $1.1 billion, down 6% sequentially and up 5% year-over-year. The sequential decrease in expenses was primarily driven by the second quarter accrual of $97 million related to a Department of Justice matter, which subsequently settled in the third quarter. The year-over-year increase was primarily driven by headcount growth, partially offset by lower marketing spend due to COVID-19. Now, moving to the balance sheet and cash flow. We finished the quarter with $26 billion in cash and marketable debt securities. During the quarter, we generated $2.3 billion in cash flow from operations. We paid dividends of $861 million. We repaid $2 billion of maturing debt, and we repurchased $201 million of stock. In addition, we issued $7.25 billion of senior notes and arranged a $1 billion term loan, which we drew down in Q4 to partially fund the acquisition of Immunomedics. After closing the Immunomedics acquisition, our balance sheet remains strong and our capital allocation priorities remain unchanged. We have, however, curtailed our share repurchase program in the near term as we focus on paying down debt incurred in the acquisition. As Dan indicated, the acquisition will immediately accelerate our revenue growth and is expected to be neutral to accretive to our non-GAAP EPS in 2023 and significantly accretive thereafter. Turning now to COVID and its continued impact on our business and the broader business environment. As we do every quarter, we've updated our base case utilizing external projections and views. As you know, the pandemic continues to progress in unpredictable ways. The recent uptick of infection and hospitalization rates in the U.S. and Europe is obviously of concern to all and will potentially impact the business environment during the fourth quarter and into 2021. Globally, external views suggest widespread vaccination will not become a reality until late in 2021. As a result, we expect the pandemic to continue to impact our business and broader market dynamics, including in particular, HCV, HIV PrEP and Veklury demand into 2021 and potentially beyond. We also expect that our HIV treatment business will continue to remain largely unaffected and that the remainder of our core business will continue to recover in the fourth quarter and into the first half of 2021. With that as context, let me turn to our updated full year 2020 guidance. It's important to reiterate that we are operating in a highly complex and dynamic environment and that projections are subject to greater uncertainty than it’s historically been the case. We have reaffirmed and narrowed our revenue guidance range to $23 billion to $23.5 billion, reflecting the latest estimates for Veklury. The guidance range provided during our second-quarter earnings reflected underlying uncertainty in the demand dynamics for Veklury, given the nature of this pandemic, and as Johanna mentioned earlier, factors such as the rate of infections by region, severity, hospitalizations and stockpiling demand, all of which have been difficult to forecast. On the expense side, we're raising our SG&A expense guidance to low-double-digit percentage growth, reflecting the Immunomedics acquisition. Our full year operating income guidance range is reaffirmed and narrowed and is now $10.7 billion to $11.2 billion. Our full year non-GAAP EPS range is also reaffirmed and narrowed and is now $6.25 to $6.60 per share. As we think about our performance to date and our guidance, we are encouraged by the significant progress we've made in such a challenging environment this year. Before we hand the call off for Q&A, we would like to express our gratitude to our 12,000 Gilead and Kite employees globally. Their spirit, dedication and resilience make it possible for us to have a meaningful impact on patients with some of the world's hardest to treat diseases. We'd now like to open the call for questions.

I show our first question comes from Matthew Harrison from Morgan Stanley. Please go ahead.

Great. Good afternoon. Thanks for taking the question. I guess, on filgotinib, can you guys maybe just describe what you're thinking in terms of the potential outcomes here once you have that Type A meeting? Is this something where you could decide not to launch the drug in the U.S. at all, or is this more a nuanced approach where maybe you won't move forward with RA, but move forward with the IBD indication? Thanks very much.

Hi Matthew, it's Merdad. Yes, predicting the outcomes is challenging. However, I believe both of the options you mentioned are feasible. I would lean towards your latter suggestion, which is that if we are unable to advance with rheumatoid arthritis, we would like to keep the possibility open to proceed with inflammatory bowel disease and continue those discussions, depending on the results from the MANTA and MANTA-RAy data.

I show our next question comes from the line of Evan Seigerman from Credit Suisse. Please go ahead.

So, with the recent review of Galapagos' Toledo program, Merdad, what do you really need to see from the proof-of-concept trials to opt in and be comfortable, potentially incorporating this into your portfolio, given your focus on portfolio optimization? Thank you.

Yes. Thanks. Great question. They're doing a really great job of exploring the potential of that program in multiple indications. And they have a great approach of trying to get there quickly, looking for early signals of activity. On our end, obviously, we would like to see the programs de-risked to the appropriate level at the time that we opt in. That will vary based on the signals we see and the magnitude of the improvement that we see. So, obviously, if you saw, hypothetically, a huge response in one indication that was really unexpected and blew it out of the water, we might opt-in more early. Whereas if it’s more nuanced in a small trial, we might want to flush that out a little bit more before we opt in. Our contract allows us to continue to work with them as the programs are de-risked. And our desire is to opt in and move as quickly as possible once we have an appropriate level of risk.

Our next question comes from the line of Cory Kasimov from JP Morgan.

I wanted to ask about remdesivir and the change to guidance now. I'm trying to understand what has changed since your guidance in the second quarter that has led to lowering the fiscal year guidance by $1.5 billion. Given the pace of infections across the country, could you provide more details on why this adjustment was made and how you see the market evolving?

Cory, it's Andy. I'll start, and Johanna can jump in as well. I think, it's relatively straightforward. I mean, it's a dynamic situation. It's very difficult to forecast, as we've discussed. And as I think most people understand, the rate of hospitalizations is the biggest factor that has moved around a lot over the last six months, and it continues to move today. So, what you're seeing is our latest estimate based on the information that we have we're pleased with the uptake in the third quarter, obviously, with the formal U.S. approval, the joint procurement agreement in place, Johanna and her team, I think, have a better sense of where we see the year, but it's still very dynamic and is unusual compared to what you have to typically forecast. Johanna, if you want to add anything to that?

Yes. Maybe just to add to that, Andy, I think what we're also seeing is the severity of the disease. So, I think as you saw through the summer months, even though there were surges, going through the U.S. mostly, some of those were younger patient populations. And therefore, the hospitalization rates really dropped over the summer months. We were seeing closer to 12% to 15% late Q2. As you go into Q3, they're closer to 5%. So, we're really tracking those very closely. It's not just the incidence. It’s really, to Andy's point, the hospitalization rates. And obviously, the assumption is, in light of the surge this fall, both in Europe as well as in the U.S., that those numbers will pop back up a little bit. So, that would be one piece of the puzzle. The other piece, I would say, is we looked at some of our assumptions around stockpiling, and although we've seen some stockpiling, not at the level that we had originally projected. And so, we're adapting to that as well.

Our next question comes from the line of Michael Yee from Jefferies. Please go ahead.

I wanted to follow up a little more on filgotinib. Obviously, it's an important driver, and you said you'll have a Type A meeting and you'll make some decisions. Can you just clarify what you would actually learn from a Type A? And if you were to, as you said, maybe keep IBD, isn't 200 milligrams really important, and so that would tie together with RA being approved at 200? So, maybe just explain a little bit where these scenarios would evolve from. And could you just make tough decisions to not go forward at all? Thank you.

Sure, Michael. I completely agree. The discussion in the Type A meeting will focus on what evidence the FDA expects regarding both issues to achieve a better understanding of the benefit-risk profile. We need to clarify this from both the 200-milligram perspective and the MANTA and MANTA-RAy perspectives. We'll receive guidance from the FDA at the Type A meeting on these two points. Based on the outcomes, we will make decisions on how to proceed, whether that means there is a clear path forward, if we can only advance with IBD, or if pursuing the 200-milligram option isn't feasible until we have results from MANTA and MANTA-RAy. All of these scenarios are possible, so it's difficult to predict the outcome. We will be open about how we plan to move forward after that discussion.

Our next question comes from the line of Geoffrey Porges from SVB Leerink. Please go ahead.

One question about Veklury and then a quick one on Trodelvy. For Veklury, could you provide insight into how many patients have been treated so far or at least this quarter, and share what the inventory stocking was? Additionally, can you give us an idea of the proportion of hospitalized patients receiving remdesivir, as we understand the standard of care? Merdad, could you also discuss the profile of Trodelvy and its combinations? It has notable safety and tolerability concerns, so which combinations do you believe it would be most suitable for? Thanks.

Let me start, Geoff, with the question about Veklury usage. In Q3, we observed an interesting dynamic since most of the supply was allocated to the U.S. patient population through the HHS. This resulted in an inventory build during Q3 that will be evident in Q4 specifically in the U.S. Additionally, due to the tremendous efforts of our manufacturing teams, we now have a supply that exceeds global demand. We are confident in our ability to meet global demand, particularly in Europe, given the drug procurement agreement and the recent surge in cases across several European countries. The percentage of patients receiving the drug varies by country and region, but it is steadily increasing. Following the FDA approval last week, we've seen increased interest, and our medical and commercial field teams are actively educating physicians on the best uses for Veklury. This aspect is crucial. Currently, we are noticing hospitalization rates indicating that around 40% to 50% of patients in the U.S. are using remdesivir, and we expect this number to rise as more people become informed about the published data and FDA approval. Merdad, could you now discuss Trodelvy?

I'll address the question about Trodelvy, Geoffrey. So far, the data on the Trodelvy combination suggests a couple of key points. First, looking at the combinations tested, we have data involving both parts and checkpoint inhibitors, which appear to support further exploration of combos. This opens various opportunities for us. When reviewing the adverse event profile and discussing with investigators their observations and management strategies, we find that the primary toxicities are neutropenia and diarrhea. Investigators generally report that these toxicities are manageable, which gives us confidence in moving to earlier lines of therapy. The specific combinations we pursue will depend on the indication, whether it be breast, urothelial, or lung cancer. However, we are particularly optimistic about combinations with checkpoint inhibitors, as we have solid data supporting their use.

Our next question comes from the line of Alethia Young from Cantor Fitzgerald. Please go ahead.

I just wanted to talk a little bit about kind of big picture immunology. So, maybe depending on what you decide with filgotinib next year based on some of the conversations, like how are you thinking about the space? Are you still committed? Would you consider doing M&A or do you have an internal pipeline that continues to drive potential revenues there? Thanks.

Thank you, Alethia. I'll begin and then Merdad can add his insights. Firstly, our commitment to the three disease areas remains unchanged. As you know, our strategy announced at the start of the year relies on two solid scientific disciplines we possess through discovery at Gilead and with our partners: antivirals and immunomodulation. We are strongly focused on this strategy as it relates to both antivirals, inflammation and fibrosis, as well as oncology. We see significant synergies in this scientific approach. Immunology, as you know, spans numerous disease states. For example, it plays a role in our antiviral efforts, especially in some of our HBV cure initiatives. In the inflammation sector, we've discussed our current position with filgotinib. We have several follow-on agents in development with our partners at Galapagos and will remain open to external opportunities to enhance our inflammation portfolio. Additionally, we have made substantial progress in the oncology space, particularly in immuno-oncology over the last year, establishing a strong oncology foundation. Trodelvy provides us with a solid presence in treating solid tumors in a comprehensive manner, which we believe will complement our first-in-class, best-in-class immuno-oncology portfolio. Merdad, do you have any further thoughts on this topic?

I believe you covered all the important aspects, Dan. The only addition I'd make is that we have an outstanding team here, and I am confident that they will effectively guide our future in immunology. As Dan mentioned, we are dedicated to this area and will keep exploring both short-term and long-term opportunities that align with our portfolio.

I mean, maybe, Merdad, it's just important to emphasize the unmet medical need in that area. It's still a very significant.

Our next question comes from the line of Carter Gould from Barclays.

Maybe just to follow up on that same sort of question on portfolio construction. Historically, old Gilead was routinely criticized for not being as disciplined with many of its mid-stage assets. Clearly, the pipeline is much broader. You guys highlighted sort of a return to discipline. Yet, it doesn't seem to be apparent, I guess, when we look to the pipeline side. When you think about the size and breadth of the pipeline today, are you comfortable with that? And I guess, will we start to see some of those prioritization decisions start to manifest soon, or if there's things you can point to today? That would be helpful.

Yes, Carter. Our entire team is focused on developing a top-notch portfolio management process. Your question is valid, and it's an ongoing effort. We have recently brought on board several new team members with excellent expertise across various therapeutic areas. We are implementing processes across research and development as well as our commercial operations to facilitate informed decision-making. You can expect to see some of these efforts come to fruition soon. The guiding principle for Merdad, Johanna, the rest of the team, and myself is to ensure that only the highest quality programs meet our criteria. I am very pleased with our organization's progress, both operationally and scientifically, over the past year. However, as you know, this is an ongoing journey. We must continually assess our external environment and unmet medical needs, regularly revisiting our standards to make informed portfolio decisions. We are committed to making difficult choices and investing in the most promising opportunities. Additionally, we're closely examining the balance of our portfolio. Historically, Gilead has pursued many high-risk, high-reward projects, some of which have not been successful in later stages. We are dedicated to maintaining a balanced portfolio that upholds stringent standards for innovation while minimizing risks earlier in the development process. This approach increases the chances of success when we reach late-stage investments in Phase 3. These are all deliberate strategies we are collaboratively working on. Merdad, I apologize if I’ve overlooked anything. Please feel free to add your thoughts since you play a key role in organizing this portfolio.

The only thing I would add, Carter, is that it's a really insightful question. As Dan mentioned, we are truly committed to this. I can say that you will observe us applying that discipline, and it will become evident sooner rather than later. It's important to understand that many initiatives are already in progress, and it wouldn't make sense to deprioritize them at this stage. We'll allow those efforts to conclude. Consequently, it may take a bit longer to sort everything out. However, you will definitely see this approach reflected in our work as we analyze data and as new opportunities are integrated into our portfolio, where we will apply that discipline to ensure we are making some difficult choices.

Our next question comes from the line of Brian Abrahams from RBC Capital Markets.

A question on HIV, inventory and stockpiling. I'm wondering if you could quantify if what you observed in the third quarter was a benefit or just normalization. And if you look to fourth quarter and beyond, what should we expect with respect to potential stockpiling, just given the newest COVID spike versus inventory drawdowns?

I can take that one, Brian. This year, especially in Q3, has been quite different regarding inventory patterns due to COVID-19. Typically, we see an increase in product supply at the end of December in Q4, which impacts our total inventory for 2020. However, this year, that expectation is influenced by Truvada’s loss of exclusivity and the introduction of a generic by Teva in early October. As a result, we think that inventory levels will be somewhat lower than what we've seen in the past. We haven't factored in stockpiling related to COVID-19 since Q4 usually shows an increase compared to other quarters. In Q3, we believe we are seeing a normalization after the fluctuations of the last couple of quarters. Normally, Q1 reduces Q4 supply, but this year, we saw an increase in March because of COVID-19, followed by a decline in Q2, and then another increase in Q3, indicating a return to normal following those two quarters. Assuming Q4 behaves similarly to previous quarters, that is what we are currently projecting. I hope this clarifies our outlook for HIV.

Our next question comes from the line of Tyler Van Buren from Piper Sandler. Please go ahead.

I would like to get more clarity on the Veklury guidance. If we consider the midpoint of the revised guidance in relation to the beginning of the year and the Q3 sales, it could indicate that sales might decrease significantly in Q4 compared to the previous quarter. However, the core business has been slightly affected by the pandemic, which might balance things out. I would like to know what you are projecting for Veklury in Q4 or what your guidance reflects. Additionally, concerning the outpatient and inhaled studies, could you provide more detail on when we can expect that data? How much do you think demand might rise if those studies succeed?

Great. Thanks, Tyler. So, Andy, why don't you handle the guidance, and maybe we'll go to Diana for the updates on Veklury's next generation?

Sure. Hi, Tyler. Thanks for the question. I appreciate it. We're not providing specific product guidance, as you know, and we typically don't. But, as you suggested and as we mentioned earlier, the revision in guidance is tied not entirely, but almost entirely to expectations around Veklury. Johanna also mentioned that there was some excess inventory in the channel as a result of the terrific work that our manufacturing team did. And you'll see in our materials that we're on track to meet the expectation that we had set in terms of 2 million treatment courses by the end of the year. So, as inventory was moving into the channel in the third quarter, at the same time that hospitalization rates and the severity of the outbreak in the U.S., at least at that time, was coming down, there was less demand in the third quarter than expected. And then, you see that play through in the fourth quarter and the full year guidance. So, we didn't recognize revenue for all of the Veklury that was shipped in the third quarter, to be clear. Some of that was constrained, and then you see that playing through in the fourth quarter and the full year guidance. So, we can't be more specific than that. Happy to provide any additional color that we can, but we're not going to provide specific product level guidance. Maybe over to Diana.

Hi, Tyler. So, our outpatient study is ongoing. We're recruiting actively. And in terms of our predictions, we think that that study will wrap up early next year, and we should have results in the first quarter. It is harder than is typical to predict the dynamics of trial enrollment for COVID-19. So much depends on the number of cases, the competition with other clinical trials. So, we're going to have to kind of take it month-by-month and see how the dynamics go. As you know, we're approved with Veklury for hospitalized patients or patients in equivalent in-patient setting. So, in terms of then what that does for us once we have the trial results, if it were successful, we would then look to getting an expanded label for that population. So, that would be further down the line. But our first step is to get the study enrolled and see how Veklury performs in the outpatient setting where we're trying to prevent hospitalization rather than hasten recovery in the hospital.

Our next question comes from the line of Umer Raffat from Evercore. Please go ahead.

Just two very quick ones. First, on Biktarvy perhaps, the IMS trends don't appear particularly encouraging for the last six months or so. I know it's growing, but not the way it was in the past. I would love to get your take on that. And secondly, on the capsid inhibitor, Merdad, how are you thinking about possible candidates for a combo? I know, there are other companies with HIV candidates as well, and this has been an ongoing question. Where are you guys headed at?

Sure. Johanna can start, and then take it from there. Johanna, do you want to start?

We are very proud of the growth of Biktarvy. When looking at market share growth, it has increased by 8 percentage points year-over-year from Q3 '19 to Q3 '20. From Q2 to Q3, we saw a 1 percentage point increase. We believe the growth will continue. However, we have noticed some impacts from the market, particularly due to COVID-19, which affected our HIV treatment business and the rate of patient switches to newer agents. As a result, there are fewer transitions to newer therapies, but Biktarvy remains a key option within that group. Gilead's overall share is still strong, with over 75% of patients on a Gilead treatment, resulting in limited switches. We noticed a slight rebound in switching during Q3 and expect this trend to persist into Q4. In the U.S., our largest market, more than half of new patients are starting on Biktarvy, giving us approximately a 56% share of naïve patients. Despite a lower rate of switches, we still have about 50% of the switch patients moving to Biktarvy, primarily from non-Gilead single treatment regimens. This is a positive development for us. We remain very confident in Biktarvy's ongoing growth, which is evident globally as the market consolidates around it. Additionally, Biktarvy's rapid start is advantageous for naïve patients, especially considering the current guidelines that eliminate the need for genotype or HLA testing. This is further bolstering our share among naïve patients.

Yes. I have to take that. Hey, Umer. As you mentioned, look, we have both internal candidates for combining with lenacapavir, and we remain open. As you said, there are other agents out there that could potentially be combination partners. And we remain definitely open to figuring out what's in the best interest of patients. And we'll continue to be diligent on that front. So, I think both possibilities remain there.

And I show our last question comes from the line of Geoff Meacham from Bank of America. Please go ahead.

I just had a couple on remdesivir. Dan, you've talked about likely not making a major long-term contribution. So, I just wanted to ask, are the investments in nebulized or next-gen programs still a priority in the near term? And the second one related is, how do you manage your inventories for when the infection step down happens, which is hopefully sometime next year?

Thank you, Geoff, for your question. It's really valuable to understand your context. Let me make a few points. We believe that Veklury (remdesivir) will significantly contribute to Gilead, as evident from its sales so far, and we expect this to continue through the end of this year and into 2021. There is still much uncertainty surrounding the pandemic, but we know that a variety of strategies will be necessary to return to normal. This will include vaccines, therapeutics in hospitals, potential combinations of therapies in hospitals, and therapeutics for use before hospitalization. We are proud to be leading with a strong antiviral that is fundamental to addressing a pandemic. Continued investment is crucial, and we are committed to exploring further opportunities from pre-hospital settings to treating hospitalized patients. While we won't be involved in vaccines, we see a promising return on investment in therapeutics. The challenge, however, is that predicting outcomes can be complex; we've already experienced this as indicated by our guidance adjustments at the halfway mark of the year. We have reaffirmed and refined our guidance, but moving forward, we need to remain adaptable regarding how much Veklury contributes to our overall business. We are confident that Veklury will positively impact our sales, provide crucial cash flow for debt repayment, and support our ongoing investment in our antiviral portfolio and beyond. Additionally, due to our internal and external portfolio development over the past year, particularly with the Immunomedics and Trodelvy transaction, we are optimistic about our growth prospects in the short and midterm, with Veklury adding variability year over year. This reflects the main themes of today's call and the progress we've made over the past year. Thank you for allowing me to share this context.

Thank you. This concludes the Q&A session. At this time, I'd like to turn the call over to Douglas Maffei for closing remarks.

Thank you, Dillon, and thank you all for joining us today. We appreciate your continued interest in Gilead. And the team here looks forward to providing you with updates on our future progress.

Ladies and gentlemen, thank you. This concludes today's presentation. Thank you for participating. You may now disconnect.