Conference Transcript - GILD 2026-05-12

Speaker 3

Hi, guys. Welcome back to the Bank of America Healthcare Conference. Our next session is with Gilead Sciences. Sitting next to me on stage is Joanna Mercier, who is Chief Commercial Officer and Head of Corporate Affairs. Joanna, thank you for making the trip out west to see us today. Easy trip. Thank you. Thanks for having me. So, for the few people who don't know Gilead as well as some of the other people do, Just give us a quick overview of the company and its focus areas, and then we can go into more detailed questions.

Johanna Mercier, Other

Okay, great. So Gilead Sciences is still a young company. It's just coming on to about 40 years or so, and one that is specialized across three therapeutic areas, some more developed than others, but HIV, oncology, and inflammation. And the foundational piece of the business is really in HIV, both treatment and prevention, and really building the oncology franchise with both solid tumors as well as liquid tumors. And then, of course, a little bit earlier pipeline in the Inflam space, although we do have a PBC cell at Elpar with LivDelze that's also doing very well in the marketplace that just launched about two years ago now, coming up to two years. So the organization is really building on a strategy that it set force about six years or so ago of that diversification and delivering against it. We just announced our earnings just last Thursday with a really strong start to 2026. We updated our guidance by about 400 million on the midpoint. That was mostly driven by HIV. Yes2Go was a big play there. and then obviously Discovi and Victarvi as well, a little bit of Tridelvi, which is also very strongly performing. We also just did three recent acquisitions, one of which that closed just last month with Arcelix in cell therapy and then two more with Tubulus and Oro that should close this quarter. So a lot of activity going on there and I think it really was on a position of strength, right? We were in a situation that we were really in a good place with no LOEs out till 2036, no major LOEs. And we felt that this was the right time. We had scurried the markets and the bar was really high for the science. And we felt that these three were the right ones on building on even further strengthening that position. So well set for the near term and the longer term.

Speaker 3

Okay, great. So on the point of the recent business development activities, you did a few within a short amount of time. And you did it across the areas that you mentioned are your focus points. So can you talk to us about, you know, whether it's just coincidence that they all happened to come around the same time? Or, you know, is there, you know, a strategy about what stage of development you want to be acquiring when you foresee those becoming commercial and the amount of investments you would need to make in order to make those successful commercial launches eventually?

Johanna Mercier, Other

I don't think it was totally planned that we would do three acquisitions in a row. I think that for the last two years since the SimaBay acquisition, we've been scurrying the markets. As I mentioned earlier, the bar for the science was very high. We were in a position of strength, so therefore we had the luxury of being very choosy and choiceful in what we were looking at. And it all kind of came together. The Arcelex was one that we already had a collaboration with Arcelex for AnidoCell. AnidoCell launching with a Padufa date expected late December of this year. We felt now was probably the right time and was obviously a partner that we knew incredibly well, that we trusted. and trusted the science and the work because we'd been working with them for years. So that was one piece of the puzzle. So that was one of the three, and obviously in oncology. The second one in oncology was Tubulus. Tubulus was also a company, private company, but a company that we had a collaboration with as well in very early collab that was still ongoing and really we were so interested in the science and what they were doing, not just what they had as a compound for ovarian cancer, but also because of the platform that they had. And we were really interested in that since our experience with ADCs, with Trodelvi as well. So that was exciting to us, and that was something that we pulled through as well. And then last but definitely not least, Oro, which is more in the inflammation space. Most of these are, for now, orphan drug diseases that we're looking at pretty closely. But with the opportunities for longer, right, it's really about the sustained response with this sub-Q, gangatrimid, that could be really interesting for us, let alone additional compounds to follow. So it basically hit our sweet spot across all three therapeutic areas that we were looking at, right, oncology and inflammation. HIV, most of that is organic in-house. and we're excited about kind of continuing to scurry the markets but I think we also have to digest a little bit and make sure we deliver. I think speed to patience is our strategy on this one and across all of them to make sure we'd really deliver at that level.

Speaker 3

Okay so with Arcelex as you mentioned you were already intimately knowledgeable about that platform. Can you talk Talk to us about how Gilead thinks about the opportunity in the multiple myeloma market using InitoCell. And how has that, if at all, changed by, you know, fully owning the company?

Johanna Mercier, Other

Yeah, listen, I think the opportunity is the same. I think owning fully the organization probably just gets us the speed that we need to really maximize the opportunity. And this has nothing to do with our cellics, right? It just has to do with two companies sometimes coming together and having to work together. it takes a little bit more time. And so that's definitely an opportunity that we see on our own. The opportunity that we see, the first launch would be in the fourth line multiple myeloma market. That fourth line market is about a $3.5 billion market and one that we believe can really make a difference with the profile that any no cell has to offer. And the profile is not just the efficacy, but it's also the safety profile that right now is looking very differentiated versus current marketplace. And so fourth line is one piece of the puzzle. It's the first launch. But really, the opportunity is much greater than that. And because of the safety profile, moving into earlier lines of therapy, second line, and eventually even first line, is the way we're thinking about that. And then that could look like a much larger market, like a $20 billion addressable patient population. So that's the opportunity. The one thing that we're thinking about as well with UnidoCell, and we're hearing anecdotally from physicians is obviously with our capabilities already established with authorized treatment centers, we're going to be up to about 200 authorized treatment centers before the end of the year and making sure we basically operationalize them for the launch of AneedoCell. This will be kind of the biggest launch that we've seen with cell therapy with 200 ATCs versus maybe, you know, 25% of that when others have launched in the past. And so I think that will make a big difference, let alone the profile lends itself well to the community setting, which is where most of the multiple myeloma patients are. And so all of those pieces together, I think will make for a very successful launch and a setup for earlier lines of therapy.

Speaker 3

Do you think you'll need to add to the sales infrastructure for this launch?

Johanna Mercier, Other

Yeah. So we have a good footprint already. We are definitely thinking about the broader scope of multiple myeloma. Also thinking about with the Arcelix team and bringing some of those those talents on board with us as well. But we're really going to leverage the footprint we have and the manufacturing capability and capacity that we have as well.

Speaker 3

Okay. We'll go to HIV in a second, but I did want to ask really quickly about ADCs. So Gilead clearly has made a long-term investment into the space. Just wanted to get your thoughts about how you're thinking about synergies of what you learned from Tridelvy versus a much earlier in development program that Tubulus has?

Johanna Mercier, Other

Yeah, I think we learned a lot. I think Tridelvy is a fabulous ADC in the breast cancer setting. We hope to show updates and data both in non-small cell lung cancer as well as endometrial later this year. But we also understand a little bit the instability of the linker. And as we were looking at the data with Tubulus, we really saw some real interesting data there, not just with Tub40, but also with their platform. And I think the stability that they can offer, really, it's about the three pieces, right? The antibody, the linker, and the payload. And understanding kind of their platforms both on the linker and the payload is going to be really interesting, because you might be able to do a little higher levels of payloads so that you can get better efficacy without necessarily the safety being an issue, right, in a more targeted way. So that's kind of what we're thinking about as where this platform can really serve us well in the future.

Speaker 3

Okay. And in the near term, as Tridel V matures, how are you thinking about the competitive landscape? Let's talk about triple negative breast cancer, where Daiichi might be having a molecule that is going to be competing. Any thoughts about what that might mean for, you know, what portion of the market might be attractive for Tridelvy?

Johanna Mercier, Other

Yeah. So, I mean, listen, I would say to you, Tridelvy has really exceeded our expectations when you think about the first quarter results. We announced just last week Q1, 37% growth with Tridelvy. And I think, you know, people were a little surprised at that. And it had a little bit to do with last year, that growth was a little bit masked by bladder cancer indication being removed. And so it grew just a couple of points, about six points or so last year. And now you're really seeing that completely come through. The other addition to that is with AscentO3 and AscentO4 in first-line metastatic TNBC in triple negative being discussed at both ASCO and ESMO. And then with the NCCN guidelines more recently, earlier this year, coming through in Category 1, that has really made a big difference. And it's made a difference in two ways. One is obviously not with, apart from medical efforts and education, we're not promoting in first line as of yet. We're waiting for the approval in the second half of this year. But people are using spontaneously in the first line setting because of the data. The data are truly practice changing for these women that a lot of these women never get to second line. So that's one piece. The second piece is many folks were still using older chemotherapies in the second-line setting, despite the fact that Tridel V was standard of care in second line. They were using chemos and then Tridel V in third, fourth line. What we've been seeing with the data in the first-line setting is it's moved everybody up, and so much stronger share in the second-line setting as well. So we're incredibly well-positioned to continue to be the standard of care, obviously in second line, But even as you move into first line, across PD-L1, negative and positive patient population. And, you know, as I said, 50% of women don't get to that second line setting because this disease is so aggressive. So, number one, it doubles the potential addressable patient population in the first line setting. But it also doubles your DOT, your duration of treatment, because they're healthier patients. And so they will stay on drug much longer. So it's basically, as we think about our models moving forward, moving into the first line setting is going to be key, and we think we have the right profile to do that.

Speaker 3

So moving on to your HIV franchise, let's start with Yes2Go. So this is one where investors have been paying very close attention, right? Almost daily, it seems, right, to the early launch metrics. So it's a differentiated product in the sense that for prop, it's dosed infrequently every six months. So can you just talk to us about, so we've done survey work, which indicates that this is a meaningful differentiator. As you receive feedback from your field force, what are you hearing both in terms of what doctors are saying and what patients are saying about it so far?

Johanna Mercier, Other

Yeah, so we've been really excited about the launch. There was a lot of work pre-launch that was done that actually was super helpful in setting us up for success. One of the big metrics that we were capturing and we were sharing externally was, of course, access. Because until access is really at a high volume, a lot of people are a little reticent to put pen to paper. As of January, we're now at 95% access across the board with 95% of those getting $0 copay. So access is no longer an issue. um the um the dynamics in the marketplace needed to adapt a little bit this was a daily still is a daily oral market and moving into an injectable you really needed the practices to kind of update their ways of working and they're working through that at different pace um but no concerns about how they're going to get there they they will all get there and many already have um i think anecdotally what we've been hearing is now that access is no longer an issue and a lot of people were kind of waiting for that to play out. And I think January was a big, and you saw it from the weekly scripts, right? A big jump in January. And it had a lot to do with, of course, access getting even greater with CVS getting on board, but also with the J-code. The J-code we got in October, but a lot of practices don't actually update their scheduling fees until the next quarter. And so that was January 1st. So we saw a big uptake there for buy-in bill as well. So really nice momentum across both specialty pharmacy and Bidenville. So the physicians are feeling more comfortable. And what we're hearing anecdotally is they're also feeling more comfortable with the second injection. And because they've done it a couple more times, they know what they're doing. Remember, lenocapivir is a very viscous product. So the injection, the first injection, if you haven't had the right training, I think that you might be a little more challenged. Having said that, with experience and with nurse educators on the ground training them, it's been super smooth, and they're getting much more comfortable with it, and so are the patients as they're getting their second injection. And so we're really encouraged to see, although we're tracking it very closely and claims data is helping us understand what's going on, but we're really encouraged to see the numbers right now of them coming back for their second injection. We need more data because the volumes are still smaller because most of those volumes came through in Q4. So Q1, Q2, and maybe a few cycles will be helpful, but very encouraged with what we're hearing anecdotally and what we're seeing in the claims data.

Speaker 3

So we ran a survey ahead of your 1Q results, which indicated, again, limited N, but that metric retreatment rate was over 80%. So I know you've talked about what a good retreatment rate would be. using the fact that the dailies have around that as an average retreatment rate, what would be good for something like this, which is, you know, in terms of quality of life could be improvement for patients because they take treatment less frequently, but it is a paradigm shift. So what's a realistic expectation for what retreatment should be?

Johanna Mercier, Other

I think that you have to think of a few things. You have to think of daily orals today, adherence is less than 50%. You have to think about current long-acting injectable on the marketplace before us. What does that look like? And we think we will be north of any of those numbers, for sure. I also think you need to think about prevention a little differently than treatment, any treatment paradigm, any chronic disease. And so these aren't people that are sick, and these are people that maybe for a certain period need prevention, and they're in and out of the system, right? If their social situation changes, if they're in a stable relationship or whatnot, they might not want to be on PrEP or need to be on PrEP moving forward. And that turns over, and the market continues to grow through that at about 14% in the first quarter of this year, year on year. And so strong growth there. And so I would say to you that through the specialty pharmacies, they're getting a lot of those second doses back in. So SPs will work to make sure that they connect with the patient for their next Yes2Go script a month before, make sure the appointments get set up. And we really chose those specialty pharmacies very specifically. Prior to launch, we contracted with the ones that had those capabilities. And so that was one piece of the puzzle. The second piece is we're also launching a persistency program this quarter, in the next month or so. And so that also is going to better support. So far, very encouraging. I will say I think you need a little bit more volume to be able to see how that plays out. But I think it's looking, it's going definitely in the right direction. And people are anecdotally saying very positive feedback around the second injection and what that looks like.

Speaker 3

Okay. How accurate are the script trackers? Because this is something that, you know, investors pay close attention to. They do. too.

Johanna Mercier, Other

The IQVIA data is directionally aligned to our data. It obviously captures your retail data. In that retail data, you're going to capture all the specialty pharmacy and you're going to capture a portion of the buy-in bill. You will actually capture any of the buy-in bill that is going through in-house pharmacies. So that'll get captured. So that's why it's pretty aligned to what we're seeing internally. The only piece that doesn't get captured is anything that's truly buy and bill without the in-house pharmacy. So literally clinics purchasing the product directly to the clinic. That's the only piece that's not getting captured.

Speaker 3

Okay. So on guidance, you raised ES2 Go guidance for a year to a billion from 800 million initially at the start of the year. What metrics did you see over the last couple of months that gave you the confidence to up that number? And I guess why wouldn't you have just started the year off with that number?

Johanna Mercier, Other

Yeah. So if you've been tracking the weeklies, people would notice that as of December to January, there was a big jump. And that big jump, when you set your number, you're setting it in December. That jump hadn't happened yet. And it happened because of the reasons we just talked about, whether it's access, comfort, J-code, all of those pieces coming together. And so that was one big piece as to why the 800 from a guidance standpoint. And then what we've seen over the last quarter is really that continuous growth. Like we've never talked about this hockey stick growth. We've always talked about a continuous durable ramp over the next years for Yes2Go in the prep market. And that's exactly how it's playing out. And we're really pleased to see what we're seeing. But I would just say it's not one metric. It's every metric was going in the right direction. The access was where it needed to be. The share from a switch market, which was our focus and still is, right? We're really focused on the current MSM market. Expansion will come in other markets, but that's a longer-term play. The intent in the short term, in the next two, three years, has always been current market. And that was a switch, although we are getting more naive than we thought as well. And so all the pieces were coming together, and that's why we felt confident that we think that we can hit the $1 billion mark in the first full 12 months.

Speaker 3

Okay. So now that you have this infrequently dosed PrEP treatment, what do you think would be the next leg of innovation for this? In PrEP intervention?

Johanna Mercier, Other

We're excited about even, you know, what's to come. We have a Q12 or a PrEP 365 that's around the corner. And this is one that obviously you could assume that some people that will be on the six monthly will go to the 12. But we also think about other populations that could be captured with a Q12 that are not currently captured with Q6. So, for example, you think about people with unstable housing, where sometimes once a year is it just easier to manage. You think about Department of Corrections. You think about college students. You think about ERs. These are all areas of expansion for us. So it's not just a shift from Q6 to Q12. It's Q6 plus. So we think that with Discovy as a daily oral, with Yes2Go Q6 monthly, and then, of course, with the potential for Q12, I think that's really how we are leaders today and will continue to lead the market in the future as well. And then longer term, how do you think of the split between injectable versus oral in the PrEP market? Yeah, different in the PrEP market than in the treatment market. Yeah, in the PrEP market, it's very clear from the research that we've done that less is more. They really, they're not sick. They don't want to be reminded of it. It's challenging. And so unless you don't like injections, you're going to go for the longer. So Q6, Q12. If you are a little bit apprehensive of injections, that's where you might go to something like dyscovy. So the split that we're assuming is probably more 60 plus market, 60 to 70% in the long acting injectable versus the oral. And maybe I should say long acting versus daily is the way I would look at it.

Speaker 3

And how long do you think it'll take to get to that split? I think it'll take a little bit of time, but I think it's picking up.

Johanna Mercier, Other

I think that obviously you'll still have a bulk of people that will stay on their daily orals, but I think a lot of people are shifting over, and as people get more comfortable with the logistics and the coordination of a longer acting, I think it'll just become more familiar.

Speaker 3

So let's flip to the treatment market. So let's talk about BICTAR-V and what's your view of where it is in the maturity of its launch trajectory?

Johanna Mercier, Other

Yeah, BICTAR-V continues to impress. It is a product that we launched in 2018. It is the standard of care integrase inhibitor. It has set the standard for all future HIV treatments, and it really, truly has. I mean, if you think about our shares right now, north of 52%, still growing on a much larger base, quarter over quarter. And something that's really interesting is you think about the naive market and the switch market in HIV treatment, probably about 70% of all new patients coming on that are HIV diagnosed, newly diagnosed, are getting DICTARV. So definitely it is setting the clear path for leadership there. In the switch market, we are also leading in the switch market, and we have the opportunity to grow that leadership with new entrants in the marketplace, with BicLen, for example, that we expect late August, Pidufa, and then with Islatravir, Lenacapavir, Q-weekly oral and treatment data by the end of this first half, and then potential launch sometime next year. And so all of those just bring more optionality for patients in the switch market setting. Because obviously, if you start on BICTARV, you can't switch to BICTARV. So if you were to switch to something else at one point, which this market does at one point in time, then we want to make sure that we have options for those patients. Okay.

Speaker 3

And then you mentioned a couple of minutes ago that in terms of injectable versus oralist, it's like the image for treatment versus...

Johanna Mercier, Other

Yeah, you have a real mix there because these are people that some people really want to know that they're taking something every single day for their HIV. and other people don't want to be reminded that they have HIV. And so you have a bit of a more of a 50-50 kind of split where we think oral and longer acting daily versus longer acting might play out. Okay.

Speaker 3

And then just in HIV in general, it's been a GSK and Gilead market for some time. How are you thinking about Merck entering the space?

Johanna Mercier, Other

Yeah, I think, listen, the more options, both in treatment and prevention, the better. All the boats rise. And so I do think education, awareness, reducing the stigma is super important. And I think, you know, more companies involved in that, I think, can really make a difference. So I think that's a good thing overall. I still think, though, that the differentiation in this marketplace is going to be really important. And the bar is high. And I think Gilead has that bar right now.

Speaker 3

So let's maybe circle right back to where we started with the last question of the day, which is we started talking about BizDev at the beginning. And now as you have all these new assets that are being brought in-house, investors still view the company with a primarily HIV lens. As the company continues to evolve, how do you think about the mix of offerings for Gilead over the next, let's say, five to seven years?

Johanna Mercier, Other

Yeah, I think that part of our strategy was always not to get away from HIV. It was to build on that HIV franchise and then build diversification. And that's exactly what we're doing. And I think that whether you think about Chidel V, obviously Yaskarda and lymphoma, but also now AnidoCell coming through, and then tubulus deal, for example, or obviously Arcelex is AnidoCell, kind of building even stronger oncology franchise, right? We are already $3 billion plus franchise in oncology, continuing to build that out with an EdoCell, and hopefully not in the so distant future with tubulus, as you think about in platinum-resistant ovarian cancer, and then potentially even into the sensitive market. So all of that is, I think, a really nice opportunity. And then Inflam is coming up, right? We are still, you know, we have a couple of readouts or updates later this year in Phase 2. The portfolio is a little bit more nascent, but it's a really interesting pipeline. And obviously, with the new acquisition with Oro, hopefully closing in the next quarter or so, all of those pieces are coming together nicely to really build out the 2030s and beyond.

Speaker 3

Yeah. And maybe just one last question on inflammation. um given the focus of some of these small companies ways to treat diseases that many companies are going after whether it be atopic germ or um psoriatic arthritis or anything related um what was the attractiveness of t-cell engagers i think it had to lose so we've been working on a b-cell strategy um with kite so gillian and kite together um for quite some time looking at any autoimmune inflammatory diseases.

Johanna Mercier, Other

And I think that, and obviously building on the strength that we've had in lymphoma and multiple myeloma expertise, but building on that, we do think there's real opportunity there. And I think the BCMA CD3 T-cell engager was something that we were really interested in. And it was something that, listen, the promise of it is a sub-Q with potentially a sustained response. What could that mean? Could that mean potentially even remission for a certain period of time, that's exciting. We're trying to break that bar of efficacy and unmet need. And we think that maybe this would be one way of doing it, but it's in line with the strategy first and foremost, and then delivering against it with potentially with URO.

Speaker 3

Okay, perfect. But with that, we are just about out of time. So I'll say thank you, Joanna. Thanks for having me. Thank you. Making the short trip over and enjoying the 105 degree heat with us today. Thanks everybody for joining this session. Appreciate it.