Gilead Sciences, Inc. (GILD) March 2026 Conference Transcript

I think it's still morning. Good morning, everyone. This is Dana Graybosch. I'm a senior equity research analyst here at Lyrinc Partners. And I'm excited to be hosting management from Gilead this morning. We have Dietmar and Andy. We have 30 minutes, which isn't sufficient time to get through that much. But I think we'll focus on some meaningful programs and strategy for the company. So thank you both for joining us. Thanks for having us.

Thank you, we're thrilled to be here again.

We were, we're gonna start with HIV. You know, we had a dinner last night and we had a lot of great discussion on HIV and I think a lot of interest there. And so, and starting with HIV treatment because you've had some strategic decisions recently and I think it would be great to understand that. So maybe the first question is, one, just give us an overview of how you're thinking about developing the next generation of HIV treatments and then based on some of the data at CROI and other data, why you've prioritized for the six-month regimens your long-acting INSTE GS3242 and the BNABS in combination with lenacapavir over the other combinations that you did also have in the pipeline? yeah thanks for the question I'm the in in HIV it's really important to to focus on these two big areas right there's HIV treatment obviously HIV prevention we can talk about both in HIV treatment we put the strategy together

roughly three to four years ago and a lot of it is about new principles in treatment like for example you know the the capsid inhibitors playing a bigger role the integrates inhibitors playing a key role but then also really going from daily therapies to more long-acting options, right, going from daily orals to, you know, like weekly, monthly, but then also going to injectables, for example, on a monthly or every six-month basis. And talking about these really long-acting, we have two approaches right now that we think will get us to once every six-month therapy. One is the combination of lanacapivir plus broadly neutralizing antibodies. The antibodies would be given by infusion, so people would come to the office of the physician once every six months, get their Lenacapivir, get their infusion, and that's the Len plus BNAPs. And what we presented at CROI at this really important retroviral and infection, but also HIV meeting, we presented patient-reported outcomes data on that combination. We also have phase two data already demonstrating efficacy but the patient reported outcomes data really supported how important this option is for people and remember a lot of this is about having the right options for the right for the right patient group right at this point in time we just spoke about that about 40 percent of patients in the US are still either undiagnosed or are not virologically suppressed and that's because we don't have the right options for them either we don't diagnose them that's 13% of patients, or we don't have the right options for them. There are patients that, for example, don't want to carry a daily pill or have stigma or don't have the right level of access, and having for them a possibility to come to the physician's office once every six months could be a game changer. That's also why we're developing an injectable option, again, based on Lana capivary, but then an integrase inhibitor with that and so-called INSTE. And that's where we had communicated, you know, actually at our HIV day more than a year ago, we had communicated we are looking at different integrase inhibitors as a combination partner for lanacapavir in that once every, you know, four to six month injectable option. And we had three options there. They all have different numbers. We had always said we picked the best one. and now we have data and it's larger really pharmacokinetic data that led us to then pick 3242 as our option to move forward for once every four to six month treatment together with lana capivir and i'm saying once every four to six month because we're currently in dose escalation for that combination of 3242 plus lana capivir at this point we absolutely know looking at the pk that we can do a once every four months we're going to higher doses so we're also confident that we will get to once every six months with that combination can you can you talk more about these 40% of patients that are undiagnosed or

not virologically suppressed I think the worry maybe just a bias worry is those patients might not have access to pay for an every six month injection plus infusion so it gives you confidence that not only will you match them compliantly and where they need it but that you'll match their financial situation yeah maybe I'll start I mean it's a mix of patients in that pool but it's an enormous number of people that are infected with HIV that are not adequately drug treated today many of them are coming in and out of care depending on their circumstances then you have others that just for whatever reason they have you know access to medicines but they're not taking them on a regular basis so it's hard to say definitively today what percentage of that roughly 40% of patients that have HIV infection in the US can be well treated with the long-acting but it's a meaningful amount of that population and significant market for us to work on and address over time with all these long acting therapies and and I think it's important to note when we speak about access it's not that you wouldn't be able to find funding or you wouldn't find access for these people it's more they're coming in and out of care right so you're speaking about people who are either unhoused or who are marginalized and who would don't have the right level of care at this point in time if they

come into the system of course they can be treated and and there's also possibilities for funding for that on prep you're developing q12 month prep and I thought it was very helpful last night to talk about what that regulatory path is and so I'd wonder if you could summarize us for that and why that path gives you so much confidence that we could have the q12 month yes to go yeah Yeah, yeah, absolutely.

And so Yes2Go every six months, of course, is a real benefit for people, and there's a lot of excitement, and we see that the launch is going well. Based on our studies for Yes2Go once every six months, we understand the PK really well, and we understand what kind of target coverage do you need in order to have protection, right? So we can easily model out if we go in with a higher dose, if we go in with the right formulation, can we get that same target coverage for 12 months, right? And we've done that, and we now have a formulation that we can give once every 12 months as an intramuscular injection. And we know that target coverage at the end of that 12-month period is actually higher than what we've seen with lanacapivir with the S2 go once every six months. So the FDA has agreed to do a model-based study, really a pharmacokinetic endpoint around that study. So it's a smaller study. We don't have to do the large purpose one, purpose two type program, several thousand patients anymore. This is a program with a couple of hundred patients where we basically show pharmacological comparability with that 12-month period. So that study is ongoing. It's recruiting well. we're expecting to have data readout in 27 and we're expecting to be able to bring that to patients in the 28 timeframe let's move on to live Dell live there's a trial the phase three ideal study and I wonder if you could talk about how that could expand the currently treated population and what gives you confidence in that trial and the outlook yeah I can start with the trial and obviously Liv Delsey has shown really good efficacy in the in the PBC population both when you look at the biomarker right the ALP but then also when you look at itch when you look at pruritus the initial study was kind of the standard study that you do in that population which is you look at the what is called the inadequate responders right those are patient and we had the response study for that, those are patients with an ALP value above 1.67 and that's where we saw the good outcomes, that's where we launched, that's where we see really the growth with Lyft-LC right now. There's a population that is called the incomplete responders which when you look at the biomarkers ALP is kind of 1 to 1.67 times the upper limit of normal. The biology is the same biology it's just like you know the the response is not complete to the earlier lines of say of therapy to to the UDCA and that's again where we think with Livdelzi we can make a real difference both when it comes to response then also when it comes to itch but then also when it comes to long-term outcomes and that's the ideal study that's a phase three study that's currently ongoing and if that study is positive it would basically double the addressable patient population have other compounds moved from this late to earlier successfully yeah it's not been it's not been a standard approach so far but now as we have lived alzy as a really active treatment option that is a really natural path you know both from a patient benefit perspective moving it early or moving it to these to these incomplete responders but also from a commercial perspective. You see that some other competitors are following our lead, they're trying to do the same thing, but of course you need to have the right efficacy in that space.

And you feel like you have a sufficient understanding of the efficacy in those patients to have powered that study?

Oh yeah, absolutely and the biology is not different and of course we had some early data that also helped us to design the study. Got it.

I'd like to talk about business development for a moment. One, to the Arcelex acquisition, I think that, is it fair to conclude that it was financially attractive? It's accretive to EPS by 2028. I think our model would agree with what you announced. But does it signal that there was a lack of other attractive acquisition opportunities? Because you already owned it, and you're just buying, you know, you're buying not having to give the gross profit to another company.

Yeah, no, that's not the signal, I think. I mean, first of all, we think it's an outstanding acquisition for us, for our shareholders. It has a lot of benefits to the company. But first and foremost, we see a much larger commercial opportunity for a neat-o-sell than the market saw. So there was a natural, it was the perfect situation from a buy-side perspective. and you're right we had a large partnership that we entered into over three years ago it's been a very successful partnership the clinical data is outstanding for those of you that don't follow a neatocell this is a bcma cell therapy that's being studied in multiple myeloma the first approval will likely come in fourth line plus later this year with then subsequent approvals in you know relatively near term in second line plus we will also do first line studies and the data so far is just spectacular in terms of the benefit like most cell therapies for patients but it has a highly differentiated based on the data that we have in in-house which is not just the fourth line plus study but the second line plus study a very differentiated safety profile that deep mark can speak to so um you know when we looked at it was relatively straightforward we're nearing approval in the united states there was a unique window where the company's stock price had traded to a level where we could actually pay a premium and still make a deal that, you know, agree to a deal that really works well for our shareholders. We're nearing launch, so we actually have the ability to control the launch. But at its core, this is really about an opportunity where we saw a significant difference in our view of peak sales opportunities and the market's view. And the easiest way to think about this is there's a competitor, BCMA Cell Therapy, that is currently on the market analysts project 6.5 billion dollars in peak sales they were projecting two to two and a half billion dollars of peak sales for a neato cell and we think that we have the best in class bcma cell therapy so um you know i the the analogy i you know we've just talked about um livdelzi you know when we acquired simabay two years ago it was a very similar situation we knew the company incredibly well we knew the liver disease space better than anyone and the same thing's true here We know EnedoCell as well as anyone. We're managing together with our partner the regulatory discussions with the FDA. We had the file acceptance for Fourth Line Plus, which was a significant de-risking event for us. And we had a completely different view of the peak sales opportunity. You know, the other part of your question, and deep, Mark, can speak to the clinical differences, was, you know, we have the flexibility with our position to continue to do corporate development. We're going to be disciplined, proactive. active. We love the position that we're in as we've reset the company. You've seen very strong growth the last three years in our base business. We're at the beginning of what we believe is kind of a 10-plus-year cycle of numerous launches. We have two drugs that we've launched recently, Liv Delsey and then Yaz Tuga for HIV Prevention that you highlighted. We have up to eight additional launches this year and next year, which is really extraordinary. All of that will drive continued top-line growth. You see expanding bottom-line growth, and then this deal adds beautifully to that in 28 and beyond which happens to correspond with the period where we will we could potentially see the impact of drug price negotiation with the u.s. on Victor V so every which way we looked at this deal we really liked it but it really fundamentally was about the the difference that we saw in terms of the peak sales opportunity to really make a huge difference for patients in multiple myeloma and then the last thing I'll offer is that cell therapies are unique and that you know it's very hard to see A biosimilar cell therapy in the future. It's incredibly difficult to manufacture.

It's difficult to show Comparability, so these are franchises whether it's our lymphoma cell therapy franchise or an Edo cell similar to our Antibody drug conjugate for solid tumors that we think have decades of durable growth potentially ahead of us you've been This was one of your strategic partnerships and for many years Gilead has been a fan of strategic partnerships with smaller companies where you take seats on board, you invest in them, make sure they have enough cash to pursue what they're pursuing, but also have freedom to innovate, and you have opt-in rights on those programs as they come to certain milestones. And now you've bought one of them. So I wonder, looking across that one and the rest of them, how do you view that strategy? Do you expect to do more of that type of strategy? or as you're moving into this new period, do more direct deals like Simabay?

Sure. I'll start. I think the answer is both, but we love that strategy. We love partnering with really smart companies that have differentiated products or technologies. We like having multiple opportunities to win with those partnerships. You saw that in a number of our partnerships. We recently, for instance, in-licensed a couple of compounds from a company called Assembly. as a small company focused in viral hepatitis and other virology indications that was kind of an all-in partnership that we think people will grow to appreciate that deal over time and you highlighted the Arcelex deal but yeah we love we love those structures and we will also supplement it I think with other other deals that like the Sima Bay deal we just identify companies that have a lead asset that's really interesting strategically and that we acquire it but any time that we can enter into partnerships and use our balance sheet to push forward innovation and have options on either a product or a series of products we think that can create a lot of value for our shareholders and you know the ourselves partnership is a great example of that we think it's going to drive tremendous value for our shareholders over a very long period of time and when you look at kind of our average cost of capital of acquiring that asset from the partnership and then the acquisition that we're doing it really provides a really attractive return for our shareholders from our perspective.

Anything you'd add? I think the only thing, you know, different types of compounds, you know, require different types of deals, right? Sometimes you want to own it outright, you want to be able to launch it, you have all the data, you want to basically own the path forward. And that's, for example, the Simabay deal, right? The Arcelix is really a good example of, you know, there was so much more to be learned about the cell therapy approach, about a needle cell specifically. And we saw there's really good science behind it, not only with regard to a needle cell, also with regards, for example, the D-domain binders that they have with regards to the platform. And then the data was also really maturing, right? So that was really reassuring for us.

And just coincidentally, at the time when we when we did execute on the on the deal we also had you know way more clinical data and we had the FDA acceptance right so it was a largely de-risked perspective also when when it comes to the scientific data and the clarity of the path forward another approach where you've actually done some acquisition already and then some partnering is an in vivo CAR T and I wonder what do you believe in vivo car t will achieve that's not possible with auto car t and and why go there and that potential disruption uh rather than allo car t or t cell engagers

i'll start maybe and you can start whatever yeah when we acquired kite eight or nine years ago we always had the vision that that was the the beginning of cell therapy and that the cell therapy field would evolve you know dramatically over time ultimately ending with kind of in vivo car t and the two deals that we've done recently around in vivo car t are are important aspects of building are integrating in vivo car t we have separate non-integrating in vivo car t programs that we're developing internally at kite and across gilead that are also really exciting why now and why have you seen a run of in vivo car t deals is that we've all seen data from a number of these companies including the the company that we acquired Interius that really show the promise proof of concept that you can do this you can insert the viral vector it gets selectively to the t cells it's integrated into the host genome transcribed and you create car t cells in the body and the human body becomes the bioreactor so as long as you know and now it's going to take years right I mean it so in the next decade people will continue to refine this but you have clear proof of concept across many companies that this is scientifically possible and now you have to get it to the same level of efficacy and safety that you see with autologous CAR T and we believe it's possible it will dramatically change the cost of goods and delivery of CAR-T therapy over time, and we think open up CAR-T to a much broader audience. And CAR-T continues to grow really nicely, but that's what's behind it. And as the world's leader in CAR-T, we want to stay at the forefront. We look at this as a multi-decade investment. I always use the analogy of watching the antibody space develop or the protein therapy space develop. Cell therapy over the coming decades is likely to continue to grow significantly and become a major treatment modality across a number of not only oncology indications, but also indications potentially in neurology and autoimmune.

Yeah. I mean, the addition here would be that, you know, Kite is really getting to a much more integrated strategy, right? You've got the ongoing business with Tecartas and YesCarda. You've got the next generation going from a CD19 to a CD19, CD20, by specific by cystronic also getting to molecules that balance or treatment approaches CAR T approaches that balance much better the efficacy and safety so that you can get into the outpatient setting so that you can actually apply it in inflammatory and neuroinflammatory conditions so we're really excited about this next generation that's coming along and then expanding into new indications which is the anitocell aspect going to myeloma which is the biggest hematology market right now and we feel there is real opportunity taking it from fourth line to then earlier lines all the way into first line and smoldering and then there's this aspect of in vivo CAR-T which when you talk about the differentiation there are two really important things one is one is the off-the-shelf characteristic so you don't have to harvest cells you don't have to modify them you can literally pull this off the shelf and give it to patients so the turnaround time the cogs all of that gets much better and then the the requirement and that's the big differentiation versus allogeneic the requirement for immunosuppression right and and all the associated side effects and i think that's also what sober does so much as a community around the the allogeneic also versus the autologous right so so there are various

benefits that we see and just as a leader in cell therapy with the early signals that we've seen we we feel we also will need a leadership position in the in vivo corti approach let's talk about trodelby it's been a real workhorse and you have a very highly competitive environment in tnbc that you're launching into how are you thinking about maintaining your position and building on it are you going to do novel combos should we expect more phase redevelopment from that program and TMBC and beyond really.

I'll start with the program right so so from a from a perspective of the clinical program we have a really comprehensive program there are several ongoing really pivotal trials right now of course we are we're building on the success we recently had with the Ascent03 and Ascent04 studies which are taking Trodelvi into the breadth of first-line triple negative breast cancer both PD-L1 high and low. We have those two studies which really are the basis of a new standard of care. That's why we have a broader program than some of the competitors have at this point in time and that's going to be a real benefit together with the experience that people have with Trodelvie and the trust that they have into Trodelvie. And then we will read out this year two studies. One is the EVOCO3 study which is in first-line PD-L1 high non-small cell lung cancer. It's a very straightforward study design, adding Trodelvi to Pembrolizumab, which I think has a decent probability of success. And then going into second-line endometrial cancer, which is the Ascend-Gyne study. And beyond that, you know, we have a study in small cell lung cancer, which is Evoco4. And we also have a study in the adjuvant setting in triple-negative breast cancer, which we'll read out in a couple of years. So that's a comprehensive program, and we're obviously looking at other additional combinations, at other additional tumor types, potentially, that we can take Trodelvie into. We also have a really large program when it comes to investigator-led studies or cooperative group studies, which just adds to the body of experience with Trodelvie. So we feel we're really well positioned with Trodelvie as a standard of care. Got it.

Maybe in the last five minutes, we can talk about your early-stage pipeline, which is beyond HIV you know we have a lot of programs actually in oncology and immunology maybe we could start with inflammation I think you talk a lot about your alpha 4 beta 7 inhibitor you have an oral TPL2 and you have a BTLA agonist and I wonder if you could any of those we're gonna see clinical data soon and anyone you want to highlight that you're more excited about yeah the the inflammation portfolio is of course earlier, right?

When we took this decision, when Gilead took this decision to really think about diversification, I'm always saying it's diversification within HIV and hepatitis, but it's also then going into oncology and inflammation. Inflammation is really the earliest when you look at these different TAs, but we do have three programs currently in phase two and then really exciting portfolio be behind that not only a clinical portfolio also research portfolio we build really strong research capabilities in in phlegm also over recent years the three that are currently in phase two one is the alpha 4 beta 7 which is an oral validated target obviously and we'll see phase two data later this year so that will tell us really what we have. I see the, I'm excited about it because I see the opportunity with an oral twofold. One, you get different pharmacokinetics, so we'll need to see what that does from an efficacy perspective. Also, you can take an oral, if it's a safe oral, into earlier lines of therapy and potentially more into the mild and moderate stages versus the moderate and severe that you can usually address with the injectables. So that's where we will have data later this year, and the data will tell us the path forward. We also have an IREC-4 inhibitor, Edis Assertib, which is in phase two in cutaneous lupus. IREC-4 is another one of those key nodes in inflammation that we're trying to address, and we will have data from that phase two study in cutaneous lupus also later this year, and I'm excited about this just from a mechanistic perspective and some early data that we've seen. We also have an IREC-4 degrader, so we're doubling down on that pathway. Obviously, that's earlier, but I'm also excited about that. And then the TIPL-2 is another target that we're pursuing in inflammatory bowel disease. It's positioned a little differently. It's in the more treatment-experienced patient population, so we're using it in a harder-to-treat. We're evaluating it in a harder-to-treat population. and again we should have phase two data upcoming not this year but the year after after that and then there's an earlier portfolio you know with the stat 60 grader and other types of molecules that we're also really excited about and Andy already mentioned before that when we think about inflammatory disease obviously the the kite program the the cell therapies also play a role so that we're really coming to a more integrated strategy and inflammatory already exist.

And maybe the last one on oncology. You're one of the last remaining companies that had, and maybe still is, investing in some novel amino oncology approaches. And that's close to my heart, so I'm getting into question. I wonder if any of those is rising to the top of your oncology portfolio, if we see some data that will inform that in the near term.

Yeah, so I've been also really interested in immuno-oncology, so we share that. I've obviously worked on some of the PD-L1 inhibitors in my background, so we were always really excited about immuno-oncology and then somewhat sobered about the opportunities. I do think we understand much more now about the underlying mechanisms. We have a few additional approaches in our portfolio. for example there's an there's an IL 18 binding protein approach there's also some other checkpoints we're looking at I think the most interesting one scientifically that I can speak about is a CCR8 antibody that we have now that that is addressing regulatory T cells and is actually eliminating regulatory T cells and for the first time with that approach we actually see monotherapy activity with a target on regulatory T cells so we think that's another area that we would like to explore further but it's early days and I do want to point out that yes immuno-oncology plays a role but we are also really interested in additional ADCs in additional to direct tumor targeting and cytotoxic approaches so we'll see you will see a broader and more balanced oncology portfolio in Gilead.

That's great and that's perfect timing, so thank you very much. I appreciate it and appreciate everybody's attention.

Thank you.