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01/09 20:09
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture: positive momentum in HIV product launches and the Trodelvy trial, but challenges in liver disease and cell therapy sales. The Q&A highlights optimism in new launches, yet some concerns remain about regulatory clarity and market dynamics. The absence of raised expectations for Yeztugo, despite early success, and vague responses on anito-cel approvability suggest caution. Overall, the sentiment is neutral, with no decisive factors indicating a strong positive or negative shift in the stock price.
Base business sales $6.9 billion, grew 4% year-over-year, driven by robust growth across Biktarvy, Descovy, Livdelzi, and Trodelvy. The growth was partially offset by lower Veklury sales due to fewer COVID-19-related hospitalizations.
Product sales $7.1 billion, grew 2% year-over-year. The growth was driven by strong base business performance but offset by lower Veklury sales.
HIV sales $5.1 billion, grew 7% year-over-year, driven by increased demand and higher average realized price. Sequentially, sales were up 11% due to inventory build and seasonal dynamics.
Biktarvy sales $3.5 billion, grew 9% year-over-year, supported by strong commercial execution and increased demand. Sequentially, sales were up 12% due to seasonal inventory build and higher average realized price.
Descovy sales $653 million, grew 35% year-over-year, driven by growing awareness of PrEP and unrestricted access. Sequentially, sales were up 11% due to seasonal inventory dynamics and higher demand.
Liver disease sales $795 million, down 4% year-over-year, reflecting lower average realized price and lower patient starts in HCV, partially offset by strong launch of Livdelzi and demand for HDV and HBV products.
Trodelvy sales $364 million, grew 14% year-over-year and 24% sequentially, driven by strength in metastatic breast cancer and offsetting the decline from the withdrawal of the bladder cancer indication in the U.S.
Cell therapy sales $485 million, down 7% year-over-year, primarily due to lower demand, partially offset by higher average realized price. Sequentially, sales were up 5% due to favorable FX impact and higher demand for Yescarta and Tecartus.
Veklury sales $121 million, down 44% year-over-year, reflecting fewer COVID-19-related hospitalizations.
Product gross margin 87%, up 1% from the same quarter last year, driven by a more favorable product mix.
FDA approval of lenacapavir (Yeztugo): Approved for twice-yearly HIV prevention, marking a significant milestone in HIV treatment.
Trodelvy: Positive Phase III results for metastatic triple-negative breast cancer, showing significant benefits in first-line treatment.
Livdelzi: Strong performance in primary biliary cholangitis, with revenue doubling from $40 million to $78 million in the second quarter.
HIV prevention market: Expanded to over 0.5 million active users in the U.S., growing in the mid-teens year-over-year.
Global access to lenacapavir: Partnership with the Global Fund to provide lenacapavir to 2 million people in low and lower-middle-income countries over three years.
Revenue growth: Base business sales grew 4% year-over-year to $6.9 billion, driven by products like Biktarvy, Descovy, Livdelzi, and Trodelvy.
Operational efficiency: Disciplined operating expense management, with SG&A expenses flat year-over-year and R&D expenses tracking as expected.
HIV treatment and prevention: Plans for up to eight additional HIV product launches by 2033, including five by 2030.
Oncology expansion: Focus on advancing Trodelvy to first-line metastatic triple-negative breast cancer and other cancer indications.
Medicare Part D redesign impact: The redesign is expected to impact the HIV business by approximately $900 million in 2025, creating a significant financial headwind.
Decline in Veklury sales: Sales of Veklury have decreased by 44% year-over-year due to fewer COVID-19-related hospitalizations, impacting overall revenue.
Cell therapy competitive pressures: Kite cell therapies face competitive headwinds, leading to a modest decline in sales expectations for 2025 compared to 2024.
HCV sales decline: HCV sales have decreased due to lower average realized price and lower patient starts, partially driven by Medicare Part D redesign.
Tariffs and policy changes: Potential tariffs or broader policy changes could impact financial performance, though the company expects the impact of known tariffs to be manageable in 2025.
Barriers to cell therapy adoption: Challenges in reducing barriers to broader adoption of cell therapy, such as administrative burdens and patient access, continue to limit growth.
HIV market headwinds: The company faces anticipated headwinds from the Medicare Part D redesign and has not updated assumptions for Yeztugo revenue in the second half of 2025.
Revenue and EPS Guidance: The company has increased its revenue and EPS guidance for the full year 2025, driven by strong commercial execution and operating expense discipline year-to-date.
HIV Sales Growth: HIV sales are expected to grow approximately 3% in 2025, up from the prior assumption of flat revenue year-over-year. This growth is driven by strong performance of Biktarvy and Descovy, as well as expectations for the second half of the year.
Yeztugo Launch: The company is targeting 75% access for Yeztugo within 6 months of launch and 90% within 12 months. Early performance is promising, with high awareness among healthcare providers and rapid initial uptake.
Lenacapavir Development: The company has initiated PURPOSE-365, a Phase III trial evaluating once yearly lenacapavir for PrEP, with potential launch as early as 2028. Updates from ARTISTRY-1 and ARTISTRY-2 trials for HIV treatment are expected in the second half of 2025.
Trodelvy Expansion: The company plans to file for full approval of Trodelvy in the first-line metastatic triple-negative breast cancer setting based on ASCENT-03 and ASCENT-04 trial results, with a potential FDA decision in 2026.
Cell Therapy Developments: A pivotal update from the Phase II iMMagine-1 trial evaluating anito-cel for multiple myeloma is expected later in 2025, with a potential commercial launch in 2026.
Product Sales Guidance: Product sales, excluding Veklury, are expected to be approximately $27.3 billion to $27.7 billion for 2025, reflecting a $0.5 billion increase in base business expectations.
Veklury Sales Adjustment: Full year 2025 expectations for Veklury sales have been reduced by $400 million to approximately $1 billion, reflecting lower COVID-19 hospitalization rates.
Dividend Payments: Gilead returned $1.5 billion to shareholders in the second quarter, which included $527 million of share repurchases. The company has a 2020 share repurchase plan that is expected to be completed over the next several quarters. Additionally, the Board approved a new $6 billion program to support continued share repurchases.
Share Repurchase Program: Gilead is executing share repurchases under its 2020 plan and expects to complete it in the next several quarters. The Board has also approved a new $6 billion program for share repurchases, which will be used to offset equity dilution at a minimum and can also be used opportunistically.
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