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01/09 20:14
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial metrics, increased revenue and EPS guidance, and promising product developments like Yeztugo and lenacapavir. The Q&A section provides additional confidence, with positive feedback on Yeztugo's launch and growth in HIV treatment. Despite some management evasiveness on specific dates, the overall sentiment is optimistic with robust product performance and strategic expansions, suggesting a positive stock price movement.
Biktarvy sales $3.7 billion, up 6% year-over-year and 4% sequentially due to higher demand, reflecting continued market growth of 2% to 3% and strong commercial execution.
Descovy sales $701 million, increasing 20% year-over-year, primarily due to higher demand for Descovy for PrEP. Sequentially, sales were up 7%, driven by higher demand and average realized price due to channel mix, partially offset by inventory dynamics.
Livdelzi sales $819 million, up 12% year-over-year and 3% sequentially, driven almost entirely by Livdelzi for primary biliary cholangitis. Livdelzi grew 35% sequentially, driven by strong commercial execution, including some new launches outside the U.S. and withdrawal of a competitor's product in the U.S.
Trodelvy sales $357 million, up 7% year-over-year, primarily due to higher demand and down 2% sequentially with higher demand offset by unfavorable inventory dynamics and lower ex U.S. average realized price.
Cell therapy sales $432 million, down 11% both year-over-year and sequentially with continued competitive headwinds from in and out of class therapies.
HIV sales $5.3 billion, represented 4% growth versus prior year and prior quarter, primarily driven by higher demand and favorable inventory dynamics, partially offset by lower average realized price.
Total product sales (excluding Veklury) $7.1 billion, up 4% year-over-year and up 2% sequentially, driven by strength across the HIV portfolio, offset in part by lower oncology revenue.
Veklury sales $277 million, down 60% year-over-year, reflecting fewer COVID-related hospitalizations.
Non-GAAP EPS $2.47 for the quarter. Excluding the $400 million nonrecurring other revenue, non-GAAP diluted EPS would have been $2.22 for the third quarter.
Operating margin 50%, reflecting the continued focus on operating expense discipline and leverage.
HIV therapies: 6% year-over-year growth for Biktarvy, 20% year-over-year growth for Descovy, and 35% sequential growth for Livdelzi. Yeztugo for HIV prevention delivered third quarter sales of $39 million or $54 million including the first few weeks of launch in June.
Liver portfolio: 12% year-over-year growth driven by Livdelzi, which exceeded $100 million in quarterly sales for the first time and became the #1 treatment for second-line PBC in the U.S.
Oncology: Progress with Trodelvy for first-line metastatic triple-negative breast cancer patients, targeting a commercial launch in 2026. Anito-cel for multiple myeloma also targets a 2026 launch.
HIV market: Increased full-year HIV revenue growth expectations to approximately 5% despite a $900 million headwind from Medicare Part D redesign. Yeztugo achieved 75% payer coverage in the U.S. nearly 3 months ahead of target.
Liver disease market: Filed for FDA approval of bulevirtide for chronic hepatitis delta virus, expected to launch in the U.S. in 2026.
Oncology market: Trodelvy's potential launch in first-line metastatic TNBC in 2026 could expand its leadership in breast cancer. Anito-cel for multiple myeloma also targets a 2026 launch.
Financial performance: 22% year-over-year growth in non-GAAP EPS, with disciplined operating expense management. Total product sales excluding Veklury were $7.1 billion, up 4% year-over-year.
R&D and pipeline: Progressed 56 clinical programs, including advancements in HIV prevention and treatment, liver disease, and oncology. ARTISTRY-1 and ARTISTRY-2 studies for next-generation HIV treatments are on track for updates.
Portfolio diversification: Several just launched or soon-to-be launched products across HIV, oncology, and liver disease. No major loss of exclusivity (LOEs) until 2036.
In vivo cell therapy: Acquired Interius team and entered a collaboration with Pregene Biopharma to accelerate exploration of in vivo cell therapies.
Medicare Part D redesign impact: The company faces a $900 million headwind for its HIV business in 2025 due to the Medicare Part D redesign, which could impact revenue growth.
Cell therapy competitive headwinds: Cell therapy sales declined by 11% year-over-year and sequentially due to competitive pressures from in-class and out-of-class therapies, with these headwinds expected to persist in the near future.
Lower oncology revenue: Oncology revenue was lower, partially offsetting growth in other areas, which could indicate challenges in maintaining or growing market share in this segment.
Veklury sales decline: Sales of Veklury were down 60% year-over-year due to fewer COVID-19-related hospitalizations, impacting overall revenue.
Regulatory and market access challenges: The company is working to expand payer coverage for new products like Yeztugo, but achieving full market access remains a challenge, with 90% coverage targeted by mid-2026.
Supply chain and manufacturing hurdles: Efforts to lower hurdles for community adoption of cell therapies and improve manufacturing processes for in vivo therapies indicate ongoing operational challenges.
Economic and pricing pressures: Lower average realized prices in the HIV segment and unfavorable inventory dynamics in oncology suggest economic pressures and pricing challenges.
HIV Revenue Growth: Full year HIV revenue growth expectations increased to approximately 5%, despite a $900 million headwind associated with the Medicare Part D redesign. The company is confident in continued growth in 2026, supported by strong product leadership and an innovative pipeline.
Yeztugo Launch and Growth: Yeztugo for HIV prevention achieved $39 million in third-quarter sales and $54 million including the first few weeks of launch. Payer coverage has reached 75%, ahead of schedule, with a target of 90% by mid-2026. The product is expected to contribute significantly to growth in 2026.
Next-Generation HIV Treatments: Phase III ARTISTRY-1 and ARTISTRY-2 studies for a single-tablet regimen of bictegravir and lenacapavir are progressing, with a product launch targeted for early 2027.
Liver Disease Portfolio: Livdelzi sales exceeded $100 million in the quarter, becoming the #1 treatment for second-line PBC in the U.S. FDA approval for bulevirtide for chronic hepatitis delta virus is expected in 2026.
Oncology Developments: Trodelvy is targeting a commercial launch in 2026 for first-line metastatic triple-negative breast cancer, supported by positive Phase III ASCENT-03 and ASCENT-04 data. Anito-cel for multiple myeloma is also targeting a 2026 launch, with updates from the pivotal iMMagine-1 study expected by year-end.
Cell Therapy: Anito-cel for multiple myeloma is targeting a commercial launch in 2026. Efforts to expand cell therapy adoption and next-generation pipeline development are ongoing.
Financial Guidance: Total product sales for 2025 are expected to be between $28.4 billion and $28.7 billion, with non-GAAP EPS guidance raised to $8.05-$8.25. HIV franchise growth is expected to be approximately 5% year-over-year, while cell therapy revenue is forecasted to decline by 10%.
Share Repurchase: We returned $1.4 billion to shareholders in the third quarter, which included $435 million of share repurchases. These repurchases are intended to offset equity dilution at a minimum, but can also be used opportunistically as you've seen in the first 3 quarters of 2025.
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