Gilead GILD Q3 2025 Earnings Call Transcript

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Date

Thursday, October 30, 2025 at 4:30 p.m. ET

Call participants

Chairman and Chief Executive Officer — Daniel P. O'Day

Chief Commercial Officer — Johanna Mercier

Chief Financial Officer — Andrew D. Dickinson

Chief Medical Officer — Dietmar P. Berger

Head, Oncology — Cindy Perettie

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Takeaways

Total product sales -- $7.3 billion in fiscal Q3 2025, up 4% sequentially from Q2 2025, with growth driven by the HIV portfolio and partially offset by lower oncology revenue; year-over-year, total product sales declined 2% due to reduced Veklury demand.

HIV product sales -- $5.3 billion in fiscal Q3 2025, representing 4% growth year over year, with Biktarvy and Descovy contributing significantly to the increase.

Veklury sales -- $277 million in fiscal Q3 2025, reflecting a decline attributed to fewer COVID-19-related hospitalizations.

PrEP market growth -- Management expects the pre-exposure prophylaxis (PrEP) market to grow at 14%-15% annually, based on recent trends.

Yescugo sales -- $54 million year to date as of fiscal Q3 2025, with management guiding for full-year sales of approximately $150 million.

Nonrecurring revenue item -- A $400 million nonrecurring accounting item was recognized in fiscal Q3 2025, providing an after-tax benefit of approximately $0.25 per share; this item did not impact product sales or gross margin.

HIV franchise guidance -- Management raised guidance for the HIV franchise to approximately 5% year-over-year growth, up from the prior estimate of 3%.

Return to shareholders -- $1.4 billion was returned to shareholders as of fiscal Q3 2025 through dividends and share repurchases.

Anticipated step-up in expenses -- Research and development, as well as SG&A expenses, are expected to increase in fiscal Q4 2025, reflecting typical end-of-year trends.

Yescugo access coverage -- Achieved 75% access coverage for Yescugo nearly three months ahead of schedule as of fiscal Q3 2025, with very limited co-pay requirements.

Descovy access -- As of September 2025, 99% of covered lives have access to Descovy, with 88% having unrestricted access.

Buy-and-bill vs. white bagging mix for Yescugo -- Currently, 70%-80% of Yescugo prescriptions are filled via white bagging, with the remainder through buy-and-bill; management expects this mix to evolve over time.

Healthcare professional training -- Over 7,000 healthcare professionals and more than 500 accounts have been trained on Yescugo use as of fiscal Q3 2025.

No patent expiries -- CEO O'Day stated, "we're in a relatively unique position with no patent expiries [until] 2036."

Summary

Gilead Sciences (NASDAQ:GILD) reported fiscal Q3 2025 results showing sequential growth in total product sales, led by continued strength in the HIV portfolio and new product launches. Management increased its HIV franchise growth guidance following strong performance from Biktarvy and Descovy. A $400 million nonrecurring revenue item contributed to after-tax earnings but will not recur in future quarters. Yescugo achieved broad market access ahead of schedule, and management highlighted ongoing investments in research and development, as well as business development opportunities in liver disease, oncology, and cell therapy.

Management emphasized constructive engagement with U.S. regulators and policymakers, including recent agreements with the U.S. State Department related to PEPFAR and a focus on sustaining innovation and addressing drug pricing.

Key upcoming clinical readouts in oncology and HIV are anticipated in the next quarter and throughout the following year.

Management reiterated a disciplined approach to business development, seeking late-stage, de-risked assets every two to three years.

Industry glossary

PrEP: Pre-exposure prophylaxis, medication taken to prevent HIV infection in high-risk individuals.

Buy-and-bill: A reimbursement model where providers purchase and bill for drugs directly, as opposed to 'white bagging', which involves pharmacies shipping drugs to providers for administration.

White bagging: A distribution model where specialty pharmacies dispense medication to healthcare providers for patient administration, bypassing the provider's own purchasing processes.

J code: A code used for billing drugs and biologics under Medicare and certain other insurance plans in the United States, enabling provider reimbursement for administered medications.

PEPFAR: The U.S. President's Emergency Plan for AIDS Relief, an initiative that provides HIV/AIDS treatment and prevention in low- and middle-income countries.

Full Conference Call Transcript

Johanna Mercier: Thanks, Dan, and good afternoon, everyone. I'm pleased to share our third quarter results representing another with strong quarter of commercial execution. Product, exciting momentum in our most recently launched Yes. Tugo and Libdelzi, in addition to continued robust Biktarvy and Descovy growth. Seven, starting on Slide third quarter product sales excluding Victory were $7.1 billion, 4% year over year up Including Veclary sales of $277 million, and up 2% sequentially, driven by strength across our HIV portfolio, third quarter total product sales were $7.3 billion, offset in part by lower oncology revenue. Up 4% sequentially, and down 2% year over year primarily reflecting lower Veclary sales associated with Moving to slide eight, fewer COVID-19 related hospitalizations. HIV sales.

A $5.3 billion represented 4% overall, the Prep Market Group approximately 14% year over year. Moving to slide 10. And one quarter Inn. Across consumer We're really excited with the initial positive reception to our Yes To Go launch clinicians, and payers. To supply Through PEPFAR Global Fund and the US State Department. Has agreed with the enough doses of lenacapavir for PrEP Houston. In including some new launches outside The affects approximate Combined with a We are pleased with these review and guideline decisions which 2026. We look forward to continue to believe a need cell has the potential to offer a best in class efficacy and safety pro European Commit Thank you, Deepmar. And good afternoon, everyone.

You can see We benefited from a $400 million We are required to recognize this revenue in the third quarter. This is a nonrecurrence accounting item and does not reflect cash received during the quarter. As a reminder, this contribution was not part of our product sales and therefore did not impact our product gross margin in the third quarter. But it does otherwise flow through to the bottom line contributing approximately 25¢ after tax. Twenty four.

Third quarter product gross margin was 80 Moving to our non-GAAP results on in line with a percent Does not in the outperformance of Biktarvy and Descovy year to date, We now anticipate our HIV franchise will grow approximately five percent year over year versus our prior guidance of three percent. Sales are anticipated to be in the range of 28.4 There is no change We expect a step up in both R&D and SG&A expenses in the fourth quarter reflecting normal end of year trends. We have updated our IPR and D expectations for the full $100 million.

Rounding out the need to expect our effect tax rate to be approximately nine And we returned $1.4 billion to shareholders in as of 2025. Overall, we are pleased with the strong performance this quarter, highlighted by our clinical and commercial execution and supported by our disciplined operating model. We continue to be growth and we remain focused on delivering on our strategic commitments. With that, well positioned for near term and long I'll invite.

Andrew D. Dickinson: Thank you, Andy. At this time, we'll invite your question. Please be courteous and limit yourself to one question so we can get to as many analysts as during today's The awareness of yet to go increases. We also believe that the naive patient population will also grow with time as well.

Operator: Our next Rough.

Daniel P. O'Day: It sounds like sounds like about 3,000 patients.

Johanna Mercier: Maybe I'll give a little bit more context to Yescugo in light of your question. And not that we've been sharing patients per se, but we do have here today at about fifty year to date as of the Q3 quarter about $54 million in sales. Some of that was in early June, right, in late June for inventory purposes, about $15 million of that. And we've really seen that inventory flow through. There's really no more stocking one of the most important indicators for the future. And meeting the 75% coverage for access. Almost three months ahead of schedule, with very limited prior basically, zero co pay.

It really sets us up nicely, actually, as you think about 2026 and beyond. The United health, ESI, many other commercial plans are on board. We have about 20 to accelerate the In what we track are the intakes the access, HCP awareness and interest, the conversion rates that I just referred to, and everything is going in the right direction. So we do expect full year yes, to go sales of around a $150 million or So hope that so, including the $54 million year to date.

Gives you a bit of perspective Switching a little bit to now that you are guiding for five percent a year over HIV treatment, with the $900 million of growth, combine that Thanks, Mohit, for that. The I do agree with you. I think we've had such an impressive growth, and it's really driven by a couple of things. It's driven by the going year on year about 6% on this and this to your point is despite Part D redesign, and those assumptions have not changed, And Biktarvy growing at six points, but also DESCOVY loan if you think about both HIV prevention at Gilead Sciences, Inc., it's over 40%.

So both HIV treatment and HIV prevention Our next question comes from Salveen Richter at Goldman Sachs. Salveen, go ahead. Your line is open. Good There's really no inventory buy in. It really happened in the first two weeks the last two weeks of June. Sorry. First two weeks of our launch. And that really got pulled through in the first '3. And then what you're seeing in the '39 is really Your ax access while also ensuring that the innovative value of Yescugo gets recognized. And so our discussion that we're on track to reach those numbers. The clear strategic fit to your business.

Evan David Seigerman: Can you just talk to me about the level of appetite for additional BD in liver focused in education such as NASH.

Andrew D. Dickinson: Andy, why don't you start there? Sure. Hi, Evan. Thanks for the question. Look. I mean, as we've said, we don't comment specifically on any subsectors. We are looking actively at opportunities across the BD spectrum in all of our areas of strategic interest. That includes liver disease as well as oncology cell therapy broadly, virology, and immunology. And we've said consistently and continue to believe that, you know, we would like to add more therapies just like Libdelvi that are, you know, best in class therapies. That serve patients in need. On a regular basis. And we would look for those, you know, late stage derisked assets every two to three years at a minimum to kind remarks.

Christopher Thomas Schott: Chris Schott at JPMorgan. Chris, go ahead. Your line we're getting obviously a lot of coverage. I'm just trying to understand a little bit more.

Johanna Mercier: So, Chris, it's Joanna. I think that's a fair question. I think what we're seeing is a lot of the access to get us the 75% goal most recently really happened in the last couple of weeks. And so it's important to understand that it you know, those don't turn on know, just overnight. And so practices need to actually integrate these changes into their working practices. Help to buy and build Your line is open.

Courtney Breen: Hi. Thank you for the question. Joanna? Could you just give us an update on Yes2Go's buy and bill and white gagging mix?

Johanna Mercier: The white bag bagging and the buying bill, you'd expect. And if you remember, at our HIV day in 2024, we did kinda share that would be heavier to the white bagging and buy and bill would build over time. And that's exactly what we're seeing. So much more in the know, coming through the scripts are going to specialty pharmacy, going through that process. Then white backing back to the clinic. Probably more towards about three quarter range. In 70 to 80%, and then the rest of that is buy and bill.

That's not steady state, obviously, and that's gonna change over time as people get more comfortable and get in and as they integrate the J code as well into their practice. So all of those things will evolve. But for right now, that's what we're seeing.

Operator: Our next Level of restriction.

Johanna Mercier: I wonder if you could give us a little more detail to how much of the lives have prior ops or co pay or any other restrictions, like, to certain types of for a number. And a very few step edits in prior And if they are, they're very simple. And I mean, those goals were set because of DESCOVY. And DESCOVY is a as of September, access is at about 99% of live covered with about 88% unrestriction. No restrictions. And so that gives you a little of a flavor of kind of the direct of where Yes2Go is going. Not there yet, but definitely well on way.

Operator: Our next question comes from Brian Abrahams at RBC Capital Markets. Brian, go ahead. Your line is open.

Brian Abrahams: Hi there. Thanks so much for taking my question. Really just wondering, like, what are the biggest barriers for a patient wanting to switch, to do so. Thanks.

Johanna Mercier: Yeah. Sure, Brian. Happy to do so. And they're changing. Right? So I'm gonna share with you kinda where at, but it's been an evolution even from July on. We're seeing a big difference in the time it takes from prescription. So as a as a physician writes a prescription, for someone for Yes2Go. Goes to specialty pharmacy, for example, and goes through the process, The it I mean, the approval process used to take over a month and so it approval and make sure that the drug gets to the office at the same time as the patient gets back into the office as well.

And so that obviously can take you know, a week or two, sometimes more depending on the patient's availability. And the doctor's availability, of course. And so that's kinda what we're playing out. So that is definitely something that was part of our assumption. But those con both conversion rates, to office to injection because that's really prescription to approval, but approval numbers come down. And, obviously, if people get more in tune with the practice gonna get easier. On the flip side, I would say buying bill is you know, obviously, it cuts out one piece of that because then it's directly within the doctor's office. They get approval. They get product.

And then they can kind of start as buy and bill builds, you're gonna see a little bit faster turnaround there as well. Hopefully, that helps give you a little bit of a picture of the patient's journey. Our next question comes from Carter Gould at Cantor Fitzgerald. Carter, go ahead. Your line is open.

Carter Lewis Gould: Great. Thank you. Good afternoon. Thanks for taking the question. I hope you'll indulge me on relatively short term minded question here on ES2Go, but we've seen, pretty volatile scripts over here the past couple weeks. And I guess, my question is, are the TRx that we're seeing reflective of what you're seeing? That is that impacted by third party prep campaigns or more standard demand growth? Or early impacts from the J code? Sure, Carter. Any color would be appreciated.

Johanna Mercier: It there's a lot of week to good directional indicator. And depending on the report, just make sure you're looking at both you know, the SP intakes, but also the buy and bill and kind of merging those two pieces together. The overall Those two pieces together, although sometimes accounts are missing, directionally are in line with of what we're seeing. But the volatility with IQVIA is definitely real right now, and I it's gonna take a little while to settle. We've seen that before with other products as well. Our next question comes from Terence Flynn at Morgan Stanley. Terence, go ahead. Your line is open.

Terence C. Flynn: Thanks for taking the questions. Congrats on the quarter. How we should think about overall Joanna, just wondering if you can comment at all high level about prep market growth. Obviously, it's been very strong the last couple of quarters, 14%. This quarter, 15%. Last quarter, Is that kind of the level we should think about at a franchise for you guys as we head into 2026. Thank you.

Johanna Mercier: Sure, Terrence. I think that's the right way to think about it. I think 14, 15% is the right approach for this market growth. This is obviously fueled by, know, by many of us to make sure And so I would assume about 14 to 15% growth continuing with prep.

Operator: Our next question comes from Tyler Van Buren at TD Cowen. Tyler, go ahead. Your line is open.

Tyler Van Buren: Hey, guys. Thanks. Congratulations on the good quarterly results. So for a needle cell, could the filing happen any day or in the very near future? What is left that's required for the filing? And we're excited for the data at ASH So should the expectation be similar efficacy to CARBICT with improved safety? Or do you believe there's still room to improve on efficacy? Tyler, we'll hand it over to Cindy to give Joanna a break.

Cindy Perettie: So with amida cel, we have communicated what our filing dates are nor will we. But what we have communicated is that we're very much looking forward to a lot second half of next year, and we're definitely on track for that. As Dan spoke to and Deepmar earlier, we will be sharing data cut of Anita's cell at ASH and I would say we're looking forward to sharing that data with everyone, and there's be impressed with the safety we're seeing similar to what we shared at EHA, and we look forward to sharing that data cut at ASH. You were asking particularly about similar.

Simon Baker: Our next question comes from Simon Baker at Rothschild and Co. Simon, go ahead. Thanks for taking the question. And Your line is open.

Cindy Perettie: Efficacy and improved safety. We continue to see we're we're continue sorry. Back to Joanna after that very short break.

Simon Baker: Back on years two go, I just wonder if you could give us some of your feedback on the patient and physician experience and reaction to YES TUGO. Obviously, your competitor has been suggesting a preference for their product over yours, but I'd be I'd be intrigued to hear what you're actually experiencing on the ground. Thanks so much.

Johanna Mercier: Absolutely. Happy to do so. Yeah. So listen. We as we look at I think you're referring to educated are not only the HCPs, but obviously everybody in their practice to make sure that they know how to give the injection, They know how to pre and post treat, you know, basically, just a short term ice It helps the whole situation. And so we've had over 7,000 HCPs have been trained over fifty hundred accounts to date with 98% Little bit of information. It can go a long way to make sure that patient and HCP experience is very smooth.

Operator: Our next question comes from Courtney Breen at Bernstein. Courtney, go ahead. Your line is open. Fantastic. Thank you so much for taking the time for a question today. I want to, I guess, zoom out a little bit to the White House deals and drug pricing, but particularly in the context of your HIV portfolio and higher Medicaid exposure. Obviously, this year, you've dealt with the Part D redesign and have grown through that. As you're looking at potential flexibility and any sort of deal with this administration on direct pricing, can you give any context to kind of the scale that you're preparing for?

Or you your actions or flexibility that you're looking to garner a deal that might ensure that impact is less than what you're experiencing with the part D redesign this year.

Daniel P. O'Day: Thanks, Courtney. This is Dan. I'll take that one as well, and thank you for the question. So I think it's important to note that we continue to have really ongoing good constructive engagements with the administration. Across the administration on a number of topics. And I would say a couple of things that you know, you know, every meeting that I and the team are in, you know, I think the administration has been very clear that they want The US to remain a leading innovator in the space, in the in the biotech pharma space.

And at the same time, addressing the issues relative to US out of pocket patient costs, and having countries outside The US do more to appropriately value innovation. Those are the principles that address our conversations, and I think we're making very, very good progress Relative to, you know, any Gilead Sciences, Inc. specific information, I can only point to that at this publicly disclosed, but I would say that you know, recently we had a yeah. As a part of it, I think, an example of this constructive dialogue, we had an announcement with the US State Department related to PEPFAR and our partnership to bring to low and low in middle income countries.

So I think this concept of Gilead Sciences, Inc.'s unique role in ending epidemics globally connecting with administration object whether that be national defense, whether that be any epidemics, is something that I think has been very much appreciated by the administration and continues to be a cornerstone in our conversations. So and then I was just lastly, just to remind Courtney things we've said in the past, but I would I would remind you that as we have broader conversations with the agency that I'm sorry, with the administration, you know, again, the vast majority of our IP is in The United States. As such, you know, tariffs is related to transfer pricing.

They have more of a limited on Gilead Sciences, Inc. versus our peers. We recognize, you know, more than 80% of our IP in The United States, 90% of our taxes are paid here. Have a strong footprint in The United States. We have almost a 100% of our R&D capital infrastructure here, and we've committed significant additional investments in The United States. Of the magnitude of $32 billion. So these conversations are wide, and I think that, you know, we will continue to update you as we have different announcements. Like we did with the state department. But I'd say we feel very good about the constructive nature of them and where they're going.

Operator: Our last question comes from Joseph Stringer at Needham. Joey, go ahead. Your line is open.

Joseph Stringer: Hi. Thanks for taking our questions. Question on Hecludex for And two, what do you think the market HDB. You put a lot of effort into getting that resubmitted since the CRL. So I guess one, what gives you confidence that you'll get approval from FDA this time around? Opportunity for the drug and is in HDD, just keeping in mind that they're are two competitors and phase three development. Thanks.

Dietmar P. Berger: Great. So we'll start with Deepmar. Welcome, Deepmar. And then we'll be another quick break. Yeah. So we thank you for the question. I mean, we're not of course, commenting in-depth on the on the regulatory strategy. But additional data Different factors give us confidence. One, we have with regards to, you know, how is the medicine injected, with Livedelzi and how perfect it is. This is kind of the same with hepcrudex. This is obviously, these are people that have hepatitis b, and it's very small percentage. It is rare disease. Small percentage of these hep b patients have also hep b, but a much, unfortunately, worse worsening with liver cirrhosis and potentially even liver cancers and death.

And so therefore, important to get to these patients as quickly as possible. And so we do believe that because of our footprint in hep b, it's it's a really good fit for us to make a difference for these patients across the board. So much smaller, but again, a little change in our footprint overall. So I think that's why we think HEPCOODEX is important, let alone the unmet need that is out there because there's nothing else out there today.

Operator: That completes the time that we have for questions. I'll now invite Dan to any closing remarks.

Daniel P. O'Day: Terrific. So let me, first of all, thank all of you joining today. We really appreciate your interest consistent way. A quarter to quarter spoke about a lot today, but also the strong clinical pipeline. I just want to point out we have some important readouts coming up in oncology and HIV in this quarter. And into next year. And just would remind you again that really we're in a relatively unique position with no patent expiries 2036. So for that, I'd like to again thank you for your time today. Jackie and team, as usual, are here to with you on any of the questions that you have. Please don't hesitate to reach out. Thank you.

I wish you all a good rest of your day.

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