Detailed Narrative
Q1 Performance Highlights
Gilead reported strong commercial and clinical execution in Q1 FY25. The base business, excluding Veklury, grew 4% year-over-year, primarily driven by HIV. Total product sales, however, saw a 1% decline year-over-year, mainly due to fewer COVID-19-related hospitalizations impacting Veklury sales. Despite these dynamics, the company achieved strong operating margins and earnings per share, underscoring its focus on expense management and business model leverage.
HIV Business Dynamics
The HIV business delivered robust sales growth of 6% year-over-year, with Biktarvy sales increasing 7%. This growth was demand-led but partially offset by the anticipated headwinds from the Medicare Part D redesign. Descovy sales surged 38% year-over-year, fueled by higher average realized prices and increased demand, contributing to a 16% year-over-year growth in the U.S. PrEP market. The company expects flat reported HIV sales for FY25 due to Part D, with a return to growth in 2026.
Oncology Pipeline Progress
Gilead announced positive Phase III ASCENT-04 study results for Trodelvy in combination with pembrolizumab for first-line PD-L1 positive metastatic triple-negative breast cancer. The study demonstrated a clinically meaningful and statistically significant improvement in progression-free survival. The company plans to present these data at a medical congress and file with global regulatory authorities. An update on the Phase III ASCENT-03 study for Trodelvy monotherapy in first-line mTNBC is also expected later this quarter.
Cell Therapy Performance and Outlook
Cell therapy sales experienced a 3% year-over-year decline, primarily due to accelerating competitive headwinds, particularly for Tecartus, which saw a 22% year-over-year decrease. Yescarta sales, however, increased 2% year-over-year. Despite these challenges, Gilead remains optimistic about the future of cell therapy, with the potential launch of anito-cel in multiple myeloma in 2026 and upcoming presentations of early-stage data for next-generation CAR T products at ASCO.
Liver Disease and Other Launches
Livdelzi continued its strong launch momentum, generating $40 million in sales in its second full quarter and capturing approximately one-third of the second-line PBC market. The European Commission granted conditional marketing authorization for Livdelzi in February, leading to a recent launch in Germany and planned expansion into other major European markets. The ongoing Phase III IDEAL trial for Livdelzi could potentially double the addressable patient population in PBC.
Lenacapavir for PrEP Launch Readiness
With the anticipated FDA decision for lenacapavir for PrEP weeks away (June 19 PDUFA date), Gilead is fully prepared for a U.S. launch. The company expects to achieve approximately 75% access within the first six months and 90% within 12 months. Awareness among healthcare providers and the community is high, and Gilead has mobilized its field teams, nurse educators, and field reimbursement managers to ensure a seamless customer experience and support for reimbursement processes.
Capital Allocation and Financial Strength
Gilead returned $1.7 billion to shareholders in Q1 FY25 through dividends and share repurchases, maintaining its disciplined capital allocation strategy. The company's financial strength was further recognized by S&P, which upgraded Gilead's long-term debt rating from BBB+ with a positive outlook to A- with a stable outlook, citing the outlook for its HIV franchise, steady revenue growth, and strong cash flow generation.