GILEAD SCIENCES Q1 FY26 earnings call GILD

Gilead's HIV business demonstrated strong performance, growing 10% year-over-year, driven by Biktarvy's continued market leadership with over 52% U.S. share and the impressive 87% growth of the U.S. PrEP business. The Yeztugo launch has exceeded expectations, leading to an increased 2026 sales guidance of $1 billion. The company is advancing its HIV pipeline with BIC/LEN under priority review for an August FDA decision, and upcoming Phase III updates for the ISLEND 1 and 2 studies evaluating a once-weekly oral regimen. Additionally, a Phase II trial for the twice-yearly injectable GS-3242 combined with lenacapavir is set to begin in the second half of the year.

The oncology franchise saw significant growth, with Trodelvy sales up 37% year-over-year, driven by demand in breast cancer indications. Regulatory decisions for Trodelvy in first-line metastatic triple-negative breast cancer are anticipated in the second half of the year, supported by NCCN Category 1 recommendations. Strategic acquisitions, including Tubulis and Arcellx, are bolstering Gilead's ADC and cell therapy capabilities. Tubulis brings TUB-040, a potential first-in-class ADC for ovarian cancer, and a next-generation ADC platform. The Arcellx acquisition, which closed in April, positions anito-cel as a potential best-in-disease CAR-T for multiple myeloma, with revenue expected to begin in early 2027.

In liver disease, Livdelzi sales more than tripled year-over-year, establishing it as a market leader in second-line PBC with over 50% U.S. share. An update from the Phase III IDEAL study for Livdelzi is expected in the second half of the year, potentially expanding its addressable population. A regulatory decision and potential U.S. launch for Hepcludex for chronic hepatitis delta virus infection are also anticipated this quarter. The pending acquisition of Ouro Medicines will add gamgertamig, a clinical-stage T cell engager for autoimmune diseases, to Gilead's inflammation portfolio, with Phase III trials targeted as early as 2027.

Gilead has strategically enhanced its portfolio through three key acquisitions: Arcellx (closed April 28), Ouro Medicines (pending), and Tubulis (pending). These deals add potential best-in-class assets in CAR-T (anito-cel), T cell engagers (gamgertamig), and ADCs (TUB-040), along with innovative technology platforms. These acquisitions are expected to drive future growth in oncology and autoimmune diseases, leveraging Kite's manufacturing expertise and Gilead's medicinal chemistry capabilities. The company's pipeline now consists of 47 clinical programs, reflecting a disciplined prioritization and strong execution.

The company reported strong first-quarter financial results, with total product sales (excluding Veklury) up 8% year-over-year to $6.8 billion. Product gross margin improved to 87%, and operating margin reached 47%. Reflecting this strength, Gilead increased its full-year 2026 revenue guidance by $400 million. Despite significant acquired IPR&D expenses of approximately $11.8 billion related to recent acquisitions, the company's non-GAAP diluted EPS, excluding these transaction costs, remains in line with its February guidance, demonstrating financial flexibility and disciplined operating expense management.

Gilead returned over $1.4 billion to shareholders in Q1 2026, including more than $400 million in share repurchases, representing approximately 60% of free cash flow. Following the recent pace of M&A activity, the company's near-term business development focus will be on integrating these new programs and maintaining clinical momentum. While ordinary course business development will continue, larger M&A is less likely this year, though strategic opportunities will always be considered. This approach aims to balance pipeline expansion with shareholder returns and financial discipline.