Gilead Sciences Earnings Call: HIV Strength, New Catalysts
Gilead Sciences ((GILD)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Gilead’s latest earnings call balanced confidence in its core franchises and late-stage pipeline with candid acknowledgment of policy and competitive pressures. Management stressed that strong HIV, liver and oncology execution, plus pipeline catalysts and disciplined capital allocation, more than offset Vecluri’s collapse and looming cell therapy headwinds.
HIV Franchise Delivers Growth Despite Policy Drag
Gilead’s HIV business grew 6% in 2025 to $20.8 billion, led by Biktarvy, which rose 7% to $14.3 billion and maintained more than 52% of the U.S. switch and treatment market. Management noted that without roughly $900 million of Medicare Part D headwinds, HIV revenue growth would have approached 10%, underscoring underlying demand strength.
Prevention Engine Accelerates with YES2GO and Descovy
The HIV prevention portfolio showed rapid momentum, anchored by the YES2GO launch which achieved about 90% payer coverage and largely zero copays, generating $96 million in Q4 and $150 million for 2025. Prevention sales climbed roughly 53% year over year in Q4, while Descovy reached $2.8 billion for the year, up 31% with around 80% of its revenue now coming from prevention.
Base Business Outperforms as COVID Wind-Down Continues
Total product sales for 2025 were $28.9 billion, up 1%, but the base business excluding Vecluri reached $28 billion, exceeding the top end of guidance by more than $300 million. That base grew about 4% year over year or roughly 8% excluding the Medicare Part D redesign, with Q4 product sales ex‑Vecluri up 7% versus last year and 9% sequentially.
Liver Portfolio and Trodelvy Strengthen Diversification
Liver disease products delivered 6% growth to $3.2 billion, supported by Libdelzi’s strong adoption, with Q4 sales of $150 million and a market‑leading share above 50% in second‑line PBC. Oncology asset Trodelvy posted 6% full‑year growth to $1.4 billion, with Q4 revenue of $384 million rising 8% both year over year and sequentially.
Pipeline and 2026 Catalysts Highlight Long-Term Upside
Management described 2026 as “catalyst rich” with multiple Phase III readouts and as many as four potential launches, including first‑line Trodelvy in TNBC, Viclen, Anidocel and bruleviratide. They flagged up to 10 possible launches through 2027, supported by 53 ongoing clinical programs and recently published positive Trodelvy data that has already influenced treatment guidelines.
Profitability Intact and Capital Returns Remain Robust
Non‑GAAP product gross margin reached 86.4% and operating margin was about 45%, or roughly 48% excluding acquired IPR&D and a one‑time $400 million item, underscoring solid profitability. Non‑GAAP EPS landed at $8.15, with earnings up versus 2024 after adjusting for Simbae, while the company returned $5.9 billion to shareholders, about 63% of free cash flow.
Anidocel Showcases Differentiated Cell Therapy Data
In cell therapy, Anidocel delivered compelling Phase II data in multiple myeloma, with a 96% overall response rate, 74% complete responses and 95% MRD negativity alongside manageable safety. A filing has been submitted, and Gilead is preparing for a potential launch in the second half of 2026, expecting modest initial revenue before a larger ramp in 2027.
Cell Therapy Under Pressure from Intensifying Competition
Despite Anidocel’s promise, current Kite revenue declined about 7% to $1.8 billion in 2025 as in‑class and out‑of‑class competitors gained ground. Management expects Kite’s top line to fall roughly another 10% in 2026 as more entrants arrive and clinical trial enrollment pulls patients away from commercial treatments.
Vecluri Decline Marks the End of the COVID Tailwind
Vecluri sales fell about 49% year over year to $911 million in 2025, dropping by roughly $900 million as COVID‑19 hospitalizations eased and utilization normalized. Management framed this as a structural reset rather than a surprise, with the core growth narrative now firmly centered on non‑COVID franchises.
Policy and Pricing Changes Create a Manageable Drag
The company estimated a roughly $900 million to $1.1 billion impact in 2025 from the Medicare Part D redesign, which weighed heavily on HIV results. Looking ahead, they expect around a 2% drag on HIV growth in 2026 from a recent drug‑pricing agreement, Medicaid dynamics and Affordable Care Act channel shifts, but characterized these effects as quantifiable and manageable.
EPS Mix and IPR&D Spending Pressure Near-Term Margins
Fourth‑quarter non‑GAAP EPS slipped slightly to $1.86 from $1.90 a year earlier, as higher acquired IPR&D expenses offset stronger product sales and lower SG&A. For the full year, $8.15 in EPS included about $3.14 per share of Simbae‑related items, while roughly $1.0 billion in acquired IPR&D reflected continued investment in early‑stage opportunities.
Strategic IPR&D and Investment Support Future Growth
Gilead emphasized that the hefty 2025 acquired IPR&D outlay is a deliberate strategy to seed future growth across oncology, virology and immunology. For 2026, the company guided to a much lower acquired IPR&D burden of about $300 million tied to existing commitments, which should ease some pressure on reported operating metrics.
Guidance Points to Steady Growth and Cash Returns
For 2026, Gilead forecast total product sales of $29.6 billion to $30.0 billion, with base business revenue of $29.0 billion to $29.4 billion implying 4% to 5% growth and Vecluri slipping to about $600 million. Management expects HIV to grow around 6%, YES2GO to scale to roughly $800 million, Kite revenue to fall about 10%, non‑GAAP EPS of $8.45 to $8.85 and at least half of free cash flow to be returned to shareholders.
Gilead’s call painted a picture of a business transitioning from COVID windfalls to durable growth in HIV, liver and oncology while investing heavily in a rich late‑stage pipeline. Policy and competitive headwinds are real but quantified, and management’s disciplined financial posture and shareholder‑friendly capital returns offer investors a measure of stability amid the evolving landscape.
