Gilead Sciences Aktie

Good afternoon, everyone, and welcome to Gilead's Third Quarter 2026 Earnings Conference Call. My name is Rebecca, and I'll be today's host. In a moment, we'll begin our prepared remarks, followed by our Q&A session. [Operator Instructions]

Now I'll hand the call over to Jacquie Ross, Senior Vice President, Treasurer and Head of Investor Relations.

Thank you, Rebecca. Just after market closed today, we issued a press release with earnings results for the third quarter of 2026. The press release, slides and supplementary data are available on the Investors section of our website at gilead.com. The speakers on today's call will be our Chairman and Chief Executive Officer, Daniel O'Day; our Chief Commercial and Corporate Affairs Officer, Joanne Mercier; our Chief Medical Officer, Demar Berger; and our Chief Financial Officer, Andrew Dickinson. .

After that, we'll open the call to Q&A where the team will be joined by Cindy Perettie, the Executive Vice President of Kite. Let me remind you that we will be making forward-looking statements. Please refer to Slide 2 regarding the risks and uncertainties relating to forward-looking statements that could cause actual results to differ materially.

With that, I'll turn the call over to Dan.

Thank you, Jacquie, and thanks, everyone, for joining us on today's call. Gilead delivered an exceptional third quarter that highlights the strength, breadth and durability of the business. Third quarter base business sales were up 16% year-over-year, Gilead's strongest growth in more than a decade, driven by Biktarvy, Descovy and Yeztugo and HIV, Trodelvy in metastatic breast cancer and Livdelzi in and TBC.

At the same time, we continue to advance our diverse pipeline as we prepare for the next phase of launches. In HIV, we continue to lead across treatment and prevention. In the third quarter, HIV sales grew 18% year-over-year. Biktarvy achieved an all-time high U.S. market share, and we had a modest initial contribution from Bixlenvo, which launched in August. HIV prevention sales nearly doubled year-over-year. As expected, Yeztugo has rapidly established itself as the leading long-acting injectable option for HIV prevention. Yeztugo and Descovy for PrEP combined have 50% market share today and a $4 billion annual run rate.

As Dietmar will cover later, we believe we have the most comprehensive and diverse HIV pipeline in the industry as well as in Gilead's history. Across daily and long-acting dosing, we are advancing a portfolio that will deliver new options for many years to come. The most near-term example is the [indiscernible] plus lenacapavir. We expect to file this year, and if approved, this would be the first once-weekly oral treatment regimen for virally suppressed people with HIV. In oncology, Trodelvy delivered another very strong quarter. Sales were up 42% year-over-year and with growing demand across triple-negative and HR-positive HER2-negative metastatic breast cancer Trodelvy reached an approximately $2 billion annual run rate.

In the third quarter, we received European approval of Trodelvy in combination with pembro for first-line PD-L1-positive metastatic triple-negative breast cancer, extending Trodelvy's benefits to patients earlier in treatment. Beyond Trodelvy in metastatic breast cancer, we now have 7 clinical stage antibody drug conjugate programs in oncology. In cell therapy, we are approaching an important catalyst with the potential approval of a needle cell toward the end of the year. This would bring our total number of approvals to 4 in 2026 alone.

In inflammation, our third strategic area of focus, we are advancing and expanding our broad and differentiated pipeline that we believe will establish a durable new growth area for the company. We recently shared promising 12-week data for emvistegrast in inflammatory bowel disease, and we expect to advance the program into Phase III studies in ulcerative colitis in 2027. Emvistegrast has the potential to be a backbone therapy for inflammatory bowel diseases as a monotherapy or in combination with other mechanisms, including the oral IL-23 receptor inhibitor we recently agreed to acquire.

Beyond IBD, we have our IRAK4 inhibitor for which we plan to share data at the upcoming ACR meeting as well as Gangertemig, which represents a promising approach to B-cell-driven autoimmune diseases with additional data expected later this year. Overall, our inflammation pipeline now includes 13 clinical programs, giving us multiple opportunities to deliver meaningful advances for patients.

In summary, the third quarter continues what is proving to be a stellar year of execution and performance. This has enabled us to raise our 2026 base business revenue guidance by $1.6 billion over the course of the year, while advancing our robust pipeline and preparing for the next wave of potential launches. This fundamental strength in our business means we are well placed to adapt to potential policy headwinds.

As you know, Biktarvy was selected for the maximum fair price determination process. That process is now complete, and CMS have informed us of the price they have set. As we have previously shared, this will have an impact on Biktarvy revenues in 2028. Andy will share details in his section of the call. And as the third quarter has reinforced again our strategy of diversification has reshaped our business and is expected to continue to drive sustainable growth.

Looking forward, the multiple opportunities to drive growth across all 3 of our therapeutic areas, the strength and diversity of our pipeline within and beyond HIV and a disciplined operating model all give us confidence in the trajectory of the company.

With that, I'll hand it over to Joanna.

Thanks, Dan, and good afternoon, everyone. Starting on Slide 7. Total product sales, excluding Veklury, of $8.2 billion were up 16% year-over-year, driven by strong HIV performance, Trodelvy and Lively. This is the highest year-over-year growth for our base business since 2015. Sequentially, sales were up 8%, driven by growth in HIV, Trodelvy and Biktarvy. Including Veklury, third quarter total product sales were $8.3 billion, up 13% year-over-year and 9% sequentially. Moving to HIV on Slide 8. And Third quarter HIV sales of $6.2 billion were up nearly $1 billion or 18% year-over-year and represented the highest year-over-year growth since the fourth quarter of 2018.

This strong performance was driven by higher average realized price, higher demand and favorable inventory dynamics. Sequentially, HIV sales were up 10% and primarily driven by higher inventory, demand and average realized price. We expect these inventory dynamics to normalize by year-end. Looking at HIV treatment in more detail on Slide 9. Biktarvy sales of $4.1 billion were up 10% year-over-year, driven by higher demand and average realized price in addition to favorable inventory dynamics. Sequentially, Biktarvy sales increased 8%, driven by favorable inventory dynamics and higher demand, partially offset by lower average realized price due to channel mix.

Biktarvy reached an all-time high treatment market share of 53% in the U.S., supported by continued gains among new patients strong retention and improving access following adjustments to the Florida ADAP program earlier in the year. While we have not yet seen the HIV treatment market return to its typical 2% to 3% growth, we have seen signs of stabilization. Biktarvy has also demonstrated continued resilience amid changes related to the Affordable Care Act reflecting the strength of the product profile and of our commercial teams to help people living with HIV maintain access to treatment.

Bixlenvo our new daily oral combination of bictegravir and lenacapavir for virally suppressed adults with HIV was launched late into the third quarter following U.S. approval in August. While it's still early days for the launch, we're pleased with the uptake we are seeing in virally suppressed people on complex regimens, which has been in line with our expectations. Overall, we remain focused on expanding coverage and bringing this new option for people who want to switch or simplify their HIV treatment.

Moving to HIV prevention or prep on Slide 10, sales nearly doubled year-over-year in the third quarter, once again outpacing overall U.S. market growth of 14% year-over-year. This is a clear testament to Gilead's strong commercial execution. Building on our leadership, now with 50% pre market share, our innovative portfolio has accounted for the vast majority of market growth since 2025. Additionally, demand in the long-acting injectable market doubled year-over-year, and we're pleased to share Yeztugo now the leading injectable prevention regimen with sales of $305 million, up 31% sequentially and on track to deliver full year sales of approximately $1 billion.

Importantly, we continue to see that more than 70% of users have returned for their second injection, resulting in combined protection of up to a full year. This continues to reinforce Yeztugo's best-in-pe persistency profile as defined by patients returning for their reinjections after 6 months. We are particularly encouraged by the mix of new starts with the majority continuing to come from individuals switching from other PrEP regimens, while the share of PrEP naive individuals increased during the quarter.

Looking ahead, -- we believe the potential launch of once weekly oral Yeztugo could further expand choice and support continued growth by reaching additional individuals who could benefit from PrEP. Looking at Descovy, total sales of $1 billion were up 49% year-over-year, driven by higher average realized price and favorable inventory dynamics. Prep sales continue to account for approximately 80% of total Descovy sales. Sequentially, Total Descovy sales were up 8%, driven by higher-than-usual inventory build and higher demand. In just 3 quarters, Descovy sales have already exceeded that of full year 2025 and driven primarily by strong demand and pricing favorability.

Moving to Livdelzi on Slide 11. Sales of $203 million were up 93% year-over-year and 21% sequentially driven by increased demand in both the U.S. and Europe. Livdelzi is the market leader in the U.S. and is helping to drive expansion of the second-line PBC market. Looking ahead, we're excited to share the detailed results from Livdelzi's Phase III IDEAL study at the upcoming ASLD Liver Meeting. The study evaluated Livdelzi in PBC patients with ALP between 1 and 1.67x the upper limit of normal, which account for approximately half of the second-line eligible population and remain associated with an increased risk of disease progression.

We are working towards global filings to update Livdelzi's label to include data from the IDEAL study and expect a U.S. label update in 2027. Together with sales in our viral hepatitis portfolio, Liver disease sales were $927 million, up 13% year-over-year, reflecting increased demand for Livdelzi in PBC as well as favorable pricing dynamics for HCV and HBV partially offset by lower HCV starts.

Sequentially, sales were up 6%, reflecting higher average realized price and inventory dynamics, partially offset by lower demand for HCV products. Moving to Slide 12. Trodelvy sales of $506 million for the quarter, now a $2 billion annual run rate was up 42% year-over-year and 11% sequentially and driven by strong demand growth in both metastatic triple-negative and HR-positive HER2-negative breast cancer across the U.S. and Europe.

Following the first-line approvals in the U.S. and Europe earlier this year, Trodelvy is establishing itself as the backbone of treatment in metastatic triple-negative breast cancer and we're working to expand Trodelvy's first-line opportunity further into new markets. Triple-negative breast cancer remains 1 of the most aggressive and challenging forms of breast cancer to treat. Bringing Trodelvy into the first-line setting represents an important opportunity to reach significantly more patients earlier in their treatment journey when the potential impact of treatment may be the greatest. We are incredibly pleased with the first-line metastatic TNBC uptake thus far.

Moving to Slide 13. And on behalf of Cindy and the Kite team, Third quarter cell therapy sales of $355 million were down 18% year-over-year, reflecting ongoing competitive headwinds. Looking ahead, we're also focused on the next potential chapter of growth for our cell therapy business. Our launch preparations are in full force as we approach Nedocell's December 23 PDUFA date in fourth line plus relapsed or refractory multiple myeloma. This includes conducting preactivation efforts within our authorized treatment centers network with a target activation of 80% of our ATCs within the first 6 months of launch.

Detailed launch planning across sales, medical and access teams as well as engaging with a range of payers with a target of 90% payer coverage within the first 12 months of launch. Coupling our steadfast preparations with the level of health care provider and patient enthusiasm we have seen for netocells profile ahead of launch, we are targeting brand leadership in the fourth line plus setting with 18 months of approval.

As we head into the final months of the year, we remain focused on delivering strong performance across our portfolio and preparing for the upcoming launch of Anetocell. In HIV, we are building on our leadership in treatment and prevention through the early launch of Bixlenvo and the continued performance of Biktarvy, Yeztugo and Descovy. Beyond HIV, Live else continues to gain share as the PBC market expands, while Trodelvy is delivering strong growth across triple-negative and HR-positive HER2-negative metastatic breast cancer. Our outstanding performance this quarter once again reflects the incredible work of our teams across the organization, and I want to thank them for their unwavering commitment to patients.

And with that, I'll hand the call over to Dietmar.

Thank you, Joanna, and good afternoon, everyone. The third quarter was another productive period across all 3 of our therapeutic areas. We received FDA approval of Bixlenvo, advanced our twice yearly HIV treatment programs and shared promising early data from our emerging inflammation portfolio, including our investigational oral alpha 4 beta 7 -- we're making strong progress across our diverse portfolio of 49 clinical programs.

Beginning with HIV treatment on Slide 16. We're advancing the most comprehensive HIV portfolio in both the industry and in Gilead's history. While Biktarvy sets the standard for daily single-tablet regimens in people with HIV, we continue to innovate across daily and long-acting treatment options to address the diverse needs of the greater than 40 million people living with HIV globally. Building on Bixlenvo's approval, we are making progress in 6 long-acting treatment programs encompassing both orals and injectables. We expect to file eslaterovir plus lenacapavir with FDA this year with a regulatory decision in 2027.

If approved, is Len would be the first once-weekly oral treatment regimen for virally suppressed people with HIV. Beyond this lens, we remain on track to initiate our Phase II trials for our wholly owned weekly oral regimens, combining lenacapavir with our investigational long-acting integrase inhibitors. Earlier this month, we started the Phase II trial for the lenacapavir combination with GS-3242, and the Phase II trial for the combination with GS-1720 is expected to start in early 2027. We will select the most promising candidate for Phase III development in treatment naive and virally suppressed people with HIV.

The selected program will have the potential to be the first insty-containing weekly regimen. We're also advancing 2 distinct long-acting injectable treatment options. First, we initiated the newly named Phase III Daybreak I and II trials for lenacapavir plus our investigational broadly neutralizing antibodies teropevumab and sellerizumab during the third quarter. This has the potential to be our first complete twice-yearly HIV treatment regimen for the virally suppressed population with susceptibility to both [indiscernible].

In parallel, we initiated the also newly named Phase II PULSAR I and II trials, evaluating injectable GS3242-plus lenacapavir, our first insty-based long-acting injectable treatment program. These studies have already begun dosing our every 4-month cohort. We expect to initiate the twice-yearly dosing cohort following additional Phase I data.

Overall, we continue to believe that this portfolio across both long-acting oral and injectable treatments positions us well to expand choice, support Gilead's continued leadership and reach more of the 44% of people with HIV who are not virally suppressed.

Turning to HIV prevention. We continue to build upon the unprecedented clinical profile demonstrated by lenacapavir in the purpose studies with twice [indiscernible], establishing a new benchmark for HIV prevention efficacy. Building on the successful commercial launch of twice yearly Yeztugo, our application of once weekly oral lenacapavir for prep is under review with the FDA with a regulatory decision expected in early February 2027. If approved, once weekly lenacapavir could become the first long-acting oral prep regimen, complementing twice yearly -- Yeztugo for people who prefer an oral option.

Looking further ahead, we continue to expect an update from the Phase III purpose 365 study evaluating once yearly intramuscular lenacabivir for PrEP in 2027. Aligning with annual preventative care visits, this option could be even more transformative in reaching more people who could benefit from PrEP and we are targeting potential launch in 2028. Turning to oncology on Slide 17. We remain focused on advancing differentiated therapies for cancers with large unmet needs. Our acquisition of [indiscernible] is earlier this year adds 4 promising clinical stage programs as well as next-generation ADC technology that further strengthened our existing ADC expertise.

Among our ADC programs, we look forward to providing an update from our Phase III ASCENT-GYN study around the end of the year. The study is evaluating Trodelvy in advanced or recurrent endometrial cancer, where patients whose disease progresses following prior treatment continue to have limited effective options. Beyond Trodelvy, we continue to advance GS-8D824, our investigational NaPi2b directed ADC in platinum-resistant ovarian cancer. The encouraging Phase I activity observed in heavily pretreated patients without biomarker selection reinforces our belief in its potential to offer a differentiated treatment option in this challenging disease.

At the same time, we're exploring GS-8824's potential more broadly in our Phase I program for platinum-sensitive ovarian cancer. We have also initiated a new trial in advanced or recurrent endometrial cancer. Our commitment to oncology extends further into our earlier stage pipeline, where we are advancing several programs designed to address high unmet needs in solid tumors. This includes a focused effort in MTAP deleted cancers, which represent approximately 10% to 15% of solid tumors with GS-5319, our investigational MTA cooperative PRMT5 inhibitor and GS-2426, our investigational MAT2A inhibitor, which targets a complementary pathway, both currently in Phase I clinical trials.

Moving to inflammation on Slide 18. We're excited to be at the stage where we're starting to share clinical data. As our third strategic area of focus, we have been building and leveraging deep expertise across immunological pathways and mechanisms to develop a pipeline of potential first-in-class or best-in-class approaches to target various severe immune-mediated inflammatory conditions with high unmet need.

In inflammatory bowel disease, we shared promising 12-week data for emvistegrast, our investigational once-daily oral small molecule inhibitor of alpha 4 beta 7 at the United European Gastroenterology meeting earlier this month. The data demonstrate the potential for best-in-class oral efficacy with a generally well-tolerated safety profile. We believe that emvistegrast could provide a much-needed oral treatment option for IBD patients who currently cycle through burdensome injectable therapies.

Following these results, we expect to advance emvistegrast's monotherapy into Phase III studies in ulcerative colitis in 2027. We -- in addition, we are exploring its potential as an oral backbone for combination regimens designed to break through the efficacy ceiling seen with approved monotherapies. We are also planning a Phase IIb/III study to evaluate emvistegrast in Crohn's disease. These programs will be conducted in both advanced therapy naive as well as advanced therapy experience populations in line with FDA guidance.

In addition to these programs, we agreed to acquire an oral peptide IL-23 receptor inhibitor which we believe adds a potentially differentiated oral approach for inflammatory bowel disease to our growing inflammation and immunology portfolio. The program known as HCXT2001 may potentially be used alone or in combination with invistigrast as a daily oral treatment for people living with IBD. This reinforces our approach to build depth and optionality in selected immune-mediated diseases through multiple complementary mechanisms and modalities.

Beyond our inflammatory bowel disease programs, we are also excited by the early-stage portfolio of T cell engager therapies acquired in our overall Medicine acquisition in partnership with Lake front. As a reminder, Gamgerdamic is a potential best-in-class BCMA/CD3 bispecific T cell engager that demonstrated robust clinical activity in early Phase I studies across autoimmune conditions. We will be presenting additional Phase I data for gamgordamic in immune thrombocytopenia at a medical congress later this year.

Additionally, we are looking forward to sharing a detailed update from our Phase IIa COSMIC study at the upcoming American College of Rheumatology meeting on November 8. While still early, the study provided the first clinical proof-of-concept signal for idesasertib, our investigational IRAK4 inhibitor in cutaneous lupus erithermatosis. Further, at the upcoming AASLD meeting, we're excited to present detailed results from our Phase III IDEAL study of Livdelzi.

This study evaluated patients with alkaline phosphatase between 1 and 1.67x the upper limit of normal or intolerant to ursodeoxycholic acid. Following positive top line results shared earlier this year. This presentation will provide a fuller view of the findings and their potential benefit for patients with PBC and an opportunity to deepen our understanding of where Livdelzi can potentially address remaining treatment needs.

Overall, our inflammation pipeline now includes 13 clinical programs led by our inflammatory bowel disease and B-cell depleting programs. We believe our portfolio gives us multiple opportunities to deliver meaningful advances for patients and establish inflammation as a potentially significant new growth area for Gilead.

Moving to cell therapy on Slide 19. And on behalf of Cindy and the Kite team, we are now less than 2 months away from Anidocell's December 23 PDUFA date and potential launch in fourth line or later relapsed or refractory multiple myeloma. The filing was supported by data from our Phase II IMEGEN-1 study for which we expect to share additional follow-up data inclusive of the Kaplan-Meier curve for PFS at an upcoming Medical Congress this year. We're excited to deliver what we believe could be an important new treatment option for patients reinforced by Anetocell's deep durable efficacy, differentiated safety profile and targeted manufacturing turnaround time of less than 3 weeks.

In addition to the fourth line plus setting, the broad [indiscernible] program adds the potential to establish a new standard of care across the multiple myeloma landscape reaching more patients earlier in treatment. We look forward to IMAGINE 3 data in second to fourth line with a potential BLA filing as early as 2027. We are pleased to share that we expect to initiate our IMAGINE 6 and IMAGINE-4 studies in transplant eligible and noneligible newly diagnosed patients in early 2027, and and plan to share data from the GEM nedofirst safety lead-in study for newly diagnosed multiple myeloma at an upcoming medical congress later this year.

Beyond the needle cell, KITE 512, our GPC3 targeted dual armored CAR T cell therapy has been cleared for clinical studies by FDA, and we look forward to enrolling the Phase I trial in patients with advanced GPC3 positive hepatocellular carcinoma soon. This marks an important milestone for extending the reach of the transformative potential of Kite cell therapies into solid tumors.

Turning to our next-gen cell therapies PALISADE 1 and 2, evaluating Kite 753 in patients with second line and third line plus relapsed or refractory diffuse large B-cell lymphoma have been placed on a partial clinical hold while we investigate safety differences we've noted between Phase I and Phase II.

Lastly, we are pleased to share that in collaboration with pre-gene we've begun dosing patients with our in vivo BCMA CAR-T therapy in an investigator-initiated trial in China. Leveraging Kite's extensive cell therapy expertise and manufacturing capabilities, our in vivo program aims to address existing class challenges and unlock broader applications across oncology and autoimmune diseases. Our advancement in the clinic is an encouraging milestone, and we look forward to providing additional updates in due course.

Moving now to our milestones on Slide 20. And I'd like to thank our research and development teams at Gilead and Kite for their dedication and execution across our clinical portfolio. We are on track for our remaining 2026 milestones, including the Phase III update for ASCENT GYN, evaluating Trodelvy in advanced or recurrent endometrial cancer and the FDA decision on Aniducel in fourth line or later relapsed or refractory multiple myeloma.

Along with our planned acquisition of an oral IL-23 receptor inhibitor program, we entered 2 new collaborations that further strengthen our solid tumor portfolio. With BioNTech, we will evaluate Trodelvy in combination with pumitamic, an investigational PD-L1 VEGF-A bispecific in first-line metastatic triple-negative breast cancer and with Vera Biotechnology, we will develop 3 novel dual mast T cell engagers for solid tumors. Taken together, these updates reflect the strength of the portfolio we have built and the opportunities that lie ahead.

Now I will turn over the call to Andy.

Thank you, Dietmar, and good afternoon, everyone. Gilead's third quarter results demonstrate outstanding commercial and clinical execution reinforced by continued operating expense discipline. As shown on Slide 22, our base business grew 16% year-over-year to $8.2 billion, driven by continued growth across Biktarvy, Descovy and Yeztugo in HIV, Trodelvy in metastatic breast cancer and Livdelzi in PBC, partially offset by lower sales of cell therapy products. Sequentially, sales were up 8%, driven by higher HIV, liver disease and Trodelvy sales, partially offset by lower sales of cell therapy products.

Total product sales of $8.3 billion were up 13% year-over-year, reflecting lower Veklury sales due to fewer COVID-19-related hospitalizations. Moving to our non-GAAP third quarter results on Slide 23. Product gross margin was 88% in the third quarter of 2026, up from 86% in the third quarter of 2025, primarily driven by the expiration of a TAF-related royalty obligation in November of 2025. R&D expenses were $1.6 billion, up 19% year-over-year and 11% sequentially, reflecting higher compensation accruals on related to our financial outperformance year-to-date as well as higher clinical costs.

SG&A expenses were $1.5 billion, up 14% year-over-year primarily reflecting HIV promotional activities that supported our strong commercial performance in addition to legal expenses and higher compensation accruals related to financial outperformance year-to-date. The operating margin was 50% in the third quarter and 49% year-to-date, excluding acquired IP R&D associated with the Arcellx, Tubulus and oral medicines acquisitions, firmly in the top quartile of our peer group and underscoring the leverage in our business model, resulting from our expense discipline.

The non-GAAP effective tax rate was 19% in the third quarter in line with our full year expectation for an effective tax rate of approximately 20%, excluding acquired IP R&D expenses related to our 2026 acquisitions. And finally, our non-GAAP diluted EPS was $2.55, primarily driven by higher product sales and lower acquired IP R&D expenses, partially offset by higher operating expenses compared to $2.47 in the same period in 2025.

Recall, as shown on Slide 24, our third quarter 2025 benefited from an approximately $400 million or $0.25 per share contribution reported in royalty contract and other revenue related to an IP asset sale from 2018. Excluding this, non-GAAP EPS increased 15% year-over-year and compares to 13% total product sales growth. Moving to our full year guidance on Slide 25, we are updating our full year sales and EPS guidance to reflect our outstanding third quarter results. We now expect base business sales to range between $30.7 billion and $31 billion. This represents an increase of $900 million at the midpoint compared to our August guidance and an increase of $1.65 billion at the midpoint compared to our initial 2026 guidance.

Within HIV, and reflecting our strong performance year-to-date, we now expect full year sales to grow approximately 12% year-over-year, driven by Biktarvy for HIV treatment as well as Yeztugo and Descovy for PrEP. Given larger inventory build than is typical for the third quarter, we expect the Q4 inventory build to be smaller than we have historically seen in the fourth quarter. We continue to expect Yeztugo sales of approximately $1 billion for the full year, allowing for more modest sequential growth reflecting holiday seasonality. And we continue to expect cell therapy sales to decline mid-teens percentage year-over-year.

Moving to total product sales. We now expect sales in the range of $31 billion to $31.3 billion. Included in total product sales, we continue to expect Veklury sales of approximately $300 million for the full year, reflecting lower COVID-19-related hospitalizations. With regards to our non-GAAP P&L, we now expect acquired IP R&D of approximately $12.9 billion, reflecting the $1.4 billion in upfront payments expected in the fourth quarter associated with the acquisition of an oral IL-23 R inhibitor program from PepStar Therapeutics and the recently announced VR research collaboration.

Moving to operating expenses. We now expect full year 2026 R&D expenses to increase a mid- to high single-digit percentage on a dollar basis compared to 2025 and SG&A expenses to increase by a high single-digit percentage on a dollar basis compared to 2025, both reflecting higher costs related to the significant increase in our expected full year financial performance.

Moving to tax. We now expect full year 2026 effective tax rate to be between 220% and 165%, reflecting the nondeductible acquired IP R&D expenses associated with the Arcellx, tubulus and oral medicines transactions as well as the expected acquired IP R&D expense associated with the Pepstar Therapeutics transaction.

Excluding these transactions, our effective tax rate would be 20%, no change from our February guidance. Overall, we expect full year non-GAAP loss per share between $1.20 and $0.85. Turning to Slide 26. Excluding approximately $9.95 per share related to the acquired IP R&D expense and full year financing costs associated with the acquisitions this year and nonrecurring other revenue, our full year non-GAAP diluted EPS would be $8.75 to $9.10, raised $0.25 on both ends from our illustrative August guidance due to higher base sales partially offset by higher operating expenses.

Looking beyond 2026, I wanted to share an update on our discussions with CMS regarding Biktarvy pricing. As a reminder, Biktarvy was selected for the maximum fair price determination process that will impact Biktarvy revenue starting in 2028. CMS has informed us that it has set pricing for Biktarvy at $2,600 per 30-day supply, which represents an approximate 38% discount from the list price in the Medicare channel.

Based on our preliminary analysis, we currently expect full year 2028 Biktarvy revenue to decline from 2027. More specifically, we expect a total net impact to Biktarvy revenue of approximately $1.5 billion in 2028, reflecting the lower price in Medicare in addition to related impacts across other U.S. channels, including Medicaid, 340B and other payer segments. Reflecting growth from other innovations across our HIV portfolio, we continue to expect total HIV revenue to grow in 2028 compared to 2027.

Further, our growing HIV business is expected to be complemented by additional growth across our innovative oncology and inflammation portfolios. As a result, we expect both total product sales and earnings per share to grow in 2028 compared to 2027. Note that these statements are based on our current assumptions that may change and could be updated at any time, including when we share formal guidance in early 2028.

Taking a step back, Gilead has demonstrated its ability to address policy impacts over the last few years, including the $1.1 billion headwind associated with Medicare Part D redesign in 2025 and a greater than $500 million headwind associated with the Affordable Care Act and other government policies in 2026. With more than a year before the new Biktarvy pricing takes effect, we will continue to work diligently to potentially mitigate some of the impact.

Back to 2026 and on Slide 27, you can see we returned approximately $1.4 billion to shareholders in the third quarter, including $370 million of share repurchases. Combined with our dividend, we have returned approximately 40% of our free cash flow to shareholders in the first 3 quarters of 2026.

In closing and building on our track record of execution so far, we remain focused on a strong finish to a remarkable year for Gilead and believe we are better positioned than ever with robust clinical and commercial pipelines and a strong business model that sets us up well in 2027 and 2028 and beyond.

And with that, I'll invite Rebecca to start our Q&A session.

[Operator Instructions] Our first question comes from Umer Raffat at Evercore.

I wanted to spend a quick second on your recently acquired oral IL-23 and the potential for combo with some of the recent data sets for the [indiscernible]. And my question is, if the alpha 4 beta 7 requires dosing as fasted and the IL-23, which is presumably a cyclic peptide requires overnight fasting and perhaps waiting another 30 minutes post the dose practically speaking, for a patient, how would the co-administration or the combo actually work? Is there a way to be able to give them simultaneously or close enough while still being practically feasible. .

Yes, Umer. Thank you for the question. This is Dietmar. I mean first of all, let me say, we're really excited about the portfolio that we're building in inflammatory bowel disease. And there's obviously really the opportunity for various types of combinations, both internal and external. The IL-23 is very early. So we're still working on different types of formulations. So please stay tuned, and we'll inform you more about those details as we move along.

Our next question comes from Akash Tewari at Jefferies.

Can you go over the moving pieces on the $1.5 billion IRA impact for Biktarvy pricing? How much of that is a net pricing impact for Medicare specifically versus the downstream impact on your kind of Medicaid best price and then the 340B impact. I want to make sure we just get those moving pieces right..

Yes. Thanks, Akash. This is Dan, and then I'll turn it over to my colleagues for some more detailed framing of your question. But before we do, just I wanted to elaborate a little bit on what was in my script and share my perspectives on the CMS price setting. First, I'd just like to say that the price set by CMS does not reflect the value of Biktarvy, the medicine that has transformed HIV treatment and widely recognized as a standard of care. And I think this is an example of how price setting approach under the IRA, especially for highly differentiated medicines like Biktarvy in the middle of their life cycle can put investment in new medicines at risk. .

We firmly believe there are ways to improve affordability for patients in America without damaging policies that undermine U.S. patent system and the innovation and support. I'll just go on to say that there are certain diseases that can only be addressed by small molecule medicines like HIV and others. And many of these diseases disproportionately impact underserved patients for what Gilead is firmly committed to supporting in so many ways. And so this pill penalty, which has now been applied to Biktarvy discourages investment in these medicines.

So I just want to end with these 2 concepts, both can be true. As I said earlier, our business is strong. The quarter has been exceptional. The portfolio that you just saw that Dietmar outlined really has never been stronger ideally yet. And we've built a business for patients and communities we serve that can respond to these policy headwinds. And I just want to say we firmly oppose policies like this that undermine innovation. Relative to the $1.5 billion, we wanted to give you some color on our preliminary analysis and what we think the impact will be in 2028 to guide you. I'm going to turn it over to Joanna to give a little bit more detail on how that $1.5 billion breaks out and what we anticipated, including in it. So over to you, Johanna.

Thanks, Dan. Yes. So again, obviously, this is a preliminary analysis and subject to change as we get closer to 2028. But we expect the $1.5 billion that Andy mentioned earlier, really, that's a net impact on Biktarvy revenues in 2028. So that is inclusive of the Medicare piece and all other skill overs to other channels in the U.S. And so to your question around kind of the split on that, we're not going to give all the details at this point in time, it's still very early. But having said that, it's primarily Medicare and then you have this spillover effect. It really is a net impact, and that's why we're giving you the total number. And this is also net of, of course, the Part D redesign, impact that we saw for Biktarvy in 2025 that goes away in 2028. So the 1.5% is all encompassing.

Our next question comes from Mohit Bansal at Wells Fargo.

And I want to turn that thing to the anitcell trial for newly diagnosed multiple myeloma, the Imagine big trial. And I couldn't help but notice that it does have a co-primary endpoint of MRD negativity at 12 months. So I would love to understand your thought process behind this? And what discussions you had with the FDA? And is there a possibility of early filing on the basis of 1 month MRD negativity here? .

Thanks, Mohit. This is Cindy. If you look at both our IMAGINE-3 trial as well as our newly diagnosed trials, they are co-primary endpoints looking at MRD followed by PFS or the Gemini first, and then I think you were referring to the IMAGINE 4 IMAGINE 6 trial, those are MRD-negative CR rate. And those are discussions that we had with global regulatory agencies as we were designing the trial. I think the thing I would point out uniquely about the files for IMAGINE-4 and IMAGINE 6 is they're in transplant ineligible, IMAGINE-4 and transplant eligible for IMAGINE 6, where we're looking at quad therapy upfront followed by a [indiscernible] and maintenance in the IMAGIN-4 trial, we're also looking at MRD guided maintenance so that patients could have treatment-free intervals.

Our next question comes from Brian Abrahams at RBC.

Congrats on the strong quarter. I really appreciate the details on the potential IRA impact in [indiscernible], that's really helpful. Can you clarify, does your expectation to be able to grow the HIV franchise through that. Does that include -- is that inclusive of prep? And then I guess I'm curious what sort of would need to happen in terms of overall market growth, new products and switches in order to be able to offset that $1.5 billion IRI impact to [indiscernible].

Yes. Johanna, why don't you start? .

Yes. Thanks, Brian, for the question. Yes, so your question about our HIV, -- of course, we look at HIV holistically. We look at our portfolio across both treatment and prevention. And so that is inclusive of all of our portfolio today, and of course, the portfolio to come as we think about the very strong pipeline that's going to support the next 10 to 15 years of growth and leadership in HIV. The other piece of your question around sorry, the offset for the $1.5 billion. And what we've said is obviously, we will look to -- we have about a year or so, we will look at different opportunities to mitigate as much as possible the $1.5 billion, but that's in addition to the overall portfolio and, of course, other strategies that we can look at. So more to come on that one. .

Our next question comes from Chris Schott at JPMorgan.

I just want to dig into the weekly oral prep launch as we head into next year. I guess, can you just help frame out what portion of the market do you think this could appeal to? And maybe just compare and contrast a little bit how you're thinking about that launch relative to what we've seen with S2G over the last year or so?

Sure. Chris, it's Johanna again. I'll take that one. We're really excited about the Q weekly. This will be the first long-acting oral in the prevention market potentially. And so we're excited about the opportunity. As we think about that launch, we are thinking that, that's going to really appeal to a population that might want the longer acting, but might not like injectables, for example. And if you think about the current market today despite the very strong growth of go because I think people are really moving towards that long acting as much as possible because it's truly prevention at the Q6 monthly and that is a preference. There are some people that don't like the injection and there's still a very strong oral market, both with Descovy as well as generic Truvada. And so we do think there's going to be a strong appeal for folks that are already on a daily oral to move to a 2 weekly oral, and we're excited about that opportunity.

And I would just add 1 more concept that's maybe a little bit different than a new launch. -- because this is an extension based on Yeztugo in the weekly, we're going to be building off the access we already have on Yeztugo, specifically around the access we have in the pharmacy benefit space, which is about 70% or so. And so we do think that as of launch, it will really help support kind of effect vast potential ramp-up as we go forward. And of course, we'll continue to expand our access over the months to follow our launch, so more to come on that.

But we're excited about that mix. And of course, to your question about, yes, to go and how that plays out, -- we still believe longer-acting is going to be preferred in the HIV prevention space, not only with our Q6 monthly but even with the potential of an annual injection with our Q12 potentially in 2028. So excited about what's to come in our HIV market.

Our next question comes from Michael Yee at UBS.

On the HIV treatment pipeline, you had a disclosure around 3107 monthly oral with a clinical hold. Maybe you could just give us an update on that program and what was going on there. .

For the question. For 3107, this is one of our prodrug compounds. And with some of the product compounds, as you know, we saw metabolites that have unexpected impact, and that is really the reason for the clinical hold at this point. We're working through that clinical hold. At the same time, broader portfolio really in the background, right, resemolecules coming out of research into the early development that are also aiming at the monthly space. So monthly oral treatment is still a key objective for us. We're following that working through 3107 and we're also in parallel working on backup molecules.

Our next question comes from Terence Flynn at Morgan Stanley.

I was just wondering, Andy, if you can help us think about margin progression here. into 2027. Obviously, you have done some business development deals. There's going to be some R&D spend behind those programs. And then also, as we think about the Biktarvy impact in 28 -- maybe just help us think high level about impact to margins there, knowing it's a little early to give guidance, but just maybe directionally.

Terence, thanks for the question. It's Andy. Look, at a high level, we continue to expect to have very strong margins not only in '27, but for the foreseeable future. And of course, we'll provide guidance on '27 and '28 as we get into those calendar years. You've seen this year our ability to do 3 acquisitions earlier this year and to absorb most of that spend. So when you look at our updated guidance this year, we were right on track.

When you parse out both our R&D spend as well as our SG&A spend, right on track for the expenses that we are targeting at the beginning of the year in our initial guidance. And then we added in the additional compensation accruals and expenses tied to our significant outperformance this year as our expected bonus payments have gone up. So we're really pleased with our ability to bring in these additional assets and fold them into the portfolio and absorb those expenses this year. And that's certainly our goal in future years as well.

We are really focused, as you heard in my comments on continued disciplined operating expense management and a very strong margin profile, both in terms of our gross margin as well as our operating margin. So we'll give you more specifics as we go forward. But we think the business is really set up nicely to continue to have a very strong margin.

Our next question comes from Daina Graybosch at Leerink Partners.

I wonder if you could talk more about the PALISADE partial clinical hold and whether taking that amongst some of the other competitive clinical holds, particularly with the SaaS manufacturing, how you're thinking about fast manufacturing? And if there's any risk you see for Kite an autoimmune disease as well and sort of the timing for when we might better understand the risk for both of these programs.

Thanks a lot, Daina, it's Cindy. So maybe I'll start with KITE363 in autoimmune because we're not using rapid manufacturing with that, and that program does continue. We expect both the rheumatology and the neurology Phase I to continue and remain excited about that program. The second question that you had around PALISADE 1 and 2, that does have a rapid manufacturing. It's a 3-day manufacturing process that we shared with you. That's different than what I think you were referring to, to the other manufacturers in this space to have rapid manufacturing is a 1-day manufacturing. Ours is a 3-day manufacturing.

When you look at the partial clinical hold, we have made a decision to take a look at differences that we're seeing specifically with Grade 3 and Grade 4 ICANs in a small number of patients. And we have decided to take some time, pause and investigate that before we move forward. This is not -- there's no patient death. There's no Grade 5. So as soon as we have more information, we'll continue to keep you informed.

Our next question comes from Louise Chen at Scotiabank.

I wanted to ask you about sort of a more long-term view on things. Currently, around 70% of your commercial franchise is HIV. And just curious if you think out in the next couple of years, how do you expect this to change as you develop these new verticals?

And maybe I'll start and I'll invite others to add, Louise, this is Dan. Our strategy has always been over the past 8 years or so to diversify our portfolio from a variety of different angles. I mean, first of all, within and that includes both HIV treatment and prep and my colleagues have spoken about that. I think you'll continue to hear how our longer-acting treatment programs continue to evolve over time, but we really are incredibly enthusiastic about how that is progressing.

Of course, the prep options that allow for even longer [indiscernible] intervals are in our pipeline and our portfolio. And then we've always said that as that provides great robustness of our HIV business that we're very interested in diversify and then, of course, outside of HIV and into oncology and inflammation. And I think the call here has really, I think, emphasized how much progress we made on that front, both in oncology, cell therapy and our non-cell therapies in that growing portfolio.

But also, I think this has really been a quarter where the inflammation and autoimmune pipeline has started to reveal itself. And you can see that we're going after a highly differentiated mechanisms and a chance to really kind of break through efficacy barriers and bring different options for people with autoimmune diseases across all of our therapeutic platforms. I'd invite others to add as well.

I mean, this is Dietmar, -- Dan you said a lot of it, right? But I'm really similarly excited about both the diversification in the HIV portfolio. You look at it, we've got 6 long-acting programs currently ongoing. We're looking at up to 5 launches before 2033 in HIV therapy, which will help us to really address the needs of people with HIV and the different options that they appreciate.

On the prevention side. I'm also really excited about the weekly oral option that we have, but then also about once every year, which so well aligns with other preventative visits that is really, I think, a broader opportunity there. In oncology. We now have the 7 ongoing ADC programs. We look at the broader tubules technology that has brought applicability also together with our medicinal chemistry capabilities -- and I think with the PRMT5 [indiscernible] programs, we have another interesting program really focusing on [indiscernible], which is very broadly present in different types of tumors.

And then finally, the inflammation program currently with 13 different projects is really starting to reveal itself. And I think we have very differentiated mechanisms and really drugs there. that have the potential to address large unmet medical needs, whether it's an inflammatory bowel disease, whether it's in B cell depletion, which is a broad set of different types of diseases or even in type 2 inflammation. So stay tuned, but I think that trajectory is starting to reveal itself.

Our next question comes from Carter Gould at Cantor Fitzgerald.

On [indiscernible] and the update we're going to get on that front. [indiscernible], can you kind of help set the stage there, the number of dosing cohorts we see -- we might see or the number of patients with over 6 months follow-up and clarify that things are still on track to enter registrational studies next year. .

So you're going to have to wait for the exact data release, right, that is coming at a conference later this year. But we're really looking forward to present more data, especially in the autoimmune cytopenia setting, also very much on the immune thrombocytopenia. I think that data is exciting. So stay tuned for that. Obviously, there's a much broader opportunity with B-cell depletion, as you know. And we're staying firm in our commitment to bring Gambertamic into a Phase III study next year in autoimmune cytopenia.

Our last question comes from Geoff Meacham at Citigroup.

I get the IRA impact longer term to HIV, but maybe can you talk about the trends you're seeing in 3Q? I wasn't sure the reason why you guys are now recognizing a stronger realized price. And then related, can you talk a little bit about if there's any discernible growth trends and just the number of new patients entering the HIV treatment market? .

Yes. Sure, Geoff. It's Johanna. Yes. So what we're seeing -- and I'll just take the Taby, right, a 10% year-on-year growth Overall, HIV is 18% year-on-year, and that's obviously inclusive of Biktarvy, but also Yestugo and Descovy. But if you think about the treatment and what's going on there, a lot of that has to do with obviously, demand, but also inventory. And we saw a little bit of a higher Q3 inventory that we usually see across all of our HIV portfolio, which is obviously something that we're conscious of and understand that, that might mean that the seasonal -- the typical seasonal Q4 inventory that plays out in Q4 usually might be a little softer than usual, but you'll still see a ramp-up of buildup and that's part of our guidance, of course.

So there was an inventory play. There was also favorable pricing and the favorable pricing has to do with the channels. So as I think I've shared before, but 1% of 1 channel is the channel moves if there's less of a discount in that channel versus a heavier discounting channel and play a big fluctuation in your pricing on a quarter-over-quarter kind of basis. And so that's what's kind of playing out there.

And of course, the demand piece. You see that the share for Biktarvy continues to grow. It's at an all-time high at 53%. So incredibly proud. We are #1 across naive, switch, we start and I think the team has just done an incredible job, and this is obviously not only in the U.S. but really worldwide and very proud of that work, let alone the big Flen launch that we haven't really touched on, and I just closed the call on that. The [indiscernible] launch is absolutely on track versus expectations. It's very early. We launched late August, but really pleased to see incredible awareness of this molecule. And really, if you compare at similar time points post launch, we are well ahead competitor launches. So we feel very strongly that this is on the right track, and we just need to continue to build access and awareness in the field, both for complex regimen as well as viral suppressed switch patients.

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

Well, first of all, I mean, I can't let a quarter go by. I like this without thanking the extraordinary Gilead team. We're delivering on this really exceptional third quarter. It's the strongest base business growth we've seen in more than 10 years. And at the same time, just the incredible advancement in our pipeline, which is getting diverse, as you can see, and we're preparing for even more launches into the future. So I'm incredibly proud of the progress that we made as a team and the impact -- and the impact that we're creating for the communities and the patients we serve. .

As we look ahead, the multiple opportunities to drive growth across all of our therapeutic areas, the strength of our commercial and clinical execution and the discipline in operating model that we are following all give us tremendous confidence in the trajectory of the company and really the fact that we can do even more for the patients and communities and shareholders that we serve. So thank you so much for joining today. As usual, we hear for your questions and comments, and we look forward to keeping you informed on our progress. Thank you again.

Great. Good morning, everybody. Thanks for joining us. I'm Terence Flynn, Morgan Stanley's U.S. biopharma analyst. For important disclosures, please see Morgan Stanley's research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative.

I'm very pleased to be hosting Gilead this morning. Joining us from the company, we have Dan O'Day, the company's Chairman and CEO; and Johanna Mercier, who's the company's Chief Commercial and Corporate Affairs Officer. Thank you both so much for flying out here to the East Coast and taking care of schedule.

Great to be here.

Looking forward to it. Maybe Dan, I'll just turn it over to you to make some opening remarks, and then we can go into the Q&A.

Sure. Thank you, Terence, for having us. Delighted to be here with Johanna. Look, first of all, maybe just to kind of set the table for Gilead. We are at, I think, a really important point in our journey. We, I think, are at another inflection point in value. And let me just kind of explain why I believe that. I mean, first of all, we have the most robust portfolio, I think, in our history, certainly since I've been here in the past 7.5 years. And this cadence of launches that we have right now is really going across all therapeutic areas, and we'll talk about that a bit.

But the setup is such that we're a bit unique in the sector and that we don't have any significant major patent expiries until 2036, with a very strong plan on how to handle that patent expiry in 2036. But let me just break it down into a couple of components. I mean I think about our portfolio from strength, but also diversification.

And I think there's 2 different ways to look at diversification. One is the diversification that we're going through right now within our core business, our HIV business, which is in the past and currently still largely based on Biktarvy. But we're in the middle of kind of transitioning the entirety of our HIV franchise across both treatment and prevention. I know we'll talk a lot about both of those and particularly prevention.

But it's important to note on the treatment side, we just recently launched a new daily oral called Bixlenvo and so you throw off, I know it's so close to the other name, I should be a little bit better at that, which is an important addition to the treatment landscape, in particular, the fact that it allows us to participate in the Switch market, which in the past, we haven't been as participant. And about 20% of patients on HIV treatment do the switches a year.

And then we have an expected launch of the first weekly oral treatment with Bixlenvo next year as well. And beyond that, and we'll continue to update you a really robust portfolio of weekly orals -- sorry, weekly and monthly orals and once every 6-month injectables, including lenacapavir is the backbone and really strong capsid inhibitor, the first capsid inhibitor combined with a variety of different medicines, including 3242, which is an INSTI that we are currently in the clinic on for every 4 months.

And PK data suggests we may be able to take that to 6 months. So stay tuned for that because that trial is ongoing. So there's just tremendous optionality within the treatment landscape that will evolve that whole treatment landscape over the course of the coming years.

Secondarily, PrEP is now almost -- the number of users on PrEP has more than doubled since 2022, so in the past 4 years, driven by Yeztugo, now Descovy, but also with line of sight towards 2 new launches in the next couple of years, weekly oral PrEP first quarter of next year. And then in 2028, a 1-year injectable version of Yeztugo. So just we think about diversification across that broad spectrum of HIV in both treatment and prevention for a growing durable business well into the end of the next decade.

And then combined upon that strength, the work we're doing on oncology and I&I. Just briefly on oncology, we'll get back into this, but anito-cel is the most imminent launch in oncology of a new molecular entity in fourth line plus multiple myeloma. We're really excited about that being a best-in-disease profile, a one-and-done type of opportunity for people with multiple myeloma.

We are fully enrolled in the second-line plus study, expect that data to read out next year. So moving that up and line to therapy, allowing people to achieve treatment-free durations is really what we're focused on in multiple myeloma. And then a broader cell therapy approach with bicistronics in lymphoma, in vivo constructs in autoimmune, combine that with the work we're doing in ADCs, both with Trodelvy in first-line triple-negative breast cancer as well as the acquisition of Tubulis, which we really are excited about as a novel ADC platform, starting first in platinum-resistant ovarian cancer, but then many indications with that platform as well.

And then -- so that's our oncology base, which is really just beginning to kind of shape and form and grow. And then I&I at an earlier stage, you're going to hear more on that later this year. But I'd just point your attention to what our chemists have been working on for the past 6 or 7 years. There's a couple of small molecules that we intend to read out Phase II results later this year with alpha-4-beta-7 and IRAK4.

We also have a STAT6 program as well as an acquisition we did earlier this year on a BCMA T cell engager for B-cell depletion. So all this to say that this is a special time at Gilead. I think we're in a unique position to drive value and growth and not all against an operating model that we're committed to, which includes top industry quartile margins strong cash flows and ability to deliver to shareholders and to patients.

All right. Great. A lot to talk about, obviously.

Sure.

So I guess the first one, just again, high level, I've been asking most of your peers this. Just it seems like we're in a different place this year versus last year on the policy front, which I think is a good thing. But just anything that's on the company's radar as we head into midterms that we need to think about coming out of D.C.

Look, Johanna and I and the team work constantly on policy. So -- and I think it's just part of the integrated fabric of what we're doing. I'd say a couple of things on that front.

First of all, I think the best defense is a good offense. So the more innovative your portfolio, the more differentiated portfolio in any country around the world. So it just gets back to what I said before. I think we're really in a unique position of having this very, very robust portfolio that's highly differentiated as we approach any policy environment.

But 2 things I would say. Look, we've been spending a lot of time in Washington, D.C. I think there will always be pressures on pricing in pharma. And the conversation is broader today than it was 5 years ago. In other words, people understand better the complexity of the health care system, where dollars go in the health care system. And I think we made real progress on making sure that people not only focus on pharma pricing, but also focus on health care pricing, in particular, insurance and PBMs and 340B, which I think we've made some progress on and more to be made there. So we'll continue to focus on that in a bipartisan way.

I think the conversations in Washington are always about how do you improve the health of Americans, keep a strong American industrial strategy. And I think on that point, everybody can agree on the details. Of course, we need to get into the details.

And then finally, what I'd say on our front, is we spend a lot of time focused on the diseases that we're in. And I can say that regardless of the administration, we've been able to draw attention because of this incredible innovation to the importance of funding HIV, public funding for HIV in this country, the work we do with the state department in countries where HIV is more rampant and higher. And I think we always get an important audience on that, and we'll continue to stand for those patients there and patients with severe diseases like oncology.

Okay. Great. I guess going to the recently launched product, Yeztugo, obviously, front and center, I know it's a huge focus for you, Johanna, and the rest of the company. So maybe just talk to us about kind of the transition that's been going on in the marketplace from orals to injectables, any other points of friction as we think about kind of the forward outlook here?

And then we'll come to broader PrEP market growth, which I think was one of the bigger takeaways for me from your second quarter earnings was being able to deliver again kind of teens market growth off an even larger base. And so I guess first part of the question is just kind of Yeztugo latest dynamics and what you're most focused on in terms of driving -- continuing to drive that growth.

Yes, sure. Thanks, Terence. Good morning, everyone. I really think the Yeztugo launch is an incredible success thus far. And it really has a lot to do with the preparation of the marketplace, but also the work that we've done for the last 10, 12 years in prevention and really understanding the market, the consumers for PrEP.

We really have grown Yeztugo. We're now expecting our guidance is at $1 billion for its first full year of launch. And that's not by chance. That's obviously a lot of increased awareness, education of physicians and, of course, consumers. The -- I do think it's exciting to see that the market continues to grow. And one of the things that we always knew as we were launching Yeztugo, our focus and the scripts would come really from Switch patients, Switch PrEP people. And -- but what we're seeing is actually a quite nice mix of both naive coming into PrEP on Yeztugo Q6 as well as the Switch.

And so you're seeing a nice balance there. We also know that it was important to grow the market. Growth of the market happens in different ways, but one of the ways that we've done it in the past is always just with new options in the marketplace, it kind of picks up the market and makes noise, increases awareness. PURPOSE 1 and 2 trials were such powerful trials for Yeztugo that it really helps everybody kind of sit up and pay attention to what prevention could be.

The research that we've done with consumers is very clear that longer is better. And so the Q6 monthly is really an option that people were waiting for. And so that's why we're seeing not only Switch from daily orals and from other long-actings to a Q6, but also even seeing naive people come into PrEP for the first time. And so we're seeing that nice balance.

One of the things around the market itself is it's growing at about 14%, 15% or so, to your point, on a larger base. And again, not by chance, right? This is a lot of work that we do to increase awareness that our competitors do to make sure people understand the why, make sure people feel empowered to own their sexual health, making sure it's very targeted in who we speak to, where we speak to them, meet them where they are. And so we've really advanced the work that we do and AI helps us do this, of course, even better than we've done in the past.

And so that has also helped all the boat rides. So it's not only helped Yeztugo, but it's also helped Descovy. And so you've seen really nice upside on Descovy as well. And the total prevention portfolio is now over $1 billion for the quarter. So that looks like an annual run rate of about $4 billion just for the PrEP business. So a lot of work behind it and a lot more to go. And one of the -- probably the signals that I'm most excited about is for us, whether it comes from a specialty pharmacy, whether Yeztugo goes through a specialty pharmacy or through buy-and-bill, it doesn't matter to us.

But what's been interesting is to see the uptake in both segments, but actually buy-and-bill is growing faster than we thought. What that means for me is a signal to future volume, right? If people are setting up their clinics, their setups to include buy-and-bill, which is actually administratively takes a little bit of time and energy and resourcing, then basically, that is very clear that they're thinking about increased volumes in the Q6.

We also have a lot more options coming around the corner. I think Dan mentioned, not only do we have a weekly oral early next year in February, PDUFA date, but we also have the potential of Q12 monthly by 2028. And so we also think that continues to expand the market.

Two things, expansion of the market happens with more options. It happens, of course, with the data that's provided by those options, but it also happens by making sure we're educating different people. So not just the HCPs that have always prescribed PrEP, but actually HCPs that have never prescribed PrEP and people that have never been on PrEP as well need to enter this marketplace. And that's what we're starting to see slowly but surely. So we think there's a lot of runway here and a lot more work to do.

Great. And maybe just -- I think you said recently the current kind of user base is 550,000 roughly in the U.S. What's the -- what are the kind of upper brackets as you think about that like addressable opportunity?

Yes. So the CDC defines the addressable opportunity at about 2.2 million people in the U.S. The way they define that is really leveraging their estimates of men having sex with men. And so we believe that number is actually much higher than that.

If you just look at FTD diagnosis in the U.S., there's about 13 million a year. These are the people you would want to have a PrEP conversation with. Having said that, even if you just take the CDC estimate, you're only at about 25% or so penetration of the total PrEP estimate that the CDC has laid out. And so we believe there's a lot of space to grow. And we think that the opportunities are with options like Q6 or even the Q12, we can really make a difference here.

Okay. Great. Maybe you mentioned the oral formulation of Yeztugo coming next year. I guess one question that comes up is the -- what's your anticipation for the source of business for that formulation? Again, is this Switch dynamic? Is it new? Like how do you think about that given what you've seen for Yeztugo Q6 monthly?

Yes. I would say I would start with Q6 because as much as the Q weekly is coming out, we still believe Q6 is actually really going to be the target. And what is preferred to the -- sorry, 6-month frequency really helps. It just meets them where they are. It's much easier to fit in their lifestyle.

Having said that, we do think that Q weekly is going to be a nice option for folks that don't like injections or folks that don't want to take a daily oral pill and want to stay on an oral long-acting. This is going to be the first oral long-acting available and a real opportunity to go once a week, maybe every Sunday or every Monday morning, you take your pill. So we think that's going to source from Descovy as well as the generic Truvada that are in the marketplace.

Different from the Q6 that actually sources from all, right? It sources from new, it sources from the Q2 current competitor as well as the daily or both Descovy and generics. So a little bit of a broader base for the Q6 than the weekly.

Okay. Makes sense. And I guess the other question, which, again, I mean, kind of waxes and wanes is just what you see for second shot frequency with Yeztugo. It sounds like you guys also have a more recent campaign to kind of even improve that further. So maybe just talk about where we stand right now and then some of the steps you're doing to kind of continue on that second shot journey.

Yes. So obviously, it took us a little bit of a while to have the right data, right? We've been following the claims longitudinally to ensure that we understood what the persistency was at that second injection. On our Q2 call, we shared that it was over 70%, which is well beyond anything we've seen from any of our competitors. That has a lot to do, again, with the profile of this medicine and what it offers to consumers of PrEP. So we're excited about that.

We also believe that it's important to continue to surround sound it. And what I mean by that is we know that specialty pharmacies right now are obviously calling back people to make sure they come back in for their injection at the right time. We know that the clinics, the doctors' clinics are also doing that to make sure that they get within the window.

We believe it's important to just make sure we just add a little bit of color to that. And so through digital app, it's actually a program called Ready to Go, kind of playing on Yeztugo. And it's really about SMS texting, alerts, things like that. It's all on digital. But it also has -- people -- as much as AI is fabulous, people also want to talk to real people. And so there's also an opportunity to have an inbound, outbound nurse call center, which I think is actually proving to be very useful to manage anything along the way, but also to remind them that it's important to make your appointment to go back to that second, third, fourth injection.

Yes. Okay. Great. Maybe just on the rest of world opportunity. Where are we right now in terms of some of those conversations? I know that's an area that you guys have been working on and felt like there were some hesitancy with a once-daily oral to maybe embrace that, and we haven't seen much of a rest of world PrEP market. But maybe now with every 6-month option or even a once yearly, maybe some of those governments are going to be more willing to kind of lean in. So where do we stand on those efforts?

Yes. So a lot of work going on. And I would say I would kind of the 3 areas, I would say. The U.S., obviously, we've been talking about. We've also done incredible work in low middle income countries. And of course, that's no profit to the company, but work in sub-Saharan Africa, where diagnostic rates are 1 out of 4, 1 out of 5 in certain countries, which is just -- in certain areas, which is just horrible. So anything we can do to help there, and we've been partnering with Global Fund as well as the State Department to do just that.

And then you have the other countries, which I think is what you're referring to, which are the first [ fall ] countries. And it really depends. We've been working to ensure that lenacapavir has been a drug that we have been working on for 17 years prior to its launch. It is incredibly transformational versus what is currently available. And it is one that we want to ensure that, that value gets recognized across the different countries around the world.

And so we are making sure we're educating and the value, the persistency, all the benefits. And it's not for everyone. It's that's the whole point of optionality. And -- but there is an opportunity in certain countries where you have a government that actually really wants to lead the legacy of ending new incidence of HIV and they see lenacapavir as a solution. And those are the governments we're working super closely with and for very specific populations. You have populations -- a great example is in Canada, where in some of the northern provinces in the rest of Canada, you have very high rates similar to Sub-Saharan Africa, which is crazy.

And so there's real opportunities to do something, and that's where lenacapavir can really make a difference. So we're working through it. But I will tell you, many markets have an HTA process that compare to a daily oral generic. And that's a tough comparison when you're bringing this kind of innovation to the market.

Okay. Great. Maybe we'll just pivot over to HIV treatment side. Dan, you mentioned a lot of the similar efforts to kind of transition the portfolio here as well, have some new launches on the Switch market, but also working on the long-acting. So I guess the first question is just on the current kind of market state. Again, you guys had a dip in growth in 2Q, but you expressed confidence getting back to kind of that 2% to 3%, which we've seen historically. So maybe just -- is that still -- should that still be our expectation there? And what are you seeing as we kind of come into the end of the third quarter?

Yes. What you're referring to is the market growth, right? The market growth for HIV, we did see a little bit of dip. We think it has to do with a little bit more of an ACA impact than we had originally expected. Obviously, this is HIV. People will find their path and find a channel for them to get reimbursement in the right way, if not the disease progresses. So we're not concerned.

It was just a little bit of a Q2 play. We also did update our guidance for HIV in the Q2 setting in addition to this additional impact of ACA, and we actually moved it from 8% to 9% to 10% growth for HIV for Gilead. So I think overall, we believe that we can more than cover that. The -- we do think the market will get back to the 2 to 3 points that we've seen in the past, and it will normalize within the next couple of quarters.

Okay. And that's what you're seeing right now or still too early to call that recovery?

Still too early a little bit, but what we are seeing is definitely that people need to find their path. And we've seen it even in the second quarter, we also had a little bit of a bump because of Florida ADAP, and we've seen that reset right away. So I do think that since Florida ADAP then we reinstated Biktarvy on its formulary in July, I think that's been a great opportunity for patients to get back on the Biktarvy.

Okay. Great. Maybe just to go to the new product launches. So Bixlenvo, again, I won't try to pronounce the name, was approved. So congratulations there. And then you have lenacapavir, islatravir, the once-weekly oral coming on the forward. So again, just remind us, this is all for the Switch market. And so again, we get some of these questions where, oh, what's the impact of these next-gen regimens on Biktarvy. But again, these are going to be positioned primarily in the Switch market. So maybe just talk to us that kind of interplay.

And then my understanding is Dovato is kind of one of the leading Switch regimens, and that's about a $3 billion, $4 billion drug. So is that the right kind of dollar opportunity that we should think about roughly? I know you're not going to give exact numbers, but again, there's an approved drug out there, and we know what the sales are. So just talk to us kind of how all that plays out.

Yes. So let's start with Biktarvy. Biktarvy is the leading agent today globally. And so with over 50% share with Biktarvy, it really is quite differentiated and especially as you think about in the naive setting, the rapid starts, the HBV co-infections, I mean it has so many indications that others do not. And it's why it leads in its naive share. So it has more than 2/3 of the market in the naive setting.

And so therefore, as you think about Switch, we are also leaders in Switch, so that has to do more with legacy medicines from the past and switching to Biktarvy. As we think about the future, if people want to Switch, it's hard to Switch from Biktarvy back to Biktarvy, right? So we do think it's really nice to have something like Bixlenvo to enter the marketplace to bring one more asset into the mix, let alone LEN/islatravir next year to really have more competitive plays in the Switch market, which is about -- I think Dan mentioned, about 20% of your total dynamic market. Your 20% is dynamic.

And so I think that's the opportunity. With Bixlenvo specifically, the launch is really focused around -- we have 2 indications. One is virally suppressed patients, which is really your typical switch in that 20% that I just mentioned. But then we also have the indications of VSCR, which is your complex regimen patients. And those represent about 5%, 6% of your total HIV patient population today.

And those are the ones really at launch that as you're navigating access, as you're ramping up access, those are the people that we've focused on because these are folks that are taking probably 5, 6, 8, 10 pills a day, and they could actually potentially switch it to 1 pill a day with Bixlenvo. And so that's a huge opportunity. And that's something that obviously physicians are willing to kind of work through the paperwork until access kind of plays out.

As that access ramps up, then obviously, then the opportunity lies in the [ virologically ] suppressed, which is a bigger population, let alone the fact that we have actually really unique data in the over 50-year-old population, more so than any other molecule to really show the benefit, and that's really the population that are switching at this point that have been on medicines for quite some time.

So we think that's a great opportunity to expand our Switch leadership, let alone with LEN/islatravir next year with the weekly oral, which I also think is going to be a nice new option for patients in the treatment Switch market. And last but not least is we do believe that there is opportunity for us to have longer acting in the HIV treatment market as well.

And Q6 would be the ideal scenario, and that's what we're working towards. I think, Dan, you touched on the 3242 molecule, where we saw data at CROI and in Phase I PK data at 4 months. It looks like it could be longer than 4 months. We're waiting for that Phase I data for 6 months to come through. We've already started our Phase II program. This includes one arm with the Q4 regimen.

And obviously, as soon as the Phase I data comes through, we would -- assuming positive, then we would add a Q6 on to the same trial. So that's kind of what we're looking at, let alone the bNAbs that we also have in place. So we have a lot going on optionality-wise so that we can really continue to drive that leadership in the HIV treatment market.

Okay. Great. And similar question as asked on Yeztugo when you have new options, new formulations, is it safe to assume that this is -- when you blend it all together, that it's additive rather than just a switching dynamic franchise?

Absolutely. Because of that market expansion play that we talked about earlier, I think depending on the option that we're referring to, but as that totality, most of them are all additive to the current market today for a couple of reasons. One is just execution on the market, increased awareness. And two is sometimes different populations that are coming through, let alone the compliance that you're going to get with a longer-acting.

Okay. Okay. Great. Maybe just one strategy, one for you, Dan, is just you mentioned immunology and a lot of the efforts you guys have on these oral drugs you're bringing to the market or in development. So as you think about Gilead has a history here in immunology and has been working for time to kind of scale up maybe just for us like what's the tipping point to make you guys a big player in immunology? Is it having a cornerstone asset? Is it having like scale portfolio? Like what's it going to take to kind of make you guys one of the bigger players in that space?

Yes, I think both. And by the way, we're eyes wide open here in terms of the competition on the one hand. On the other hand, we're also eyes wide open on the opportunity. I mean I think just as what has been done in cancer, I think we're in an era of I&I scientific knowledge and in particular, the ability to have new modalities that not be combinable because part of what I think held us back in I&I is the ability to get to truly differentiated efficacy points at a tolerability profile. And that's where 7 years ago, when Johanna and I and the team, we sat down with our strategy, said, where can we differentiate? And part of that, at least one aspect of that was taking our small molecule chemistry expertise that has been put to work on everything that Johanna just spoke about on the HIV side towards targets in immunology.

And that's what you're seeing play out now with the Phase II readouts that you'll see later this year. I mean those all come from Gilead chemistry, which is the alpha-4 beta-7 IRAK4 against STAT6 and others. And so to your point, I think it is both portfolio and anchor assets. And once you see the data that we'll present later this year, Phase II data, to be clear, we'll be able to articulate more comprehensively with that data set kind of how we anticipate moving ahead in I&I.

We absolutely understand that we have to have very differentiated efficacy moving forward, either alone or in combination. And I think we'll pick our disease states well within I&I to make sure that we understand where we're moving. One example of that is the oral acquisition at the beginning of this year, which is a BCMA T cell targeted therapy called gamgertamig, I think I said that right, where we're looking at 4 kind of more rare diseases within I&I, where a B-cell depletion strategy could really make a difference.

So I think our I&I strategy will follow the science, but it will also be very pragmatic about how we approach it. And that is combined to a very robust cell therapy and ADC strategy in oncology and then the backdrop of this kind of strong durability in HIV.

Yes. And how do you think about solo versus collaboration? I mean you guys were an innovator in HIV where we saw you do these cross-company collaborations, Johnson & Johnson, Bristol, Merck now. And so is that a playbook that you could use in immunology? Or is this something that you think is kind of more ROI positive to go it alone?

Well, definitely. Look, I think -- and the most recent one that we're getting ready to launch this year is the collaboration we have with Merck around islatravir and lenacapavir. So I think we've always been -- our scientists have always been and we've always been looking at when we have a single asset that's highly differentiated. Of course, we want to develop other single assets within our own portfolio, but we can't have patients waiting to do that. So we always look for optimal combos, and I think we would certainly look at that as a potential strategy in I&I as well.

Okay. Great. Maybe just in the last few minutes, I know oncology has been another focal effort, and you mentioned a lot of the efforts going on in your prepared remarks. anito-cel is the most near-term asset that is coming. So maybe just, again, high-level kind of positioning here in the marketplace and then, again, launch readiness maybe for Johanna.

Yes. We'll tag team on this one. So I'll just set the table and because Johanna's team and Cindy's team have been working really closely together, we are now in a very robust launch phase right now. And so we're sharing experiences on the launch side.

But again, I've spent a lot of time going around and speaking to folks within the multiple myeloma segment. The profile of anito-cel is really highly differentiated. We think it's best in disease. Starting in fourth line plus, we want to -- it's very important to get the first launch right. And so the team is spending a lot of time on that. And Johanna can talk a little bit about some of the strategies there.

But bottom line is that our approach with anito-cel is multifold. Of course, it's getting the fourth-line launch right. It's moving up in lines of therapy because that's really -- you want to use a CAR-T-directed cell therapy when your immune system is strongest. This gives you the best opportunity for a long durable response potentially a cure like we've seen in lymphomas from a curative intent.

So it's rapidly moving up in lines of therapy, including the second-line trial that I mentioned was completed and beginning what we intend to launch a newly diagnosed multiple myeloma play as well. But then not to stop there to use the same technology, the D domain binder, which is present in anito-cel and potential in vivo constructs in the future, both for multiple myeloma, but also other diseases, including cancers and autoimmune diseases. But let me turn it over to Johanna on some of the other profiles of the anito-cel that and HER-2 clinical aspect...

Yes, sure. You asked about launch readiness. We've been doing a lot of interchange, as Dan was referring to, between the Kite team and the Gilead team because obviously, we've had a few launches lately. And I mean, they are absolutely ready. The -- it's really impressive. They have right now about just under 180 or so authorized treatment centers.

They think they're going to be at about 200 by the time we get the PDUFA in December. That means basically 4x more than when the competitor launched from a setting standpoint of our authorized treatment centers. So very well established. We've been having pre-informed on our medical -- with our medical team on the data, making sure we get to our payers, our plans, make sure that everything is set up so that once you have the label, it's just plug and play, so that you can kind of pull it through in the first quarter of next year and get those patients that really need something like anito-cel as quickly as possible.

The intent, obviously, is to really penetrate the fourth-line market quickly, about a $3.5 billion market opportunity in multiple myeloma. We think the profile, we talked about -- we believe best in disease, but so do our physicians, that's actually our KOLs are seeing it as well and really an opportunity to differentiate there so then you move up lines of therapy as the data comes through. So excited about the opportunity.

And also, I do think the profile lends itself incredibly well for the outpatient setting, which is going to be even more important as you move up lines of therapy. The profile is thus far, incredibly safe, right? No -- we haven't seen any of the neurotoxicities we've seen with others. We're not seeing any of the enterocolitis.

And so from an outpatient setting, that's important because in multiple myeloma, most of your patients, you're going to actually see in the community versus academia. So as much as academia is important at launch, the bulk of the volume of patients is actually in the community where outpatient setting makes the difference. And that's where I think anito-cel can really win.

Great. Well, thank you both so much. I really appreciate the time and insights and thank you.

Thank you.

Okay. Great. And thank you for joining us in day 2 of the Cantor Global Healthcare Conference. My name is Carter Gould. I cover the large-cap biopharma names here at Cantor. I'm pleased to welcome Gilead to the stage. Joining us is Andy Dickinson, CFO; Jacquie Ross from IR and Treasury is also in the crowd someplace. Andy, before we get started, maybe just any opening comments, and then we'll jump into Q&A.

Sure. Well, first of all, thank you for having us. We appreciate it. It's great to be here. Great to kick off the September conference season. It's a really exciting time at Gilead. I think you've seen the incredible progress over the last 2 or 3 years with our business overall, including our HIV business. We had an exciting new approval in the HIV business at the end of August that I'm sure we'll talk about. You're seeing very strong growth across the HIV franchise, obviously, with the Yeztugo launch in HIV prevention. The growth of the HIV prevention market. It's an exciting, relatively new chapter for Gilead. And then you're seeing some exciting growth and developments in the oncology and the inflammation business. We have a lot of data coming later this year. We have a really important approval that we expect later this year of Anito-cel for the cell therapy business. So there's a lot to watch and be excited about and happy to kind of dig into any of it.

Okay. Perfect. Since you teed it up, why don't we start off with Yeztugo? And maybe just give us sort of the state of the state in terms of on-ramping of new patients. Clearly, those people in the crowd, we put out notes every Friday on the sort of trends. But from your vantage point, how you feel about sort of the new starts cadence of patients?

Sure. Yes, we feel great about it. I think at a high level. I mean, look, when you kind of step back, this is one of the most exciting launches in health care, right? You look at what's happening in the GLP-1 space and the HIV prevention space. I mean this is a really exciting development for people at risk of getting HIV. And at a high level, the launch, every single metric of the launch is either tracking to or exceeding our expectations. We've guided to roughly $1 billion of sales that are expected this year. Again, this -- the drug was approved right at the very end of the second quarter last year, if I remember correctly.

So we're kind of at a year into the launch and all of the metrics look great. We talked at the end of the second quarter about a 70% persistence rate, which, again, for a prevention medicine from our perspective, is very, very strong as well. And so we're off to a great start. The big picture for the HIV prevention business is if you think about it over the next 10 or 15 years, and we expect to have a yearly injectable version of lenacapavir or Yeztugo available in 2028. Over time, we expect the market to consistently steadily move from the orals, including the oral long-acting to the injectables.

A lot of the growth that you're seeing -- or maybe the other thing I should mention, Carter, is like today, we're on a $4 billion run rate for our HIV prevention business. It's not that long ago that this was a $1.5 billion business for us. The market has been growing beautifully mid-teens percentage growth for the overall HIV prevention market. You've seen stronger growth in our business as a result of both of the Yeztugo launch, also some pricing tailwinds and growth for Descovy, which is really exciting. And then the final piece of the puzzle is in addition to the long-acting injectables, which we think will be the best option for patients in the long run, and you'll see the market continuously move towards the long-acting injectables.

We have a weekly oral version of lenacapavir that will -- that we expect will be approved next year in the United States. And that will allow us to target those patients that, for whatever reason, don't want to use an injectable or want to start with an oral. 50% of the market today is generic daily oral in Truvada. I think the weekly oral opens up that part of the market significantly to move over as a precursor potentially from a daily oral to a weekly oral before these people maybe consider moving to the long-acting injectables. So every which way we look at it, the launch is going really well. The prevention business overall is doing great, and we think it's just the beginning of kind of a long period of growth for that franchise.

You sort of teed up the next question. As we think about that once-weekly oral, is that more of a way to cannibalize Descovy? Or is it -- I guess, you kind of alluded to it, opening up new segments that maybe weren't interested in the current offerings?

I think it's both. It's more -- and it's less about cannibalizing Descovy or Truvada and more about just offering a better alternative for people that are at risk of getting HIV. So the future of HIV prevention in our view, is clearly in the long acting. You see that with the Yeztugo launch. So the weekly oral, the monthly orals that will be coming in the future, including our programs, will continue to open up that market. So I think you have 2 dynamics happening at the same time. In the short run, when you have an oral-to-oral conversion, you can see pretty profound movements in the market in a short period of time if you bring an alternative that is better for patients that are at risk of getting HIV.

The best example is when we launched Descovy, whatever it was for prevention now 5 or 6 years ago, 50% of the market roughly, the daily oral market moved from Truvada to Descovy in 15 months. So as we launch the weekly oral, there's a real opportunity to take that 85% of the market that is currently using 1 of the 2 daily oral alternatives to move to a weekly oral and ensure greater adherence and compliance. It won't be for everyone. And then the second piece of the puzzle that we've talked about, again, is that over time, we expect that 85% of the market on the orals to shrink as more and more of the market moves to the long-acting injectables, including Yeztugo.

And on that long-acting side of the marketplace, how do you think about every 6 months and every 12 months sort of coexisting? Is that something we should expect? Or would you expect it longer term to gravitate to the...

I think they'll -- we expect that they'll coexist. Many of the physicians that are treating people at risk of HIV actually like seeing the patients twice a year. So the every 6-month Yeztugo is kind of the perfect formulation. There will be both physicians and patients that prefer the yearly injection. The yearly injection is going to be an intramuscular injection versus a subcu injection. There may be some patients that prefer and physicians one over the other, but they will coexist.

I think maybe the most important point is all of these launches will continue to grow HIV prevention awareness and grow the market overall. And that's exactly what you've seen in the last 2 years in particular, once we have the PURPOSE data, which is the incredible long-acting every 6-month lenacapavir Phase III studies, you've seen this really substantial expansion of the HIV prevention market as awareness has grown. So I think they will coexist every 6 months. I mean it's hard to say today. We don't yet have the data on the yearly injectable. But all things being equal, I think they both have a significant role to play going forward.

Okay. Maybe switching gears to the treatment side of HIV. BIKTARVY continues to just get bigger and bigger. You're now over 52% share. How big can BIKTARVY get, particularly as we see the introduction of other agents, including some from Gilead, albeit in different settings maybe?

Yes, yes. I mean BIKTARVY can continue to grow is the answer. I mean it is a -- but it's such a big product now that on a percentage basis, the growth has slowed over time, which is to be expected when you have that much of the market. So you've mentioned 52% of patients in the United States roughly today are on BIKTARVY for HIV treatment, which is incredible. Over 70% of new patient initiations start on BIKTARVY. And there's good reason for it. BIKTARVY is the absolute gold standard for HIV treatment at kind of every metric that you look at, whether it's tolerability, the resistance profile, et cetera. It's just a really fantastic medicine.

We are launching, though, additional treatment medicines over the next decade that we think will play a really important part in that market as well. And the first one is the drug that was approved a couple of weeks ago. This is another daily oral, but it's a 2-drug combination of bictegravir, which is the integrase inhibitor in BIKTARVY and lenacapavir, the long -- or the capsid inhibitor that we just talked about in the prevention setting. And this is a really exciting opportunity for 2 reasons. One, because the vast majority of patients start on BIKTARVY, if a patient is going to switch for any reason to another drug, for the last 10 years, we've had a lower share of the HIV switch market, which is the most dynamic part of the HIV treatment market. And with the launch of -- and I forget our trade name off the -- Jacquie will remind me, Bixlenvo, thank you, that we now have a meaningful opportunity to participate more robustly in the switch market.

The other thing that's really interesting is 5% to 6% of patients in the United States on HIV treatment therapies are on -- have developed significant resistance or have other issues that put them on these multi-tablet regimens kind of reminiscent of what you saw 15 or 20 years ago where patients took all these different pills, some in the morning, some in the middle of the day, at night. It was very difficult to stay on those regimens. You saw more viral breakthroughs, harder time bringing people to undetectable levels so that they couldn't transmit the disease. That 5% to 6% of patients in addition to the overall switch market are logical candidates to go on this new launch therapy very quickly.

So that's an exciting time. But over time, as we have these launches, the next one coming next year is a weekly oral combination with our partner, Merck, that we think will be another exciting opportunity for patients in the switch market. And then over time, we expect to launch monthly orals, every 6 months or every 3 or every 6-month injection combinations for treatment, all of which should open up bigger HIV treatment market and move more of the market from the daily orals to the long-acting therapies just like you're seeing in prevention.

Okay. BIKTARVY is going to run into some IRA impacts later in the decade. How would you advise investors to think about the magnitude of those impacts, the cadence, timing of those impacts? Put your CFO hat on and help guide us through that.

Yes. We're in the middle of the negotiations with the U.S. government right now, to your point. This is -- I think what we've always said -- and so I can't give you any specifics in terms of where we are. The government publishes the results, if I remember correctly, at the end of November, we'll have a sense just before that of kind of where we end up in terms of the government essentially a mandated price at the end of the day. It's a long process. We started a number of months ago with the government. It will impact our business in 2028. We think the impact should be manageable. Again, I don't know what the number is.

So -- but the impact should be manageable. I've always described this as kind of a patent cliff that then you grow through. So when you look at the -- I use the example of the Truvada patent cliff because that was the last major patent cliff that we dealt with, whatever it was, 6 years ago, 7 years ago, where you saw a $1.5 billion step down in our HIV business, and we grew through it really quickly. I think you should expect to see the same thing here. So to some extent, it depends on the magnitude of the price cut and the overall impact. But the key message is we think it's manageable. We expect our HIV treatment business to be a growth business even with this impact through 2030 and beyond. Remember, with BIKTARVY, we have composition of matter patent protection through 2036. We talked about the launches that are coming, including the one that's just underway, all of which will grow and diversify our business. So when you think of just the HIV treatment business, let alone then layering on the HIV prevention business, the HIV treatment business is a growth business for us for the foreseeable future, even with the BIKTARVY drug price negotiation.

Okay. So it sounds like nothing terribly surprising coming out of those negotiations more or less what we've seen in.

I mean, again, I can't say specifically because we're in the middle of it. But I've always said, we expect that it will be manageable and more to come later this year, we can -- as we have the price, and we can talk more specifically about what it means. But any -- in the -- when you look at where we are today, our expectation is we can absorb that, we can manage it and the business can grow through it.

Okay. Maybe let's switch gears to the I&I franchise. You sort of alluded to positive alpha4beta7 data earlier this year. It's definitely caught the eyes of a lot of investors. Maybe before we jump into that, what is Gilead's -- what are Gilead's ambitions in I&I?

In I&I. Well, it's one of the 3 scientific areas that are our core focus areas. So again, step back, we're the world's largest virology company. We've built a robust oncology business. And the third leg of the stool, so to speak, is the I&I business that we're growing. The other big picture comment that I'd make is I've been back at Gilead for 10 years. We have completely transformed the portfolio, the quality, size and depth of the portfolio, the research portfolio. We've made the investments that are required to grow internal research and development, and you're really starting to see the fruits of that.

And honestly, the alpha4beta7 outside of lenacapavir, which I think people expect us to show that level of innovation in virology. But outside of virology, lenacapavir -- I'm sorry, the alpha4beta7 may be one of the -- it's one of many examples, but it's the most prominent one. The data -- the Phase II data in ulcerative colitis will be shared here in the coming months at a scientific conference, so I can talk more specifically about it. We have said that we're excited about the data. We're moving the program forward into Phase III as a monotherapy, and we're exploring combination opportunities for it, which -- and we know this market really well. We followed the leading injectable alpha4beta7 for years. We know the other companies that are developing the oral versions of alpha4beta7 like our program. So we followed it closely. We know what good looks like. We're excited to kind of share our data and talk about it. But maybe more importantly, I think this is a proxy for where the company is going in terms of the breadth, depth and quality of our portfolio and additional growth opportunities that are coming outside of just the HIV business and the HIV prevention business.

Okay. So you affirmed we're going to get data this year. We're going to see it at a medical meeting.

Correct. Yes.

Okay. In terms of potentially executing on combinations, is that something Gilead can do internally alone? Will you need to look at a potential partnering or external assets?

Yes. I mean we do have other assets in IBD. So for instance, we have a TPL2 inhibitor that also was internally developed. We have a gut-restricted FXR agonist that we have 2 of them, but we have -- one was acquired, the one that we're taking forward is internally developed as well, all of which could be combination partners. But then when you look at the logical combinations in this space, I'll use one example, like oral IL-23s, right, which could be a logical combination when you see some of the drugs that are approved, those today would come from outside partnerships.

So we are looking at multiple potential partnerships. I think we've been pretty open that as we build this business, and it's no different than, frankly, what we've done in HIV. Over time, Gilead has partnered with a number of companies, most prominently BMS on Atripla back in the day, J&J on Symtuza, more recently, the Merck partnership for the weekly oral that we just talked about, doing the same thing in the IBD space or in I&I more broadly makes a lot of sense. Maybe the other thing, Carter, that you and I have talked about is we don't yet have a commercial organization in I&I. We do have a large organization in oncology, virology and then in liver disease, part of which is kind of has an I&I focus through our CymaBay acquisition and PBC franchise.

But as we build that out, there's always the opportunity to leverage what other people have built as well. So more to come. Those are early-stage discussions. I can't tell you where it's going to go. But the most important point is I think there's a lot happening in that I&I franchise. We didn't talk about Ouro, one of the acquisitions we did this year. You'll also see data, I expect later this year in the B-cell depletion space. That's a partnership with Lakefront Bio, one of our partners, formerly known as Galapagos. So you should see some data there, too. Just another example of a program that we have in that space that then we can build out over time.

Okay. We could go down that for another 20 minutes, but we'll move along. Why don't we move to cell therapy. You do have the Anito-cel PDUFA coming up before the end of the year. Then a lot of questions, certainly debates within the halls of Cantor around what that label will look like. Any updates on the conversations with FDA and your confidence you'll get that fourth line plus label?

I mean no specific updates. We still have a lot of confidence that we're going to get the fourth line plus label. That's always been our expectation. We don't comment specifically kind of on the interactions with the regulatory authorities and we're going through an approval like this. But again, nothing has changed from our perspective. We see Anito-cel as a significant growth driver for our cell therapy business, an incredibly important entrant in the multiple myeloma market. We think it has a differentiated profile. The most obvious piece is kind of on the safety side when you look at the neurological side effects that one of the competitor regimens has as well as some severe colitis side effects that some KOLs will highlight.

We think we have the potential to have a therapy that is safer on both of those measures and that over time, could take a significant part of the multiple myeloma market. You highlighted that we expect to start in the fourth line plus market, which is a smaller piece of the market, still a pretty big commercial opportunity for us when you look at the size of our cell therapy business today, could easily directionally double the size of our cell therapy business. But then moving into the second line plus, we've already fully enrolled the Phase III trial looking at Anito-cel in second-line plus and then as you would expect, we'll have that data over the coming years, and we would expect an expanded approval in second line plus. That really opens up the opportunity for Anito-cel. But we see cell therapy in multiple myeloma and the BCMA cell therapies, in particular, as a huge part of the long-term treatment algorithm, especially in second line plus and in some earlier line settings, and we think Anito-cel can drive a lot of growth in that franchise.

And sort of your confidence and willingness to make those investments, is that -- has that been in any way impacted by the progress we've seen in the bispecifics? We've seen combination bispecific data. We've had more BCMA bispecific data just last week with better CRS profiles. Does that...

Well, it's certainly something that's been part of the calculus. I mean we look very closely at the bispecifics. We have a number of our own bispecific programs. Actually, the B-cell depleter that I talked about earlier is a BCMA B-cell depleter that we acquired together with Galapagos. So we look at all of these spaces. Look, the multiple myeloma treatment guidelines are relatively clear. I mean when you look at the -- I forget the exact organization, but the group that develops the treatment guidelines for multiple myeloma suggests saving the bispecifics for after CAR-T, recognizing the benefits of CAR-T. One, the data to date suggests that you get much more durable responses with CAR-T. You certainly see that in the DLBCL space.

And this is the patient really one opportunity for what -- something that could be a curative regimen, right? There's some important differences between the DLBCL market where we started with YESCARTA and multiple myeloma. In DLBCL, the first-line and second-line treatments are also curative, right? When you look at R-CHOP and then stem cell transplants. So physicians treating those patients already have curative regimens. In the multiple myeloma space, the -- generally today, it appears that cell therapies are really the only potential for a cure in that market, which is incredibly important for patients and physicians. So our belief is that the cell therapies over time will be used earlier and will be really solid for many patients, second-line kind of treatment option, and then you can save the bispecifics later for patients that don't have the robust response to cell therapy. But all of that, to your question, did go into kind of how we looked at it. When we bought the rest of Arcellx earlier this year that we didn't already own, that was based on our expectations not only for the label, but how the market is going to develop over time.

Okay. As far as the other acquisitions you completed this year, Ouro and Tubulis, you alluded to some potential updates on the Ouro side. Maybe just recap that as well as on the Tubulis side. The ovarian data at ASCO was standing room only. We had to send our associates hours before to get seats. What else can we expect on these fronts this year?

Yes. I think it's -- again, it's an exciting kind of examples of where Gilead is. I mean I talked earlier about the strength and breadth of our internal research and pipeline, and then we can add to that over time with these acquisitions. So we just talked about the full acquisition of the Arcellx right and kind of owning all of that. Part of that, by the way, is like the things that we can do with the BCMA binder from Arcellx and other programs, especially for in vivo cell therapy that we've been focused on and others for years now. So we're excited about that. But on Tubulis, and Ouro specifically, maybe just starting with Ouro given that I highlighted earlier, this is -- the B-cell depletion space is a really exciting space.

Many of you have seen companies working on this. But the idea of resetting the immune system and letting the B cells and plasma cells repopulate in order -- and getting rid of kind of the cells that are causing kind of the disease aberrant B cells in a safe way. The early data from Ouro, and it's a very competitive process, is really exciting. The company was studying it. Ouro is a small company. They licensed the drug from a company in China, studying it in 3 relatively large orphan diseases, which I also think is a great fit for us in terms of your question earlier about building out in the I&I space. If we continue to see success and get these products approved, building out your commercial organization in these large orphan diseases is a really elegant and capital-efficient way of building the next step of our I&I franchise.

So you'll see the data -- the early sets of data later this year, I expect at a scientific conference. Again, we're working on that with our partner, Lakefront. So whether it's later this year or early next year at some point, we expect to share some of that data. And then on Tubulis, Tubulis is -- was a large private company in Germany that had developed what we believe is a best-in-class antibody drug conjugate ADC platform that was very differentiated. I mean to kind of step back since we did the Immunomedics acquisition to acquire rights to TRODELVY, I think that was 6 years ago now, roughly, if I remember correctly. We've been looking to expand in ADCs and to find the right platform. We had a partnership with Tubulis.

It was a great proving ground to really work closely with them to see what the platform could do. And we are absolutely convinced that this is the highest quality, best, most differentiated ADC platform and technology and chemistry, including their linkers and what you can attach in terms of the warheads. You can use this technology in oncology, including for the lead ovarian program that you referenced that had the exciting data that was shared at ASCO earlier this year. But you can also use it in virology. There are a number of ADC applications in virology. You saw that with a deal earlier this year that another one of our peers did.

So there's a lot to do with that, that we're really excited about. The other thing kind of when you look at our capital model, like we're a very efficient company. We're finally spending at the right level, R&D as a percentage of revenue, roughly 20% of our revenue is reinvested in R&D. We are much, much lower than that when I joined Gilead 10 years ago. But we have the ability to bring in all 3 of these assets and fold them in. There would be a modest increase in our R&D, but it doesn't really change anything in the long run to kind of build these out. We still expect to -- that our top line growth will lead to significant earnings accretion over time. So we're excited about all 3 of them. They all go to kind of the diversification, the build-out of the business. And most importantly, like everything that we've done, the data -- the early data, recognizing it's early, looks really significant in terms of moving the needle for patients.

And since we have you here, it'd be [indiscernible] duty to not ask you on sort of capital allocation and continued focus on M&A. You guys have been pretty disciplined. You made some splashes this year. But I guess the question is really, again, like how that M&A appetite, do you expect that will evolve over the course of this year and into next year and the appetite to move into some of these additional TAs? Or should we view your TA scope sort of as established now and unlikely to evolve?

Yes. Maybe starting with the last part of the question. I think our TA scope, at least for the reasonable foreseeable future, is firmly established, and that's where we're focused. I mean we always retain the right to change that if we see something that we think could dramatically change health care for patients or an opportunity that we just can't pass up. But I think it's -- we are very focused and highly likely that we stay in oncology, virology and I&I for the foreseeable future. The -- in terms of the M&A appetite, we're always going to add things from external innovation. I mean there's a lot that's happening outside of our walls that is really important. You see that with the Tubulis, Ouro deals, Arcellx. We're going to add that.

But the big picture is we're just in such a different place than we were 10 years ago when I joined the company, where we had a very modest, to say the least pipeline, a much smaller research group that was focused predominantly on viral hepatitis and virology or HIV. Today, we have a really robust internal research engine. We -- I mean, to put this in context, when I joined, we would have 2, 3 or 4 molecules move from research into clinical development in any given year on average. We're now at 10-plus a year moving towards more of those. And we can be really selective about what we take forward. So the need for large external deals is -- we don't have the need that we had 10 years ago, 7 years ago when Dan joined and when I joined. But we'll always look at things.

So do I expect to do more deals like the Tubulis deal over time? Yes. But there's no sense of urgency to do that. Many of our peers that have large patent cliffs coming up, I think, have a greater need than we do. We are really excited about what we're seeing not only internally, but in the outside world in terms of the level of innovation. So we'll want to keep adding some of that, but we can be pretty selective. Maybe the other thing I'd say, Carter, on this is like we are really focused on kind of the capital model, the efficiency pulling forward. We went through this big phase of growth as we rebuilt the business. You see the last 2 or 3 years, we've been very focused on making sure that we pull forward efficiencies across the entire business. I still think we're relatively early in that journey, and there's more that we can do over the next 5 or 10 years in terms of pulling forward efficiencies on things like procurement and contracting, leveraging kind of different models over time to find efficiencies that will help drive the bottom line as well. So more to come on that.

Maybe on the last point, and I'm going to do the unfair thing I've only given you 1.5 minutes to answer the last question. As you think about those push pulls around contemplating potentially expanding your alpha4beta7 and taking that into what would almost inevitably be a large set of later-stage Phase III trials against what you talked about discipline on the margin side and still some ambition on M&A. So how do you balance all that? I guess it kind of gets back to the earlier question around that appetite and that willingness to make those big investments in I&I.

Yes. I think that the -- first of all, we have to see where we go, right? Some of those trials, as we said earlier, could be combination trials where you're sharing that both the risk and the cost with the partner. So the other thing to remember is we have a lot of large trials that we started in the last 10 years that are rolling off. So like any company, we have a really disciplined modeling approach where we're looking at where we are in our R&D spend, what's rolling off, what's rolling on. So honestly, at the beginning of the year, I was more concerned about not having enough in the pipeline as we looked at '27, '28 and '29.

So not only do I think these 3 deals really add to kind of the quality of the portfolio, but we also had a need to add to the overall portfolio. We are at a point, though, where there's more that we could do than we're going to do, which is a really healthy place. Historically, when our portfolio was smaller, it was much easier to take everything forward because you didn't have enough -- so I think we're at a very healthy place now, and you can kind of balance both. But R&D spend as a percentage of revenue is never a flat line. There will be periods where it may go above 20%. There will be periods where it's below 20%. I always think about this over the cycle. But when I look at it right now, there's a lot that we can do -- first of all, maybe the other thing to say is we will always focus first and foremost on what's best for patients.

If we have something using the alpha4beta7 as an example that we think we can really benefit patients, we will take it forward and find a way to take it forward. The last thing there, we -- on the TRODELVY lung cancer study that we did over the last couple of years, we did a partnership around that where we had some R&D funding that helped pay for that study. And that's just -- there's examples like that of ways that companies can use partnerships or capital partners to make sure that you're taking all the programs forward that could benefit patients.

Perfect. Well, we'll have to leave it there. Andy, thanks for having us.

Thank you. Appreciate it. Thank you very much.

Awesome. Thank you very much for joining us today. My name is Mohit Bansal. I'm one of the Biotin pharma analyst here at Wells Fargo, and I'm joined by Dr. Dietmar Berger, Gilead's Chief Medical Officer. Thank you very much, Dietmar, for joining us today for the first time.

Thanks for having me.

So Gilead has been a regular. This is fifth year in a row at Wells Fargo Conference, first time for Dietmar, we are excited to have some R&D discussion here. So Dietmar, let's just talk a little bit about the pipeline focus right now. So it does seem like you have a mix of like, obviously, building on HIV, where you have a leadership and then oncology, some data set coming in [ Miraji ] as well. So talk a little bit about -- when you look at the internal portfolio and some of the assets you acquired earlier this year, like where is the focus internally is -- and then what do you see the most exciting stuff out there?

Yes. No, thanks for that question. We're the current management team at Gilead, right, they joined like 7 years ago. And there was a clear realization that we want to diversify and that's been our strategy for some time. And we've clearly highlighted, yes, we are -- we have a clear stronghold in virology and there's diversification in virology as well, and that's important to us. And then there's really this expansion into oncology and into inflammation, right. From a portfolio perspective, we've made good progress in all 3 areas. And Obviously, on the virology side, there's this focus on both HIV treatment and prophylaxis and we can really talk about how that is progressing.

For example, we've just launched the combination of bictegravir [indiscernible] as a daily oral for a very specific patient population. That's the big [indiscernible] launch where we've presented data on the [indiscernible] bictegravir combination as a once-weekly oral, but we we're working on longer duration treatment options right all the way up to once every 6-month treatment options. And then we have obviously the prep portfolio HIV prevention portfolio where, for example, we have submitted for the once-weekly lenacapavir. We've launched the ones every 6 months, and we have clinical trials for the one of the 12 months, right? And beyond that, we look more broadly at virology and antivirals as an opportunity.

Then in oncology, we have to think about that in 2 ways. One is obviously, the cell therapy portfolio with KITE. That's also one of the acquisitions that you mentioned. That's the Arcellx acquisition that brings a needle cell fully into Gilead, that's where we have strong data in the fourth line plus multiple myeloma setting. We also have a study ongoing in the second to fourth line, and we're also preparing for studies in earlier lines, for example, in the first-line setting. We are hoping for approval in this fourth line plus setting towards the end of the year. We think that's a really important opportunity because we feel a needle cell is very differentiated option.

And beyond that, with the KITE portfolio with the CAR T cell portfolio, we're also focusing on next-generation CAR Ts, for example, bispecific CAR T, CD19, CD20. We're also looking at how can we expand that from oncology also into inflammation and neuro inflammation. And we're also working on in vivo CAR T as an option, but that's a longer-term perspective, right, which is important. The current focus and standard of care and that's where also the opportunity is really the ex vivo autologous. And then on the noncellular therapy side, that's where we have another acquisition also. That's where we have the tubules acquisition that brings top 40 into our portfolio, which is ovarian cancer focused. We've had data with a 60% objective response rate at ASCO, which really confirms the underlying concept of a new linker technology, also new payload technology, very stable linker, really confirmed with the strong efficacy and also good tolerability.

Of course, early days, but we'll explore that further. And we want to move that rapidly also into Phase III studies in ovarian cancer. And there's a whole portfolio behind that of ADCs from tubules besides that, obviously, we have Trodelvy really meaningful growth rates in breast cancer and also additional data coming, for example, in endometrial cancer, for example, in the adjuvant, triple-negative breast cancer setting and also in small cell lung cancer and a whole slew of cooperative studies beyond that. And in oncology, we're also trying to broaden the portfolio and really focus on tumor drivers, ADCs, somewhat targeted mechanisms with that portfolio, and we're making good progress there. And on the inflam side, and I want to say inflam plus liver side, obviously, have lively as a marketed product, which is also making good headway from a commercial perspective, we had additional data with the IDEAL study, which takes us into an even earlier treatment paradigm.

Also thinks more about normalization of ALP values, normalization of liver function, which we believe can give us a better long-term trajectory and which really increases the market size roughly doubles the addressable patient population. And beyond that, we have, on the inflammation side, an array of what I consider really interesting molecules. We have an oral alpha 4 beta 7, where we are looking forward to present data later this year. We have an IRAK-4 inhibitor, which we tested in cutaneous lupus, where we also will present the data later this year. We also have an IL-4 degrader. That's in early studies. We're focusing also on STAT6 degradation. And then the final acquisition I want to talk about is really the acquisition of gamgertamig, which is a BCMA T cell engager which takes us into autoantibody-driven disorders.

I think immune thrombocytopenia, think autoimmune hemolytic anemia and other types of autoantibody-driven disorders. So overall, I would argue we have worked heavily on improving the portfolio and thinking about how can we drive further differentiation, patient benefit and then eventually also revenue across the virology portfolio, the oncology portfolio and then also the inflam portfolio. And I'm really encouraged by where we are at this stage and how we can deliver against that.

Very, very helpful. Thank you very much for this overview. There's a lot going on at Gilead. So I want to briefly touch upon the HIV before moving into the pipeline side of things. So I think even the HIV as well pipeline. Talk a little bit about the decision to think about intramuscular prep here. Is it more driven by yearly dosing versus intramuscular because like initially, we thought that subcu would be the preferred choice, but then in terms kind of like some doctors [indiscernible]. So like what are you seeing in the marketplace? Or is there any reason to believe intramuscular [indiscernible] is more suitable for a longer acting cap?

Yes. I think more broadly in HIV it is really about optionality, right? And you find people who are very informed about both treatment and prevention and who have clear preferences, right? And for us, in prevention, it's really important to be a leader in the prevention market. And we achieved that by having those different options. We see Descovy with really stellar growth rates as a daily oral option for prevention. We see the prevention market growing, right? We think it's underpenetrated at this point. We have more than 500,000 people on prep as the addressable patient population, the patient population that the population of people qualifying for PrEP should be more like 2.2 million, right? So we feel there's a real growth trajectory and obviously, Descovy playing a key role as a daily option, then yes, to go as a once every 6-month subcutaneous option.

We have filed for a weekly option weekly oral lenacapavir as an option. We hope for approval of that in the beginning of next year, first quarter of next year. And then we have a clinical trial ongoing for the Yeztugo as an injectable once every year. That type of optionality we feel is really important. And when I go out, when I talk to people at sites, for example, there's a real excitement about the once every year. People go, "Oh, this is like a vaccine. I can go in like once a year and can get my shot and really have the effective prevention that I know from Yeztugo." Yes, you're right, that's an intramuscular injection. Some people prefer that.

Some people prefer the subcutaneous, which is Yeztugo once every 6 months, right? Other people don't want injections at all, that's whether weekly then [indiscernible] would come in or the daily Descovy. So having that optionality, we feel is really important.

Got it. That makes sense. And then for Yeztugo, these different approaches intramuscular or overall, you are taking the PK/PD type approach here rather than a full trial. So talk a little bit about if you can talk about regulatory discussions for the oral filing and -- should we see this filing as risky per se because it doesn't have a clinical proper Phase III clinical trial behind this? Or do you think PK/PD is enough pace on your discussion here?

So in our experience, the FDA is really kind of a trailblazing agency in this field. has been very interested in model-informed drug development and very interested in kind of exposure effect relationships, right? One of the beauties of virology development is that you can very effectively model the type of coverage you need in order to both prevent an infection and also in order to treat the virus. So now in the prevention setting, you've got 2 different things, right? You've got the lenacapavir weekly. That's where we've already submitted for approval.

That submission is entirely based on 2 things. One, the modeling, right? The model informed drug development, really understanding the PK but second, also the experience we have with Yeztugo. Because remember for Yeztugo, we already have a bridging option, which is an oral therapy that you can give weekly that can bridge. For example, if somebody misses their once every 6-month Yeztugo injection. They can go and take the pills for a couple of weeks and then go to the next injection. So based on that experience and that label that already exists, it was also -- it was only a smaller step to then get to the weekly lenacapavir prevention option, like the entire weekly oral option.

So I don't look at this as a riskier than any other type of submission. Obviously, we had extensive discussions with FDA. Obviously, I will not comment on what FDA will do right, but we are in active discussions with them about that. And I'm really encouraged by the experience that we have with Yeztugo with a bridging option already and then the PK data. And then for the once every year treatment, you're right, that is a Phase III study. And that Phase III study has eventually a PK primary endpoint. So it's really about getting to those lenacapavir systemic levels in circulation that we know will effectively prevent, right? So we want an effect that's similar to what we've seen with Yeztugo once every 6 months.

And we know with the dose that we use in the once every 12 months, we get very similar or even higher levels of lenacapavir in circulation then we get with the once every 6 months. So we're very confident about the target coverage and very confident about that preventive efficacy. So we're really looking forward to seeing the data sometime next year.

Got it. Exciting. Thank you for that. So now let's just switch to treatment a little bit. I think earlier this year, you showed every [indiscernible] data because I think you have -- like you need multiple draws, you already have one drug, which can be every 6 months or maybe every year with the intramuscular delivery, but you need an integrated inhibitor to combine with that. So the one you are taking forward is -- I think we have seen data for every 4 months. Now what are we -- so like what profile do you want to see? Do you -- it has to be every 6 months or it can be every quarter? Like how do you think about the next generation of HIV?

Yes, great question. And there are some really important points that you mentioned already. So first of all, again, the same component of optionality and really having different offers for patients becomes important here in the treatment setting, very similar to the prevention setting. You want to have like your daily, your weekly, monthly once every 6 months, right? You want to have that type of optionality. How do we get there? On the treatment side, we always need combinations, right? You've got a higher viral load, so you always need combinations.

That's one important component. And the other important component is Biktarvy has set the bar so high, right? From an efficacy perspective, from a perspective of forgiveness, if you miss a dose from perspective of resistance, that, that becomes your goal standard. So we don't want to compromise on that type of profile, right? So that's very similar to -- that then gives you really what you want to see with, for example, you want every 6 months, right? You want a high level of efficacy. You want a really positive profile when it comes to resistance, right? You don't want to see a lot of resistance development. You want a high level of convenience as well, right?

So you want to have these really good characteristics. And you need the combination. So when we think about once every 6 months, we have one component of the combination already, which is lenacapavir, right? Lenacapavir, is already approved as a once every 6-month treatment called Sunlenca, which is for the highly treatment-experienced patients in combination with other antiretrovirals but we want to once every 6-month treatment approach that, for example, has an integrase inhibitor. That's we're working on the combination of a long-acting integrase inhibitor, which is called 3242 -- GS-3242. That's the integrated component plus lenacapavir every 6 months. We're working actively on that. We know already that the integrase inhibitor, 3242 can cover for 4 months, right? We're doing that. We're exploring that in a dose escalation study. And just from a PK perspective, you need these higher doses to then cover the longer period in time, right?

We're confident that we can get to once every 6 months with 3242 but that's current ongoing area of study. We'll know that roughly by the end of the year, and then we'll move that combination into Phase II to get to [indiscernible] every 6 months treatment with an integrase inhibitor and a capsid. And again, what we're really looking for is high level of efficacy, low level of resistance or no resistance right, and then the type of forgiveness and convenience that we see with a drug like Biktarvy.

Got it. Very, very helpful. So maybe let's just move on to anito-cel a little bit here, right? I mean, so now a PDUFA is coming as well. The question we get a lot and is that like me, like, as of now, it does look -- the safety is the differentiation versus CARVYKTI at this point. How comfortable you are that we really know the profile of the drug that we are not going to see a delay in neurotoxicity here or anything in subsequent data set or like obviously, mechanistically, there's a reason there. But again, what do you say to someone who says like, oh, it does take 1 or 2 cases and probably -- or you say that probably you're not going to see those cases at this point?

Yes. So you're talking about exactly the safety profile from a differentiation perspective, we've not seen the, for example, the delayed neurotoxicity, the Parkinsonism, the [indiscernible]. We've also not seen the enterocolitis, for example, that some of the competitor products have seen. We think that's really based in the mechanism and the on-off characteristic at the receptor and the inflammatory conditions that, that can raise with some of the competitor molecules.

The key argument, I think, is the time line, right? Those types of side effects with the competitor profile -- with the competitor drugs, have been seen within the first 100 days usually after treatment. We now have north of 400 patients who have been treated with a net or cell with observation periods, like one data set with the median observation period of like 15 months, another one took patients all the way out to 38 months, right, after treatment and we have not seen a single case so far of either the delayed neurotoxicity or the enterocolitis we should have seen those.

You've got very substantial numbers of patients that have gone through those first 100 days. So I feel very encouraged by that. right, that the safety profile is really differentiated versus some of the other treatment approaches out there, where you see rates all the way up to 10% of these long-term irreversible side effects. And that's where people are really concerned about those, and we see a clear differentiation and a clear opportunity, right? Besides that, obviously, you want to see really good efficacy and that's also where I'm very encouraged by the objective response rate, the PFS data that we've seen and also the MRD data, the minimal residual disease data that we see that really predict like strong long-term outcomes with the needle cell.

Got it. Very helpful. Thank you for that. I want to move a little bit on I&I. The exciting area where you do not get any credit right now, but again, everybody is looking forward to those data sets both for IRAK4 and alpha-4-beta-7. So talk a little bit about that. I mean this is a new area for you as well. So for you, there has to be a bar for you to move forward. So how you are thinking about when you look at the data, what would make you make a go/no-go decision on those assets here?

Yes. The -- I think the inflammation portfolio has emerged very nicely. As discussed, it has been a longer-term strategic priority for Gilead. But you now see that some of the early bets that we're taking some of the molecules that have also come out of research are actually moving forward in the portfolio. And you will see I think, quite meaningful news flow for our I&I portfolio during the second half of this year, right? And obviously, these data will be at conferences, and I will not give you a prediction of the data, but just talk a little bit about hypotheticals, right?

First of all, I think there are really meaningful targets we're working on, right? And some of those are highly validated. Others are still in validation. But when you think about an alpha-4-beta-7, for example, that's a very validated target, right? ENTYVIO as an injectable is a molecule that's a backbone in inflammatory bowel disease, right? So we have an oral avistagrast currently in clinical trials. We've completed the Phase II analysis, and we're looking forward to present that data at a conference later this year. But just thinking about it, it's a validated target. It's a real backbone. It's differentiated, both from an efficacy and a safety perspective, which is really important.

And you can think about this moving forward in different ways, right? If we assume that we're maintaining efficacy, right? And that's an assumption. We need to show you the data. If we're assuming we are maintaining efficacy, then there is a discussion about how can you develop that as a backbone in monotherapy and then how can you also think about combinations, right? There is an efficacy ceiling currently in inflammatory bowel disease and people start talking more about combinations. And then there are obvious combination partners because there are various orals currently in development that could be potential combination partners.

So I think, for example, for the alpha-4-beta-7, once we've shown you the data, we should discuss more. But in principle, you need to think about monotherapy development and combination development. Then talking about that portfolio, we also have the IRAK-4 inhibitor, [indiscernible], which has been in a Phase IIa study, which is the study we call the COSMIC study. Again, we're looking forward to share the data. That study was in cutaneous lupus. There, we've already communicated that we will move the drug forward into the next study, which would be a Phase IIb. So again, you will -- we will show you the data, but you can already deduct that. We're excited about the data we're moving it forward. And that will really validate also IRAK-4 inhibition as target and an important mechanism.

And we're also following up obviously with an IRAK-4 degrader which we have in an early study at this point in time, right? And then the other piece of data I'm excited about is we had the [indiscernible] acquisition that brought the BCMA T cell engager into our portfolio, gamgertamig. Now GS-0336. There, we've already shared data in immune thrombocytopenia with really good efficacy and also really good durability of efficacy. So looking forward to sharing more data at a conference later this year in immune thrombocytopenia. And we've also communicated that we're planning to move forward with gamgertamig in Phase III in 2027 in ITP and in autoimmune hemolytic anemia. So overall, when you look at that picture in inflammation, right? We do see the portfolio moving forward. And I think there are some really meaningful opportunities there.

Got it. So I mean it's kind of like -- so [indiscernible] it kind of reminds me of early days of HIV. You had Truvada, you used Sustiva partnered with someone else. So could that be a case here? Like do you think -- so you talked about partnerships. So there are orals out there you would be open to those kind of partnerships if you -- the asset works?

I mean, definitely, this will all be data-driven, right? So I think these are discussions that we absolutely need to have once we've shown you the data and once you can really get a better picture of what we actually have. But when you think about an area like inflammatory bowel disease, the current standard of care is obviously biologic monotherapy, right? Of course, people go through different types of therapy and then they arrive at the biologics. .

But we see this, as I said, in these experienced cases of patients, we do see this efficacy ceiling and patients deserve that we do better. And that is where we have to think about combination therapy. That's where also now with the different biologics mechanisms, we can think about which mechanisms would make sense to combine and I think that has to be part of the discussion.

So as the management team was right here, right before you. So they were saying the same thing basically -- exactly the same thing. Thank you for that. So let's talk about tubulars, right? I mean that is an asset which I -- again, I don't think people really understand this really well, but you are really excited about this asset. And more so, you're excited about the unique linker technology they have -- so talk a little bit about that because you keep talking about how this technology can actually make you go into previously undruggable areas and all that. So can you help us understand this a little bit and what excited you there?

Yes. The -- we've been working with tubules for some time as a research collaboration. And that's where our research team really understands the kind of the details of the chemistry and the linker technology and all of that. And that detailed understanding has helped us a lot to assess that the tubules opportunity. And there are really 2 things there, right? One is what they call their P5 technology, which is how is the linker connected to the antibody. And the P5 technology leads to very stable linkage and that, we believe, leads to less of the toxin, less of the payload in circulation and a better kind of tolerability profile which then also allows us to get to higher doses and higher doses specifically at a target, right, specifically in the tumor.

And that we believe is more broadly applicable for the tubules portfolio. And then they have a second technology, which they call the LCO 5 technology, which really focuses on how is the payload connected to the linker, right? And the current technology focuses on no specific binding technologies. And this is entirely different. This is like via hydroxyl binding. And that gives us basically a lot of variability and different opportunities on the toxin side. And we have different toxins in our kind of chemistry pocket and tubules has different toxins that they have been ignoring and that also allows us to potentially move away and move beyond the current [indiscernible] payloads. And people are already asking about as we see more and more ADCs in the oncology space.

Should you actually do TOPO inhibition after TOPO inhibition? No, you shouldn't, because you develop resistance, right? So thinking about different types of payloads also becomes really important. So we were excited about tubules as a technology platform for both the linkage and for the payload technologies. And top 40, which is the front-runner molecule gave us a really good validation because what we see and what we presented at ASCO is a high response rate, 60% objective response rate in an unselected population in platinum-resistant ovarian cancer. That gives us a good basis to explore that further to explore the platinum-resistant ovarian cancer space. The target here is NaPi2b, 85% of ovarian cancer patients show high expression of NaPi2b in their tumor. So there's good reason to believe that this could be an unselected approach with high efficacy.

We also saw good tolerability which that is important if you want to go earlier in the treatment paradigm, for example, to platinum-sensitive ovarian cancer, that's where you need the possibility to combine with chemotherapy and the tolerability profile that we've seen based on this very stable linkage, we feel really encourages us to think about the earlier lines of therapy as well. And top 40 is the front runner. There's another molecule already in the clinic, which is called top 30, which targets another tumor antigen, which is called 5T4, which is broadly expressed on different tumor types, right? So we're exploring the same technology in with different targets. And there's other molecules behind that, that we will also put into clinical testing. Beyond the initial top 40 focus on ovarian cancer, NaPi2b, for example, is also expressed in lung cancer, non-small cell lung cancer, at lower levels. So we need to think about the biomarker-driven program there, companion diagnostic, et cetera. which we're doing in parallel. So there's just a broader push than with our oncology portfolio with the addition of tubules and with the ADC opportunity.

Awesome. So when you look at the internal portfolio right now between HIV, tubulars, I&I, anito-cel and all that, and even in vivo, we didn't talk about -- do you think you have enough on your plate right now? Like do you have -- like do you think you have enough for the goals of diversification and growth you have for next decade and all? Or like is there anything -- any area you want to go in?

I believe we've made really good progress with our diversification efforts, right? And you see how the virology portfolio is moving forward. How the oncology portfolio is getting broader and focusing on more direct tumor targeting, focusing on proximity-based approaches like ADCs, like T cell engagers, focusing on tumor drivers. And in infra, we've got some very meaningful targets that we're addressing. I think we're at a stage at this point. where we even need to prioritize, right? And I've always said that's actually a good thing, right? You want to move the best molecules forward. You want to have a portfolio that's really focusing on higher probability of success and also higher reward that can really translate then into patient benefit but also into revenue, right?

And we're at that stage where we need to prioritize, and I think that's a good thing. But we will continue to look for additions that are compelling in those therapeutic areas. We are already supplementing our portfolio with earlier-stage opportunities. That's like our standard ongoing business development. We also have really good molecules coming out of our internal research. Our research group had also made great progress over the last 5 years in those different areas, virology, oncology and inflam. So we're really trying to boost the portfolio both internally but also externally. And then the key will be to have more shots on goal early, but then also to have the data that allow us to then kill those programs early and then prioritize and move only the most important ones forward.

One last question, which I ask every management team. Fast forward 1 year, 2027 [indiscernible] conference. I hope you are here. I hope I am here. If -- what would make you look back at the year and say it was a great year for us?

I think we're at this point where we really also need to execute and deliver, right? 2026 was a year. We're really focused on shaping the portfolio, bringing new molecules both [indiscernible] and external into the fold. We have some -- and we had some very meaningful readouts. We have a number of launches, actually for Gilead, an unprecedented number of launches. We just launched [indiscernible], we're now working on the lenacapavir prevention on a weekly basis for next year. We're focusing on [indiscernible] we had the Trodelvy first-line launches, really nice growth there with Trodelvy looking forward to a needle cell launch.

So I think it will be a great year if we can deliver on those and then if we can look at the portfolio development for example in inflammation in oncology, also in virology, that really give us a path forward from a portfolio perspective and allow us to really prepare for the future.

Awesome. On that high note, thank you very much, Dietmar. I really appreciate it. .

Thanks, Mohit.

Thank you. Pleasure.

Good afternoon, everyone, and welcome to Gilead's Second Quarter 2026 Earnings Conference Call. My name is Rebecca, and I'll be today's host. In a moment, we'll begin our prepared remarks followed by our Q&A session. [Operator Instructions] Now I'll hand the call over to Jackie Ross, Senior Vice President, Treasurer and Head of Investor Relations.

Thank you, Rebecca. Just after market closed today, we issued a press release with earnings results for the second quarter of 2026. The press release, slides and supplementary data are available on the Investors section of our website at gilead.com. The speakers on today's call will be our Chairman and Chief Executive Officer, Daniel O'Day, our Chief Commercial and Corporate Affairs Officer, Johanna Mercier, our Chief Medical Officer, Dietmar Berger, and our Chief Financial Officer, Andrew Dickinson.

After that, we'll open the call to Q&A where the team will be joined by Cindy Perettie, the Executive Vice President of Kite. Let me remind you that we will be making forward-looking statements. Please refer to Slide 2 regarding the risks and uncertainties relating to forward-looking statements that could cause actual results to differ materially.

With that, I'll turn the call over to Dan.

Thank you, Jackie, and thanks, everyone, for joining us on today's call. As you'll see from today's results, Gilead has delivered another quarter of commercial excellence with base business sales up 10% year-over-year our strongest second quarter growth in 3 years, driven by our HIV portfolio, Trodelvy and LiDelzi. This was also an exciting quarter of clinical execution with positive updates across our core therapeutic areas.

Turning to HIV performance this quarter. Sales grew 12% year-over-year, driven by impressive Biktarvy and PEP business growth. Yes, [ Togo ] has quickly become the leading long-acting prep option for new patient starts. Quarterly prep sales doubled year-over-year, exceeding $1 billion for the first time. With a $4 billion annual run rate for our PEP business and Biktarvy's continued strength, we are raising our full year HIV growth expectations to 9% to 10% year-over-year from prior guidance of 8% growth.

We continue to advance our retentive HIV pipeline potential new daily, weekly, monthly, twice yearly and yearly options. Later this month, we expect an FDA decision on our once-daily oral treatment combining bictegravir and lenacapavir. Big Len has the potential to become the first dedicated switch regimen within our treatment portfolio, expanding the options we offer for virally suppressed people with HIV and further strengthening our leadership in the switch market.

We shared detailed data from our positive Phase III ISLEND-1 and ISLEND-2 studies at the 2026 International Aid Society meeting. These data are expected to support the filing and potential launch of the first once-weekly oral HIV treatment regimen, a flatter plus planacatavir in 2027. We -- in oncology, Trodelvy sales were up 26% year-over-year, reflecting strong demand across both triple-negative and pretreated HR-positive CO2 negative metastatic breast cancer.

We also secured additional approvals for Trodelvy this quarter in first-line metastatic triple-negative breast cancer across PD-L1 status. The acquisition of Tubulis has now closed, providing Gilead with an industry-leading ABC platform and promising clinical stage ADCs. At ASCO, we have shared encouraging Phase I efficacy and safety data for GS-8824, formerly known as TUB40 in platinum-resistant ovarian cancer.

In cell therapy, launch preparations are fully underway for a needle cell, which is 5 months to go until the PDUFA date. The completed acquisition of Arcellx has given us full ownership of Anite cell, enabling faster, more focused execution in multiple myeloma as well as the domain binder platform for future opportunities in both autologous and in vivo CAR-T.

This was a strong quarter for our liver disease business with LIVDELZI sales more than doubling year-over-year. LIVDELZI continues to gain momentum as the leading second-line treatment for primary biliary cholangitis or PBC. The recent positive Phase III IDEAL data further strengthened the opportunity for LIVDELZI to reach more patients with PBC. We also launched TepCludex in the U.S. this quarter as first and only FDA-approved treatment for chronic hepatitis delta virus or HDV.

In summary, it's been a very strong first half and second quarter with impressive revenue growth across therapeutic areas, 2 commercial launches and 3 positive Phase III readouts. In the second half, we expect another 2 commercial launches in HIV in oncology while continuing to deliver clinical and commercial excellence across the portfolio. With that, I'll hand it over to Joanna.

Thanks, Dan, and good afternoon, everyone. This was another exceptional quarter of commercial execution across our core therapeutic areas. Starting on Slide 7. Total product sales, excluding Veklury, of $7.6 billion increased 10% year-over-year, driven by strong growth in Biktarvy, Descovy and GetGo in HIV, Trodelvy in oncology and Livdalzi in liver disease. Sequentially, base business sales were up 12%, driven by strength across each of our therapeutic areas. Including Veklury's second quarter total product sales were $7.6 billion, up 8% year-over-year and 10% sequentially.

Moving to HIV on Slide 8. Second quarter HIV sales of $5.7 billion were up 12% year-over-year with strong performances for Biktarvy in treatment as well as disco the Anestugo in prep, driven by higher average realized price and higher demand. Sequentially, HIV sales increased 13% primarily driven by inventory build and higher average realized price, both typical in the second quarter following first quarter seasonal dynamics.

Given the strong performance in the first half of the year, we now expect full year 2026 HIV sales to grow between 9% and 10% compared to 2025, up from our prior expectation of 8% and and driven by continued strong growth in Biktarvy, -- yes Togo and Descovy. Looking at HIV treatment in more detail on Slide 9, and Biktarvy sales of $3.8 billion were up 7% year-over-year, driven by higher average realized price due to channel mix, in addition to inventory build and higher demand.

Sequentially, Biktarvy sales increased 12%, driven by typical seasonality, partially offset by lower demand due to market dynamics, including a greater-than-expected impact associated with changes in the Affordable Care Act. As people with HIV navigate these changes, we did see a slowing in HIV treatment market growth in the second quarter, although we expect to see this trend back to the typical 2% to 3% rate of annual growth.

Biktarvy continues to lead as the regimen of choice for both naive and switch patients across major markets and once again increased share year-over-year in the second quarter. We're excited to bring new potentially highly effective and differentiated therapies to further expand Gilead's leadership in the switch market. U.S. launch preparations are currently underway for bictegravir plus lenacapavir our once-daily single tablet regimen, where we expect an FDA priority review decision later this month. We're also anticipating islatravir plus lenacapavir, the potential first once-weekly single tablet regimen to launch next year continuing to build on Gilead's HIV leadership.

Moving to Slide 10. Our HIV prevention or PrEP business doubled year-over-year in the second quarter and, for the first time, exceeded $1 billion in quarterly sales. With our expanding portfolio of prep options, Gilead continues to gain market share in a rapidly growing market. The U.S. pet market grew approximately 14% year-over-year, marking another quarter of double-digit percentage growth on an increasingly larger base of users.

Gilead Pratt sales growth of over 100% in has once again significantly outpaced the market, driven by strong commercial execution. Yeztugo has already established itself as the leading long-acting injectable for PrEP naive individuals. In the prep switch market, Yeztugo is now the overall leader across oral and injectable options, an impressive achievement after only 4 full quarters of launch.

Now with 12 months of data, we are pleased to share Yeztugo's persistency rate. More than 70% of users so far have returned for reinjection at 6 months and extended their protection against HIV to a full year. We're very excited to see such a high level of persistency at a rate that we believe is well above available prep options.

Overall, we continue to be very pleased with the progress of the launch and with second quarter sales of $232 million, up 40% sequentially and continue to target full year 2026 sales of approximately $1 billion. Moving to DESCOVY for PrEP sales of approximately $801 million, which accounts for around 80% of total DESCOVY sales were up 60% year-over-year, driven by higher average realized price due to channel mix and demand growth.

Sequentially, DESCOVY for PrEP sales were up 23%, driven by second quarter seasonality and higher demand. We continue to expect robust full year growth for DESCOVY driven by pricing favorability as well as demand growth and an expanding U.S. market. Our total pet business is already operating at an annual run rate of $4 billion. And with our diverse pipeline of new prevention options in development in a growing prep market, Gilead is well positioned for significant long-term growth.

Moving to Livdelzi on Slide 11. Sales of $167 million more than doubled year-over-year, primarily driven by increased U.S. demand as well as continued uptake in Europe. Sequentially, Livdelzi sales grew 26% driven by increased demand, partially offset by lower average realized price. Livdelzi continues to be the leading second-line PBC regimen driving encouraging second quarter market growth as we move beyond first quarter seasonality.

We also announced new positive results from the Phase III IDEAL study, evaluating Livdelzi in patients with inadequately controlled disease and ALP between 1 and 1.67x the upper limit of normal. We look forward to potentially expanding Livdelzi's leadership in the second-line PBC population as early as next year.

More broadly, in liver disease, sales of $877 million were up 10% year-over-year, reflecting increased demand across PBC, HBV and HDV partially offset by lower HCV starts. Sequentially, sales were up 14%, reflecting increased demand in inventory build, partially offset by lower average realized price.

In the U.S. Hepcludex with granted FDA accelerated approval in May, becoming the first and only treatment for chronic HDV. We look forward to bringing Hepcludex into the small but deeply underserved patient population and it is expected to be a modest growth contributor in our liver disease business.

Moving to Slide 12. Trodelvy delivered an exceptional quarter of growth. with sales of $457 million, up 26% year-over-year and 13% sequentially, driven by strong demand across both triple-negative and pretreated HR-positive HER2-negative metastatic breast cancer. Building on Trodelvy's success in second-line plus metastatic TNBC, we were thrilled to receive back-to-back FDA approval of Trodelvy in first-line metastatic TNBC across PD-L1 status.

With an addressable population almost double that of the second-line setting and a longer median duration of treatment. This represents an opportunity to further extend Trodelvy's reach and benefit for patients. Following NCCN guideline updates earlier this year and our recent approvals in first-line metastatic TNBC, we have seen increasing breadth and depth in the adoption of Trodelvy. We look forward to further cementing Trodelvy as the backbone of treatment in metastatic TNBC through our ongoing launch while continuing to strengthen our position in later-line HR-positive HER2-negative metastatic breast cancer.

Moving to Slide 13 and on behalf of Cindy and the Kite team. Second quarter cell therapy sales of $417 million were down 14% year-over-year, reflecting the expected ongoing in and out of class competition across regions. Sequentially, sales were up 2%, reflecting increased Yescarta demand in the U.S. and internationally, partially offset by increased competitive pressures for Takata.

In preparation for [ NetSol ] December 23, produce a date in fourth line plus relapsed or refractory multiple myeloma, we have already begun extensive launch readiness activities. This includes optimizing and mobilizing our sales, medical and access team, conducting pre-activation work, including initiating contractual reviews and quality training at the majority of our authorized treatment centers, building momentum with KOLs around unmet medical needs and engaging with a range of payers to ensure broad and timely access.

We are confident in the profile of a net cell, which we believe is a compelling and differentiated option in multiple myeloma, and we are very encouraged by the strong interest we have received ahead of the potential launch. Building on momentum of the launches of Yestuco and Livdelzi, this continues to be an exciting and unprecedented period for Gilead's commercial organization.

In 2026 to date, the launches of Trodelvy in first-line metastatic TNBC and Hepcludex in HDV are already underway, and we expect potential launches for Biklen in HIV treatment and a need of cell in multiple myeloma before year-end. With additional anticipated launches in 2027 and beyond, the teams are energized and focused on delivering continued commercial excellence. And with that, I'll hand the call over to Dietmar.

Thank you, Johanna, and good afternoon, everyone. We delivered another strong quarter of clinical execution across our 53 ongoing clinical programs reflecting both the continued growth of our pipeline and our disciplined approach to portfolio prioritization. We expanded the breadth of our innovation engine through the acquisitions of our Salix tubules and oral medicines, adding differentiated and potentially best-in-class cell therapy, antibody-drug conugate and bispecific T-cell engager assets.

These acquisitions further complement the broadest and most diverse pipeline in Gilead's history. Starting with HIV on Slide 16. Gilead continues to expand and advance our industry-leading HIV pipeline. In treatment, we continue to evaluate 6 potential new daily and longer-acting orals and injectables for people with HIV. We anticipate once daily bictegravir plus lenacapavir or big Len will be the first new addition to our treatment portfolio for virally suppressed people with HIV or the switch population, combining 2 orthogonal mechanisms of action each with high potency Big Glen has the potential to deliver long-term viral suppression for people with HIV, including those switching from complex regimens.

As previously shared, FDA has granted Big Glen priority review, and we continue to anticipate a decision by August '27. Turning to our once-weekly oral portfolio. We are making significant progress on another novel regimen for virally suppressed people with HIV. At the International AIDS Society Conference held in Brazil last week, Gilead shared data from 54 abstracts and highlights included oral presentations with a simultaneous publication in the New England Journal of Medicine on Gilead and Merck's once-weekly oral regimen combining islatravir plus lenacapavir or ISLEN. In the Phase III ISLEN-1 and 2 trials, ISLEN met the primary endpoints of noninferiority versus both Victory and physicians' choice, oral antiretroviral regimens, respectively.

We continue to work towards global regulatory filings as quickly as possible with potential for launch of the first weekly oral in 2027. Beyond the switch population, we are developing 2 different potential once-weekly oral combinations of lenacapavir with our investigational wholly-owned long-acting integrase inhibitors or incs which we believe could be a preferred option across a broad range of people with HIV, including treatment naive.

We expect to initiate new Phase II trials in both the switch and naive populations with the first study evaluating once-weekly oral lenacapavir with oral GS-32402r starting before the end of the year and the second study testing once weekly oral lenacapavir with oral GS20, starting in early 2027. We are pleased that GS-1720 has recently been cleared for further clinical studies by the FDA, so we are now able to move 2 Phase II clinical programs forward.

We expect to advance the combination with the most compelling profile to Phase III. Focusing on twice yearly treatment intervals, we are now initiating our Phase III trial evaluating lenacapavir with 2 broadly neutralizing antibodies, TAB and SAB. This regimen takes a novel approach targeting the HIV viral reservoir and could be the first complete twice yearly treatment regimen for virally suppressed people with HIV.

We view this as a differentiated opportunity for a subset of the virally-suppressed population, and with potential for launch around 2030, it could establish an important early presence in the twice yearly treatment market ahead of our insty-based regimen currently in development. As you may recall, we first shared Phase I data for GS-3242 injection at the CROI meeting in February.

Preliminary data showed the potential for dosing intervals longer than 4 months with additional data from the higher dose cohorts expected later this year. We started our first program of GS-3242 injection in combination with lenacapavir in June. For HIV prevention or PrEP, we have the broadest and most differentiated portfolio in the industry that we believe is uniquely positioned to meet individual preferences and needs.

At the same time, we are investing in the next generation of prep innovation that we believe could continue to broaden the reach of prep and potentially accelerate progress towards ending the HIV epidemic. In June, the FDA accepted our filing for once weekly oral lenacapavir for PrEP. The submission is supported by the robust and established clinical profile of Yeztugo for PREP from the pivotal Phase III trials, in which more than 99.9% of participants did not acquire HIV infection.

We anticipate a regulatory decision by February 2, 2027, and look forward to the opportunity to add the first long-acting oral prevention option to our industry-leading portfolio. Looking beyond daily, weekly and twice yearly options, we have completed recruitment for purpose 365, evaluating once yearly intramuscular lenacapavir for prep. We expect to provide an update in 2027 with potential to launch in 2028.

Taken together, we believe our HIV portfolio provides a strong foundation for long-term leadership and durable growth. With multiple opportunities to expand choice across both treatment and prevention, a deep pipeline of differentiated innovations and a steady cadence of catalysts ahead we are well positioned to create value for patients, health care systems and shareholders while advancing our vision to end the HIV epidemic.

Turning to liver disease on Slide 17. We continue to build on our long-standing commitment to advancing innovative therapies and generating additional clinical data aimed at improving the lives of people living with serious liver conditions. This quarter, we reached an important milestone in HDV with the FDA's accelerated approval of Hepcludex the first and only FDA-approved treatment of chronic hepatitis delta virus infection based on data from the Phase III MIRR 301 study.

Chronic HDV is considered the most severe form of viral hepatitis due to rapid disease progression towards liver failure and liver-related death and impacts between 40,000 and 80,000 people in the United States. As a reminder, Hepcludex has been available in the EU since July 2020. We also announced positive top line results from the Phase III IDEAL study, evaluating LEDELZI in patients with primary biliary cholangitis, or PBC, whose disease remains inadequately controlled with alkaline phosphatase or ALP levels between 1 and 1.67x the upper limit of NORMA.

Treatment with Livdelzi demonstrated statistically significant composite ALP normalization. This is a particularly important finding as these patients have been underrepresented in prior randomized trials. We're looking forward to sharing the detailed results at a future medical congress this year.

Moving to oncology on Slide 18. We remain focused on disciplined execution of our core clinical programs and continued development of our research platforms that complement our ADC and cell therapy leadership. Specifically, we closed our acquisitions of tubules and Arcellx adding tubules next-generation ADC platform with its novel linker and payload technologies alongside our differentiated domain binder platform for future cell therapy development.

At ASCO and EHA, we shared more than 25 abstracts expanding both ADCs and cell therapy that reinforce Gilead's long-term position in oncology. Focusing first on our ADC programs, we shared additional analyses from the Phase III ASCEND-03 and 04 studies, which continue to strengthen the evidence supporting Trodelvy with or without pembrolizumab in first-line metastatic triple-negative breast cancer. We are pleased that FDA have now approved Trodelvy for first-line treatment of metastatic ruble negative breast cancer based on results from the Phase III ASCEND-03 and 04 trials.

These regulatory decisions provide a new potential standard of care for the most aggressive form of breast cancer in the first-line setting when it may have the greatest potential to provide a durable response and delay disease progression. Shortly following flows of the tubules acquisition in May, we were pleased to present updated safety and efficacy data from the Phase I NAPISTAR-101 study, evaluating top-40 now known as GS-8824 in platinum-resistant ovarian cancer at ASCO.

Across select doses, GS-8824, an API2 directed ADC demonstrated deep and durable responses with a confirmed objective response rate of 61%, a clinically significant median progression-free survival of 11 months and a low rate of hematological toxicity. We believe GS-8824 has the potential to be transformative in ovarian cancer given these results in biomarker unselected and heavily pretreated platinum-resistant ovarian cancer patients who have limited effective treatment options and short survival.

Our pipeline now includes a Phase I/II clinical program in platinum-resistant ovarian cancer, and we continue to expect entering registrational development in platinum-resistant ovarian cancer as early as 2027. Further, we have added Phase I clinical programs in platinum-sensitive ovarian cancer and other advanced tumor types.

In parallel, we are continuing to evaluate GS-8823 previously known as top 30, a 5T4 directed ADC as well as other potential research-stage candidates utilizing Cubelis platform technologies. Altogether, Gilead is positioned to be a leader in ADC innovation long term.

Moving to cell therapy on Slide 19. And on behalf of Cindy and the Kite's team, with the completion of the Arcellx acquisition in April, we now have full control of Anidosales development, enabling us to move with greater speed and focus in maximizing the long-term potential of a needle cell. -- including in earlier lines of multiple myeloma as well as the full potential of the D domain binder platform.

With its deep and durable efficacy as well as a differentiated safety profile observed in the Phase II EMERGENT-1 study, we continue to believe anetocell has best-in-disease potential. And we look forward to a regulatory decision later this year. We completed enrollment of IMAGINE-3 in second-line multiple myeloma this quarter and look forward to potentially filing in this indication as early as 2027.

Reinforcing Kite's enduring operational and technical leadership across novel cell therapies we presented data at ASCO showing a 98% first pass manufacturing success rate and global median turnaround time of 18 days across a net cell patients with multiple myeloma. As such, we are confident that we can quickly meet the needs of multiple myeloma patients that are awaiting potential Anidocell launch. In addition to our work on Anidocell.

We're excited to unlock the broad potential of the Ddomainbinder platform, which has applications far beyond autologous multiple myeloma CAR-T. Combining Kite's extensive experience in CAR-T clinical development with strategically selected business development, we are rapidly advancing our updated in vivo CAR-T platform. We are developing a differentiated in-vivo program that not only addresses class challenges of durability, safety and manufacturability, but also provide scalability for broad expansion across oncology and autoimmune diseases.

Specifically, our smaller domain binder enables bypassing payload challenges associated with viral vector to target multiple antigens simultaneously. The plug-and-play modular interior platform allows Kite to optimize CAR constructs and vector targets by diseases and our collaboration with pre-gene enabled speed to clinic, where we will start exploring our updated in vivo platform in 2 investigator-sponsored studies later this year.

Moving now to our milestones on Slide 20. I'd like to recognize our research and development teams at Gilead and Kite and our partners whose tireless efforts have contributed to the significant progress we have made across our key clinical milestones. Since our last quarterly update, we shared 4 Phase III clinical trial updates and 3 FDA approvals.

For the remainder of the year, we anticipate FDA's regulatory decisions for Blen in virally suppressed people with HIV and a needle cell in fourth line or later relapsed and/or refractory multiple myeloma in as well as a Phase III Ascent Gin update for Trodelvy in advanced or recurrent endometrial cancer.

In addition to these milestones, we expect to share updates from our broader inflammation portfolio this year, including the Phase II SWIFT study evaluating GS-1427 or investors our investigational oral alpha-4-beta-7 inhibitor for inflammatory valve diseases and the Phase IIa COSMIC study, evaluating edicesertib, our investigational IRAK4 kinase inhibitor in cutaneous lupus aritematosis. Taken together, these updates reflect the strength of the portfolio we have built and the opportunities that lie ahead.

Now I'll turn over the call to Andy.

Thank you, Dietmar, and good afternoon, everyone. Once again, our quarterly results demonstrated the strength and durability of Gilead's portfolio, underpinned by our disciplined operational execution. As shown on Slide 22, our base business grew 10% year-over-year to $7.6 billion, driven by continued growth across HIV products, Trodelvy and Livdelzi partially offset by lower sales of cell therapy and HCV products.

Sequentially, sales were up 12%, driven by growth across HIV, liver disease and oncology. Total product sales of $7.6 billion were up 8% year-over-year, reflecting the 10% growth we saw in our base business, partially offset by lower Beckley sales due to fewer COVID-19-related hospitalizations. Other revenue of $176 million included $156 million related to an increase in future estimated royalties associated with the prior IP asset sale. This is a nonrecurring and noncash item reflecting an accounting change.

Moving to our non-GAAP second quarter results on Slide 23. Product gross margin was 87% flat year-over-year and in line with our full year guidance. R&D expenses were $1.4 billion, relatively flat year-over-year, reflecting lower oncology clinical study activity partially offset by higher R&D costs associated with our newly acquired entities.

Acquired IP R&D expenses were $11.2 billion primarily reflecting our acquisitions of Arcellx, Tubulus and oral medicines. SG&A expenses were $1.5 billion, up 12% year-over-year primarily due to expected promotional activities related to Yeztugo. Second quarter operating margin was negative 94%, reflecting our acquisitions of our Selextubulus and Oro medicines, -- excluding the $11.1 billion in acquired IP R&D expenses associated with the 3 acquisitions, our second quarter operating margin was approximately 49%.

This is consistent with the strong margins we delivered in prior quarters and firmly in the top quartile of our peer group, underscoring our disciplined operating model. The non-GAAP effective tax rate was negative 11.4% in the second quarter, primarily driven by the acquisitions of our SelxTubulus and Oral medicines. Excluding these acquisitions, non-GAAP effective tax rate was approximately 19%.

And on Slide 24, our non-GAAP diluted EPS was negative $6.75. This reflected higher acquired IPR&D expenses, tax and SG&A expenses, partially offset by higher revenue. Excluding these acquisitions and the nonrecurring other revenue -- non-GAAP diluted EPS was $2.27. I'll highlight that for both the second quarter and the first half, illustrative EPS has grown approximately 13% compared to the same period last year.

This compares favorably to total product sales growth of 8% in the second quarter of 2026 and 7% in the first half of the year, highlighting the leverage in our business model as we continue through this period of sustained growth. Moving to our full year guidance on Slide 25. We had strong second quarter base business performance and are updating our full year sales and EPS guidance as follows: we now expect base business sales to grow approximately 6% to 7% year-over-year and range between $29.8 million and $30.1 billion.

This represents an increase of $350 million at the midpoint compared to our May guidance and an increase of $750 million at the midpoint compared to our initial 2026 guidance. Within HIV, we now expect full year sales to grow between 9% and 10% year-over-year, up from 8% previously, driven by continued strong growth in Biktarvy for HIV treatment as well as Yeztugo and Descovy for PrEP.

We continue to expect approximately $1 billion for Yeztugo sales for the full year, and we now expect cell therapy to decline mid-teens percentage year-over-year. Moving to total product sales. We have raised the lower end of our range and now expect total product sales in the range of $30.1 million and $30.4 billion. Included in total product sales we now expect Veklury sales of approximately $300 million compared to approximately $600 million previously, reflecting lower COVID-19-related hospitalizations.

With regards to our non-GAAP P&L. We now expect acquired IP R&D of $11.5 billion, reflecting $300 million lower second quarter expenses associated with the accounting treatment of potential future milestones related to the Tubulus acquisition. We continue to expect both R&D and SG&A expenses to increase a mid-single-digit percentage on a dollar basis compared to 2025.

Moving to tax. We now expect full year 2026 effective tax rate to be between 140% and 115%, reflecting the nondeductible acquired IP R&D expenses associated with the Arcellx, Tubulus and Oro Medicines transactions. Excluding these transactions, our effective tax rate would be 20%, no change from our February guidance. Overall, we expect full year non-GAAP EPS between negative $0.65 and negative $0.30.

Turning to Slide 26. Excluding approximately $9.15 per share relating to the acquired IP R&D expense and full year financing costs associated with the Arcellex, Tubulus and oral medicines transactions as well as nonrecurring other revenue, our full year non-GAAP diluted EPS would be $8.50 to $8.85, raised $0.05 on the bottom end from our May illustrative guidance due to higher base sales, partially offset by lower Veklury sales.

On Slide 27, we returned close to $1.4 billion to shareholders in the second quarter of 2026, including $355 million of share repurchases. Combined with our dividend, we have returned approximately 49% of our free cash flow to shareholders in the first half of 2026. As we look ahead, and given the acquisitions completed during the first half of 2026, our near-term priorities are centered on integrating the new programs and platforms into our business.

Therefore, we do not currently anticipate pursuing additional sizable M&A transactions this year. That said, we will remain opportunistic and continue to assess strategic opportunities to further enhance our portfolio and create value. In summary, Gilead has delivered another quarter of strong clinical and commercial execution and continued operating discipline. We believe Gilead is well positioned for both near-term and long-term growth and we remain fully focused on executing on our strategic commitments. With that, I'll invite Rebecca to begin the Q&A.

Thank you, Andy. [Operator Instructions] Our first question comes from Tyler Van Buren at TD Cowen.

It's impressive to see the continued performance of the prep franchise overall between both Descovy and Yeztugo. But to be specific -- could you help us better understand the growing delta in recent Yeztugo prescription trends versus sales that are being reported by outlets like IQVIA and then maybe outline what you believe are the biggest growth drivers for Yeztugo go through the end of the year?

Thanks, Tyler. It's Julianna. I'll take that question. Yes, we're really excited about the performance thus far in the first half of the year. But the overall franchise, right, at this last quarter, just about over $1 billion run rate for $4 billion for the year. So that's very exciting.

In your question about IQVIA, now that we're about a year into the launch, we won't be commenting on how IQVIA captures the data. We'll obviously be commenting on our data which has all the pieces of the puzzle pulled in together. For Yeztugo, as you think about the back half of this year, really building on a really strong first half. And I would say that we expect strong continued launch momentum because we're still in launch mode.

And that's really driven by the strong uptake we've been seeing in both naive and switch market. The growing confidence that we're seeing with our health care professionals with access pathways, logistics, experience with Yeztugo. Of course, the PrEP market itself growing at 14% and building on a larger base, and that's not by chance, right? That's a lot of the work that Yeztugo and Descovy teams are ensuring around education awareness across many different communities.

And last but not least, as we've shared, is the more than 70% persistency that we've been seeing as people return for their second injection and get protection for a full year. So we're really excited about the numbers we're seeing, the numbers we've shared today and obviously, very much confident in our guidance of approximately about $1 billion for FIGO this year.

Our next question comes from Evan Seigerman at BMO Capital Markets.

One more on Prep specifically, talking about Yeztugo and your once-weekly options. So the value proposition for Yeztugo was built around eliminating the need multiple pills every week. -- now you're investing behind a once weekly oral prep option, which Yeztugo, is better than Descovy. I'm curious as to what has changed? Are you seeing that people just aren't as enthusiastic about a twice-yearly injection as you originally thought? Or is there something else going on here that we should be over on?

Thanks, Evan. Joanna again. I would say nothing has changed. On the contrary, I think what we're seeing is incredible excitement for the long acting. We've always suggested that we felt that long-acting options longer with better in a prep setting especially. What we do know, however, is that you still have about 80%, 85% of the total market that are daily oral, both Descovy as well as generic TDF.

And so there's still a huge opportunity. And with a weekly oral, so not having to think about it every single day and moving to once weekly is a really nice opportunity for us to make sure that we capture the market of folks that do want to be on an oral, maybe don't enjoy an injectable and want to make sure that they don't have to think about it every single day. And so we think that's a huge opportunity. And I don't think 1 substitutes the other.

On the contrary, there's an opportunity for market expansion in light of this, especially if you think about there's still 40% or more of folks on generics as well. So there's a real nice opportunity here for patient optionality, not only with the Q6 monthly, the Q weekly oral, potentially the full year as well, injectable by 2028. So all of those pieces come together to support that leadership for Gilead in HIV prevention.

Our next question comes from Michael at UBS.

Great -- just thinking about the strength Yeztugo, I think, Joan, you mentioned there's a 70% compliance. How are you thinking about things that you could do to get it higher? Are there things that you're seeing in the channel and in the marketplace and patient feedback? And what are the factors that could consider making it lower?

Thanks, Michael. I think it's about making it higher. I totally agree with you. Over 70% is definitely by far the strongest persistency rate that we've seen across all the options in PrEP. And to your point, of course, the team is trying to make sure that we continue to challenge ourselves.

We've done a lot of programs already at the HCP level to make sure that the right reminders, leveraging the EMR system, the HR system, to make sure that they're part and parcel of your logistics. The team has just recently launched in the last month or so, a support program for individuals on PrEP. It's actually called ready to go. And this program was actually designed with PrEP consumers.

So it's really taking in their input as to what would be helpful. And this program basically is really focused on making sure that Yeztugo individuals start but also stay on Yeztugo for long term. And so it will include SMS reminders, educational resources, links to patient support, friendly nudges along the way. And probably the most important piece of the puzzle is having a nurse inbound and outbound call center, so that people can actually have somebody to talk to.

So that's what the team has actually just launched in the last month or so to continue to drive forward the Yeztugo persistency and I think all the pieces coming together in addition to all the campaigns that are out there around awareness about HIV prep and the long term of a Q6 monthly and what the protection that it offers you, I think, are all going to be very positive to continue to support our persistency rates.

Our next question comes from Geoff Meacham at Citibank.

I had a bigger picture 1 for Dan or perhaps, Andy, when you look at Gilead's core therapeutic areas, you guys have clearly diversified the business today in terms of pipeline, but you're not really there yet with respect to sales you guys used to talk about this a lot, but is lower than the concentration of HIV is still an intentional long-term goal at Gilead? Or has that become less of a priority as long as you just have strong growth, cash flow, improving margins, et cetera?

Yes. Thanks, Geoff. I'll start, and I'll let Andy to give some quantification to it as well. Clearly, our objective is still to diversify the business but in 2 different ways, just to clarify, 1 is within virology, and the second 1 is outside of virology. So I think that's developed over time. And I think clearly, what we've talked about on the call here today within HIV, for instance, to be able to diversify our HIV business across multiple different options.

The treatment area, of course, it's going to start with this big plan. We expect approval by the end of this month another daily oral option to kind of capture the switch market within Gilead and then, of course, once weekly, on monthly once every 6 months and once a year across the treatment and portfolio, which we think is durable and long lasting well into the end of the next decade.

So that's job #1 is to diversify that. And then secondly, to diversify in oncology and immunology. And you've seen some of that work obviously, with Trodelvy and our cell therapy business, but now expanding with acquisitions like tubules, as Dietmar mentioned, in his remarks as well. And then finally, we're going to be giving you a lot more on our inflammation portfolio coming up over the course of the rest of this year and into next year, and that's developing really nicely. So we'll continue to follow the science. But we believe that our diversification strategy is progressing very well. Andy, I don' know if you want to give any...

Yes, Geoff, maybe just a couple of things to reiterate that you heard in the prepared remarks. One, just within HIV itself, the prep business being at a $4 billion run rate and growing is very exciting. And when you look at the HIV franchise overall, where we are today is the result of an incredible amount of work from the clinical development of the commercial teams over the last 5 or 6 years to really build out the long-acting portfolio.

So we're thrilled with the growth that you're seeing. And we're really happy with the progress that we're making outside of HIV and other areas of virology. So for instance, Trodelvy, you saw that Trodelvy 26%. And year-over-year in the quarter, it is approaching a $2 billion run rate with $450 million plus or minus of sales. in the quarter. You know that we have a lot of -- there's a lot of excitement for Nets and the launch there as well as the other acquisitions that we just did.

So I think we can do both. We continue to diversify and grow the HIV business, including in prep, but also in treatment, and then we can continue to build-out in oncology and inflammation. And we look forward to sharing more information later this year. Dietmar mentioned some of the inflammation data for instance that will be presented later this year. So we look forward to sharing that and discussing it at that time.

Our next question comes from Brian Abrahams at RBC Capital Markets.

So it sounds like the earlier Linanetocell study enrolled really quickly and filing could happen as early as next year. I know there's been a lot of changes in FDA leadership and had some of the principles put forth around CAR-T registrational requirements for the position paper a few months back and then the recent backtracking by the current acting commissioner, just curious how consistent your regulatory interactions have been at least in the late line and maybe your latest impression of what the filing requirements might be for the earlier second line to fourth line patients.

Thanks a lot, Brian. So we continue to have interactions with the FDA as part of normal course of business and questions during a filing. And have not seen major changes at this point. I think the components that you're referencing on the earlier lines of therapy.

Again, we have a dual primary end point of both minimal residual disease and PFS and our continuing to progress those endpoints and would plan to file based on the dual primary with FDA and haven't had any conversations that would indicate differently.

Our next question comes from Courtney Breen at Bernstein.

Jane, thanks so much for squeezing in a question from us. I really wanted to just understand a little bit more about the HIV treatment strength specifically kind of looking at Biktarvy resi performance beyond consensus expectations.

And this is in the context of insurance coverage losses in the U.S. And so wanting to get your context around how we should think about the drivers of those different volume dynamics relative to the mix and other pricing dynamics that are playing out for a product like Biktarvy?

Sure, Courtney. This is Joanna. So Biktarvy sales were about $3.7 billion for Q2, growing year-on-year about 7% and quarter-over-quarter at 12%. And -- the -- what you're referring to, I believe, is what we've been -- what we've been watching very closely since January of this year is with the ACA tax subsidies being eliminated, there's some folks that have basically fallen out of insurance plans, right?

So most of those are health exchange plans where the patients are actually either now become uninsured or underinsured and they're kind of navigating the channels to understand where they go next. And so there's a little bit of a transition. And so we kind of saw that directly impact the HIV treatment market.

So it was a little softer in Q2. We believe that will bounce back to the 2% to 3% that we've seen in the past and that we expect to see in the future. So that was definitely what was going on there. Having said that, that would have had a bit of an impact on the volume in Q2. We think that bounces back. And of course, as you've seen by the guidance, being raised to 9% to 10% for HIV overall. That's really driven by the strength of Biktarvy and of course, our prep business. So those are the kind of the pieces that play together for Q2. Hopefully, that was helpful.

Our next question comes from Simon Baker at Rothschild.

One on GS-8824, if I may. You alluded to the fact that it is under evaluation in non-small cell lung cancer. Just wondering if you could give us your thoughts on the potential there in the nonsquamous setting because it looks particularly interesting application given that NIPI2b expression seems to be disproportionately in areas where checkpoint inhibitors performed less well, namely women and non-small cell never smokers. So any thoughts on that would be great.

Yes, Simon, this is Dietmar. Thank you for the question. You're exactly right, right? It's 1 of those targets that is expressed in non-small cell lung cancer in the nonsquamous setting specifically. Obviously, this is early days for us. But what we've seen with Papuan ovarian cancer really encourages us quite a lot. The efficacy that we see, the tolerability that we see we really feel there is an opportunity for GS-8824 or top 40 in non-small cell lung cancer. But as I said, it's early days, and we need to generate more data.

Our next question comes from Tazeen Ahmad at Bank of America.

Okay. A quick 1 for me. Are you still planning on sharing a Phase II update for your alpha 4 beta 7 in IBD. And if you are, what level of data should we expect to see there? And how could it differentiate from other programs that are looking at the same indication using that similar mechanism?

Yes. Thanks for the question, Tazeen. Yes, of course, we're planning to share an update at a medical conference later this year. Expect kind of Phase II normal type of update with data and clinical remission with data on histological remission et cetera, just IBD endpoints.

Obviously, as you know, Alpha4beta7 is a validated target. So we hope to see you -- we hope to show you data that are really demonstrating the potential there. But wait for the update later this year.

Our next question comes from Greg Renza at Truist Securities.

This is [indiscernible] on for Greg. I have 1 question on HIV. How should we think about Island's net economics, whether it to be TAVI or your next-gen big land could migration from wholly owned regimen be dilutive per patient and requiring competitive share gains to create value?

Sure. I'll start. I'll take that one. So we're excited about is Len and the potential launch in 2027. We just shared Phase III data at IAS, and I think physician response was incredibly positive. For our first once-weekly oral option. And of course, this is in partnership with Merck, as you pointed out, we believe that this is an opportunity in the switch market, where we do have leadership today with Biktarvy.

But obviously, when you have the lion's share of the naive market, you can't really switch back to Biktarvy, if you've already started on Biktarvy. And so this is an opportunity with islatravir lenacapavir as well as with Bickle, to be honest, to really expand or switch leadership in this space. And that's why we believe -- this is an incredible opportunity for us to continue to drive that leadership in HIV treatment. So islatravir lenacapavir is an exciting one. It's -- and it's something that we've already started working with our partner with Merck to prepare for the launch.

Our next question comes from Chris Schott at JPMorgan.

Just a 2-parter on Descovy, obviously seeing very healthy sales growth and pricing dynamics here. So just maybe the first part, as we think about the rest of the year, should we think about this level of year-over-year price benefit we've seen in the first half of the year continuing?

And then as we look forward on Descovy and with the weekly Yeztugo go coming to market next year, -- do you see weekly -- yes to as a product that can more meaningfully cannibalize Descovy? And it seems like so far the injectables not been cannibalizing as much. I was wondering if that dynamic changes next year with the weekly?

Yes. Sure. Chris, it's Diana. So a couple of things. On Descovy, we have been seeing really nice growth, right, 60% year-over-year. That's driven by a couple of different pieces. One is favorability in price, as you mentioned, due to the channel mix. also, of course, demand driving with Descovy. So I do think as Yeztugo, come into the marketplace, really driving the overall market and growing the market at 14%, 15% and -- you also have all the other boats that are rising with it. And so it's just helping further support Descovy demand.

So we do believe that we will be able to maintain that as we move forward with Yeztugo to a point, right? Obviously, I do think, Yeztugo to your comment, I would just say, Yeztugo is picking up from a source of business is picking up in the naive market slowly but surely, our focus has obviously been switched.

And from that switch, we're seeing probably roughly about 1/3, 1/3, 1/3 across Appitude, Descovy and generics, maybe a little bit more heavily weighted towards the daily orals, which you would assume because that's the biggest proportion of the market, and that's exactly our focus.

To your point about the opportunity with the Q weekly oral, we do believe the Q weekly or for people that have been on Descovy and comfortable with the daily oral and not necessarily seeking to go for a longer-acting in an injectable setting, we do believe that QE is going to be a really nice opportunity for both Descovy, but also for generics to move over to the Q weekly yes to option. So we're excited about that, and that's why we see it as a real complementary opportunity as we think about this launch.

Our next question comes from Terence Flynn at Morgan Stanley.

On 3242, you're long-acting integrase, can you just confirm the dosing interval in the Phase II trial? I was a little unclear based on your comments if it's exploring 4 months or 6 months or if there's still more data you're waiting on to expand to a 6-month interval.

Yes, Terence, thanks for the question. This is Dietmar. Obviously, there's a lot going on with 3242. We got both the oral application as well as the injectable -- that shows you how versatile this is as an integrase inhibitor. What we've always said, the ambition here is to bring this to once every 6 months. But we're going to have to increase the dose, and it's currently in a dose escalation study.

At this point in time, we're sure that this can be dosed once every 4 months. We're currently testing the higher doses in the Phase I study, and we're confident that after the completion of those higher doses, we can take it up to the 6-month level. But of course, we need to see the data from the Phase I study. First, the ambition is absolutely to take this to a once every 6-month dosing paradigm.

Our last question comes from Salveen Richter at Goldman Sachs.

Great. Thanks for the question. Congrats on the quarter. This is Matt on for Salveen. Maybe on the HIV pipeline, specifically the weekly orals, I guess as we think about the profile of your Merck partner program and kind of how that compares to available treatments, or some of the newer daily options hitting the market. Is there anything you all would flag outside of the dosing difference, of course, either with regard to the molecule or the mechanism or anything in the full Phase III data we saw this week. Either pros or cons that may factor into patient or physician preferences when considering switching to this treatment?

Yes. Thanks, Matt, for the question. This is Dietmar again. Obviously, we're excited, as you heard from Johanna as well about the first weekly oral that we have together with Merck, the islatravir lenacapavir combination. But we are also excited to share about these 2 new weekly oral options that we're exploring, which combine lenacapavir with either GS-1720 or GS-3242 integrate inhibitors, right? We feel combining our breakthrough capsid inhibitor with really today's standard of care backbone, which is an integrase inhibitor could be a preferred option

Everything we've learned from physicians based on the HIV treatment guidelines, insty-based regimens are really important to people based on the mechanism is well understood. They have strong safety profile. They have high barriers of resistance, that's where we are really encouraged by the possibility to develop these 2 different Phase II regimens. Forward and then selecting the most compelling 1 and bringing that into Phase III.

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

Well, first of all, I'd like to thank the Gilead team for a very strong second quarter in the first half of the year. Hopefully, you can all see that we continue to deliver against our strategy with significant progress and impact across really all of our therapeutic areas, driven by both the clinical and commercial excellence that we spoke about today.

And the second half of the year promises to be just as productive. Actually, we expect a potential of 2 additional launches, 1 in HIV pick land and in oncology with the needle cell. So we're fully preparing for those in addition to continuing all the commercial and clinical excellence that we have.

So we look forward to keeping you informed on our progress, please continue to reach out to our Investor Relations team on any additional questions you may have, and thank all of you for joining us today, and I know it was a very busy day. Thank you.

Goodbye.

Good afternoon, everyone. Thank you so much for joining us. It's my pleasure to introduce the Gilead team. We have Dan O'Day, Chairman and Chief Executive Officer; and Andy Dickinson, Chief Financial Officer.

To start here, Dan and Andy, perhaps give us an overview of where the company stands today, including your core franchises and how you're thinking about priorities, outlook and strategy as we head into second half of the -- or the year and beyond.

Sure. I'll start, and Andy and I can tag team on it. But first of all, thanks for having us here. And we've been talking at this conference for a while now. I would say this is a really important time for Gilead. It's really just watching our strategy play out over the past 7 years.

And what that means is kind of consistent commercial clinical execution, and we have the most robust pipeline that we've ever had in Gilead's history. And I say that with a lot of admiration for the people that were at Gilead before I was. But -- and what that means is we've got 3 really strong therapeutic areas.

Virology, never been stronger in terms of HIV. We just launched Hepcludex now for hepatitis B. But HIV, the long-acting programs, I know we'll talk about that in both treatment and PrEP, Including kind of near-term issues that are occurring. We expect BIC/LEN to be launched soon, which is a terrific opportunity to take advantage of the switch market that occurs in HIV treatment with really novel integrase and capsid inhibitor.

We just got the news yesterday that the once-weekly is LEN program that we have with Merck was successful from a clinical trial perspective. So we look forward to also providing the first kind of long-acting treatment regimen. And we have just countless other programs within the long-acting treatment and long-acting prevention that I know we'll talk about.

But combine that with the momentum we have right now with oncology, TRODELVY growing 37% in the first quarter of this year, anito-cel expectation towards the end of this year, the recent acquisition with Tubulis in ovarian cancer, the oncology portfolio is a meaningful part of our business today and growing significantly. So I know we'll talk more about that.

And then finally, inflammation and autoimmune. I mean what we have today is Livdelzi. We just had a recent trial readouts that showed efficacy in earlier lines of therapy that can more than double the patient population. But then we have a variety of other Phase II assets that we'll report on later this year like alpha-4, beta-7 or IRAK4.

Put all that together, a very strong portfolio, both in the short, medium and long term. We're making good decisions within the company on what to pursue and what not to pursue. We're being disciplined about our operating expenditures. And I'll just remind you, we have no patent expiries of significance until BIKTARVY in 2036. So we've got a long runway of growth and diversification ahead of us, and we're going to be financially prudent about how we approach that.

Great. And broadly here, maybe on the drug pricing side, post the recent agreements with the administration, where do you see the industry now standing with regard to drug pricing policy?

Yes. I think the MFN agreements that we signed at the end of last year were intend to do 2 things. Number one, begin to address the patient affordability issue here for some medicines within the country, but make sure that the essence of the innovation ecosystem that works here in the United States was preserved.

That certainly was the case with our agreement. It was a voluntary agreement. And it allows us to make sure that we can continue to invest appropriately in medicines moving into the future. I think there's a lot of momentum in Washington to begin to address some of the fundamental issues that go into patients' out-of-pocket costs. Certainly, MFN was one aspect of that, but PBM reform, additional attention on 340B the conversation in Washington is much broader than just innovator drug pricing now.

And I think that's a result of really educating people, frankly, for the past 5 to 7 years. So we have to be alert on the policy front. Anything that happens in Washington, we want to happen that helps people afford their medicines more, but make sure that the type of innovation we're seeing across Gilead and other companies continues to be preserved.

I'm feeling good when I talk to the lawmakers about where we're headed, and we always have to be astute to that. But I think there's a lot of reform that we can drive that will secure innovation, but really help people pay less for their medicines here in the United States.

Great. How is Gilead thinking about China here from a strategic standpoint in terms of innovation? And more broadly, how do you plan to interface with the company?

Only twice here. So please, Andy.

Yes. We spend a lot of time in China like our peers. So -- and the amount of time that we spend in China has increased over the last 5 or 6 years. The quality and depth of assets that we're seeing has improved dramatically even over the last couple of years.

I think we said a couple of years ago that coming out of the beginning of the year, as we set our priorities in the last couple of years, roughly 50% of the things that we prioritized on the corporate development front have either are coming from China or originally came from China into the United States. It doesn't mean that we're not spending a lot of time in Boston and across the United States and in Europe. We're seeing incredibly strong innovation across the entire ecosystem, which is really exciting. But like others, with the additional investment that you've seen in China over the last couple of decades, we're seeing a number of programs that we can add.

Most of that is late preclinical, early clinical assets that we can plug in, in what we call ordinary course corporate development transactions. But it has been a noticeable change and something that's exciting for us in terms of the ability to continue to add to our portfolio.

And the thing I'd add to that because I think that's so accurate about sourcing new innovation. The other way to look at China is doing early-stage studies improve probability of success. I mean we've done that cell therapy. So on the one hand, we've acquired a company called Interius in Pennsylvania that is about the construct.

But then we also did a deal with a company in China called Pregene. And the combination of those 2, in addition to having the world-leading cell therapy platform that we can plug and play onto the in vivo platform is to be able to do trials in China at a sophisticated level that allow you to kind of determine what may be successful and to take into later-stage trials.

So I think both sourcing and innovation and kind of early innovation tests are the 2 things we think about strategically when we think about China.

Okay. Maybe pivoting over to the HIV franchise here. So a question for both of you. The YEZTUGO launch continues to be the primary focus from a commercial perspective right now. And you reported sales of about $166 million in the first quarter of the year and raised full year guidance from $800 million to $1 billion.

As we think about 2026, what are the key assumptions built into that updated guidance in terms of both new user growth and user persistency? And in particular, where are you seeing persistency stabilize versus that 70% best case scenario that you pointed to?

Yes, I'm happy to start. The -- look, all of the launch metrics, not just persistency. So your first question of increasing the guidance. I mean, it's really driven by every one of the launch metrics that we're looking at. We're either tracking with our expectation or ahead of expectations. So that includes coverage, unrestricted coverage, awareness and the training, bringing different practices online in terms of the progress of buy-and-bill versus the pharmacy.

We're seeing higher buy-and-bill percentage of the market than we expect at this point, which is great for the long-term launch. On persistence specifically, we regimen in HIV, long-acting HIV prevention persistence based on their statements. Our expectation is that we will do better than that and the early data is on par. But maybe back to the first part of your question is where is most of the business coming from? It's coming from patients moving off of other preventative therapies, typically the orals because that's by far the biggest share of the market, roughly 94% of the market or the daily orals when we launched YEZTUGO.

So you're still seeing most of the people moving from existing PrEP patients moving to the long-acting injectables. So it's driven by the new to long-acting patients for the most part. And the good news for us, again, other launch metrics is a share of that, roughly 1/3 of that is coming from the generic orals, a share -- 1/3 of it is coming from Descovy, which is our other branded daily pill for prevention and then 1/3 from -- I'm sorry, 1/3 of them are naive patients to prevention and then 1/3 from the daily orals and 1/3 from the long-acting injectables.

So that's -- all of that together gave us confidence that we're well on track to the $1 billion of revenue this year given the strong start in the first quarter.

And I think to Andy's point, we're playing a multi-tiered long approach to prevention. The earliest to go is really around, to Andy's point, capturing those patients that are switching or naive to care, but are currently kind of in the concept of care.

There's a whole another percentage of patients in this country that are probably still a couple of years away from us truly being able to access, but where long-acting is really the solution for them. And that's where we largely see HIV incidents increasing in this country. It's around 700 new cases a week in this country.

Largely in the rural south amongst underserved communities that where oral PrEP is just not an option due to stigma discrimination and other factors. So we have very targeted programs. It's not a nationwide program but targeted to those communities literally down to the ZIP code where we were -- where we need to educate new providers and obviously, new people that could benefit from PrEP. So we think about it in a multi-tiered way. I know people are focused on the launch, rightfully so, and they should be. We are, too. But I think we have to think about PrEP in the short, medium and long term, including other options for PrEP like our once yearly, which is almost now fully recruited and could be launched as early as 2028. So that's -- the PrEP market, think -- we think has long durable growth in it.

In the context of the data that was announced yesterday for your Merck partnered weekly treatment here for HIV, maybe help us understand -- I know we'll see data shortly, but help us understand the commercial outlook for this asset in terms of capture when you think about where BIKTARVY is positioned and where you could have additional growth?

And then how to think about maybe pricing dynamics, it may be too early to provide that, but how to think about that commercial strategy?

Let me start on that one and then Andy can add. So this is -- it's important to put this readout from yesterday, the pending FDA approval of BIC/LEN in the context. So when we think about HIV treatment, we think about providing people with novel options for their therapy. Obviously, BIKTARVY is currently the standard of care. In this country alone, it's got a market share globally around 52% overall.

But around 72% of naive patients start on BIKTARVY. So that continues to be kind of without a doubt, the premier medicine within HIV treatment today. And it's hard to improve upon BIKTARVY on a daily basis because of the level of efficacy and the resistance profile. But what you can offer people is when they do decide to switch an option to switch to. And some of that is going to be true long-acting like once a month or once every 6-month treatment.

Some of it is going to be just the opportunity for people to try something different or try something new. Actually, around 20% on average of people on treatment switch on an annual basis. Largely, they switch because Gilead has such a prominent position. They switch today overwhelmingly to non-Gilead regimens.

What the news from yesterday and our BIC/LEN approval provide is an opportunity to capture some of that switch that is currently going out of Gilead with more novel options to meet people where they are. In the case of BIC/LEN, it's a novel capsid inhibitor combined with the #1 integrase inhibitor. It's very attractive to some people even if they're doing well on their current regimen.

With the Islatravir, Lenacapavir data from yesterday, which well you're right, we'll show you a little bit later this year, but did show non-inferiority to BIKTARVY, it allows people to go on a less frequent dosing once a week. We will also have other options for longer acting, including our own wholly owned once weekly, which we expect to take into the clinic later this year.

We're still working on once monthly and once every 6-month injectables. So there is a lot to come on our treatment landscape, and we just want to provide people with options that allow them to stay adherent to their therapy and reduce the likelihood of spreading it to others and living long, healthy lives.

Remember, in this country alone, there's still around 30% of people that have HIV that are not virologically suppressed in this day and age in the United States. So there is opportunity both to transition people that are well maintained, but also an opportunity to address those people that aren't virologic expressed today, maybe they struggle with a daily oral pill. That's where once weekly may help, once monthly, once every 6 months may help. That's the broader context of what we're achieving here.

Great. Could you put it in the context just with regard to the overall move here for the long-acting treatments across both PrEP and treatment and the competitive dynamics that are playing out as well? And so how do you think of where you feel confident with leadership into the next decade? And which segments of the market do you see the most risk as you think about expansion versus cannibalization?

Yes, I'm happy to start. I mean we'll maybe start with the treatment market. I mean, picking up on what Dan said, we are developing long-acting treatments at kind of every reasonable treatment interval that patients may want. So that includes in addition to the daily orals that are available today and BIC/LEN we're launching later this year, then the weekly orals, including the Merck partnered combination that you were just discussing as well as monthly oral combinations every 3-month or every 4-month injections and then probably every 6-month injections.

We'll have Phase II data on our long-acting injectable integrase inhibitor later this year that we believe should demonstrate that we can get to 6 months and pair that with Lenacapavir. So the biggest opportunities in the market for treatment when you do the market research suggests, as you would expect, every 6-month or longer injections and the monthly orals are the largest opportunities beyond the daily orals. And so when you kind of look down the road based on where we are today, and we've developed, I should say, multiple programs for each of those areas of opportunity.

So if one of our programs for any reason doesn't move forward, we have another, for instance, integrase inhibitor that we can slot into any of those programs. So we have a high degree of confidence that we're going to get there across the board in terms of delivering these long-acting therapies for patients that currently have HIV.

And you should see that over the next 5 or 6 years. There are some programs that are more advanced, including the Phase II data that I just discussed with the every 6-month injectable and then there are others, including our wholly owned weekly orals that we should be moving into Phase II later this year.

And of course, you'd see then launches early in the 2030s. So in terms of treatment, given where we are today, we feel great about the breadth and depth of the program and expect that we'll continue to be a market leader over time. In prevention, we're already there today, as you know, with every 6-month approved -- Yeztugo approval a year ago for every 6-month subcutaneous injection.

We also have a yearly intramuscular formulation of Lenacapavir that builds on the purpose data from Yeztugo. So we're just doing a simple PK bridging study that's underway. We expect to report out that data later this year or next year and launch the yearly intramuscular HIV prevention therapy in 2028.

And then finally, in terms of oral long-acting therapies for prevention, that's another area of active exploration on our end. And you can imagine that any oral small molecule that we develop for treatment could also then be developed for HIV prevention. So happy to provide updates on the totality of the programs over time, but we feel great in terms of where we are.

I'll just say one thing about cannibalizing to add to Andy's comments. Let's just take prevention, for instance. When we cannibalize Descovy with Yeztugo, there's obviously a net benefit for the person because the compliance rate of daily Descovy and Truvada is quite low. So you actually -- it's not just a one-for-one cannibalization.

You're assuring 6 months of compliance with Yeztugo. Eventually, it could be 1 year of compliance. That's a very big difference for people, but it's also a big difference for our business and how we account for that. And the same thing, as I mentioned before, even in the treatment market, whereas people are largely compliant because if they're not, they obviously develop disease again and they fall then into that 34% biologic suppressed.

But as we develop long-acting, of course, we will cannibalize, if you like, BIKTARVY over time, which is part of our strategy, of course, is to give people an even better option than BIKTARVY prior to its patent expiry in 2036. But you also then get the people that are in an unaddressable market with daily oral today. So it's a combination of both cannibalizing, but then getting to portions of the market that don't exist today. So that's how we think about the totality of HIV care as we introduce these new options.

On the oncology front, you have a December 23 PDUFA for anito-cel here. Walk us through how you're thinking about the launch in multiple myeloma, including the initial sales trajectory next year and the ultimate size of the fourth-line plus opportunity.

So we're very enthusiastic about anito-cel. Obviously, we've doubled down on the acquisition of Arcellx because we know that therapy better than anybody. And the reason we're so enthusiastic about it is that it kind of strikes the best-in-disease profile category that we see as needed in multiple myeloma today.

Multiple myeloma, a lot of products and a lot of competition. But if you just kind of boil down the guidelines at the end of the day, and what I've heard also as I go and visit our customers, is that what people really want is the opportunity to have a one-and-done therapy early in the course of the disease that will allow them not to go through constant therapy.

I mean, to forget about their disease for a little while. Now anito-cel, we believe, has that profile over time. We'll start in the fourth line plus scenario, a very late-line scenario. But even there, it's about a $3.5 billion market of the $20 billion multiple myeloma market.

We are very well prepared to go into that disease with a differentiated product profile in anito-cel and being a cell therapy that has strong durability and a better side effect profile in terms of not having neurotoxins and low ICANS, which allows us to both be used perhaps more so in the community setting than the current offering, but also to avoid having that dilemma in physician's mind do I give somebody a long durable response, but is there a percentage chance that somebody develops another disease, Parkinsonism or others.

In the fourth line plus that's important, but you can imagine how much more important that becomes when you're talking about second line or potentially first line. So we want to have a strong start. We're going to be -- this aido-cel goes upon our world-leading cell therapy backbone. And what do I mean by backbone, fast turnaround time in manufacturing, about 14 days. It's the same platform as just started. We're supplying that for the clinical trials today, so we know we can do that.

We've got capacity to meet demand. We have a very sophisticated system of high touch with the customer base out there. We're going to be launching with 5x the number of ATC centers that others have launched with in the past just because we have a very broad ATC coverage and then we'll eventually move into the community. So we feel really well positioned for this launch. And over time, to move up in lines of therapy.

Our second-line trial is essentially almost completely enrolled now, and we could be filing that as early as 2027 for a 2028 launch. So it won't be too long do we move that up into the lines of therapy. The last thing I'll say is because we feel this medicine, this therapy is so differentiated, the domain aspect of anito-cel is something that we could also use and in our in vivo platforms for the future as well. So it gives us a lot of optionality and functionality. I don't know if there's anything else on that...

Maybe to follow-up.

I get excited by -- everything, but also anito-cell.

When you think about the return to growth strategy here for the cell therapy vertical, how much of that do you think will play out from anito-cell and then really this effort you're making now in vivo?

Yes. I think certainly for the next decade, it's largely driven by anito-cel. I mean there is -- as Dan highlight the multiple myeloma market is really large, by far the largest market for CAR-T today. And we think anito-cel is positioned to be the best-in-class, best-in-disease asset.

So we see very significant growth for anito-cel as an autologous cell therapy over the next decade. I think if you -- as you look down the road, whether it's 8 years from now, 12, 15 years from now, you likely will see in vivo CAR-T treatments.

This is an area that we started focusing on well over 5 years ago. We made one of the early investments in a company, a private company that was sold recently. But we've actually made some additional selective investments. We bought a company called Interius in Philadelphia that has in vivo CAR-T, both data in humans as well as technology. We did a partnership with a company in China called Pregene, back to your earlier question that has both a technology angle, but more the ability to do early proof-of-concept clinical studies that Dan alluded to.

And then we've been developing our own non-integrating in vivo cell therapy programs as well. So we're taking kind of a dual approach in developing in vivo cell therapies. And like many people believe, based on the early data where there's good proof of concept, not only with our programs, but with others that eventually, we're likely to see cell therapies that have similar efficacy and durability to the autologous, but that's years and years down the road.

Between now and then, the needle cell will be the biggest growth driver. We also have our own CD19, CD20 bicistronic CAR-Ts that we're developing as follow-ons. Think of them as better versions, next-generation versions of Yescarta and Tecartus that are in late-stage clinical studies that could add growth. And then finally, we acquired from another company in Philadelphia that had been spun out of pin called Tmunity, a glioblastoma, CAR-T that has some encouraging early clinical data that also could drive additional growth. So we really like where the CAR-T business is going with the aito cell launch and all the other ones from there.

Obviously, we have a very solid foundation to build upon. Dan highlighted the manufacturing. And then we will be making the investments needed in vivo to stay at the forefront of cell therapy.

You've announced several notable acquisitions this year from Arcellx, Tubulis and oral medicines. Walk us through the strategic rationale really underlying these deals and what key assets apart from Arcellx, which we discussed that we should be paying closest attention to in the near term?

Yes. Well, first of all, we're really excited about all 3 of them. And that comes on top of my comments at the beginning, which is this is the strongest portfolio we've had across all 3 therapeutic areas in Gilead's history. So the bar is high for these acquisitions to come into our space.

And we've been looking at everything like most companies. But the last large transition we did was actually -- was LibDELY and was about 2 years ago. So although we've been looking, we haven't really found anything that kind of met our bar of being proactive, but also disciplined.

Remember, we don't have any large patent cliffs until the end of 2036. So our sense of urgency is different than other companies with the calculus we have. So all 3 of these hit our sweet spot. We've already talked about Arcellx.

The other 2 -- and they fit into really all 3 of our therapeutic areas, of course. So with Tubulus, maybe I'll cover that one, and then I'll hand it over to Andy to talk a little bit about oral because I think it's equally interesting and exciting when we talk about our I&I approach and B-cell depletion. But on tubulus, maybe just to frame that one, ever since we acquired Immunomedics, we've been looking and scanning the world for kind of what's the next generation really step change, if you like, in ADC technology. And we feel we found it in tubulus in that it has a proprietary linker that is very different than anything else which we've seen and the capability to have all different types of payloads, I mean, beyond just cytotoxics.

It could be antivirals, it could be degraders. It could be a variety of different payloads. So it gives us a lot of optionality. So while the lead program 040 is targeting NaPi2b ovarian cancer, potentially both platinum resistance and platinum-sensitive, first of all, NaPi2b is expressed in multiple different cancer types, so we could take that into other tumor types.

The second program that's in a Phase I basket trial now is targeting [5T4], which is, again, overexpressed in different cancers. But we can really look at this as a broad platform to kind of build from moving forward.

So we're maintaining Tubulus, the innovation center in Munich, where it's at, and they're going to work really closely with our scientists in California. But I think there's just a tremendous amount of optionality that, that provides us and fits into our portfolio context. And maybe I'll ask Andy too...

The Ouro acquisition, like the Tubulus acquisition really bolsters our mid-stage pipeline. So part of the Gilead story this year, as Dan talked about the 3 therapeutic areas, we have developed internally a number of really exciting, albeit relatively early kind of mid-stage I&I programs.

The Ouro acquisition is a great complement to that. So it brings a CD3, BCMA, bispecific that depletes B cells. So it's one of the many programs out there that are focused on deep B-cell depletion in I&I conditions. And this is an asset that came from China, a company called [KMed] that was partnered with the venture capital firms in the United States. And they did a really nice job over the last year of developing some really compelling clinical data in large orphan I&I indications where deep B-cell depletion can be beneficial. And like Tubulus, the efficacy that you're seeing in these early Phase I/II studies is really impressive.

And you'll see it like Tubulus again at scientific conferences later this year, and we can talk about it in greater detail. So it's a great addition to kind of what we are already developing internally. The other thing that we like is as we think about, over time, thoughtfully and selectively building an inflammation commercial organization beyond what we have today for PBC and Livdelzi, these large orphan indications offer a really nice strategic entry point for us to build and then gives us the ability to build on that over time when we launch presumably other therapies, including hopefully some that we have in mid-stage development, including our Ouro alpha 4 beta 7 small molecule that was developed internally.

We have a couple of STAT6 degrader programs and an IRAK4 small molecule amongst others. So it's an emerging area for us in I&I, and this acquisition just fit really well audience quality of the early data and then strategically what it would allow us to...

See some combined 3 transactions accounted for about $13 billion in deal value. Where does your appetite stand from here with regard to sizable M&A?

Yes. I think the primary focus in the short run is on integrating and really making sure that we don't miss a beat in terms of moving forward these programs in clinical development. These are competitive areas, as you highlighted, and we have a lot going on.

I mean they were all rightsized for us. So we're really happy with the progress that we're making and all 3 of the deals are closed now. The integrations are going really well. We've always said that we want to add programs on a somewhat regular basis every 2 to 3 years, kind of more sizable deals, which to us typically means kind of the small to medium-sized. M&A deals similar to these. So we will continue to add to the portfolio over time. But maybe just circling back to where Dan started, the company has never been in a better position in terms of both the launches that are underway.

We've talked about Livdelzi and Yeztugo launch. The growth in the HIV prevention business. You have anito-cel coming, TRODELVY in first-line triple-negative breast cancer. So there's all sorts of existing late-stage assets that are going to drive growth, BIC/LEN, Lenacapavir. And then we are really developing nicely this mid-stage pipeline that can drive longer-term growth that we talked about.

So we don't have the same need today, certainly that we had 7 years ago when Dan joined the company to add to the portfolio or when I joined, but we will selectively add over time. And we have the financial flexibility to do it. Even after doing $13 billion in deals, we just took our debt levels back up to our historic debt levels. Our net debt and total debt-to-EBITDA ratios are very attractive for a company of our size. So we really like where we are in terms of kind of financial flexibility, but the primary focus is on making sure that we do the integrations right.

And you reported about 47% in operating margins in 1Q. As you absorb these deals here, how are you thinking about the trajectory there for '27?

There's a modest increase in operating expenses in '26 and '27. Most of that in the existing portfolio. And then the other thing that's important to highlight as we are building out our mid-stage pipeline is that as we looked at our long-range planning, we were going to have room in our R&D budget in '27, '28 and beyond as we roll off a lot of the large Phase III programs that we've run over the last many years.

So these programs fit perfectly both scientifically with the quality of data and the room that we are going to have in our R&D budget. So when we did the deal, we said it's modest, manageable increase in '26 and '27. We'll do everything we can to cover that in our existing portfolio. You've also seen the outperformance in the first quarter of the commercial portfolio that allows us to increase slightly the investment, but not impact our EPS growth and kind of the EPS we can deliver for shareholders.

So I think we're very comfortable that these fit nicely. And maybe to your question, allow us to maintain the top quartile or industry-leading operating margins. We don't expect that to change. We are very focused on disciplined expense management and maintaining those strong margins throughout the cycle.

Great. Dan?

Well, I would just add, I just want everybody to know that all -- what does all this mean? It means we can do more for patients out there across the world in this country. And it also means we have a good, consistent ability to deliver top quartile growth on the revenue side. We're very committed, Andy and I, to top quartile operating margins.

We feel we still have a lot of leverage in the business to get there. And then obviously, EPS accretion is faster than sales over time is exactly our goal. And our capital allocation priorities will remain investing in the business, appropriate M&A, a growing dividend, opportunistic share buybacks in that order. But we're firmly committed to what we can do for patients, but also the attractiveness for shareholders as well.

Great. With that, thank you so much.

Thank you. Thank you for having us.

Fantastic. Thank you so much for all being here today. I am thrilled to be on the stage here with Dan O'Day, the Chairman and Chief Executive Officer of Gilead Sciences. This is a company we follow a lot. We spend a lot of time thinking about. And we're very excited to give you an optimality to tell the Gilead story to a broad set of investors.

Perhaps I'll start with letting you just give some opening remarks to contextualize kind of Gilead the story where we're at today and what's on the horizon. And then I've got some Q&A that I would love to go through. For all of those in the room as well, please do see there's a QR code dotted around in multiple places. I think on your lanyards as well. Please feel free to use this to add questions to the pigeon hole. And I can then integrate them into the conversation. I really want to make sure it's as relevant as possible for everyone in the room, and we get through the questions that are most important to you all.

So with that, Dan would love to get some opening remarks and hear a little bit about the Gilead story.

Right. Well, Courtney, thank you for having me. I'm delighted to have this chance to chat with you as well and to be with all of you. I think the key message for Gilead right now is that we're really in a position of strength. After 7 years of concentrating in our strategy, diversifying the business, we really are in a position where we have the strongest portfolio that we've actually ever had in our history.

And I say that with humility, based upon what Gilead achieved before I came, -- but our ability to kind of produce robust and sustainable growth has never been stronger. We have up to 10 ongoing or to be expected launches between now and the end of 2027, and that's across all 3 of our therapeutic areas. So it's kind of 1 of the proof points. In fact, this year alone, we've got 4 potential approvals, new medicine approvals. One we just actually had with Hepcludex the other day, but 3 more to come this year and 5 Phase III readouts and that will continue, of course, into 2027.

That, combined with a keen focus on operating expenditure discipline, we are comfortably in the top quartile of the margins of the industry. We expect to continue to stay that way with a focus on operating expenses and disciplines. We've got a strong balance sheet, good cash flows. So I think we're really poised right now to be able to make an even bigger impact on patients and a compelling story for investors.

Fantastic. No, it is certainly an exciting time of expansion and diversification at Gilead. We were chatting about this before we dive into the conversation and kind of opened this up for everyone, but 2025 was a year of significant pressures from the policy side of the equation. tariffs kind of onshoring manufacturing, all these different topics. As we move through 2026, does it feel like much of that overhang is now behind us. And how is this year different from last year? What is it -- what has shifted and where you're able to spend your time and energy?

Yes. Thanks for the question. I mean, first, what I would say is just to contextualize 2025, it was actually an incredibly strong year for Gilead. We grew our base business at around 4%. That despite the fact that it was -- it was a year where we had to offset a Medicare Part D reform of about $1.2 billion across our business. So the underlying business growth was even stronger than that.

And perhaps probably the biggest highlight, although there are many highlights in 2025 was the launch of BSI Go, which is what I'm sure we'll talk about, but it's just in the very early stages of really making a big difference for prevention. So relative to the kind of the policy environment in 2026, I think there is, I think, greater certainty in 2026 than there was in 2025.

We're 1 of the companies that did into an agreement with the U.S. government that I think allowed us to preserve our growth business, but also contribute to affordability of medicines in the United States, but without damaging our innovation cycle overall. But what I would say is because you're never quite sure what the next policy is going to be in this country in any country. And what I've learned after lots of decades in this business, is that you have to have an underlying business that can weather those headwinds.

And I think we really do right now. I mean back to what our business is today, we've got a really robust pipeline. I've already mentioned the 4 launches and the 5 Phase III readouts. You need really strong innovation to weather any headwind. And I think the type of innovation we have leave a net cell coming out, big Glen and others. I mean it's really kind of transformational medicines. And those medicines -- that's the starting and perhaps the ending point for all of this.

If you have truly transformational medicines, they make their way through policy headwinds. But in addition to that, of course, we're highly focused on the execution of our launches, continue to drive our portfolio, keen attention to operating expenditures. And the fact that we've been able to navigate headwinds in the past, like I just mentioned in 2025, gives us a lot of confidence in even the unknowns that may come in the future for this.

In terms of our focus as a company, strategy is a long-term, long-term game in our industry. And what I'm really impressed by what the team is able to do is just we've stuck with our strategy of diversifying within virology, and we have many, many launches in HIV that I know that we'll talk about that will help us diversify our business within HIV.

We don't have any major patent loss of exclusivity until 2036, and lots of time to kind of allow us to diversify that overall HIV business in both treatment in a growing prevention market. But then also the strength of our oncology business today and the expected launches, including first-line triple-negative breast cancer for TRODELVY, which we're expecting in the second half of this year as well as well as a needle cell launch gives us really -- those are near-term activities.

I'm sure we'll also talk about tubules and some of the other aspects of the oncology portfolio, that gives us a lot of confidence in the growing oncology differentiated business to differentiate outside of urology, so to speak. And then a really exciting inflammation portfolio that we'll be reporting more data on this year around some novel small molecules that we think really have the chance to make a difference in that large inflammation autoimmune space as well.

So -- that's kind of how we think we're going to stick with that focus. It's important to have a focus. It's important to execute every quarter. But I think that strategy has served us well to date, and we're still very much in the middle of rolling that strategy out. So we want to stay focused on that regardless of things that may be happening outside the company.

Absolutely. And 1 of the things that I think Gilead was perhaps in a better position to weather last year than some of the other pharma companies was around manufacturing geolocations and kind of where you were based. And you've got a very strong local manufacturing footprint in Gilead. Did that mean that you kind of -- did you need to make any more additional manufacturing commitments for onshoring with this administration? And how is the the policy pressures or the policy changes or the Tax Cuts and Jobs Act, influencing how you then think about manufacturing locations as you expand that portfolio that you just touched on, the inflammation, the oncology, et cetera?

Yes. I mean maybe to start with. Gilead is going to be celebrating its 40th birthday next year. It's a U.S.-based company. The last -- the largest -- the large majority of our footprint is in the United States. That includes probably greater than 90% of our R&D is in the United States, but certainly, the vast majority of our manufacturing base is here, too.

Now having said that, so -- and we've said in the past, as a result of that because the vast majority of our IP is also domiciled in the United States, our exposure to any potential future tariffs was always on the low end side. And certainly, nonsector tariffs that we're managing today are very manageable within our guide and within our business.

But what I would say is because of the growth that I just spoke about, we do need to continue to invest. And we announced last year around 32 additional $1 billion of investment over the next several years in both manufacturing and research facilities in the U.S. We've got buildings going up right now at our headquarter campus in Foster City and both the research side and the manufacturing side just to kind of manage our growing portfolio.

We've got facilities in Maryland and elsewhere for our cell therapy business. So I think we've got a really robust -- well, first of all, we have a global supply chain that has multiple redundancies into to handle issues associated with geopolitical concerns, number one. Number two, we are continuing to invest around the globe, but disproportionately in the United States to make sure that we have products here for our most important and largest market in the world.

So I think those are -- that's kind of the way we think about it. Again, these are long-term decisions that can't be overly influenced by short-term policy. But I think we're in a very good position vis-a-vis U.S. policy.

Fantastic. That's super helpful, poll context setting. And particularly, as you touched on those focus areas of the business, kind of I do want to dive into years to go. Of course, this is an incredibly important product for those in the audience that don't know the. This is an HIV prevention product twice yearly injection in contrast to what has largely been a once-daily market up until this point.

You've also got a once daily, that's been in the market for a long time as well. How should we think about the kind of progression of patients coming into this market particularly into years to go, what are new patient starts going to look like as we think about the evolution of the prep market. It's obviously relatively nascent compared to the HIV treatment market, much newer.

But how should we think about the progression? Where will we see that growth come from? Is it going to be at the cannibalization impact to other parts of your business? How do we think about kind of years to go as a net add to Gilead's growth in the future?

And you framed it really well, just to make sure we're -- everybody understands what we're talking about. So I mean the treatment business is a large business today. It grows at about 2% to 3% a year. And I think there's opportunity with long-acting treatment to get to portions of the population that have HIV in this country and around the world that aren't well served by a daily oral today, which is part of we may speak about that part of our long-acting program in treatment.

In fact, you'd be surprised to probably know that 30% or so of people that are -- that have HIV in this country are not virologically suppressed because either because of their living circumstance or because they just may not have access to healthcare. But taking a daily pill can be difficult. But we're going to see continued evolution in the treatment market over time that will be important.

But to your point, the prevention market is really quite new in the grand scheme of things. And just to put that into context, CDC had identified about 1.2 million people in this country that can benefit from PrEP. That's been the number they've used for the past 5 or 6 years. Recently, they updated that to around 2.2 million people. So they more than doubled it. And part of that is, of course, the evolution of technology because again, just as I mentioned with treatment, it can sometimes be difficult for people to take a daily pill.

Can you imagine if you don't have a disease, how difficult it is to be compliant on a daily pill regimen. It's not good. It's less than 50% compliance for people that are on prep today. But maybe just -- so it's an evolving market. And very importantly, I mean, our objective is to end HIV globally over the coming decades. But the only bill you have to do that is to, number one, make sure that everybody has HIV is well treated because if they're well treated, they can't pass the disease on. So that's 1 way you stop the infection rate.

And the second piece, which is why prevention is so important is you've got to get at people that have the potential to be exposed to the virus and put them on prep. Both of those combined over decades, I think, eventually stops it. But the reason that long-acting prevention and lenacapavir is so important is because so few people that can benefit from PrEP are either on it today or compliant with it today.

So just to put that $1.2 million figure, the $2.2 million figure into context, in 2022, there were only about 200,000, 250,000 people on PrEP in this country today. It's actually grown significantly. So now we're at about 0.5 million people that are on prep today as we expect to hear today. We expect that market to grow to more than 1 million or at least 1 million people by the mid-2030s. So there's tremendous expansion of people on prep, which is the first thing.

But secondly, the ability -- to improve with the long acting. So if you think about it, with a once every 6-month injection, you essentially assure compliance for 6 months. And then, of course, when people come back, you assure compliance for another 6 months and another 6 months. So it's really -- it's been touted as 1 of the most important advances in HIV and for good reason because if you can really assure that compliance when people are potentially exposed to the virus, then you can really reduce it.

So it's good for people, most importantly, it's good for payers. -- because if they're going to be reimbursing something, they want to make sure it has the impact. So all of this comes together suggests that we've got tremendous growth potential with long-acting prep and lunicapavir in particular. Just to put that into context, while I said the treatment market grows about 2% to 3%, the PrEP market today is growing around 14%.

Our business -- our prep business in the first quarter this year grew 87%, just to put that into context with lenacapavir entering the market. And what I'm trying to give you an impression of is we're still at the very early stages of kind of penetrating that market over time. So long acting, just out the door is very good. Yes, 2 goes after a very good launch. Only about less than a year since we received the approval. And we're already working on other opportunities to extend that.

We actually have a once-a-year program that has been fully enrolled now, and we expect to potentially be launching a once-a-year version of this as early as 2028. So these are really important dynamics, of course, for our business, but also for the societal impact that it can have.

Absolutely. And as you think about that once year opportunity, does this translate to a pure increase in adherence? Or do we think that this perhaps entices different patients to come in, kind of do you think about these as different categories? Or just a better version of what we have today?

Well, I think both. I think for some people, they'll still but an oral alternative. But for many people, the longer-acting every 6 months will fit into their lifestyle. It will connect with when they see their physician for regular STD testing. So I think, clearly, the twice a year is very important.

But to your point, I think the 1 year extends it to potentially even more people. Of course, some people will prefer the once a year versus the twice here. It's an intramuscular injection likely than a subcutaneous. So there's those pieces of it, too. But very importantly, in what you said back to kind of the underpenetration of the market here today. There are 700 new cases of HIV in this country every week, which usually astonishes people because -- and it's in very concentrated areas like we have down to the ZIP code level, where HIV is spreading.

A lot of it happens to be in the rural south these days with populations that we have stigma and discrimination associated with HIV, where a daily pill is just not going to fit into their lives. So I do think that we bring more people into care with longer-acting. It's more discrete. We have different physicians that we'll be more comfortable with prescribing that. Black women in this country are more exposed to HIV, Hispanic men. And so when you get to different physicians that are not common prescribers for PrEP today, but you give them options that allow them to assure compliance for their patient population.

I think our objective is to really get everybody that could benefit from prep into care and the longer acting, the once a year in particular, but also the every 6 months are going to be the type of product that will fit into those people's lives, into those people's circumstances. It could also be people that are in-house that just don't have access to daily medications. So yes, -- very clearly, it expands it.

But most importantly, we want to have options as many options as possible in both treatment and prevention that meets people where they are. So whether that's once every day oral or -- once in treatment, for instance, or once a week or once a month or once every 6-month injection, different people will need different things for their life. We want to have every solution for people in both prevention and treatment that allows us to meet people where they are.

And to that point, I think the HIV treatment strategy that you've kind of developed has been that menu of options, kind of offering. And you're already the leader in HIV treatment with . This is a pretty incredible product. I think it's north of 50% market share these days and has continued to pick up even recently. You've also got a daily doublet launching this year, which is lenacapavir from Yasuo plus bictegravir from Biktarvy.

We've also got a once-weekly oral launch also this 1 has shared with Merck also has lenacapavir in it, one of Merck's products plus a lot of the longer-acting agents kind of earlier in development. How do these future innovations fit together particularly given you already have dominance in this market, how do you think about kind of what does this do to your portfolio over the long run by continuing to introduce these new innovations?

Yes. Thankfully, I get to work with scientists every day that kind of never settle for great. Like they're constantly innovating. We got to a stage with treatment and prevention where it's hard to beat the efficacy results. So we've been moving and safety results and very low resistance results. So we've been moving from efficacy and safety to longer-acting options back to what we just discussed.

So look, these things all fit in. I'll just talk about some of the near-term things that you mentioned. So importantly, BIC len, which is kind of our next expected launch in HIV is an alternative daily pill. But it's a daily pill based upon decades of research that kind of has the both -- it's a doublet. So it's 2 medicine combined together, but it's kind of the most advanced areas in each of those single medicines.

One aspect of that medicine is lenacapavir. So it's a capsid inhibitor for those of you. It's lenacapavir is the first capsid inhibitor in HIV. So it's a brand-new mechanism that's shown to be very robust and very effective against resistance. The other one, the Biktarvy piece of that or the bictegravir piece of that is from Biktarvy. Putting those 2 together allows us to, first of all, meet people that may have resistance issues with other medicines on the market.

But it also provides us within Gilead with the opportunity to provide people that want to switch and sometimes people do want to switch their therapies. In fact, about 20% of people on treatment regimens today, daily oral regimens switch in a calendar year. Today, we don't have another daily oral option for them to switch to. So they're going to switch, they may go to a competitive product with big len will have another daily oral option that is really on cutting edge science that they'll be able to switch to as well.

So I think that's one aspect of our strategy. But then back to the long-acting piece of it. Yes, you mentioned we've got -- we're expecting clinical trial readouts in the second half of this year on islatravir, lenacapavir, should be the first in collaboration with Merck, the first weekly oral medicine. Again, that provides people with options that struggle to take daily, to take weekly. But we're not stopping there. We have additional weekly regimens that we're working on. We have additional monthly oral regimens. And then we have 2 kind of once every 6-month regimens that we're working on right now, there would be injectables.

The reason those are important is, again, to get to those 30% or 40% of people that aren't virally suppressed today, but also to meet people where they are. Maybe they were able to take a daily pill at a certain stage of their life, but now they desire or want a less frequent dosing interval. So what you want to do in the innovation piece and never settling for great is just continually innovate to allow us to have the right option for that particular patient.

And -- as I said before, the only LOE we really have in our portfolio is Biktarvy, which is in 2036. By the time we get to 2036, we will have launched multiple different long-acting treatment regimens that will meet people where they are. And as greater products as Biktarvy is and will continue to be a very important product until 2036 we will be less concentrated on our Biktarvy revenue by 2036 because of all these new entrants and new launches. So that's part of our strategy as well.

Of course, meet people where they are with products that are even more advantageous to them than Biktarvy before the loss of exclusivity.

Fantastic. That's -- it's really exciting to see kind of that continued focus on innovation, even though the efficacy borrowers are already so high, those patients which is a really wonderful to see.

I would say 1 other thing if you allow me. I mean it's not commercially relevant to us, but it's very important to us at Gilead. 2/3 of the HIV cases in the world are in sub-Saharan Africa. And we have programs I'm really proud of what the team has done to get our medicines at no profit to Gilead or through voluntary generic licenses, royalty free to the developing world. And probably -- and we do this with treatment and prevention.

But what I'm most proud of the team is it normally took at least several years between a product being introduced in the United States and being available in sub-Saharan Africa. With lenacapavir because of all the planning that went into really starting with the clinical trials because we knew this would be groundbreaking, we had it launched or are available in the first sub-Saharan African country in 5 months after the launch in the United States.

And we've worked with Global Fund, we work with Peppa, the United States, the state department and then generic manufacturers, which should be entering next year to really scale this in sub-Saharan Africa in a way that reduces the incidence of this disease.

It's important to me, but it's important to everybody that works at Gilead that we are doing our part with infectious diseases and particularly the no-no boundaries to suppress them globally and around the world.

Absolutely. No, it's incredible to see the impact that can potentially be had with these longer-acting agents in those environments where that compliance is even more challenging often.

Absolutely.

I do want to pivot away from HIV even though it is the core of Gilead kind of today and you are on this diversification journey. And you spoke about oncology, I mean you've obviously got kind different types of assets in that space, including kind of the Kite business. You've also spoken about inflammation. Recently, you announced 3 acquisitions in very quick succession -- there seems to be a theme with pharma companies this year, kind of lots of deals all at once.

You announced an acquisition of tubules, which is in oncology, and this is an antibody drug conjugate. -- company, an acquisition of ARO, which is an immunology kind of T cell engager company, and you announced an acquisition of Arcellx, which is a CAR-T focused company with the lead there being a decel.

How and why was Gilead able to do 3 transactions in such a quick succession. And as you think about the work still to be done, kind of where the portfolio gaps? What are the things you're looking for? Why are you looking externally rather than internally in building kind of this best diversified portfolio?

Yes. Terrific. Why there's a lot in there, but I'll try to cover, and you'll hold me -- keep me honest. What I would say is just because we're switching from virology to our other therapeutic areas. I think the team is very excited about what we're building in oncology. Today, it's basically 2 different kind of core anchors. One is -- and the other 1 is our cell therapy business, where we're the world leader in cell therapy. In both of those areas, we have new launches coming up.

I mean in Trodelvy, we've got pending with the FDA right now of first-line triple breast cancer indication, which would more than double the market for Trodelvy, where we're already leaders in second line and beyond in triple-negative breast cancer. It's very important. And we have other Trodelvy readouts later this year in lung cancer and gynecologic cancers.

And then with our cell therapy business, we are very excited about Anetocel.It's 1 of the acquisitions. So we'll talk about that. But in ESL, we see as a highly differentiated cell therapy product in multiple myeloma, which we can come back to you, but very exciting in terms of curative potential as we've seen with lymphoma, we're also pursuing in multiple myeloma disease that really needs options for patients as well. So that's just to kind of set the scene for oncology.

Now let's talk a little bit about the acquisitions. The vast majority of what we're doing within the company comes from our internal research portfolio. In virology, now because of our established oncology portfolio, and inflammation, which we'll talk about. But inflammation -- the vast majority of the medicines that are in Phase II right now that you'll hear some more data on came from our Gilead Sciences. So I mean that's the core of what we do.

Of course, we have to supplement that with external innovation. Number one, it keeps us honest. It makes sure that the things we're doing internally compete well with what's going on outside of our company. I always say you always want competitive pressure on your R&D portfolio. Every internal program should have to compete with the best science externally and vice versa. And we draw the bar high on that. So that's good.

The fact that we just did 3 acquisitions in a short period of time, is not a reflection at all on the strength of our portfolio. It's the fact that there were 3 opportunities that just happened to come up at the same time. We've said our M&A strategy is the following. We do about $1 billion of M&A every year on early-stage assets. That's really important to feed our early-stage pipeline. And then we said, every couple of years, we'll do something of a larger size, kind of mid-single digit accordingly.

Now the last time we've done something of a larger size is actually 2 years ago. That was Sema. That's Lidl, which is the product that is now really in a very exciting launch phase right now and doing very, very well. But we've gone 2 years. Now the reason we went 2 years is not because we weren't looking at things constantly through those 2 years. In fact, we scrubbed everything that came available in all 3 of our therapeutic areas.

But we were also -- we said we're going to be proactive and disciplined because we have a long time before our LOE and because we have a robust internal portfolio, we have our own metrics in terms of what discipline means, but it is a high bar. So first of all, it has to fit in our strategy. Secondly, it has to be really transformational medicine. But b, we have to be confident that we're spending our shareholders' money in a way that makes sense. We're not going to pursue something behind a reasonable intrinsic value analysis. And so that's really important to us.

And that's why we haven't done things for 3 years, not because we haven't seen interesting things. But in some cases, and we've been involved in many transactions, we've stepped away because of the disciplined piece of it. But the 3 of these, we were able to find the sweet spot all at the same time. It was opportunistic. We have a tremendous cash flow in our business. So we have lots of firepower to put to work. We don't feel like we have to put it to work, but we are capable of doing 3 in a row like this.

And each of them is very different. -- happy to -- we can talk as much or as little about them as you want. Arcellx is that cell therapy, multiple myeloma product that we had a partnership with -- but we felt like owning it outright. This was the right time to do it, both from a valuation perspective but also a strategic perspective. We may come back and talk to that.

Tubulus, a very important platform play. We acquired Trodelvy, gosh, about 6 years ago now, 5, 6 years ago. It's this antibody drug conjugate. It's similar to cell therapy. It's a novel kind of approach to cancers, you're killing only cancer cells and saving normal cells in your body. But we have been looking for kind of the next-generation ADC platform for about 5 or 6 years after Trodelvy and haven't found it until we found Tubulus.

We think Tubulus is really unique. It's a private company in Germany. We had a research collaboration with them. But we think -- and ADCs are made up of a protein, a linker and then a payload. The payload is the killing function, the protein attaches to cancer cells. And the linker is really important because the linker makes sure that you don't discharge your chemotherapy before it attaches to the cancer cell. I won't get into more detail on that.

Other than we think that the Tubulus platform is met our bar of truly differentiated and unique. In other words, it has a really good therapeutic index. It allows us to get to cancer cells in a way that has low or minimal side effects, which is particularly important when you talk about combination therapy. So if you use an ADC in combination with another agent, whether it's a biologic or chemotherapy, you want this ADC to have a really good therapeutic index.

So -- we're very excited about that. The lead program is an ovarian cancer program where we think we -- we believe we can be best in class, and we're progressing that very, very quickly. But it's important to know that with tubuli -- that is a very broad platform that we can take into other types of cancers with other payloads and other linkers and other proteins. So it's much more than a single product acquisition. It's really a platform acquisition that fits really nicely in our portfolio.

And then finally, the Oro transaction is exciting. It's earlier stage. It's more of a single asset, but it allows us to think about B-cell depletion in autoimmune disease inflammation largely. And what that means B-cell displetion for those of you that aren't deep in the space is it's kind of the next stage of advancement in autoimmune diseases by allowing you to kind of reset the immune system in an immune system that's gotten haywire for whatever reason, in a person's body.

So I think that's kind of how we think about those 3, and we're going to -- we're very busy now integrating those companies in and delivering on those.

Absolutely. I'm sure there's a lot of work to do for the I do want to spend a moment on an EDL especially, particularly given that you've got a launch ideally that's upcoming with a PDUFA date with the FDA in December. How kind of -- can you touch a little bit -- you mentioned it briefly, but can you touch a little bit on the efficiency that you believe is gained by wholly owning this asset. You mentioned valuation, but also other benefits.

And can you think about framing for us kind of where you think the Street is under appreciating kind of the potential of this asset even in those first early years, kind of we look at some of the metrics around the CVR deal terms, especially the goal and the milestone there is quite distinct compared to -- it was almost double what -- the Street is expecting over the same period. And so understanding what do you think the Street is getting wrong about that launch would be really fascinating.

Yes, absolutely. Maybe just to frame what this is. So Anita cell is a onetime cell therapy that is used in multiple myeloma that has the potential to really transform the course of the disease. It's a BCMA-directed therapy. The reason we're -- there are both strategic and financial reasons for why we decided to own all of our sellers.

Let me concentrate in the strategic areas. The reason we think this is a unique asset, there is another cell therapy asset available out there. And it has a profile and such that it has neurotox side effects, some severe neurotox side effects. The reason that's important is that as you go into earlier lines of therapy, multiple myeloma can be a disease that people live with for 10 years. Eventually, there is no cure for multiple myeloma.

But as you go up in the earlier lines of therapy, the benefit/risk profile becomes even more important, right? We haven't seen any neurotox side effects in a needle cell. So while it can have while south therapy can have a significant impact on multiple myeloma you don't want to, in turn, give somebody another disease that they live with for the rest of their life.

And we -- even though that chance is smaller from a percentage standpoint, you still don't want to enter that into the equation. So the strategic reason to fully own a Edatel and this very competitive but also a large market. It's around a $20 billion market, all therapies within multiple myeloma is that we need to move fast at this stage. We had derisked in our collaboration with our Calix to a degree where we felt comfortable owning the whole thing for us and our shareholders.

That allows us to -- it's going to start in fourth line plus multiple myeloma owning it alone, anytime you have a collaboration with another company, things slow down. And we have a huge sense of urgency around this. So the ability to get into second line, first line, potentially even the smoldering myeloma drastically improves. And therefore, the area you're under the curve of your revenue improves if you own it outright. So that's also the financial aspect.

The other thing is this product is so unique that to have the rights to be able to use it in kind of next-generation cell therapy, which is the in vivo cell therapy was something we didn't have in our current collaboration. So this gives us full rights to use this construct in kind of future areas, which, again, I think is very important as you think about the overall strategy.

And then finally, any time you have 1 product, 1 company over 2 companies, at a launch period of time, we think there's efficiencies to be gained by having a single company launching. You only get 1 chance to launch a product correctly. And I think it just gives us a chance to make sure we get the best launch accordingly.

And then finally, from a valuation perspective, I mean, clearly, we know this asset better than anybody. We were the natural owner of this asset in its totality. I think we see the potential of this stronger than the Street or intrinsic valuation is clearly stronger than the Street. Plus, we had economics associated with our partnership, including royalties and milestone payments that we now take off the table and incorporate.

So we feel very good about the financial aspects. There was -- I think it was a unique window of opportunity to think about acquiring it outright in terms of where our Selic was trading and how -- the Street fell it was and how we felt it was. So there was a real opportunity to kind of I think, a onetime opportunity to own that outright. And we intend to be very focused now on executing on this and delivering on that.

Absolutely. And you mentioned that, obviously, you've got kind of 4 and more launches in flights are on the way. You've got kind of these -- the internalization of these recent acquisitions. -- does that take kind of M&A off the table for a while in terms of you've got -- you've just got your hands full. How are you thinking about kind of continuing to add to the business over the next few years?

Right. As I spoke about, about $1 billion of our M&A every year is on the early stage stuff that will continue. Clearly, we have -- we want to concentrate on integrating these assets -- so I think by very definition, in the very near term, I wouldn't expect that we're going to enter into many more transactions. Having said that, you always keep the opportunity open. I mean just to put it into context, -- we are a very strong cash-generating business.

And even with all 3 of those acquisitions, 11-some billion combined, we'll be at the same net debt level at the end of this year as we were before these acquisitions. So just to put that into context, it's -- we have -- my point is we'll have firepower in should we need to use it. Having said that, just pragmatically, we've got these to integrate and we're going to continue to stay proactive and disciplined in our approach in M&A. So I'm comfortable that we always have that opportunity again, because of the robustness of our portfolio, there's no urgency. There's no fire drill going around that. Every external asset has to compete with our internal portfolio that's getting stronger and stronger every day.

So I think that will be our approach. But as we've always said, we always want to make sure we are complementing our internal portfolio with attractive and interesting late-stage opportunities with some regularity every couple of years on.

And as we think about this portfolio continuing to diversify, you'll have a kind of an increasing portfolio of Phase III studies that are ongoing. It appears at least kind of looking at all the different things that are perhaps getting ready to move into that pivotal stage. Should we be thinking about R&D spend in absolute form increasing at Gilead as we think about kind of fully realizing all of these opportunities you're bringing into the pipeline?

Or are you getting more disciplined at prioritizing which Phase IIIs and so envelope will stay roughly the same. How are you thinking about kind of that investment in future innovation kind of getting to -- translating to revenue through pivotal studies?

Yes. Look, I'm very comfortable with the percentage of R&D spend we have right now at Gilead in relation to our revenue it's roughly 20%. And I think that equates to good quartile spend across the industry. I think we should be disciplined about that. We had to increase it over the past 7 years. We were kind of at the low teens level when I came in. Hard to drive a business in the medium and long term at that kind of investment level in R&D. So we have purposely and with shareholder support, been able to increase that number to a percentage that I think is competitive and important -- and there's a couple of dynamics on that.

Even with all 3 of these acquisitions, we will still -- we'll have -- as we talked about in our first quarter call, -- we have a slight increase in R&D expenditure this year, but it's all in our guide and manageable or in a revised guide, and it's still in that 20% range. As you know, with the portfolio in biopharma, you constantly have clinical trials rolling off and new trials starting. And that's how you kind of keep that 20% R&D investment, keeping the bar high while still maintaining your focus on discipline and approach there.

So I would say because that's an important line item in our P&L, of course, and an important part of our margin story. -- it's why we -- it's why I continue to remain confident that we will continue to have top quartile operating margins in the future. We'll be disciplined in operating expenditures. We have lots of opportunities to continue to improve our productivity in the organization while we're growing and while we're investing appropriately in R&D and SG&A, but we really want to scrutinize everything we're spending and stay a high-margin company and a good return for shareholders.

Absolutely. You've led me to where I wanted to go next, which was kind of AI and the potential for AI in the industry at large, but specifically at Gilead. I think we're hearing from lots of companies that they are looking for productivity or efficiency gains and lots of different parts of their business, be it the SG&A, be it some of the back-office operations, be it even some of the operations in R&D.

We're also hearing consume that they're beginning to kind of see opportunities in the innovation lever also being bent that curve also being improved by the application of AI and investments there. Can you just give us some context? Is that how Gilead is and how you are thinking about the potential for AI and in your business? Where could it add value? When might we see the impact of this? And what are some of the practical things that you're seeing improvement on today?

Yes, terrific. I mean it's something I spend a lot of time on because if I'm up in the middle of the night, I'm thinking about the opportunity, I think that AI presents to accelerate what is already a fast-growing additional understanding in biological sciences combined with kind of AI and all the things you just spoke about.

So I think broadly speaking, there are -- 2 very large kind of buckets that we think about in AI in the company at Gilead, and it's not that unique per se. But 1 is making sure we enable every employee to be more effective at their job. And so we've rolled out copilot to every single 1 of our employees, and we're really training and encouraging people to do individual experimentation to make themselves more productive.

And it's too early to kind of tell exactly how that's playing out, but anecdotal feedback is very strong. The other 1 then is to your point, just fundamentally looking at use cases in our business that allow us to reduce time lines, increase success rates and reduce overall costs and expenditures. So I think the lower hanging fruit there is kind of what you articulated, the productivity gains, whether that's in particularly the development part of our organization, manufacturing and sales, but also G&A.

And I can say we already are benefiting from those, right? It's still early days, but I think we're definitely benefiting from that I'll give you a couple of examples. I mean on clinical trials, we're able to shorten clinical trials by being more effective at using AI with identifying clinical trials. We're able to reduce the period of time it takes from last patient central and data close to regulatory filing. Even if you're saving weeks or a couple of months, that makes a big difference.

And that's why I'm also confident in the margin side of our business that we're just at the early stages of trying to pull all that productivity gain through. I think -- the more challenging thing is something that is, I think, sometimes oversimplified is its application to early-stage research. And if you like, new target discovery and new target development. While I'm very excited about that, and it is starting to -- the classic example but uses here is protein folding -- and if protein folding took 18 months in the past and you bring it down to 6 months, that's a significant advance.

But -- when you think about AI application to early-stage research and discovery, there's a couple of things that I'm reminded by my scientists of all the time. Number 1 is, unlike maybe other industries, what we know about biological sciences is actually very small, probably less than 10% biological knowledge, we actually know today of the trillions of cells in our body. So that means that 90% is unknown.

And of course, AI works really well when you're applied to well-constructed model. So sure, it will help us accelerate our knowledge of the other 90% without a doubt, I'm convinced that will occur, but it's also not going to happen overnight. It will take human beings and human ingenuity to grow that. So I think that's the first thing.

The second thing I would say is if you think about research discovery, so identification of a molecule up until baby entry into humans, let's just say that's a 100-step process. There are probably 5 steps of those problem. I'm just using an example that are being accelerated. But there's like another 80 that still need -- I mean you need wet labs, you need to test that AI generated molecule in animals and then in humans. And those things aren't necessarily growing any faster today.

So I'm very confident -- let's just take a lenacapavir took 17 years to get from concept to an approval. I'm very confident in the next 5 to 10 years, we'll see that time period go down drastically. It's not going to get down to 2 years, but let's say it went down to 10 years or 11 or 12 years. The massive R&D productivity improvements in our industry that we'll be working with.

So I'm sobered by what my scientists tell me, but I'm also very clear eyed that we have to keep up with this and make sure that we're on the cutting edge of this.

Absolutely. Absolutely. No, it's an incredibly exciting time, but there are long cycle times it takes a long time to see that pay off. And certainly, for our observers on the outside, we're kind of trying to pay through kind of all the blindfolds you guys have around all the great innovation you're doing to try and figure out when might we see kind of the real impact on that innovation question.

Just in the last couple of seconds that we have. You mentioned margin and kind of Gilead has obviously continued to hold a very high margin and perhaps even expanded it even more recently. In some ways, when you look at companies that have done that, it's where they have real concentrations of their business. And we know HIV kind of scale. -- really affords kind of that -- some of that efficiency in your organization. Is this something that can still hold as you diversify your business? How do you think about that evolution?

I mean, obviously, margin is a function of where your opportunities are and where you're heading. I'm very confident that for a variety of reasons that will continue to be a high-margin business. Number one, I think the therapeutic areas that we are concentrated on are generally higher-margin businesses overall. Number two, back to the conversation we just finished, we're continuing to have a real focus on our operational expenditure we've come a long way in the past 7 years. But I'm also convinced we still have a long way to go at Gilead.

So continuing to focus on the cost base as well as the gross margin base on a particular therapeutic area are both dynamics that I think we're going to continue to manage accordingly here. So I'm confident that if you bring -- if you keep the bar high enough for transformational innovation, that society will reward that accordingly. So when I think about the difference that lenacapavir could make for every HIV person that's infected, that's a lifetime cost of about $1.1 million, $1.2 million.

So when you think about the economic benefit to society of transformational innovation, that's also something that we keep the bar high on a Gilead and allows us to be confident about our margin story.

Fantastic. What a wonderful place to end. I think we kind of looked back to where we began on innovation being so central to Gilead, but also to the industry at large. Thank you so much, Dan, it was a pleasure talking to you.

Thanks for having me. I appreciate it.

Welcome back, everyone. I'm Brian Abrahams, senior biotech analyst here at RBC Capital Markets. We're really pleased to have our next featured company, Gilead Sciences, represented by their Chief Medical Officer, Dietmar Berger. Dietmar, thanks again for joining us.

Yes. Thanks for having us. Pleasure to be here.

So a lot to cover. So I'll kick it off and maybe just start with Trodelvy because I know we're going to see a big data point this year on EVOKE-03. Can you talk a little bit more about, I guess, what you're looking for out of those results? In particular, what specific efficacy thresholds on PFS or OS do you think this trial would need to show in order to justify the positioning of a TROP2 ADC in frontline. How are you thinking about the competitive landscape overall here? And really just what should we be looking...

Trodelvy is obviously our TROP2 ADC, where we had positive data recently in first-line triple-negative breast cancer. That's the ASCENT-3 and -04 study. And that's where we're looking forward also to hopefully get an approval later this year for that setting. And EVOKE-03, the study that you're talking about is a study in first-line PD-L1 high non-small cell lung cancer, very straightforward study design. You basically have pembro as the standard of care and you add Trodelvy to that, right?

So what we want to see in this setting, this is an early analysis. So yes, PFS is going to be mature. OS is going to be earlier. But what you really want to see is like a significant PFS benefit, right? And then, of course, we will follow the study longer for OS as well. This would be -- if the study is positive, this would be the first time that you really see meaningful benefit of a combination in this setting on top of pembrolizumab.

But also when you think about it, these people are currently treated depending on how quickly the tumor grows, either with pembro or also with the addition of chemotherapy. So there is benefit in -- with chemotherapy for these people, and that's where an ADC obviously can maximize that benefit also with good tolerability, and that's what we're hoping to see, right? And that would be a meaningful addition, obviously, to what we can do with Trodelvy. We also have ongoing studies in endometrial cancer, for example, and a variety of other studies in different tumor types. From a competitive perspective, yes, there are other molecules targeting TROP2...

It seems like more and more people are -- more and more companies are following in you guys...

Yes. TROP2 as a target is just one good target for ADCs. With Trodelvy, we have the biggest data set, right? And people are really comfortable with Trodelvy. That's also what we see in breast cancer, both in hormone receptor positive and triple-negative breast cancer. The level of comfort that people have with the drug, the confidence with the efficacy is really there. That's why we've seen year-over-year also an increase with Trodelvy, 37%, right? And that's really a testament to, yes, there's good use, there's increasing use, and that's where the EVOKE-03 will add to what we can do with Trodelvy.

Got it. And then maybe kind of staying on the solid tumor front. You recently acquired a private company, Tubulis, and I know we're going to see some updated data at ASCO. What excited you most about that asset? I mean to what degree was it the data, the unmet need, the overall technology that they have? And what should we be looking for at ASCO?

Yes. We've been -- I mean, obviously, we just spoke about Trodelvy. So we have a lot of experience in ADCs, and we've been scouring the planet pretty much for what's your next level innovation in ADCs. And what we saw in Tubulis is both a really interesting front-runner molecule, but also really interesting and differentiated platform. And the platform is a completely different linker and payload technology. They call this the P5 platform, which is really more how is the antibody connected to the linker.

And then there's the Alco5 platform, which is really more how is the linker connected to the payload, right? And both of these are really novel chemistry and allow for kind of features of molecules that we had not seen before. For example, the P5 platform allows for really stable linkage, which means you don't get the systemic toxicities, whereas the Alco5 platform allows for really combinatorial activity with different payloads, so completely novel payloads that we can utilize that either come out of our medicinal chemistry or that come out of Tubulis. So we really like the platform. And we knew a lot about the platform because we worked with Tubulis on novel molecules since 2 years. We had an ongoing project with them. So we understood the platform really well.

And then on top of that, their front-runner molecule is TUB-040, which is a NaPi2b ADC, where at ESMO last year, ESMO 2025, they presented, in our view, really convincing data in platinum-resistant ovarian cancer. So they had like a 50% to 60% objective response rate. They had like a 90% disease control rate on the basis of roughly 50 patients, which we found really encouraging. When you think about the current standard of care with bev and chemo is roughly 25% to 30% objective response rate.

So we saw a real benefit and that benefit together with a really positive tolerability profile, right? Again, going back to the really stable linkage, which biologically, it makes sense to then see less side effects and good tolerability. And we didn't see any of the kind of the major side effects that you see with some of the other ADCs, whether it's neurotox or eye toxicity or intestinal tox, this was all really tolerable. So that benefit, that combination was really important to us on top of the platform.

Okay. Great. And then maybe, I guess, speaking of companies that you've acquired, you recently gained full rights to anito-cel. I guess how confident are you on the efficacy side that we're going to continue to see similar response rates and a PFS tail that looks comparable to other -- what other CAR-Ts have seen? And as you kind of move -- on the safety side, as you move into the earlier line population, including newly diagnosed myeloma, how do you expect the safety differentiation to evolve in a patient population that maybe has cleaner baseline organ function and less prior treatment exposure? It will be quite as prominent.

Yes. No, the anito-cel is obviously the BCMA CAR-T, where we already had rights to and really acquired the entire company, the entire Arcellx, both anito-cel, but then also the platform, the D-domain binders were really important, these smaller binders that I think really make a difference and allow us to also go into our in vivo CAR-T and apply them differently in different areas. So that was part of the decision.

But having full ownership of the commercialization and also full ownership of the future development was really important to us, right? So you -- you're asking about how confident we are with regards to the differentiation. I have to say I'm very confident in that regard. And that's based on the early efficacy data that we see, which is really more myeloma responses -- of course, we don't have the long-term tail. You're talking about the long-term PFS and OS tail. But what we do have is an early indicator, which is measurable residual disease or MRD.

So how deep is the response? And how much do you really reduce the myeloma load in those patients? And MRD is a really good predictive parameter. And the MRD data for anito-cel are just better than anything that's out there. So I'm actually -- I'm a hematologist, right? But I'm really looking at these data are really attractive and I think are a positive signal regarding really good long-term outcomes.

Now on top of that efficacy, what you also see with anito-cel is, I think, unprecedented safety in myeloma. We're not getting any of the kind of the longer-term severe neurotoxicities, no Parkinsonism, no Guillain-Barré, none of the enterocolitis effects also that you see with some of the CAR-T approaches in myeloma. So we feel there's really good differentiation with anito-cel from both an efficacy and a safety perspective.

Obviously, iMMagine-1, that's the study in fourth line plus that we're currently discussing with regulatory authorities with potentially an approval towards the end of this year. That's the initial indication. Then iMMagine-3 is a study that takes us into second to fourth line. That study is ongoing, really looking forward to seeing those data.

And then we're currently in planning for even earlier lines. So thinking newly diagnosed myeloma, both the transplant eligible and transplant ineligible patient population, right? So really taking this also into earlier lines because -- we are more and more in myeloma speaking about long-term outcomes, even speaking about is there a possibility to even have like cures in advance for these patients. And that's what you reach in earlier lines, right?

Basically, what you want to see out of iMMagine-3? Is there some degree of follow-up data that would inform the decision to go into first line?

No, I think we're confident enough about the drug that really we are in planning stages for first line at this point, right? And iMMagine-3 will give us, I think, really meaningful data in the second to fourth line setting. So really working late line, fourth line plus, second to fourth and then early lines. But we are very committed to the overall anito-cel program.

Okay. Good. Maybe shifting gears to I&I. On the earnings call, you mentioned that the alpha-4-beta-7 inhibitor 1427 that we're going to see some data in the near term there. I guess what excites you most about this asset? What would you want to demonstrate this -- in this early to mid-stage point in its development to move it forward? And what do you think are the key differentiating elements versus the other oral alpha-4-beta-7, which have maybe shown some signals, but maybe were a little bit more mixed?

Yes. The -- let me step back first and really say, when you think about how the Gilead portfolio is shaping up, we've said for some time that we're focused on virology, oncology and inflammation/immuno.

It's finally maturing now.

And yes, I look at this as one signal, and I think a strong signal that the inflammation portfolio is also coming together, right? So we have HIV with long-acting. We've got other virology assets that's the underlying virology strategy also in different types of hepatitis, et cetera. You've got the oncology strategy. We talked about Trodelvy. We talked about Tubulis and now also about the cell therapy portfolio.

And then in inflammation, there is really an emerging portfolio for Gilead. We currently have more than 10 molecules in the inflammation portfolio and 3 of them in Phase II. So, granted, somewhat earlier. But when you think about those molecules that are currently in Phase II stages, we're really looking forward then also to data readouts, there's the oral alpha-4-beta-7, which I'll talk about in a second for IBD, which I think is a really interesting molecule. There's an IRAK4 inhibitor, edecesertib, which is also in Phase II. And then there's a TPL2 also for IBD. So there is an emerging portfolio that I think is really interesting, also addressing really important targets in immunology.

Getting to alpha-4-beta-7, that's a validated target, right? ENTYVIO is out there as one of the backbone therapies in inflammatory bowel disease in Crohn's and colitis. What people really like about ENTYVIO is the balance of efficacy and safety. It's an efficacious approach that shows really good safety as well, right? It's an injectable, right? And as we're moving also more and more to orals in IBD therapy, you've got the IL-23, you've got other molecules that are going oral. It's really interesting to think about what can an oral alpha-4-beta-7 actually do.

And obviously, what we are hoping to see, right, we have the Phase II study in-house, and we'll communicate the data later this year at a medical conference. What we're really hoping to show is obviously differentiated efficacy and safety with the added convenience of the oral, right? And that's where I think we have a real opportunity and let us show you the data first, and then we can talk about what can we do with this type of molecule. But I'm really encouraged about what I see in the inflammation portfolio and how is it coming together and alpha-4-beta-7 is one component of that.

Okay. Do you think about that as a potential monotherapy? Or is that potentially combinable with some of your other assets?

Yes. And I want to stay in the hypothetical because we haven't communicated the data yet. But in principle, everything is possible, right? Alpha-4-beta-7 ENTYVIO is there as a monotherapy and there are obviously also combination approaches. And what we currently see in IBD and inflammatory bowel diseases is most people start with some type of monotherapy. And of course, they have to go through different steps before they go to the biologics.

But there are patients where we have an efficacy ceiling with the monotherapies where you really have to think about combinations. So it's really those patients that -- it's not that I would believe everybody would go on combination, and that's where it's important to have data, especially if you think about developing a backbone therapy, where you have data with different iterations, right, monotherapy and combination. A lot is possible. So let's show you the data.

Okay. Looking forward to that. And then speaking of data in the relatively near future, you guys are looking -- you've had a successful launch with Yeztugo so far, and it's only early days, but you're already looking at next-generation versions. And I know you have a once-yearly study, lenacapavir study ongoing that's intramuscular. Tell us a little bit about, I guess, how you selected the right formulation to move into this Phase III study? And then just what has the FDA said will be the bar for bioequivalence that you think you need to hit to be sure that you are comparable to Yeztugo whose efficacy is really unprecedented and that there aren't any sort of outlier patients at week 50 or 51 that might drop below the necessary exposure?

Yes. So it's really important to realize what we're talking about here is prevention. So you're not thinking about, hey, there's a virus that can develop resistance over time. This is more like you prevent an infection as a person is exposed to a virus. So your typical resistance discussion in that point is very different for the prevention setting, right? And that's where really the understanding that we have developed with lenacapavir with Yeztugo is very important. We can absolutely model what type of level, like serum level eventually of lenacapavir we need in order to right, in order to get that prevention...

and I know, I think, you guys published...

Yes, exactly. We have those PK data. And what we can do is we can model if you wanted to have that level of coverage over a year, what type of starting dose would you need, right? Because you form a depot. And then over time, obviously, you get lower and lower levels, right? And we need to have those 52 weeks full coverage at the levels that we've seen with the Yeztugo once every 6 months.

And we've modeled that, and we are very confident that with the once every year injection that we use in PURPOSE-365, which is the Phase III study, where we've already completed recruitment, that the levels we need that we will actually have those throughout the full year. Actually, what we know at this point is we think even after at the end of the 52-week period, the levels we will still see are higher than the levels that we see with the Yeztugo subcutaneous once every 6 months, right?

And we were able to get to a slight change of the formulation, which then is used in the intramuscular injection that we use in the once every 12-month application. And that's where the FDA then has also agreed to a PK-based study. So the PURPOSE-365 study has endpoints around PK and around safety, and we basically need to demonstrate these levels over time, and we need to demonstrate safety. And we believe we can do that.

And do you anticipate that the market will shift from every 6-month subcu Yeztugo to go to annually -- annual IM?

What we've learned about the prevention market is that people really like optionality, right? And that's also what we see now. We see really good adoption of Descovy, right, which is a daily oral. We also see, as you all know, really good adoption of Yeztugo, which is the once every 6-month injectable, right? And we've just updated our predictions for this year where we expect Yeztugo to be a blockbuster by the end of the year.

What we do get back from people in the community is they're really excited about the once every year option, and they liken it to -- this is simply I get my one shot once a year like a vaccine and then I'm protected. And then we're always saying, yes, but be aware, it's not a vaccine, right? It's actually better than a vaccine because you get much better protection levels.

So there's a lot of excitement around it. It would be hard for me to predict now whether -- how the market will develop, but I do believe it's going to be a really important option for people with -- who want prevention, right? And I think one of the big positives around this type of prevention is you really don't have to think about forgiveness or gaps in prevention or anything like with an oral. The key benefit is really you're done one shot once a year and you're protected for the entire year. And that's what people see.

Let's shift gears from HIV prevention to HIV treatment. You have a number of next-generation, both completely proprietary as well as partnered assets that are continuing to emerge. So maybe just starting on the islatravir, lenacapavir once-weekly oral. I guess what are you looking for out of those data to dictate the regimen's potential role?

Yes. The -- obviously, we'll have data from our ISLEND-1 and 2 studies, which is a weekly treatment later this quarter. So really looking forward to that. These are studies in already virologically suppressed people. So these are people who are, for example, on Biktarvy, which is currently absolutely the standard of care, who then switch to islatravir plus lenacapavir to a once-weekly oral treatment option.

Biktarvy, basically, everybody is virologically suppressed. So we want to see that same level of suppression, right? We do not want to compromise on efficacy. And we do want to see that same level, obviously, with good tolerability. That's also then positioning islatravir, LEN clearly into the switch market, right? About 20% of people on Biktarvy, for example, per year, want to switch to something else. That's where islatravir, LEN would be a really important option, right? And that's how we're looking forward to the data.

Got it. And then for your own potential wholly owned weekly oral, I guess, what characteristics are you going to be prioritizing versus lenacapavir for a potential capsid in that regimen and just some of the PK properties, timelines that you envision for that to move forward?

Yes. We do want to develop a wholly owned combination. We believe an integrase inhibitor plus a capsid inhibitor is a really strong option for that.

High-barrier resistance...

Exactly, high barrier of resistance. So we are currently in the process of -- from our large portfolio of integrase inhibitors and capsid inhibitors and capsid inhibitor prodrugs, we're currently selecting the 2 combination partners. And then we're looking forward to bring those into the clinic. And we'll obviously communicate around those plans as soon as we finalize them.

Got it. And then speaking of long-acting, I guess, even longer acting, I know you guys are looking at the potential for an every 6-month injectable on the treatment side. And you've had some encouraging early data. I think it was at CROI for 3242. I know historically, it's been tough to get integrase dosed high enough in a subcu to have multi-month durability without running into tolerability issues like injection site reactions. But it seems like so far, so good with 3242. I guess where do you stand with the ongoing dose escalation work? And what gives you confidence that the higher doses will have the durability to get to your goal of every 6 months and you won't run into any safety compromises?

Yes. So again, optionality is really important. That's how we're looking also at the treatment space, and then we're talking about these different options. For the once every 6 months, we also have an injectable option, right, with lenacapavir and 2 broadly neutralizing antibodies where we're planning to start the Phase III later this year.

For the integrase inhibitor-based option with 3242, as you said, we have the PK data that we presented some of that at CROI. And this is a dose escalation study. So what we know for sure right now is once every 4 months, right? And the even higher dosing cohorts are still ongoing. From a modeling perspective, from what we've seen from a safety perspective so far, we're confident that we can get to the once every 6 months, which -- but of course, again, we need to see the data eventually. And you're right, it hasn't been easy to get to that once every 6-month integrase inhibitor offering, but we're confident that 3242 will potentially provide a path forward.

Excellent. Well, unfortunately, we're out of time. But Dietmar, thank you so much for [indiscernible] and thanks, everyone.

Thanks a lot.

Welcome back to the Bank of America Healthcare Conference. Our next session is with Gilead Sciences. Sitting next to me on stage is Johanna Mercier, who is Chief Commercial Officer and Head of Corporate Affairs.

Johanna, thank you for making the trip out West to see us today.

Easy trip. Thank you. Thanks for having me.

So for the few people who don't know Gilead as well as some of the other people do, just give us a quick overview of the company and its focus areas, and then we can go into more detailed questions.

Okay. Great. So Gilead Sciences is still a young company. It's just coming on to about 40 years or so and one that is specialized across 3 therapeutic areas, some more developed than others, but HIV, oncology and inflammation.

And the foundational piece of the business is really in HIV, both treatment and prevention and really building the oncology franchise with both solid tumor as well as liquid tumors. And then, of course, a little bit earlier pipeline in the inflam space, although we do have a PBC seladelpar with LIBALVI that's also doing very well in the marketplace that just launched about 2 years ago now coming up to 2 years.

So the organization is really building on a strategy that it set forth about 6 years or so ago of that diversification and delivering against it. We just announced our earnings just last Thursday with a really strong start to 2026. We updated our guidance by about $400 million on the midpoint.

That was mostly driven by HIV Yeztugo, was a big play there. And then obviously, Descovy and Biktarvy as well, a little bit of Trodelvy, which is also very strongly performing. We also just did 3 recent acquisitions, one of which that closed just last month with Arcellx in cell therapy and then 2 more with Tubulis and oral that should close this quarter.

So a lot of activity going on there. And I think it really was on a position of strength, right? We were in a situation that we were really in a good place with no LOEs out until 2036, no major LOEs. And we felt that this was the right time. We had scurried the market and the bar was really high for the science, and we felt that these 3 were the right ones on building on even further strengthening that position.

So well set for the near term and the longer term.

Okay. Great. So on the point of the recent business development activities, you did a few within a short amount of time. And you did it across the areas that you mentioned are your focus point. So can you talk to us about whether it's just coincidence that they all happen to come around the same time or is there a strategy about what stage of development you want to be acquiring, when you foresee those becoming commercial and the amount of investments you would need to make in order to make those successful commercial launches eventually?

Yes. I don't think it was totally planned that we would do 3 acquisitions in a row. I think that for the last 2 years since the CymaBay acquisition, we've been scouring the market.

As I mentioned earlier, the bar for the science was very high. We were in a position of strength. So therefore, we had the luxury of being very choosy and choiceful in what we were looking at. And it all kind of came together. The Arcellx was one that we already had a collaboration with Arcellx for anito-cel, anito-cel launching with a PDUFA date expected late December of this year.

We felt now was probably the right time and it was obviously a partner that we knew incredibly well that we trusted, trusted the science and the work because we've been working with them for years. So that was one piece of the puzzle. So that was 1 of the 3 and obviously, in oncology. The second one in oncology was Tubulis. Tubulis was also a company, private company, but a company that we had a collaboration with as well in very early collab that was still ongoing and really was -- we were so interested in the science and what they were doing, not just what they had as a compound for ovarian cancer, but also because of the platform that they had, and we were really interested in that since our experience with ADCs with Trodelvy as well.

So that was exciting to us, and that was something that we pulled through as well. And then last but definitely not least, oral, which is more in the inflammation space. Most of these are for now orphan drug diseases that we're looking at pretty closely. But with the opportunities for longer, right, it's really about the sustained response with this subcu [indiscernible] that could be really interesting for us, let alone additional compounds to follow.

So it basically hit our sweet spot across all 3 therapeutic areas that we were looking at, right, oncology and inflammation, HIV, most of that is organic in-house. And we're excited about kind of continuing to scurry the markets, but I think we also have to digest a little bit and make sure we deliver. I think speed to patients is our strategy on this one and across all of them to make sure we really deliver at that level.

Okay. So with Arcellx, as you mentioned, you were already intimately knowledgeable about that platform. Can you talk to us about how Gilead thinks about the opportunity in the multiple myeloma market using immuno cell? And how has that, if at all, changed by fully owning the company?

Yes. Listen, I think the opportunity is the same. I think owning fully the organization probably just gets us the speed that we need to really maximize the opportunity. And this has nothing to do with Arcellx, right? It just has to do with 2 companies sometimes coming together and having to work together.

It takes a little bit more time. And so that's definitely an opportunity that we see on our own. The opportunity that we see, the first launch would be in the fourth-line multiple myeloma market. That fourth-line market is about a $3.5 billion market and one that we believe can really make a difference with the profile that Anito-cel has to offer.

And the profile is not just the efficacy, but it's also the safety profile that right now is looking very differentiated versus current marketplace. And so fourth line is one piece of the puzzle. It just -- it's the first launch. But really, the opportunity is much greater than that. And because of the safety profile, moving into earlier lines of therapy, second line and eventually even first line is the way we're thinking about that.

And then that could look like a much larger market like a $20 billion addressable patient population. So that's the opportunity. The one thing that we're thinking about as well with Anito-cel, and we're hearing anecdotally from physicians is, obviously, with our capabilities already established with authorized treatment centers, we're going to be up to about 200 authorized treatment centers before the end of the year and making sure we basically operationalize them for the launch of Anito-cel.

This will be kind of the biggest launch that we've seen with cell therapy with 200 ATCs versus maybe 25% of that when others have launched in the past. And so I think that will make a big difference, let alone the profile lends itself well to the community setting, which is where most of the multiple myeloma patients are. And so all those pieces together, I think, will make for a very successful launch and a setup for earlier lines of therapy.

Do you think you'll need to add to the sales infrastructure for this one?

Yes. So we have a good footprint already. We are definitely thinking about the broader scope of multiple myeloma, also thinking about with the Arcellx team and bringing some of those talents on board with us as well, but we're really going to leverage the footprint we have and the manufacturing capability and capacity that we have as well.

Okay. We'll go to HIV in a second, but I did want to ask really quickly about ADCs. So Gilead clearly has made a long-term investment into the space. Just wanted to get your thoughts about how you're thinking about synergies of what you learned from Trodelvy versus a much earlier in development program that Tubulis has?

Yes. I think we learned a lot. I think Trodelvy is a fabulous ADC in the breast cancer setting. We hope to show updates and data both in non-small cell lung cancer as well as endometrial later this year.

But we also understand a little bit the instability of the linker. And as we were looking at the data with Tubulis, we really saw some real interesting data there, not just with TUB-040, but also with their platform. And I think the stability that they can offer, really, it's about the 3 pieces, right, the antibody, the linker and the payload and understanding kind of their platforms, both on the linker and the payload is going to be really interesting because you might be able to do a little higher levels of payloads so that you can get better efficacy without necessarily the safety being an issue, right, in a more targeted way. So that's kind of what we're thinking about as where this platform can really serve us well in the future.

Okay. And in the near term, as Trodelvy matures, how are you thinking about the competitive landscape? Let's talk about triple-negative breast cancer where Daiichi might be having a molecule that is going to be competing. Any thoughts about what that might mean for what portion of the market might be attractive for Trodelvy?

Yes. So I mean, listen, I would say to you, Trodelvy has really exceeded our expectations when you think about the first quarter results. We announced just last week, Q1, 37% growth with Trodelvy. And I think people were a little surprised at that. And it had a little bit to do with last year, that growth was a little bit masked by bladder cancer indication being removed.

And so it grew just a couple of points, about 6 points or so last year. And now you're really seeing that completely come through. The other addition to that is with ASCENT-03 and ASCENT-04 in first-line metastatic TNBC in triple-negative being discussed at both ASCO and ESMO.

And then with the NCCN guidelines more recently earlier this year coming through in Category 1, that has really made a big difference. And it's made a difference in 2 ways. One is, obviously, not with -- apart from medical efforts and education, we're not promoting in first line as of yet. We're waiting for the approval in the second half of this year, but people are using spontaneously in the first-line setting because of the data.

The data are truly practice-changing for these women that a lot of these women never get to second line. So that's one piece. The second piece is many folks were still using older chemotherapies in the second-line setting. Despite the fact that Trodelvy was standard of care in second line, they were using chemo and then Trodelvy in third, fourth line. What we've been seeing with the data in the first-line setting is it's moved everybody up.

And so much stronger share in the second-line setting as well. So we're incredibly well positioned to continue to be the standard of care, obviously, in second line, but even as you move into first line across PD-L1 negative and positive patient population. And as I said, 50% of women don't get to that second-line setting because this disease is so aggressive. So number one, it doubles the potential addressable patient population in the first-line setting, but it also doubles your DOT, your duration of treatment because they are healthier patients.

And so they will stay on drug much longer. So it's basically, as we think about our models moving forward, moving into the first-line setting is going to be key, and we think we have the right profile to do that.

Okay. So moving on to your HIV franchise. Let's start with Yeztugo. So this is one where investors have been paying very close attention, right?

Weekly.

Almost daily, it seems, right, to the early launch metrics. So it's a differentiated product in the sense that for PrEP, it's dosed infrequently every 6 months. So can you just talk to us about -- so we've done survey work, which indicates that this is a meaningful differentiator.

As you receive feedback from your field force, what are you hearing both in terms of what doctors are saying and what patients are saying about it so far?

Yes. So we've been really excited about the launch. There was a lot of work prelaunch that was done that actually was super helpful in setting us up for success. One of the big metrics that we were capturing and we were sharing externally was, of course, access because until access is really at a high volume, a lot of people are a little reticent to put pen to paper.

As of January, we're now at 95% access across the board with 95% of those getting $0 co-pay. So access is no longer an issue. The dynamics in the marketplace needed to adapt a little bit. This was a -- it still is a daily oral market. And moving into an injectable, you really needed the practices to kind of update their ways of working, and they're working through that at a different pace.

But no concerns about how they're going to get there. They will all get there and many already have. I think anecdotally, what we've been hearing is now that access is no longer an issue, and a lot of people are kind of waiting for that to play out. And I think January was a big and you saw it from the weekly scripts, right, a big jump in January, and it had a lot to do with course access getting even greater with CVS getting on board, but also with the J-code.

The J-code we got in October, but a lot of practices don't actually update their scheduling fees until the next quarter. And so that was January 1. So we saw a big uptake there for buy-and-bill as well. So really nice momentum across both specialty pharmacy and buy-and-bill. So physicians are feeling more comfortable. And what we're hearing anecdotally is they're also feeling more comfortable with the second injection.

And because they've done it a couple of more times, they know what they're doing. Remember, lenacapavir is a very viscous product. So the injection, the first injection, if you haven't had the right training, I think that you might be a little more challenged.

Having said that, with experience and with nurse educators on the ground training them, it's been super smooth. And they're getting much more comfortable with it. And so are the patients as they're getting their second injection. And so we're really encouraged to see, although we're tracking it very closely and claims data is helping us understand what's going on.

But we're really encouraged to see the numbers right now of them coming back for their second injection. We need more data because the volumes are still smaller because most of those volumes came through in Q4. So Q1, Q2 and maybe a few cycles will be helpful, but very encouraged with what we're hearing anecdotally and what we're seeing in the claims data.

Yes. So we ran a survey ahead of your 1Q results, which indicated again, limited end, but that metric retreatment rate was over 80%. So I know you've talked about what a good retreatment rate would be using the fact that the dailies have around that as an average retreatment rate.

What would be good for something like this, which is in terms of quality of life could be improvement for patients because they take treatment less frequently, but it is a paradigm shift. What's a realistic expectation for what retreatment should be?

I think that you have to think of a few things. You have to think of daily orals today, adherence is less than 50%. You have to think about current long-acting injectable on the marketplace before us. What does that look like? And we think we will be north of any of those numbers for sure. I also think you need to think about prevention a little differently than treatment, any treatment paradigm, any chronic disease.

And so these aren't people that are sick, and these are people that maybe for a certain period, need prevention and they're in and out of the system, right? If their social situation changes, if they're in a stable relationship or whatnot, they might not want to be on PrEP or need to be on PrEP moving forward and that turns over and the market continues to grow through that at about 14% in the first quarter of this year year-on-year.

And so strong growth there. And so I would say to you that through the specialty pharmacies, they're getting a lot of those second doses back in. So SPs will work to make sure that they connect with the patient for their next Yeztugo script a month before, make sure the appointments get set up.

And we really chose those specialty pharmacies very specifically. Prior to launch, we contracted with the ones that had those capabilities. And so that was one piece of the puzzle. The second piece is we're also launching a persistency program this quarter in the next month or so. And so that also is going to better support.

So far, very encouraging. I will say I think you need a little bit more volume to be able to see how that plays out. But I think it's looking -- it's going definitely in the right direction, and people are anecdotally saying very positive feedback around the second injection and what that looks like.

Okay. How accurate are the script trackers because this is something that investors pay close attention to?

They do. The IQVIA data is directionally aligned to our data. It obviously captures your retail data. In that retail data, you're going to capture all the specialty pharmacy, and you're going to capture a portion of the buy-and-bill.

You will actually capture any of the buy-and-bill that is going through in-house pharmacies. So they all get captured. So that's why it's pretty aligned to what we're seeing internally. The only piece that doesn't get captured is anything that's truly buy and bill without the in-house pharmacy. So literally clinics purchasing the product directly to the clinic. That's the only piece that's not getting captured.

Okay. So on guidance, you raised the Yeztugo guidance this year to $1 billion from $800 million initially at the start of the year. What metrics did you see over the last couple of months that gave you the confidence to up that number? And I guess why wouldn't just started the year up with that number?

Yes. So if you've been tracking the weeklies, people would notice that as of December to January, there was a big jump. And that big jump when you set your number, you're setting it in December that jump hadn't happened yet.

And it happened because of the reasons we just talked about, whether it's access, comfort, J-code, all of those pieces coming together. And so that was one big piece as to why the $800 million from a guidance standpoint. And then what we've seen over the last quarter is really that continuous growth. Like we've never talked about this hockey stick growth. We've always talked about a continuous durable ramp over the next years for Yeztugo in the PrEP market.

And that's exactly how it's playing out and we're really pleased to see what we're seeing. But I would just say it's not one metric. It's every metric was going in the right direction. The access was where it needed to be. The share from a switch market, which was our focus and still is, right, we're really focused on the current MSM market.

Expansion will come in other markets, but that's a longer-term play. The intent in the short term in the next 2, 3 years has always been current market. And that was a switch, although we are getting more naive than we thought as well. And so all the pieces were coming together, and that's why we felt confident that we think that we can hit the $1 billion mark in the first full 12 months.

Okay. So now that you have this infrequently dosed PrEP treatment, what do you think would be the next leg of innovation through this PrEP intervention.

We're excited about even what's to come. We have a Q12 or PrEP 365 that's around the corner. And this is one that, obviously, you could assume that some people that will be on the 6 monthly will go to the 12, but we also think about other populations that could be captured with a Q12 that are not currently captured with Q6.

So for example, you think about people with unstable housing where sometimes once a year is it just easier to manage. You think about Department of Corrections, you think about college students, you think about ERs. These are all areas of expansion for us. So it's not just a shift from Q6 to Q12, it's Q6 plus. So we think that with Descovy as a daily oral with Yeztugo Q6 monthly and then, of course, with the potential for Q12, I think that's really how we are leaders today and we'll continue to lead the market in the future as well.

Okay. And then longer term, how do you think of the split between injectable versus oral in the PrEP market?

Yes, different in the PrEP market than in the treatment market. Yes, in the PrEP market, it's very clear from the research that we've done that less is more. They really -- they're not sick.

They don't want to be reminded of it. It's challenging. And so unless you don't like injections, you're going to go for the longer, so Q6, Q12. If you are a little bit apprehensive of injections, that's where you might go to something like Descovy.

So the split that we're assuming is probably more 60-plus market, 60% to 70% in the long-acting injectable and versus the oral. And maybe I should say long-acting versus daily is the way I would look at it.

And how long do you think it will take to get to that split?

I think it will take a little bit of time, but not -- I think it's picking up. I think that obviously, you'll still have a bulk of people that will stay on their daily orals.

But I think a lot of people are shifting over. And as people get more comfortable with the logistics and the coordination of a longer-acting, I think it will just become more familiar.

Okay. So let's go to the treatment market. So let's talk about Biktarvy. And what's your view of where it is in the maturity of its launch trajectory?

Yes. Biktarvy continues to impress. It is a product that we launched in 2018. It is the standard of care integrase inhibitor. It has set the standard for all future HIV treatments, and it really truly has.

I mean if you think about our shares right now, north of 52%, still growing on a much larger base quarter-over-quarter. And something that's really interesting as you think about the naive market and the switch market in HIV treatment, probably about 70% of all new patients coming on to -- that are HIV diagnosed, newly diagnosed are getting Biktarvy.

So definitely, it is setting the clear path for leadership there. In the switch market, we are also leading in the switch market, and we have the opportunity to grow that leadership with new entrants in the marketplace with [ bic/len ], for example, that we expect late August PDUFA.

And then with islatravir, lenacapavir 2 weekly oral in treatment data by the end of this first half and then potential launch sometime next year. And so all of those just bring more optionality for patients in the switch market setting.

Because obviously, if you start on Biktarvy, you can't switch to Biktarvy. So if you were to switch to something else at one point, which this market does at one point in time, then we want to make sure that we have options for those patients.

Okay. And then you mentioned a couple of minutes ago that in terms of injectables versus oral this is like advantage for treatment versus...

Yes. You have a real mix there because these are people that -- some people really want to know that they're taking something every single day for their HIV and other people don't want to be reminded that they have HIV.

And so you have a bit of a more of a 50-50 kind of split where we think oral and longer-acting -- daily versus longer-acting might play out.

Okay. And then just in HIV in general, it's been a GSK and Gilead market for some time. How are you thinking about Merck entering the space?

Yes. I think, listen, the more options, both in treatment and prevention, the better. All the boats rise. And so I do think education, awareness, reducing the stigma, super important.

And I think more companies involved in that, I think, can really make a difference. So I think that's a good thing overall. I still think, though, that the differentiation in this marketplace is going to be really important and the bar is high. And I think Gilead has that bar right now.

Okay. So let's maybe circle right back to where we started with the last question of the day, which is we started talking about biz dev at the beginning. And now as you have all these new assets that are being brought in-house, investors still view the company with a primarily HIV lens.

As the company continues to evolve, how do you think about the mix of offerings for Gilead over the next, let's say, 5 to 7 years?

Yes. I think that part of our strategy was always not to get away from HIV was to build on that HIV franchise and then build diversification. And that's exactly what we're doing.

And I think that whether you think about Trodelvy, obviously, Yescarta in lymphoma, but also now Anito-cel coming through and then Tubulis deal, for example, obviously, Arcellx, is Anito-cel, kind of building even stronger oncology franchise, right?

We are already $3 billion-plus franchise in oncology, continuing to build that out with Anito-cel and hopefully not in the so distant future with Tubulis, right, as you think about in platinum-resistant ovarian cancer and then potentially even into the sensitive market.

So all of that is, I think, a really nice opportunity. And then inflam is coming up, right? We are still -- we have a couple of readouts or updates later this year in Phase II.

The portfolio is a little bit more nascent, but it's some really interesting pipeline. And obviously, with the new acquisition with Ouro, hopefully closing in the next quarter or so, all of those pieces are coming together nicely to really build out the 2030s and beyond.

Yes. And maybe just one last question on inflammation. Given the focus of some of these small companies ways to treat diseases that many companies are going after, whether it be atopic derm or psoriatic arthritis or anything related, what was the attractiveness of T cell engagers?

I think it had -- so we've been working on a B-cell strategy with Kite, so Gilead and Kite together for quite some time, looking at any autoimmune inflammatory diseases.

And I think that -- and obviously, building on the strength that we've had in lymphoma and multiple myeloma expertise. But building on that, we do think there's real opportunity there. And I think the BCMA CD3 T cell engager was something that we were really interested in.

It was something that -- listen, the promise of it is a subcu with potentially a sustained response. What could that mean? Could that mean potentially even remission for a certain period of time? That's exciting. We're trying to break that bar of efficacy and unmet need, and we think that maybe this would be one way of doing it. But it's in line with the strategy, first and foremost, and then delivering against it with -- potentially with oral.

Okay. Perfect. Well with that, we are just about out of time. So I'll say thank you, Johanna. Thanks for having me. Thank you making the short trip over and enjoying the 105-degree heat with us today. Thanks, everybody for session.

Thanks everyone.

Good afternoon, everyone, and welcome to Gilead's First Quarter 2026 Earnings Conference Call. My name is Rebecca, and I'll be today's host. [Operator Instructions]

Now I'll hand the call over to Jacquie Ross, Senior Vice President, Treasurer and Head of Investor Relations.

Thank you, Rebecca. Just our market close today, we issued a press release with earnings results for the first quarter of 2026. The press release, slides and supplementary data are available on the Investors section of our website at gilead.com. The speakers on today's call will be our Chairman and Chief Executive Officer, Daniel O'Day; our Chief Commercial and Corporate Affairs Officer, Johanna Mercier; our Chief Medical Officer, Dietmar Berger; and our Chief Financial Officer, Andrew Dickinson. After that, we'll open the call to Q&A where the team will be joined by Cindy Perettie, the Executive Vice President of Kite.

Let me remind you that we will be making forward-looking statements. Please refer to Slide 2 regarding the risks and uncertainties relating to forward-looking statements that could cause actual results to differ materially.

With that, I'll turn the call over to Dan.

Thank you, Jacquie, and good afternoon, everyone. I'm pleased to share highlights from Gilead's first quarter which has extended our consistent track record of commercial, clinical and financial execution. Our strong financial performance and increase in sales guidance reflects the depth and quality of our portfolio, the numerous launches underway and our continued focus on financial discipline. As we execute on the strongest pipeline in our history, Gilead also taking steps to further strengthen the company's position for the future. We are looking forward to sharing much more on our Arcellx, Ouro and Tubulis in coming quarters.

Our HIV business grew 10% year-over-year, reflecting 7% growth for Biktarvy and an impressive 87% growth for our U.S. prep business. The ongoing success of Yeztugo launch is a key driver of this growth in HIV prevention with first quarter sales growing 72% sequentially. Looking forward, with no major LOEs until 2036, Gilead's HIV business is poised for strong durable growth, supported by up to 7 potential new HIV product launches by 2033.

The first of these potential launches is bictegravir plus lenacapavir an investigational once-daily oral regimen for virally suppressed people with HIV. This is now a priority review, and we expect an FDA decision in August. Other upcoming HIV milestones include Phase III updates later this quarter from the ISL/LEN 1 and 2 studies evaluating a potential first once-weekly oral for virally suppressed people with HIV. We shared encouraging Phase I data at CROI in February for a long-acting integrated inhibitor GS-3242. Later this year, we plan to share additional data that could support the combination of GS-3242 with lenacapavir as a potential twice yearly injectable treatment regimen. The time frame for potential launch is between 2031 and 2033.

In oncology, first quarter Trodelvy sales were up 37% year-over-year, reflecting growing demand for Trodelvy. We anticipate regulatory decisions on extending into first-line metastatic triple-negative breast cancer in the second half of this year. Ahead of these decisions, Trodelvy has already received NCCN Category 1 recommendations across the first line and is the leading ADC and second-line metastatic TNBC treatment. We are also expecting Phase III updates from the EVOKE-03 trial in first-line metastatic non-small cell lung cancer and the ASCENT-GYN trial in second-line plus metastatic endometrial cancer in the second half of this year.

The pending acquisition of Tubulis is another significant milestone in building Gilead's oncology franchise. The company brings a clinical stage candidate, TUB-040, which we believe has the potential to be a leading ADC in ovarian cancer and a next-generation ADC platform with a promising early pipeline. At the upcoming ASCO meeting, we look forward to additional Phase I data on TUB-040 in platinum-resistant ovarian cancer. Additionally, we are expecting a regulatory decision on Anito-cel, our potential best-in-disease BCMA CAR-T in December of this year.

Our acquisition of Arcellx, which closed on April 28, and reflects our conviction in the potential of Anito-cel as a differentiated option for patients with multiple myeloma. Given the significant opportunity in fourth line as well as earlier lines of therapy, we believe that Anito-cel could become a foundational therapy for multiple myeloma, driving growth in our cell therapy business in 2027 and beyond. The Arcellx platform will leverage Kite's industry-leading manufacturing capabilities and could further strengthen our future in oncology and inflammation.

In liver disease, Livdelzi revenue second-line primary biliary cholangitis more than tripled year-over-year. We are expecting an update from our Phase III IDEAL study for Livdelzi in the second half of this year. If positive, the IDEAL study could support a label update and expand the second-line PBC addressable population. Additionally, we expect a regulatory decision and potential U.S. launch of Hepcludex for chronic hepatitis delta virus infection later this quarter. In inflammation, the potential acquisition of oral medicines will add to our portfolio with gamgertamig, a BCMAxCD3 T cell engager in multiple B-cell-driven autoimmune diseases.

We will also share Phase II updates for our oral IRAK-4 inhibitor and oral alpha-4 beta-7 small molecule this year. These commercial and clinical updates demonstrate the strength of our execution today, underpinned by our continued commitment to financial discipline. As we look to the remainder of 2026, we see many exciting opportunities to further expand our impact on the patients and communities we aim to serve.

With that, I'll hand it over to Johanna.

Thanks, Dan, and good afternoon, everyone. It has been a remarkable start to the year from a commercial perspective, reflecting the innovative nature of our portfolio and our strong execution. Beginning on Slide 7. First quarter total product sales, excluding Veklury, were $6.8 billion, up 8% year-over-year, driven by continued growth across our key products in HIV, breast cancer and PBC, partially offset by HCV and Cell Therapy. Including Veklury, first quarter total product sales were $6.9 billion, up 5% year-over-year. Sequentially, sales were down 12%, in line with normal first quarter seasonality.

Moving to Slide 8. Our HIV commercial teams drove first quarter sales of $5 billion, up an impressive 10% year-over-year. This growth was driven by strong demand across Biktarvy, Yeztugo and Descovy as well as pricing favorability. Sequentially, HIV sales were down 13%, primarily driven by Q1 seasonality, in line with our expectations. These typical first quarter factors included inventory drawdown following a year-end build in the prior quarter and lower average realized price due to channel mix.

Looking at HIV treatment in more detail on Slide 9. Biktarvy sales of $3.4 billion, were up 7% year-over-year, driven by higher demand and average realized price partially offset by inventory drawdown. Sequentially, sales were down 15%, reflecting the first quarter seasonality that I just discussed. Biktarvy continues to lead as the regimen of choice for both naive and Switch patients across major markets. In U.S. Biktarvy's share was once again more than 52%, continuing its record of year-over-year gains in every quarter since launch. This market leadership is a testament to Biktarvy's differentiation and continued physician confidence.

We also continue to innovate with bictegravir plus lenacapavir or BIC/LEN, our once-daily single-tablet regimen. We are targeting a potential launch in late August for people with virally suppressed HIV, including those on complex regimens. Building on our long-standing track record of delivering highly effective, differentiated therapies for people with HIV, we believe that BIC/LEN is an exciting addition to our HIV treatment portfolio and has the potential to further expand Gilead's leadership in the Switch market.

Moving to Slide 10. Our U.S. HIV prevention or PrEp business grew 87% year-over-year, comprised of the market-leading branded daily oral Descovy and the first and only twice yearly injectable Yeztugo. This performance was driven primarily by commercial execution and the strong product profile of Descovy and Yeztugo. We believe we have the most compelling portfolio of products on the market and expect to retain and grow our leadership in the rapidly expanding PrEp market in both and long term. In the first quarter, the U.S. PrEp market grew approximately 14% year-over-year, and we look forward to further expand the reach of HIV prevention over time.

Descovy first quarter sales of $807 million were up 38% year-over-year, driven by high average realized price and demand growth. Sequentially, Descovy sales were down 1% due to typical first quarter seasonality and partially offset by favorable channel mix. Specifically within PrEp, which accounts for about 80% of Descovy's business, first quarter U.S. sales were up approximately 50% year-over-year. Yeztugo continues to show an unprecedented launch trajectory for a new long-acting PrEp product. First quarter sales of $166 million were up 72% sequentially, exceeding our expectations. I am pleased to share we continue to see strong performance across our key Yeztugo launch metrics. This includes [ Access ], where now approximately 95% of individuals are covered in the U.S., of which 95% can access Yeztugo with $0 co-pay.

Market share where we are now the leading long-acting injectable in Switch, and we continue to see a higher-than-expected number of naive prop users initiating on Yeztugo with early signs of growing momentum in this segment. Persistency, where our initial experience of return users is encouraging. Although it's still early, we expect Yeztugo persistency to be the highest in the HIV prevention category. And the impact of our direct-to-consumer campaign, where we are creating strong brand awareness and interest in Yeztugo through our omnichannel approach, focusing on communities and geographies with the highest needs.

Given the outperformance of Yeztugo in the first quarter and our growing confidence in the trends we're seeing, we're increasing our 2026 Yeztugo guidance to $1 billion, potentially achieving blockbuster status in its first full year. Beyond 2026, we continue to expect a steady and durable build in sales over many years as we work to eliminate stigma associated with HIV PrEp and broaden adoption to all communities and individuals who can benefit. Both Yeztugo and Descovy for PrEP sales are expected to meaningfully grow in 2026.

Reflecting this increase to our Yeztugo guidance, in addition to first quarter strength across HIV, we are now expecting 2026 total HIV sales, including both treatment and prevention, to grow approximately 8% year-over-year compared to the 6% previously shared in our February guidance. This is inclusive of headwinds of approximately 2% associated with the drug pricing agreement with the U.S. government to lower Medicaid pricing for some of our products and proposed changes to the Affordable Care Act.

Turning to Slide 11. Livdelzi sales of $133 million more than tripled year-over-year as the launch continues to generate strong and growing demand in the U.S. as well as across Europe. Demand growth continues to be driven by expansion in prescriber adoption, confidence in Livdelzi clinical profile and broader utilization among appropriate second-line PBC patients. Sequentially, sales declined 11%, largely driven by inventory drawdown. As we previously highlighted, fourth quarter sales included a bolus of switches associated with the discontinuation of a competing product, which has normalized in the first quarter.

As we enter the second quarter, Livdelzi's rapid market capture continues to impress, maintaining its position as market leader with more than 50% share of the U.S. second-line PBC market. More broadly, in liver disease, first quarter sales of $767 million were up 1% year-over-year, primarily reflecting the continued launch of Livdelzi partially offset by inventory drawdown across the portfolio and lower HCV patient starts. Sequentially, sales were down 9%, reflecting seasonality, partially offset by higher average realized price for HCV products.

Moving to Trodelvy on Slide 12. Sales of $402 million were up 37% year-over-year and 5% sequentially with growing demand across breast cancer indications in all regions. Trodelvy is already approved in over 60 countries and has been firmly established as the leading regimen in second-line metastatic TNBC across major markets. Turning to the first-line metastatic setting. In the Phase III ASCENT-03 and 04 trials, Trodelvy demonstrated highly statistically significant and clinically meaningful improvements in progression-free survival over the standard of care, both as a monotherapy in PD-L1 negative patients and in combination with pembrolizumab in PD-L1 positive patients. Ahead of potential FDA decisions, the NCCN updated their guidelines with Category 1 recommendation across first-line metastatic TNBC, which reinforces the strength of the data in first line with a potential launch in the U.S. in the second half of 2026.

Moving to cell therapy on Slide 13 and on behalf of Cindy and the Kite team, first quarter cell therapy sales were $407 million, down 12% year-over-year and down 11% sequentially, reflecting the expected ongoing in and out-of-class competition across regions. We continue to pursue expanding access and global reach of our cell therapies. For example, in April, Tecartus received full FDA approval in adult relapsed or refractory mantle cell lymphoma, adding data on patients who are BTK inhibitor naive. This important work of increasing awareness and physician comfort with CAR-T helps set the stage for the potential launch of our next-generation products.

Turning to Anito-cel and with the close of the Arcellx acquisition last week, we are ramping up our detailed launch preparation for what we believe could be a best-in-disease multiple myeloma therapy, adding Kite's end-to-end expertise in cell therapy to Anito-cel's demonstrated deep durable efficacy and differentiated safety profile positions Anito-cel to maximize its potential in the $3.5 billion fourth-line-plus CAR-T market. With the late December PDUFA date and factoring in the time needed for site activation, we expect revenue from Anito-cel to begin in early 2027.

As we wrap up the first quarter and look forward to up to 4 additional launches this year, shown on Slide 14, I want to recognize our commercialization teams for their exceptional execution in driving another strong quarter in Q1 and thank them for their commitment to growing patient impact in the second quarter and beyond. And with that, I'll hand the call over to Dietmar.

Thank you, Johanna, and good afternoon, everyone. I am pleased to share that the strong momentum across our research and clinical programs has accelerated since our full year earnings in February. This is supported by disciplined portfolio prioritization and strong execution. With the close of the Arcellx acquisition, our pipeline now consists of 47 clinical programs, spanning our portfolio of first-in-class or best-in-class assets. The completed acquisition of Arcellx and pending acquisitions of Ouro Medicines and Tubulis add potential best-in-class CAR-Ts, T cell engagers and antibody conjugates as well as capability expanding technologies through the novel D-domain binder and next-generation ADC conjugation platforms.

Starting with HIV on Slide 16, we shared 60 abstracts at CROI in February, continuing our track record of showcasing our comprehensive and innovative HIV pipeline at this flagship conference. This year, we highlighted new data across our suite of lenacapavir-based regimens for treatment and prevention as well as our other investigational programs for HIV treatment. Updates across our HIV portfolio include our once-daily oral bictegravir, lenacapavir or BIC/LEN for treatment of virally suppressed people with HIV has been filed with FDA, and we expect a regulatory decision based on priority review in August. At CROI, we highlighted that BIC/LEN demonstrated viral suppression in people switching from a multi-tablet regimen in ARTISTRY-1 or from Biktarvy in ARTISTRY-2 with no clinically meaningful emergent resistance.

Moving to once-weekly oral programs, we continue to target updates from the Phase III ISLEND-1 and 2 trials in collaboration with Merck later this quarter. These trials are evaluating islatravir plus lenacapavir for virally suppressed people with HIV. And if successful, this could result in the first-ever long-acting oral treatment regimen. We also continue to develop a wholly owned weekly oral treatment regimen combining a capsid inhibitor with an integrase inhibitor for treatment of people with HIV. With multiple alternative molecules in our portfolio, we are finalizing the selection of the capsid inhibitor and integrase inhibitor for the new combination and look forward to updating you in due course.

Moving to even longer-acting options. We're excited to be initiating a Phase II trial combining our investigational integrase inhibitor, GS-3242 with lenacapavir in the second half of this year. This followed Phase I data shared at CROI that showed potential for injectable dosing every 4 months. The higher dose Phase I cohorts with potential for twice yearly dosing are ongoing. In HIV prevention, we continue to drive innovation, building on the exceptional clinical profile of Yeztugo, and I'm pleased to share that enrollment in our Phase III PURPOSE-365 study evaluating once yearly intramuscular lenacapavir is complete. This registrational study is testing PK, safety and tolerability across a diverse set of participants indicated for PrEP. We expect these data along with the unprecedented efficacy and safety results from PURPOSE-1 and 2 to form the basis of regulatory submission with target U.S. approval in 2028.

Transitioning to oncology and starting on Slide 17, we have announced several strategic investments over the last few months that we believe further strengthen our ADC and Cell Therapy capabilities and portfolios. ADCs are one of the most promising modalities in cancer today, as highlighted by the incredible impact Trodelvy has demonstrated or patients with second-line metastatic triple-negative breast cancer and pretreated receptor positive HER2-ngeative metastatic breast cancer. We continue to expect regulatory decisions from FDA for first-line metastatic TNBC in the second half of 2026. And we now also anticipate European Commission decisions later this year.

Further, we continue to expect Phase III updates from EVOKE-03 in first-line PD-L1 high metastatic non-small cell lung cancer and ASCENT-GYN in second-line plus metastatic endometrial cancer in the second half of this year. Given our foundational ADC experience with Trodelvy, we're excited to expand our portfolio and capabilities with the acquisition of Tubulis. The lead asset, TUB-040 is a potential first-in-class NaPi2b directed ADC that we believe has transformative potential in platinum-resistant ovarian cancer, a challenging and aggressive condition with a poor prognosis for many women.

At the ESMO conference last year, TUB-040 Phase I data showed early treatment responses that deepened over time in a broad ovarian cancer population without any biomarker selection. This is potentially meaningful differentiation from other approved ADCs. We Also, in the share data, TUB-040 was generally well tolerated across a wide therapeutic index with no clinical relevant bleeding, pneumonitis, ocular toxicity, stomatitis or neuropathy observed. In the immediate future, we look forward to more mature Phase I data on TUB-040 in ovarian cancer at this year's ASCO meeting in June and expect to enter registrational Phase III studies for platinum-resistant ovarian cancer in 2027.

Looking longer term, Tubulis' pipeline includes TUB-030, a potential first-in-class ADC targeting 5T4 being evaluated in a Phase I basket trial in multiple solid tumors, including head and cancer and non-small cell lung cancer. Further, Tubulis has multiple preclinical assets that utilize its next-generation ADC platform. We're excited by the potential to develop ADCs that incorporate novel payloads, including ones developed by Gilead's industry-leading medicinal chemistry group.

Moving to cell therapy on Slide 18 and on half of Cindy and the Kite team, we are pleased to have closed our acquisition of Arcellx at the end of April, which formally brings Anito-cel's entire program and the broader D-domain binder portfolio into our R&D organization. We have long believed Anito-cel has a potential best-in-disease profile in multiple myeloma, and this is supported by clinically meaningful, deep and durable efficacy as well as a differentiated safety profile. This includes no delayed on non-enhanced neurotoxicities and enterocolitis in our clinical program.

Given our confidence in Anito-cel's clinical profile, we are evaluating Anito-cel in earlier treatment lines, including second to fourth line relapsed or refractory multiple myeloma in the Phase III iMMagine-3 trial. This trial is recruiting ahead of expectations with enrollment completion expected in the second quarter. We are also planning to develop Anito-cel in newly diagnosed multiple myeloma. Beyond Anito-cel, the Arcellx acquisition brings an array of promising research assets, and we are particularly excited to explore the broader applications of the unique D-domain binder platform across a variety of targets in oncology and autoimmune diseases and notably for in vivo cell therapies. With our increasingly differentiated Cell Therapy pipeline, we look forward to bringing CAR-T to even more patients in the years ahead.

Moving to Slide 19. Our inflammation pipeline has nearly doubled since 2019 and now consists of 10 clinical stage assets, spanning small molecules, antibodies, including bispecifics, and therapies that enable a diverse array of approaches to address challenging autoimmune diseases. We are excited about the handling acquisition of Ouro Medicines and its lead asset, gamgertamig, a clinical stage subcutaneously administered BCMA CD3 bispecific T cell engager that we expect to develop in collaboration with Galapagos. Together with Kite's portfolio of Anito-cel and next-generation bisystronic CAR-Ts, we believe we could achieve durable immune reset, shifting some autoimmune diseases from chronic symptom control to a transformative long-term treatment effect.

Each asset offers unique potential advantages that could allow us to target different patient populations. Specifically, gamgertamig has showed rapid, deep and sustained plasma and B-cell depletion, while maintaining low rate and low-grade CRS with no ICANS to date in over 60 patients with immune-mediated diseases. We are focusing first on orphan autoimmune indications with established proof-of-concept and high unmet need, including autoimmune cytopenias, pemphigus and idiopathic inflammatory myopathies. We're targeting Phase III registrational trials in select autoimmune diseases as early as 2027. Longer term, we believe gamgertamig has potential in more than 20 autoimmune diseases that are driven by pathogenic B and plasma cells.

Additionally, this year, we plan to share updates from our broader inflammation portfolio, including the Phase III IDEAL study, evaluating Livdelzi in PBC patients with incomplete response to UDCA. The Phase II SWIFT study evaluating GS-1427 or emvistagrast, our investigational oral alpha-4 beta-7 inhibitor for inflammatory bowel diseases, and the Phase IIa COSMIC study evaluating edecesertib, our investigational IRAK-4 kinase inhibitor in cutaneous lupus erythematosus.

Finally, reviewing our 2026 pipeline milestones on Slide 20. We remain on track across all our key deliverables. We expect an FDA regulatory decision for Bulevirtide as a treatment for chronic HDV infection later this quarter. Bulevirtide has been approved as Hepcludex in the EU since 2020, and we look forward to making this available to patients in the U.S. Additionally, we expect FDA regulatory decisions for BIC/LEN in August and Anito-cel in December of this year as well as Phase III update for ISLEND-1 and 2 in the first half of this year, and for EVOKE-03, ASCENT-GYN and IDEAL in the second half. With that, I'd like to thank our research and development teams and our partners whose continued strong clinical execution are driving the progress we have seen across our pipeline.

Now I'll turn over the call to Andy.

Thank you, Dietmar, and good afternoon, everyone. As you've heard, Gilead delivered strong first quarter results with continued commercial outperformance and disciplined operating execution. As shown on Slide 22, our base business grew 8% year-over-year to $6.8 billion, driven by continued growth in sales for HIV products, Trodelvy and Livdelzi, partially offset by lower sales of HCV and Cell Therapy products. Sequentially, sales were down 12%, reflecting typical seasonal inventory dynamics in line with our expectations. Total product sales of $6.9 billion were up 5% year-over-year reflecting lower Veklury sales due to fewer COVID-19-related hospitalizations.

Moving to our non-GAAP first quarter results on Slide 23. Product gross margin was 87%, in line with our full year guidance and up 2 percentage points year-over-year due to the expiration of a long-standing TAF-related royalty obligation in addition to product mix. R&D expenses were $1.4 billion, relatively flat year-over-year, reflecting higher investments in virology clinical manufacturing, offset by lower oncology clinical study activity. Acquired IPR&D expenses were $107 million, primarily driven by an upfront payment related to our Genhouse licensing deal. Additionally, we have now closed the acquisition of Arcellx and the acquisitions of Ouro Medicines and Tubulis are expected to close later this quarter.

The upfront payments related to these transactions are expected to be recorded in our second quarter acquired IPR&D and have been reflected in our full year EPS guidance, which I will discuss shortly. Back to our first quarter results. SG&A expenses were up 12% year-over-year primarily reflecting higher selling and marketing expenses related to the Yeztugo launch. First quarter operating margin was 47%, reflecting our continued focus on operating expense discipline, and delivering top quartile margins. The non-GAAP effective tax rate was 18.3% in the first quarter. Finally, non-GAAP diluted EPS was $2.03, up 12% year-over-year. This reflected higher product sales and lower IPR&D expenses incurred this quarter, partially offset by higher tax and SG&A expenses.

Moving to our full year guidance. We are pleased to share our updated expectations for 2026, reflecting revenue outperformance in the first quarter and expected momentum through the rest of the year. As a result, we are increasing our revenue ranges by $400 million. With regards to operating expenses in 2026 and as discussed on our transaction call a few weeks ago, we continue the careful prioritization of operational spend consistent with our track record over the last several years. For R&D, we expect a transaction-related modest and manageable dollar increase compared to our start of the year guidance. And in SG&A, we are effectively absorbing incremental expenses associated with the acquisitions in our prior guidance.

Upfront IPR&D of $11.5 billion together with transaction financing expenses, collectively amounting to $9.50 per share are reflected in our updated EPS guidance. We are pleased to note that excluding these transaction-related costs, we are effectively maintaining our start of the year non-GAAP EPS guidance, highlighting the flexibility in our operating model and our agility as we flex to accommodate the needs of the business.

Looking at the details starting on Slide 24. Reflecting strength across our HIV businesses, we now expect 2026 HIV sales to grow 8% year-over-year, ahead of our prior guidance of 6% growth. Within HIV, we now expect Yeztugo sales of approximately $1 billion, up from $800 million at the start of the year. As a result, we are increasing our 2026 base business guidance and now expect to range between $29.4 billion and $29.8 billion. This increase of $400 million results in 5% to 6% growth compared to 2025, up from the 4% to 5% growth expectation we shared in February.

As we highlighted last quarter, our guidance includes a roughly 2% growth headwind from policy-related changes this year, primarily related to the drug pricing agreement announced in December 2025 and the Affordable Care Act. Absent this headwind, base business growth would be expected to be 7% to 8%. Our full year Veklury guidance remains unchanged at approximately $600 million, contributing to expected 2026 total product sales between $30 billion and $30.4 billion an increase of $400 million.

Moving to the non-GAAP P&L for the full year 2026. We are adjusting our guidance to reflect the Arcellx, Ouro medicines and Tubulis acquisitions. Specifically, we expect R&D expenses to increase a mid-single-digit percentage from 2025, slightly higher than the low single-digit percentage increase shared in our February guidance. This is primarily driven by our investment in clinical programs related to the announced acquisitions of Tubulis and Arcellx. Overall, we expect R&D expense as a percentage of total product sales to be less than 20% in 2026. We expect acquired IPR&D investments of approximately $11.8 billion for the year, which includes the upfront payments associated with our recently announced acquisitions.

We expect SG&A expenses to remain in line with our February guidance of a mid-single-digit percentage increase compared to 2025. And we expect full year 2026 operating income of $2.4 billion to $2.9 billion. Full year 2026 effective tax rate is expected to be between 140% and 190% and reflecting the nondeductible expenses from the Arcellx, Ouro Medicines and Tubulis transactions. Excluding the $11.5 billion in upfront payments related to these recent transactions, operating income would be between $14 billion and $14.5 billion or $200 million higher than our February guidance.

On Slide 25, you can see that we now expect full year 2026 non-GAAP loss per share in the range of $1.05 to $0.65 per share. This includes an expense of approximately $9.50 per share relating to the upfront payments and financing costs associated with the Arcellx, Ouro and Tubulis transactions. Excluding this impact, our non-GAAP diluted EPS would be $8.45 to $8.85 or in line with the non-GAAP EPS guidance we shared back in February. We are pleased to note that the strength in our commercial business reflected in the $400 million increase in product sales is effectively offsetting the impact primarily R&D of the 3 deals on an EPS basis.

On Slide 26, we returned greater than $1.4 billion to shareholders in the first quarter of 2026, including over $400 million of share repurchases. Combined with our dividend, we returned approximately 60% of our free cash flow to shareholders in the first quarter of 2026. Looking ahead, given the pace of our activity in the first 4 months of 2026, our business development focus in the near term will be closing and successfully integrating these programs and maintaining strong clinal momentum. At the same time, we will continue to pursue ordinary course business development transactions.

It is less likely that we will pursue more sizable M&A this year, although we will leave the door open to consider strategic acquisitions if a compelling opportunity emerges. Overall, we are pleased with Gilead's consistent strong performance, highlighted by solid clinical and commercial execution and supported by our disciplined operating model. We continue to be very well positioned for both near-term and long-term growth and fully focused on executing our strategic fitments.

With that, I'll invite Rebecca to begin the Q&A.

[Operator Instructions] The question comes from Akash Tewari at Jefferies.

Can you talk a bit more about the Tubulis deal? How much of that NPV was driven by ovarian and the signal you're seeing there for 040 versus the potential to take this into lung given the amount of NaPi2b expression there? And additionally, we're kind of seeing 2 steps forward, 1 step back with the PD-1 VEGFs. You guys haven't been in that class so far. What additional validation would you need to see from the class at ASCO to look forward towards combination approaches with your ADC platform?

Yes. Thanks for the question, Akash. I'll invite some of my colleagues to comment as well. Let me just frame this and the other transactions. As I've said before, we have one of the strongest portfolios ever in Gilead's history, in fact, the strongest before these acquisitions. And each of these kind of contribute to different aspects of strengthening our business. Tubulis in particular, and we'll get to that, is not only TUB-040, as you've heard in the prepared remarks, and TUB-030, but also the strength of the platform overall. And I'll invite Dietmar to comment a little bit further on how he sees the uniqueness of this platform. And then, Andy, if you have any additional comments, please welcome them as well. But Dietmar, over to you first.

Yes. Thanks, Akash, for the question. The Tubulis platform, to just expand a bit on what Dan has said, right, we see the value of the front runner molecule, which was what we think is unprecedented data in ovarian cancer. When you look at the data, they are presented at ESMO in platinum-resistant ovarian cancer, the objective response rates, the durability of the response and also the tolerability in the patients treated. We think that really stands out. And on top of that, this is not in a biomarker-selected population. So we really see a lot of value there. obviously, also with the objective to take this in earlier lines of therapy, especially into platinum-sensitive ovarian cancer.

Then there's a second clinical program with the 5T4 targeted TUB-030 program with broader potential in different tumor types currently in dose escalation, but already with encouraging findings when you look at expression of 5T4 and some of the early data. And then talking about the platform, these are really 2 technologies we are especially excited about. One is the P5 technology that is linker technology that from a chemical perspective, is entirely new allows for very stable linkage and allows for delivery of the payload directly at the tumor site with limited general toxicity and the toxicity profile that we see with the molecule with, at this point in time, no lung toxicity, no ocular toxicity, et cetera, really underpins that biological story.

And then the second part of the platform being the ALKO 5 platform, which allows to link different types of payloads. And this is also where the synergy between Tubulis and Gilead comes in. Developing novel payloads, both from a Tubulis perspective, but also from a Gilead perspective using our medicinal chemistry capabilities. We have been scouring the world for developed and really attractive ADC technologies. We have good experience, obviously, with Trodelvy, and we wanted to add that and expand beyond that. And the Tubulis technology is really the first that convinced us to add that to our portfolio because it's just so transformational and has so much opportunity.

Regarding your second question with the VEGF, PD-1, obviously, this is interesting mechanism that we follow closely. The combinations need to be, in my mind, very targeted to the individual tumor type. So you need to really evaluate the PD-1 mechanism play a role? Does the VEGF mechanism play a role? And we're also obviously looking at the data that is coming out with these different molecules currently in development across different tumor types.

And Akash, it's Andy. Maybe I would just add following what you heard from Dietmar and Dan. There are clearly numerous sources of value in the acquisition that we're excited about. I think I said on our call a couple weeks ago, the ovarian opportunity alone is very large. The data is really encouraging. The financial return for our company and the shareholders on ovarian cancer alone, and justify the transaction price. You're absolutely right. There is upside in lung cancer potentially. We'll see as the data develops. And all of these products have the potential to be pipeline in a product, but just the ovarian cancer opportunity alone is very exciting. So I'll leave it at that for now.

[Operator Instructions] Our next question comes from Terence Flynn at Morgan Stanley.

Congrats on all the progress. This is a question for Johanna, and that's 1 question, I promise. Just on the Yeztugo launch, can you provide the latest mix of Switch versus naive buy and bill? And then anything new on the adherence assumption that's embedded in the $1 billion guidance?

Thanks for the question. Yes, we're really excited about what we're seeing with the strong performance in the first quarter, and that's really across all of the launch metrics that you were referring to. I would start with just growing confidence with health care professionals as the access pathways are getting a lot easier. The logistics, the experience is growing and we're really seeing that pick up as well as new prescribers of Yeztugo also adding every single week. From an access standpoint, we're now at about 95% of coverage, with 95% of those have $0 co-pay. So we're in a really good situation, which I think is what you're seeing kind of that growth post the January 1 play because of the updates in the prescriber fees scheduled for a J-code and everything else just kind of coming into play.

On the market share front that you were referring to, we're obviously tracking both the naive and Switch share. Switch share is obviously greater than the naive, but naive is coming along really quite nicely, and we're seeing strong momentum there as well. We see in the Switch share, we see a bit of a split. Across 1/3, 1/3, 1/3 basically across L.A. -- other LAI injectable the Truvada generics as well as Descovy. So we're seeing a little bit of a play there. And then we're seeing really strong market growth at about 14%. That is driving not just Yeztugo, that's obviously helping Descovy as well.

And then your last comment was around persistency. Still early days, right? As you think about the volume, only really started in Q4. But what we are seeing, we're really pleased with, very encouraging. I think HCPs are starting the second injection and thinking it's a lot easier, access is easier as well as the experience, the confidence in the injection and the experience for the people getting the injection is also better as with what we're hearing anecdotally. We do expect Yeztugo persistency to keep growing over time and to be the highest in the overall HIV prevention market. Yes. So basically, that sum up our first quarter for Yeztugo, incredibly strong performance and explains why we've updated our guidance to the $1 billion opportunity for 2026.

Our next question comes from Salveen Richter at Goldman Sachs.

My question, with regard to users who haven't yet returned for a second dose, do you have a sense of what's driving this how it breaks down between users who are stopping PrEp versus switching to another option or just delayed in coming back from the second dose? And maybe just speak to the DTC efforts as well.

Sure. Thanks, Salveen. I think what we're doing is we're tracking the claims data pretty closely. It's not perfect data, I'll be honest with you. So I don't have the level of detail that you're referring to. What we are seeing, however, is really good comeback on the second dose and within a certain time frame. So as long as you give it a couple of weeks, plus or minus. I think what we're seeing is really positive and encouraging. And what we're hearing as well, right, as you -- as we do a lot of market research with our health care professionals as well.

The DTC only adds to that. We have a lot of efforts going on with persistency. We really leverage our specialty pharmacies to make sure that they call and remind them to make their appointments well ahead of time. The DTC helps that as well. Our DTC started late February and what we've been seeing is a huge increase in brand awareness and visibility for Yeztugo, but it really also helps remind people to come back for their injection as well. So all those pieces are coming together, let alone additional work that we're doing to kind of accelerate that and support DTC campaign. As for actual results on DTC, it's still really early. We just launched late February. We're seeing social media awareness really ramp up. Because of those efforts -- but it takes 6 to 12 months before we really see kind of the output of the DTC.

Our next question comes from Mohit Bansal at Wells Fargo.

Hope your BD team got some rest off from the crazy first quarter. So my question is regarding the attractiveness of BIC/LEN treatment here with -- as you are about to launch. So 5% to 6% of the HIV market could still be a sizable opportunity. So could you please help us understand the opportunity here? And how big this product could be even in the Switch market?

Thanks, Mohit. It's Johanna. I'll take that one. So yes, we're really excited about BIC/LEN with the PDUFA date around the corner, right, late August. And the way we're thinking about BIC/LEN is really 2 opportunities within it. One is what you referred to, which is with ARTISTRY-1 showing with virologically suppressed complex regimen, there's still about 5% to 6% people living with HIV that are on multiple pills, 5, 6, 7, 8 pills on a daily basis. And this is an opportunity to simplify the regimen and move to 1 pill once a day. And so that is something that we will be very focused on at launch.

In addition to that opportunity, we also believe that in the Switch market, which is the dynamic market for people living with HIV, there's about 20% or so that Switch. And that has to do with the innovation life cycle that we've seen over the years. And so people want to Switch to the next thing that comes on the market. So that does happen in our marketplace. And so we see that as an opportunity for BIC/LEN. As you think about Biktarvy. And obviously, Biktarvy, we believe, will continue to remain the standard of care for many years to come with an LOE out to 2036.

We do believe, though, that some people do Switch off Biktarvy. And right now, they're switching off to competitor products. We believe with BIC/LEN, there's an opportunity to play in that Switch market, which we haven't had in the past and moved them from Biktarvy, if they're going to anyway to BIC/LEN. And as you think about BIC/LEN with, bictegravir as the integrase inhibitor, standard of care and lenacapavir as a really innovative capsid inhibitor, pulling those 2 together that combination of 2 orthogonal mechanisms with really high resistance and no cross resistance makes it a really appealing option for patients.

And so that's how we're thinking about the BIC/LEN opportunity. I will say, obviously, with the late launch in '27 in late August, Access will need to ramp up. So it will be modest revenues in 2026 with a nice ramp in '27 and beyond.

Our next question comes from Carter Gould at Cantor Fitzgerald.

Another one on Yeztugo adherence. Johanna, I appreciate your framing of adherence is sort of highest in the category. Fair to assume those comments are anchoring on aptitude adherence around 50% still? And are there any reasons based, I guess, on the early days that the greater than 80% adherence that you outlined at HIV Day 18 months ago is not still in play? With the once yearly offering.

Yes. Thanks, Carter. I think what you're referring to is also the adherence, not the persistency at 80%. And we still believe, obviously, that adherence is obviously much greater because you're 100% for 6-month. From a persistency level, we do believe -- well, we do believe with a Q6 monthly and what we're seeing in early days is definitely much stronger than what the current competition is seeing in the marketplace. And so that's what's encouraging to see people coming back for their second injection, and obviously, potentially even third later this year. And so that's what we're tracking super closely. And supporting those efforts as well.

I think we -- what we're also very conscious of is just making sure the logistics and the schedule is happening in a timely way and working with clinics and different specialty pharmacies to make sure that happens exactly in line with that. And so I do see the opportunity for Yeztugo to be very persistent going forward. And of course, understanding that you're in a prevention market. So it's never going to be 100%. But I think it's just that balance is important as well.

Our next question comes from Geoff Meacham at Citi.

Congrats on the quarter. One on Anito-cel, as you guys approach the launch and just looking at the development in earlier lines, just want to get your perspective on the safety advantage among CAR-Ts. Would we expect it to narrow or to widen as you treat patients upstream that are maybe perhaps less heavily pretreated?

Thanks, Geoff. It's Cindy. We actually agree with the statement you just made. We're really excited about the potential for Anito-cel going into earlier lines, whether it's newly diagnosed multiple myeloma or even in smoldering where patients aren't technically diagnosed with the disease. So safety really matters at that point. I think it's a combination, though, particularly with our efficacy profile that we've seen to date, coupled with the safety profile, we think it's going to be a really important option for patients in earlier lines. And we're working on right now, the trial designs in newly diagnosed multiple myeloma, and we'll be sharing more information on those as available. So we think it's going to be an opportunity based on both exceptional efficacy that we're observing as well as a differentiated safety profile.

Our next question comes from Alex Hammond at Wolfe.

So obviously, this year, you guys have had 3 new acquisition integrations running simultaneously alongside multiple commercial launches. So I guess like how should we think about margins in the near term and the long term? Is there room for continued margin expansion, particularly in that '27 to '28 time frame?

Alex, it's Andy. Thanks for the question. We appreciate it. I mean look, you see in the first quarter, a 47% operating margin, significant strengthening of the margin from last year. The business continues to perform really well. You see that in our updated guidance, including the increase in the revenue guidance. You also see the ability to absorb all 3 of these deals essentially to offset with the revenue outperformance the incremental expenses that we expect this year. So of the roughly $400 million in incremental expenses, a little over $200 million of those are R&D expenses this year and then the remainder of them are the financing expenses. But you see our ability with the revenue outperformance and the disciplined expense management to pull those in and offset that when you look -- when you exclude the IPR&D and kind of look at our expectation on an apples-to-apples basis.

I will say, we expect in 2027 to find room in our portfolio and our P&L for these as well. We've spent a lot of time planning for this as we were looking at the transaction. So we feel very comfortable about the ability to navigate the incremental expenses. And then when you look beyond '27, our expectation was that we were going to have more room in our portfolio in any event. As you know you've been wrapping up a number of Phase III trials across our entire portfolio. So I think '26 and '27, these are modest increases. They're manageable. '28 and beyond, we needed to add to the portfolio in any event, and these are really high-quality assets that we can add, and you should still expect very strong financial performance on the bottom line and the top line, and there is room to strengthen the margin over time. Of course, it can vary from quarter-to-quarter. But when we look at where we feel like we're in a great spot today and really excited about what lies ahead.

Our next question comes from Umer Raffat at Evercore.

I was actually really looking forward to a possible update on your Phase II ulcerative colitis trial of the oral alpha 4 beta 7. I think when trial says it wrapped up in March. I guess how should I interpret lack of any update there?

Umer, thank you for the question. We are really excited about the alpha 4 beta 7, and we're very much looking forward to updating you in due course, right? I don't read anything into the current time line, right? We are looking at the data, and we will update you very soon.

Our next question comes from Tyler Van Buren at TD Cowen.

For Yeztugo, can you discuss what regions in the U.S. you're seeing the greatest uptake so far in the launch and how you expect that to evolve in the coming months and years?

Sure, Tyler. It's Johanna. I'll take that. Where we are seeing the greatest uptake is actually where we had already penetrated the HIV PrEP market as you think about certain cities across the United States, san Francisco, L.A., New York, Florida, et cetera. Those are definitely areas where they were more comfortable with PrEP. And so therefore, it's more of a Switch market there. What we're also very focused on in parallel to that kind of build has been on the naive market and making sure that we're creating awareness where there is a high unmet medical need where you see the highest HIV incidents in certain parts, for example, the rural south of the United States. And that's obviously -- that's going to be over time, but that's also where we're seeing more of the naive prescription coming through as well.

Our next question comes from Mike Yee at UBS.

On GS-3242, you had some great data at CROI recently. Your competitor seems to think that they are ahead, I think, publicly stating 2030 type time to market. You're saying 2031 to 2033. Could you talk a little bit about your timing and what drives the difference between '31 and '33 and how you're thinking about that program?

Yes. Thanks for the question. I mean obviously, currently and what you've seen at CROI, we're currently in the dose escalation phase. We're looking at the pharmacokinetics for different doses. We are very comfortable with the Q4 months dosing. Obviously, our ambition, and we are really encouraged by the data we've seen is to bring this to once every 6 months dosing. So I'm confident moving forward there. And '31 to '33 is really only a reflection and I would call it a conservative reflection of the different trial designs and different clinical plans that we're currently working on.

But what I do want to assure you about is we will try to bring this forward to patients as quickly as possible because we feel once every 6-month injectable treatment on the basis of 3242 will really be able to make a difference for patients.

Our next question comes from Chris Schott at JPMorgan. Apologies. Our next question comes from Tazeen Ahmad at BofA.

I wanted to ask your thoughts on how you're thinking about the impact to Trodelvy sales and triple negative, in particular, in the case that [ Astranaichi ] and [ Satara ] is approved, I think they have PDUFA in June. And they're claiming a superior overall survival benefit relative to chemotherapy in patients that aren't eligible for immunotherapy. Does that change what you think the market opportunity is in this indication for Trodelvy?

Yes. Thanks, Tazeen, for the question. Listen, we're really excited about Trodelvy performance. Let me start with Q1, right, with the 37% year-on-year growth. And a lot of that growth is really driven by the confidence that is building with physicians, with Trodelvy. So we had really been building as the standard of care in second-line setting for metastatic TNBC. What we've seen since the publications and the NCCN guidelines updating us to a Category 1 for both first-line PD-L1 negative as well as PD-L1 positive. What we've seen is a really nice uptake in earlier lines, including first line, and obviously, that spontaneous use that we're seeing.

So we feel very confident that the offering that Trodelvy is bringing to the patients, to these women is really going to make a difference. And I think it's the overall profile of Trodelvy. I think the data speaks for itself. I think it's practice changing as we've been told both at ASCO and ESMO when both studies were presented. And we're excited about the potential approvals of both first line and second line towards the later, I guess, Q3 of this year. So more to come.

Our last question comes from Chris Schott at JPMorgan.

Sorry, I was muted before. I just wanted to come back to Anito-cel and launch dynamics as we look out to 2027. I guess, specifically, do you think you're going to need the second-line iMMagine-3 data before you can broadly convert over practices? Or do you think there's an ability to ramp this product just based on the initial later line approvals?

Thanks a lot for the question, Chris. This is Cindy. We feel really confident about the Anito-cel launch. We think that it's going to offer the one-and-done treatment that Cell Therapy has with stellar efficacy but also with not compromising on safety, and that matters in every line. We're excited to bring it forward in fourth line. We're hearing from our KOLs and many of our authorized treatment centers, their excitement and that pans through in 2 ways. One is we've seen it in our enrollment for iMMagine-3, which went faster than we expected.

And the second is that we expect to have a majority of our authorized treatment centers activated within the first quarter of 2027 based on their enthusiasm to bring this on board. So we see an opportunity at a patient level, we know the market in fourth line plus is $3.5 billion. So there's a substantial opportunity there. We also think that Anito-cel offers that differentiated both efficacy and safety profile that patients and physicians are looking for.

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

So thanks, everybody, for joining. I just want to wrap up a very strong quarter with thanking the Gilead teams for another impressive quarter. I think the performance that you're seeing at Gilead today in the second quarter is clearly driven by the quality of our portfolio that's been enhanced also by adding some acquisitions since the beginning of the year.

Numerous launches underway and our continued focus on financial -- disciplined financial management, which you heard today and our ability to add to the portfolio and continue to have our focus on disciplined financial management. So underpinning all of this is obviously the dedication of our teams that I get to work with every day, the people and communities. And we're going to continue to stay very focused on commercial and clinical execution like you've seen us do in past quarters.

So I would just say, closing off as we look for the remainder of 2026, in addition to the really strong launches that are underway right now with Yeztugo and Livdelzi, we have up to 4 potential upcoming launches before the end of the year and up to 5 Phase III updates this year. So there's just so many opportunities on the horizon to increase our impact, and we look forward to keeping you informed on the progress throughout the year.

As usual, if you have any additional questions, that you weren't able to get answered today, please reach out to our Investor Relations group. We're happy to help you and support you in any way possible. Thank you for your attention and focus on Gilead today.

Good afternoon. Thank you for attending today's Gilead Sciences update on proposed Tubulis, Ouro and Arcellx acquisitions call. My name is Tamia, and I will be your moderator for today's call. [Operator Instructions]

I would now like to pass the conference over to your host, Jacquie Ross, SVP, Treasurer and Head of Investor Relations.

Thank you, Tamia. Good afternoon, everyone, and welcome to today's call to discuss this morning's announcement of Gilead's definitive agreement to acquire Tubulis in addition to other recently announced transactions with Arcellx and Ouro.

A press release, in addition to the presentation slides from today's call are available on the Investors section of our website at gilead.com.

The speakers on today's call will be our Chairman and Chief Executive Officer, Daniel P. O'Day; our Chief Medical Officer, Dietmar Berger; the Executive Vice President of Kite, Cindy Perettie; and our Chief Financial Officer, Andrew Dickinson. After that, we'll open the call to Q&A where the team will be joined by Johanna Mercier, our Chief Commercial and Corporate Affairs Officer.

Before we get started, let me remind you that we will be making forward-looking statements. Please refer to Slide 2 regarding the risks and uncertainties relating to forward-looking statements that could cause actual results to differ materially.

With that, I'll turn the call over to Dan.

Thank you, Jacquie, and good afternoon, everyone. We're really excited to connect with you following this morning's announcement regarding our definitive agreement to acquire Tubulis. We believe the Tubulis' lead program could be transformative for ovarian cancer and combined with all our existing internal programs and the recent announcements with both Arcellx and Ouro, the quality of Gilead's pipeline has never been stronger.

Even prior to these announcements, 2026 was already an exciting moment in Gilead's history. Building on our recent consistent track record of commercial, clinical and financial execution, Gilead's portfolio is the most robust and diverse ever. In 2026 alone, we expect 5 Phase III updates across spirology, oncology and inflammation, highlighting the productivity of our clinical pipeline. Our pipeline is also driving up to 10 ongoing and potential new launches through 2027 across our 3 therapeutic areas of focus. This reflects the success of the strategy that's been shaping Gilead over the last 6 years.

Combined with strong commercial execution and no major LOEs until 2036, we believe that this sets us up for a period of sustained and robust growth, establishing Gilead as one of the top growth companies in our sector. From this position of strength, we are mindful of the opportunity for thoughtful business development to ensure that Gilead enters the 2030s with an even more differentiated portfolio that is expected to contribute additional top and bottom line growth and scale our patient impact.

Given the strength of our existing pipeline and our commitment to financial discipline, the bar for acquisitions is higher than ever before. We've been disciplined and patient and have passed on dozens of deals that didn't meet our high bar. Indeed, Gilead has not completed a larger deal since early 2024 with the acquisition of CymaBay that led to the successful commercial launch of Livdelzi. The proposed acquisitions of Tubulis, Ouro and Arcellx are driven by and consistent with our strategic priorities.

Each buildup or extends capabilities and patient impact in 1 or more of our 3 therapeutic areas of folks. Each offers unique and sizable commercial opportunities that potentially extend the longevity and growth of Gilead's pipeline while also contributing to our financial goals. Each meets the high bar we set for the quality of science, potential to address unmet needs and expected contribution to Gilead's growth ambitions. And as a group, these acquisitions bring potential best in disease and first-in-class blockbusters in addition to broader research and development platforms.

The fact that 3 acquisitions are expected to close in the second quarter did not reflect any change in the confidence we have in our existing clinical pipeline nor any change in our philosophy regarding M&A. Rather, it simply reflects the fact that 3 companies met our high bar in quick succession. Recognizing the pace of business development activity over the last few months, we expect to take some time now to focus on integration activities and more ordinary core business development transactions.

Andy will discuss the financial impact of the 3 transactions and our capital priorities in more detail, but there is no change to our commitment to operating expense discipline nor to our focus on execution across our existing commercial and finical portfolios.

We look forward to sharing our first quarter results on May 7. In the meantime, I'll hand the call over to Dietmar and Cindy to share more about our recent announcements regarding Tubulis with its lead acid in ovarian cancer or with its lead acid in autoimmune diseases and our cell with its lead acid and multiple myeloma. Dietmar?

Thanks, Dan, and good afternoon, everyone. Since 2019, Gilead has undergone an incredible transformation, building the most robust and differentiated pipeline in the company's history. In virology, Gilead's team and our partners have a long history of world-class innovation, resulting in the most exciting commercial portfolio and clinical pipeline in the industry and a proud legacy of Global Health impact.

Moving to our growing inflammation and oncology businesses, we are well on our way to delivering similar impact for patients with autoimmune diseases and cancer. While our existing pipeline at a high bar, we continue to refine and add to it with the best science where the new breakthrough therapies are discovered through internal or external research. Tubulis, Ouro Medicines and Arcellx, each offer potentially best-in-disease assets that I believe will build up and accelerate the progress made to date by our internal oncology information research and development teams.

We shared this morning that we reached an agreement to acquire Tubulis, a privately held clinical-stage biotechnology company that has developed what we believe is an industry-leading platform for antibody-drug conjugate or ADC development. ADCs represent one of the most promising modalities in cancer today. Gilead has had a long-running interest in this area and already has a leading ADC with Trodelvy, which is a standard of care regimen in metastatic triple-negative breast cancer and pretreated hormone receptor positive HER2-negative metastatic breast cancer.

Additionally, we have deep late-stage clinical programs for Trodelvy with several important Phase III updates expected later this year. Building on our experience with Trodelvy and years of diligence, we first partnered with Tubulis in 2024 to apply their ADC platform to a Gilead provided antibody with an undisclosed target. This Gilead owned ADC is currently in preclinical development. Our experience working with the tubules platform has provided us with great insights into the platform's capabilities.

In addition, the compelling clinical data that Tubulis has recently shared have increased our confidence that Tubulis has the right technology to meet our aspirations. Tubulis adds complementary ADCs in new tumor types and a potentially industry-leading platform for continued development of next-generation ADCs. Specifically, Tubulis has developed proprietary P5 conjugation, which combined with a highly potent exatecan payload for their topotecan platform. This platform produces highly differentiated ADCs with consistent and high drug-to-antibody ratios that are extremely stable in circulation compared to other ADC platforms.

It is the sum of these properties that has unlocked a broad range of new targets for ADCs, including NAPI 2B that have been elusive with prior ADC attempts. Additionally, Tubulis has developed proprietary ALK5 conjugation, which takes it a step further by allowing for development of ADCs with new classes of payloads, including various cytotoxins, protein degraders and immune modulators. By combining the capabilities unlocked by these technologies with our industry-leading medicinal chemistry, we see an opportunity to drive an unprecedented wave of innovation in the ADC space across oncology, inflammation and virology.

Moving to Slide 5. You can see why we believe Cubulis's investigational lead asset, 2040 has the potential to substantially transform ovarian cancer treatment. First, TUB-040 targets NaPi2b, which is expressed in approximately 90% of ovarian cancer cells while having minimal expression in normal cells. This allows TUB-040 to deliver extremely potent tumor killing payloads directly to the ovarian cancer cells expressing NaPi2b and still spare healthy cells to avoid toxicity.

Second, TUB-040's efficacy data is compelling compared to approved and investigational ADC options, especially given the patients were not selected for high NaPi2b expression or any other biomarker. At ESMO in October 2025, Phase I data in 46 patients with platinum-resistant ovarian cancer showed a confirmed overall response rate of 50% or 59%, including unconfirmed responses. These responses occurred early and deepened over time. Further, since ESMO, this data has matured promisingly with over 130 patients treated to date, and we look forward to sharing updates at a future medical congress.

Third, TUB-040 showed potential for clear safety and tolerability differentiation versus other approved or investigational ADCs in ovarian cancer patients. In the Phase I data, 2040 showed potentially lower rates of grade 3 plus treatment-emergent adverse events and no discontinuations due to adverse events.

Additionally, there were no clinically relevant bleeding, pneumonitis, ocular toxicity, stomatitis or neuropathy observed. 2040 has already advanced to the Phase II portion of its trial in platinum-resistant ovarian cancer patients and is expected to enter registrational Phase III studies for this population in 2027. Overall, we are very excited by the potential of TUB-040 in this difficult-to-treat cancer.

Now moving to Slide 6. We are equally excited by our recent definitive agreement to acquire Oral Medicines, a privately held biotechnology company with a portfolio of potential best-in-class and first-in-class T-cell engager therapies under evaluation for certain autoimmune conditions. We are delighted to be partnering with Galapagos on this transaction where the efficient use of capital and shared investment and expertise add value to both Gilead and Galapagos Oral Medicine's lead asset, OM336 or gamgertamig, is a clinical stage BCMA CD3 bispecific T cell engager with potentially superior potency and lower CRS than other BCMA T cell engagers.

In addition, OM336 is administered subcutaneously and has shown clinical proof of concept in approximately 60 patients across immune-mediated diseases. OM336 is an ongoing development for multiple orphan autoimmune indications with high unmet need, including autoimmune hemolytic anemia, immune thrombocytopenia, pemphigus vulgaris, pemphigus foliaceus and idiopathic inflammatory myopathies, these indications potentially accelerate Gilead's expansion in inflammation with potential Phase III registrational trials starting as early as 2027.

Beyond its initial indications, OM336 could have development potential in more than 20 immune-mediated diseases that are driven by pathogenic B and plasma cells such as myasthenia Braves, rheumatoid arthritis, sugar and disease and systemic lupus erythematosus, just to name a few. OM336 reflects a compelling approach to achieving deep and sustained reduction in B and plasma cells. Anito cell, a BCA directed CAR team reflects a complementary approach. Together, OM336 and the anito cell or potentially also other car constructs, would enable a paradigm shift in the treatment of autoimmune diseases from chronic symptom control to potentially durable immune reset.

And with that, I'll hand the call over to Cindy to highlight further Gilead and Kite strategy in this rapidly developing and transformative field of medicine.

Thank you, Dietmar, and good afternoon, everyone. Moving to our select on Slide 7. The acquisition follows more than 3 years of our highly productive collaboration on Medical, a transformative and potentially best in disease asset in BCMA cell therapy. Strategically, the acquisition allows us to maximize the long-term blockbuster potential of anito cell, notably in earlier-line settings. We are excited by this opportunity to unlock the over $20 billion CAR-T multiple myeloma market and believe that Amedisys potential here is underappreciated. We are now less than 9 months away from our FDA PDUFA date in fourth line plus multiple myeloma and our preparations for the potential launch are well underway.

We are also -- we also have an ongoing pivotal trial in the second line plus population. In addition, we are preparing for the clinical program in the newly diagnosed setting, where there's an even more sizable population of patients that could benefit. Our confidence in anito cell potential to reach across lines of therapy is underpinned by the exceptional ASH data from the IMAGINE-1 study in fourth-line plus multiple myeloma. The data demonstrated clinically meaningful, deep and durable efficacy as well as a differentiated safety profile, including no delayed or non ICAN neurotoxicities and enterocolitis.

Importantly, a need to help complement our portfolio and leverages our end-to-end expertise in cell therapy. In addition to our commercial footprint and our network of authorized treatment centers, -- we believe that our track record of manufacturing reliably has yet to be matched in the industry. This positions us well to scale rapidly as we did at launch. Bringing the development of anti-cell fully in talent also enables streamlined decision-making. This allows us to rapidly explore emerging opportunities such as smoldering multiple myeloma and community studies.

Beyond anito cell, the acquisition of Arcellx earlier-stage clinical programs, in addition to differentiated and scalable technology platform built on the proprietary D-domain binders. These binders have the potential to expand our pipeline and research efforts to next-generation autologous CAR Ts, in vivo CAR Ts as well as T cell engagers over time. Following the acquisition, we will capture the full economics of anito cell by eliminating cost sharing and royalties as well as up to $1.5 billion in anticipated regulatory and development milestone payments.

Combining our Arcellx and Ouro acquisitions with our internal programs, I'm more excited than ever about the potential of CAR T and T cell engagers to deliver therapeutic innovation and potentially immune reset

With that, I'm going to turn it over to Andy.

Thank you, Cindy, and good afternoon, everyone. Before we get to your questions, I wanted to touch on the P&L impact of these transactions on Slide 8. With these acquisitions, we continue to evolve our clinical and preclinical programs with the company's long-term growth firmly in mind. At the same time, we remain committed to operating expense discipline to ensure that we are appropriately balancing shorter-term goals including upcoming product launches with longer-term goals, including the progression of earlier-stage clinical assets that are also fundamental to Gilead's sustainability and continued growth.

The acquisitions of Tubulis, Ouro and Arcellx are all currently expected to close in the second quarter, and we will update our full year 2026 guidance in due course. In the meantime, and excluding transaction-related IPR&D, I can share that we do not expect a significant increase in operating expenses in 2026. This reflects the careful prioritization of operational spend, consistent with our track record over the last several years, in addition to the share development expenses with Galapagos and the existing collaboration agreement with Arcellx.

With regards to R&D specifically, we expect a modest and manageable dollar increase compared to our start of the year guidance for 2026, and expect R&D as a percentage of total revenue to be less than 20% for the full year. As noted previously, and excluding the IPR&D impact of the transaction, we expect the Arcellx acquisition to be modestly dilutive to non-GAAP EPS in 2026 and 2027 and accretive thereafter. Given the significantly smaller scale of the Ouro and Tubulis transactions, the additional operating expenses are expected to be manageable and within our broader research and development budget, which is relatively constant even as Phase III programs roll on and new programs progress into the portfolio.

Moving to Slide 9. And in terms of funding the acquisitions of Arcellx and Ouro, we are using cash and adding liquidity to our balance sheet through a short-term $5 billion loan that we expect to repay before the end of 2026. Additionally, we expect to issue senior unsecured notes to fund the acquisition of Tubulis in the second quarter of 2026, and after which our total long-term debt is expected to be approximately $24 billion or flat with our long-term debt level at the end of 2025.

As we look forward, and considering the pace of our activity in the first 4 months of 2026, our business development focus in the near term will be closing and ensuring the successful integration of these programs with a commitment to maintaining strong clinical momentum. At the same time, we will continue to pursue ordinary course business development transactions. It's less likely that we will pursue more sizable M&A this year, although we will always leave the door open to consider strategic acquisitions if a compelling opportunity emerges.

With that, I'll invite the operator to begin the Q&A.

[Operator Instructions] The first question comes from Tyler Van Buren with TD Cowen.

Congratulations on the recently announced string of transactions, which were very exciting. I'm going to ask about Tubulis since that's the most recent. So is it fair to assume that the clear majority of the 3.15 upfront valuation comes from TUB-040 in ovarian? Or is lung included? And specifically, what have you seen in the ovarian data since ESMO to increase your confidence in its best-in-class potential with a particular focus on durability and would love to hear anything you have to say about what we should expect to ASCO as well.

Tyler, it's Andy. Maybe I'll start and then hand it over to Dietmar for the second part of your question. In terms of the opportunity, we are excited by the fact that Tubulis is more than just the lead asset. There's a number of additional assets and then there's the very strong platform that you heard us talk about in the prepared remarks.

In terms of the upfront valuation, it is supported by the ovarian cancer indications alone. So there's a significant opportunity, not only in the PROC, but also in other forms of ovarian cancer and earlier lines that we're excited about. So the deal value represents the entirety of the transaction and the platform, but the opportunity in ovarian cancer alone is really significant.

Do you want to talk about the clinical data, Dietmar?

Yes, of course. So thanks for the question. When you look at the data and the data that has been presented at ESMO in 2025, that data is already really exciting. But when you look at, yes, unprecedented efficacy, looking at the objective response rates, the disease control rate, coming with a really strong safety profile. None of the major toxicities that you see with some of the other ADCs around really low neutropenia rates, et cetera, and good efficacy actually across a variety of dosing spectrum and also good durability of that efficacy, all validate the platform, but also more importantly, validate the opportunity in ovarian cancer.

What we've seen, obviously, is further maturation of that data in these 130 patients that we spoke about. We cannot share details on that data at this point in time. But let's say these data, we also see those as encouraging and further validating the data that have been seen before. And yes, absolutely, you will see more data during the year in upcoming medical conferences.

[Operator Instructions] The next question comes from Geoff Meacham with Citi.

Congrats on these deals. I had one on Arcellx I know obviously, you guys have been a partner here for quite a while. Maybe just curious what the tipping point was to ultimately consolidate all the economics. Did you see something in the emerging clinical data set? Was it just confidence in the differentiation as you look to opportunities and newly diagnosed or first or second line. And I want to get your -- maybe your perspective of the where we are from an FDA perspective about more rapidly looking at things like MRD negativity as an approvable endpoint in earlier stages of myeloma.

Yes, terrific. Thanks, Jeff. I'm going to start, Dan, and I'll certainly turn it over to Cindy. But just to frame this, I mean, obviously, Arcellx is a company and an opportunity that we have full knowledge about. And really what's important here is I think when we look at anito cell, we see a transformative the potentially best in disease asset in BCMA cell therapy with an opportunity that's underappreciated by the Street.

In particular, I would say, to your question about why and why now. I think the opportunity to really accelerate and achieve the full potential of anito cell across the populations in multiple myeloma. By combining this into -- fully into Gilead, it allows us to move with speed, both in the initial launches but also very importantly, as we expand into the earlier lines of therapy, we're seeing and we have the potential to see really transformative changes in terms of this disease course. And that's really driven quite a bit of this in our ability to make sure that we can maximize the potential of this.

And what I would say is why now, I think we are kind of at the right point of the risk continuum. We had seen the significant derisking of the data at the end of last year in terms of the profile of the product and in a relatively large term of patients over a long period -- a longer period of time. That, combined with the fact that the acceptance of the FDA BLA allowed us to really take this opportunity and believe this was the right opportunity to fully acquire and maximize this. And then finally, I'll say, the opportunity to look beyond just the pure needle cell concept in the platform and the domain profile allows us to consider this contract in other types of platforms for future diseases, including, of course, oncology, but other diseases as well.

With that, I'll have Cindy give a greater granularity on a couple of these things.

Yes. No, I think you highlighted the points that are important as to why now. And of course, our launch plays into that as well, and we wanted to have ample time for preparation in addition to what Dan has shared. You saw the data at ASH. It's incredibly compelling. And we think that this has significant commercial opportunity that may be underrepresented today, particularly in the early lines.

I think the second piece I would talk about is you've asked about the second-line study and our filings. Starting with our filing, we continue to have good dialogue with the FDA and none of the questions that we're receiving today are what we would consider surprising. So the filing is going really well. We also are in the process of completing this quarter, the enrollment in Imagine and we're excited as that continues to progress and read out in the 2027 time frame. The discussions with FDA on the IMAGINE-3 protocol occurred when we submitted it. and they understand the dual endpoints. And obviously, we'll continue to have that dialogue when we get the data.

The next question comes from Michael Yee of UBS.

Congrats on the transactions. On Ouro, can you talk a little bit about how you think about the competitive landscape versus, say, other, say, directly competitive BCMA TCs like candid, which seem to have strong efficacy and safety as well. Do you view yourself as best-in-class or first-in-class or just different indications and targets. How do you think about comparing that given the competitive landscape?

Yes. Michael, this is Dietmar. Thank you for the question. Obviously, as you can imagine, we looked at the landscape really carefully, and we have variance in the landscape also from a CAR T perspective, right, really focusing on the target of BCMA. We decided to really look at overall and do the acquisition there because we think it's a really well differentiated asset with a lot of potential across the board in different B and plasma cell-driven disease. And what really helped us in there is also some of the early data that we've seen. You may know that there has been a case study that has been published in the England Journal of Medicine and with 2 patients with autoimmune hemolytic anemia. That showed rapid improvement with a short course of treatment, which was very encouraging. And of course, we have additional data that have not been shared so far. That could also lead to OM336 entering registration trials as early as 2027.

So all of these factors, the efficacy that we've seen, the safety that we've seen in the broad applicability and also the data that we have that could lead to rather short term also regulatory upside has really led us to go with Ouro in a, yes, granted, rather competitive field.

The next question comes from Salveen Richter with Goldman Sachs.

You highlighted in the press release that Tubulis' next-generation ADC technologies, combined with your capabilities could unlock new classes of payloads and drive ADC innovation across additional categories, including I&I and virology. Could you just speak to that? And also talk to how this platform compares to industry leaders like AstraZeneca or emerging players, such as Immuno?

Yes. Thanks, Salveen, for the question. The Tubulis platform really has 2 very specific types of innovation that we feel are broadly applicable. One is the P5 conjugation which is really phosphorus-based chemistry, which is very different from anything else in the ADC space. And that allows, together with a highly potent exatecan payload, now to have this broader application of this topotecan platform in oncology with various targets, right? So there's a lot of combinability on that basis.

And then you have -- on top of that, you have this ALCO 5 conjugation, which expands that even further. And what that does is it does allow to actually enter entirely new classes of payloads into the mix. And this is where it gets really interesting where you could have cytotoxin, you could have protein degraders, you could have immune modulators and other types of payloads, which then become really attractive, for example, in immunology or in virology. Think about potential antiviral payloads, think about potential immunologically modulating payload. So that's where we see the real opportunity, and that's also where our chemistry and medicinal chemistry, but also biological capabilities come in, in combination with this unique platform that Tubulis has developed. So we're really excited about those opportunities.

Yes, of course, oncology, ovarian cancer and then other areas in oncology are the first directions, but there is real opportunity to build out and move into information and into virology.

The next question comes from Carter Gould with Cantor.

Congrats on the announcements. Dietmar and team, I guess you alluded to it a bit, but how did you get comfortable with 040 given the prior track record of agents targeting NaPi2b. Your early efficacy data are compelling, but were there other aspects of your own ADC capabilities that gave you insight into explaining the failure and setbacks of prior agents here and how that help give you confidence in the fidelity of the data?

Thank you for the question, Carter. I'm well aware of some of the other attempts to target NaPi2b. And obviously, they were most limited by the therapeutic index that they saw, right? What we've seen here with TUB-040 is, first of all, the data is really encouraging from an efficacy perspective, from a safety perspective, from a durability perspective. But also when you look at the characteristics of the molecule, it is -- due to this new linker technology, it is highly stable in circulation, which really leads to a situation where you do not a lot of leakage, where you do not get a lot of unwanted toxicity by release of the payload into the circulation and systemic toxicity. You get the efficacy really where you need it, which is obviously in the tumor where the target is expressed.

And you also see this long-standing durability. And we try to describe that really as, as you know, the mix of these different characteristics leads to a different type of therapeutic index. So I think the biological basis for it, the chemistry and the biological basis really underpins what we see clinically from an efficacy and safety perspective. And that's where we think the differentiation really is.

The next question comes from Brian Abrams with RBC Capital.

Congrats on all the deal activity. Back on Ouro, I was wondering if you could talk about what are the key additional data that you're looking for here to drive what indications to prioritize for the initial pivotals? And when and how might you look to explore some of those broader indications that you mentioned? Is there an optimal population or a safety bar to generally think about?

Yes. Thanks for the question. There are ongoing studies. And obviously, I'm speaking here about also the collaboration with Galapagos, and we will do that together with a partner. When you think about addressing B cells and plasma cells with a BCMA-targeted molecules, you're thinking largely autoantibody-driven disease, right? And that's what we're looking for obviously, more information from the ongoing studies on efficacy on safety also on durability of the effect. The question of what you need to do to get to a real immune reset. For example, do you need to retreat?

So all of those are ongoing questions that you're currently exploring, how can we strategize between the ongoing CAR T portfolio that we have and the overall opportunity with the T cell engagers. How I'm thinking about this, there are some immediate and we've spoken about that, there are some immediate indications that are heavily driven by autoantibodies and literally by the plasma and vice component. That's the order new hemolytic anemia. We have seen some early data published in the New England Journal of Medicine. But also ITP, also pemphigus vulgaris, foliaceus, et cetera, the indication that we've mentioned.

And then going into further and larger indications like SLE, like rheumatoid arthritis that are also driven obviously by B cells, by autoantibodies, that's again where we need to see further data. We have actually some of those data are currently generated and we're really looking forward to share those with you, and then to share a broader update on the overall strategy for the molecule and the overall strategy that we have in addressing B cell-driven diseases through deep B-cell depletion.

The next question comes from Daina Graybosch with Leerink Partners.

I'm wondering if you could talk about strategically 2 of these acquisitions were of current partners. And you have a lot of other partners. In fact, you've really prioritized doing a broad set of collaborations and partnerships. What makes a partner acquirable versus making more sense to continue the partnership or collaboration?

Sure. Maybe I'll start, Dan, and then ask any others to add. The first thing I would say is one of the real strengths of Gilead is that in addition to believing in our own innovation, we believe an outside in innovation. In other words, we have a lot of partnerships. And I think in all different stages of risk, in all different stages of development, that allows us to make sure we're tapping into the best science at all different periods of time. And there is no one size fits all for how those partnerships will eventually evolve. Some of them progress, some of them dissolve because of a result of the science. And some of them, we feel just would be helpful for us to fully integrate into the further strength of Gilead.

I've already mentioned on the call, Cindy and I, the Arcellx transaction. And I think the Tubulis one is just another really nice example of having our scientists to really appreciate the benefit that each other brings. I mean the opportunity to have complementary skill-sets on a scientific level is another rationale for why we felt that by combining the 2 companies, we get the best of both world. As Dietmar said on the Tubulis side, our really strong chemistry and biology in different therapeutic areas, combined with really the unique chemistry and capabilities of Tubulis as it relates to the specific attributes that Dietmar mentioned in both the linker and payload capability.

So I think it really depends. I would say that this does not mean that every partner that we have ends up with an acquisition. That is not the right size, and there is no one size fits all. But where we think the synergies combined can be a bigger impact for patients or accelerate that type of development, I think that's where we'll lead into the opportunity.

The next question comes from James Shin with Deutsche Bank.

I'm going to keep Dietmar busy for a bit. Dietmar, has you thought about applying P5 and ALCO 5 tech to improve TRODELVY stability? Or are there any plans to rebuild the TROP2 from the ground up with Tubulis? And then as it relates to TUB-040, over is very competitive. Any thoughts on including Lars comparator and stratified by Frolov at subsequent ovarian trials?

James, thank you for the questions. In thinking about the capabilities that we have with Tubulis and that we're now newly applying to different areas, I look at this as like several tiers of activity, right? The first tier really being with TUB-040 with a very promising molecule that you do want to move forward as quickly as possible, right? That's one of our priorities, and we want to do that obviously with the team that's there, but also with our team and apply those capabilities also on a global scale, right?

Then you've got an earlier portfolio that's coming out of Tubulis. We haven't spoken about TUB-030, right, the [ 5T4 ] targeting ADC, and then there's actually a slew of additional ADCs that they have in development. That we will also focus on how can we maximize those and how can we really build on the capability. And then I think the world is actually wide open. But we can look at a variety of targets and we will evaluate a variety of targets. And obviously, TROP2 is an important target. We haven't taken any decisions about which targets to work on. But I think with those capabilities and those technologies, we have the possibility to address really a large spectrum of really important targets and TROP2 could be one of them.

Thinking about would you include specific competitors. We will inform you about our clinical plans as those evolve. Please keep in mind that folate receptor alpha doesn't show the same expression level in ovarian cancer as NaPi2b does, right? So just thinking clinically, when you have a highly expressed target, where you basically don't need a biomarker, you don't necessarily want to compare to a target that's expressed only in part of the population, right? So in principle, we will, of course, very carefully choose the clinical plan. We will inform you about it as it emerges. But we think there is a key opportunity for TUB-040, just also based on the fact, besides efficacy and tolerability, just based on the fact that we do not expect to run a biomarker-driven program here. The activity that has been seen is in an unselected population, and we think that's the right approach of the ovarian cancer population.

The next question comes from Evan Seigerman with BMO Capital.

One for Cindy. So with whole ownership of anito cell, how do you think you'll be able to accelerate the launch of the asset once approved? Do you see a meaningful kind of streamlining in these efforts once you have that fully in-house?

Thank you, Evan, for your question. I think there's a couple of aspects of it that are going to be really important as it relates to the launch. The first is if you think about our field-facing personnel, we'll have one team focused on that launch. And what we've seen with some of the other constructs in the space, when you have two teams going to market, it can create sometimes confusion with the HCPs and who they follow up with. So we really think having one field-facing team will make a huge difference. It also allows us to target both academic centers as well as community is one. So in some cases, getting referrals. In other cases, we may be able to unlock the community, as we shared before, because of the safety profile and tremendous efficacy that we see with the need to sell.

So in our go-to-market strategy, we're very excited to be a single company who is well established in the space going to market and leveraging our current infrastructure. The piece that we're also excited about is around the development and how we expand rapidly and have single decision-making in [ Tau ] and be able to move into new areas as we suggested, like our newly diagnosed studies coming forward, the smoldering population and then being able to leverage a lot of the great science coming out of Arcellx with their domain binders more broadly in next-generation autologous therapies as well as our in vivo therapies and now within our T-cell engager platform.

The next question comes from Akash Tewari with Jefferies.

This is Amy on for Akash. Congrats on all the recent transactions. So what's interesting to us about the tubules deal, and you've also emphasized it several times on this call is that you're getting a fairly combinable asset. So BioNTech ovarian cancer data suggests an improved response rate with their TROP2 ADC and PD-L1 VEGF combo. How should we think about your combination strategy from here? Can we anticipate Gilead entering the PD-1 VEGF space at some point? And finally, how are you thinking about ADC, ADC combinations with the tubules platform?

Thank you, Amy, for those questions. I mean obviously, we are not commenting on really in detail right now, what is the clinical development plan for TUB-040. You're absolutely right. One area that really attracted us is the tolerability of TUB-040, which then translates into what we expect to be a good combinability. And that combinability obviously can play out in different ways. Most importantly, combined ability with current standard of care, right? And that then gives us the possibility to potentially also move into earlier lines of therapy. And out of the platinum-resistant into more of a platinum-sensitive space.

And then beyond that, beyond combinations with standard of care, of course, we will aim to combine with the most promising agents that are out there. And that can play a role to further lead to benefit in the ovarian cancer patient population. PD-1 VGF is one opportunity. These are active principles, obviously, in ovarian cancer. Another ADC could be another opportunity. ADC, ADC combinations is an interesting question in that, again, you need to look at therapeutic index and tolerability. And that's, of course, what we're trying to bring to ovarian cancer patients is really efficacy benefit and good tolerability. And that's what we need to see is that possibly in the ADC plus ADC space. If it is, we think TUB-040 with the safety profile and the efficacy could be an ideal combination partner in that space as well.

The next question comes from Louise Chen with Scotiabank.

Congratulations on all the deals. I wanted to ask you about Ouro, Tubulis and Arcellx and how you think about R&D spend in 2027 and beyond in addition to your existing pipeline, maybe just high-level thoughts would be helpful. And then secondly, as you start to think about these products, when do you expect to commercialize product from Ouro and Tubulis?

Louise, it's Andy. Thanks for your question. We appreciate it. And I hit on some of this in our prepared remarks. But for R&D, when you look at all of these together, we expect a modest and manageable dollar increase in R&D as compared to our guidance from the start of the year. And we continue to expect that R&D as a percentage of total revenue would be less than 20% for the full year.

We also highlighted that going forward, we always have programs that are rolling off. So at a high level, Louise, we had an opportunity to add to our portfolio because we had room in the R&D budget, certainly in '28 and beyond. So the overall message is very manageable in the short run, and we were going to need to add to kind of our mid- to late-stage portfolio in any event, and these are 3 incredibly exciting deals that allow us to leverage that R&D spend and the capacity that we had against what we believe are blockbuster opportunities.

And Louise, thank you also for the question on the -- when would these potentially come to patients. Of course, for all of these 3, we are trying to bring these to patients as quickly as possible, and we will use the fastest both clinical and registrational pathway is possible to do that. As discussed during our prepared remarks, for both Tubulis and Ouro, we expect to enter registration studies in 2027, which then we haven't commented on what kind of launch that would lead to, but we'll try to bring these to patients as quickly as possible. That's a high priority for us.

The next question comes from Gregory Renza with Truist Securities.

It's [ Anish ] on for Greg. Congrats on the sand. Just first, as you consider the broader CAR T strategy for Gilead with the integration of Arcellx, how are you framing your positioning in niche within the competitive landscape of in vivo CAR T?

And just a quick one for Andy. Just playing off the tubules acquisition, how policy set under the current administration, such as tariffs and tax treatments for offshore developmental programs factored into your appetite for ex U.S. assets and BD.

Thanks so much. As it relates to the Arcellx question and the context with which we considered the acquisition. It is broad. And as we suggested earlier, we have a number of next-generation autologous constructs that we're looking at where you would do dual targeting part of that. The in vivo opportunity is also one, but it's earlier in development and the T cell engager. So it was a broad position. But just to be clear, we are really excited about the data that we've seen out of our Arcellx and the potential of anito cell and we do believe it is a best-in-disease opportunity for patients as we come to market.

And [ Anish ], maybe I'll just add to Cindy's comment. Obviously, the acquisition of ourselves also allows us then to use the domain binders in our in vivo efforts as we've highlighted before. And then on your question on ex U.S. business development, look, our business development deals are focused on the quality of the science and the clinical data. And you've heard deep our comment on why we're so excited about and Cindy, all 3 of these opportunities. We have a large global supply chain with all of our products. We look at manufacturing, and we have time to kind of think about where we want to place manufacturing and potentially having multiple different sources of manufacturing globally.

But it really -- so to answer your question, it hasn't changed anything. If we find great science in Europe, or in Asia, it's no different than finding great science in the U.S. And we are really excited about the quality of science that we're seeing and our ability to bring these programs in and benefit patients globally.

The next question comes from Brian Skorney with Baird.

This is Luke on for Brian. On Tubulis and 040 in particular, given the impressive therapeutic index thus far, do you think there's headroom on the dose response curve to go even higher? Or are you fairly comfortable with the current range?

Thanks for the question. The -- when you look at the data that was presented at ESMO, the efficacy across the dose range started across the dose range studies, was actually really convincing, right? And we need to see as we move forward, how can we further optimize that. We have tested higher doses or tubules have tested higher doses as well. So we'll absolutely optimize the dose both in monotherapy as well as in combination so that we can bring the best benefit risk to patients.

The final question comes from -- Apologies. There are no more questions at this time. I'll pass it back over to Jacquie for closing remarks.

Thank you. As always, the Investor Relations team is happy to help with any additional questions you have on our recent acquisition announcements. Otherwise, as Dan mentioned, we're planning to share first quarter of 2026 results on Thursday, May 7. We appreciate your continued interest in Gilead, and thank you for taking the time on short notice to join our call this afternoon.

Good day, and thank you for standing by. Welcome to the Galapagos Conference Call. [Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sherri Spear. Please go ahead.

Hello from Belgium. Thank you for joining Galapagos for our conference call today. Before we begin, I would like to remind everyone that we will be making forward-looking statements. These forward-looking statements include remarks concerning the collaboration agreement with Gilead and the expected benefits of such collaboration, the potential of gamgertamig and BCMA targeted T-cell engagers, future developments of our company and our pipeline and possible changes in the industry and competitive environment.

These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Actual results may differ materially from those indicated by these statements and are accurate only as of the date of this recording, March 31, 2026.

Galapagos is not under any obligation to update statements regarding the future or to conform these statements in relation to actual results unless required by law. You are cautioned not to place any undue reliance on these statements.

Joining us on today's call from the executive team are Henry Gosebruch, Chief Executive Officer; Eric Hedrick; Head of Clinical Evaluation and Aaron Cox, Chief Financial Officer; Sooin Kwon, Chief Business Officer; and Dan Grossman, Chief Strategy Officer, will be joining us for the Q&A session.

With that, let me turn the call over to Henry.

Thank you, Sherri. Hello from Belgium and our corporate headquarters in Mechelen. Galapagos has a rich history as one of the oldest and historically one of the most successful European biotech companies. And that rich history provided us with a strong balance sheet and the opportunity to create shareholder value.

Last week, we announced that we were in advanced discussions to collaborate with Gilead in a transaction with Ouro, a company with an exciting clinically derisked lead program, gamgertamig, that has the potential to change treatment paradigm in several immune-mediated diseases. Today, I'm pleased to announce that we have entered into a binding agreement with Gilead.

The collaboration centers on gamgertamig, a BCMAxCD3 T-cell engager for autoimmune diseases with multibillion dollar revenue potential, currently in Phase Ib dose-ranging studies and expected to enter registrational studies as early as 2027.

Galapagos and Gilead will equally split an upfront payment of $1.675 billion in milestone payments of up to $500 million. Galapagos and Gilead will collaborate on development of gamgertamig with Galapagos responsible for development costs through initiation of registrational studies after which development costs will be shared equally. Galapagos is eligible for up to $100 million in development milestones.

Galapagos also gained a preclinical portfolio of 3 additional autoimmune focused programs originally from Ouro with an opt-in for Gilead for a 50-50 profit split at proof-of-concept for $75 million per program. Gilead will retain sole worldwide commercialization rights and pay all related costs outside of Greater China, and Galapagos will receive royalties of 20% to 23%.

The proposed arrangements will amend the legacy OCA with Gilead to designate an additional $500 million of Galapagos cash available for R&D or strategic transactions outside of Gilead partnerships, including up to $150 million for potential return of capital. This is an important step in our ongoing transformation, and we're really excited about it.

To start, we believe the transaction is backed by a compelling strategic rationale. Gamgertamig, Ouro's lead molecule is, in our view, a best and first-in-class T-cell engager that has demonstrated a differentiated profile in clinical studies. The collaboration brings a meaningfully clinically derisked high-potential asset into our portfolio. Registrational studies are expected to start as early as 2027. The proof-of-concept initial indications are orphan indications, where the clinical trials are manageable in size and scope with significant potential for expansion into additional indications.

We are also excited about the early pipeline with 3 oral preclinical programs coming to Galapagos as part of this deal. The transaction allows us to add a talented and accomplished team of drug developers to Galapagos, building on our own capabilities and bringing top talent that has a strong track record of success. We are well positioned to continue the development of Ouro's programs with urgency as speed to market is critical.

Additionally, we are pleased with the financial terms we've been able to negotiate. The risk-adjusted potential financial return from this collaboration is attractive. The structure of the collaboration effectively leverages our partners' capabilities in global commercialization and derisk those operational aspects for us. The transaction includes a significantly higher financial contribution from Gilead, which all in should amount to over $1 billion, compared to the legacy agreement which would have allowed Gilead to opt into commercial rights outside of Europe for just $150 million.

The preclinical pipeline adds additional value creation potential and the ability to share in future profits 50-50 with Gilead. Importantly, this transaction enhances our future strategic flexibility. $500 million will be available for R&D or strategic transactions independent of Gilead, including up to $150 million for return of capital.

We retained the majority of our available capital for transactions and investments beyond the Ouro transaction and the capital we have earmarked for investment in Ouro's programs. We had a very high bar to deploy cash, and this is a transaction that meets our strategic and financial criteria and advances our transformation strategy.

At Galapagos, we've assembled a team with world-class business development expertise and a shared mission of leveraging our unique position to create significant shareholder value. Collectively, our team has executed hundreds of transactions in the Life Sciences sector and has been working tirelessly with the goal of creating value for our shareholders.

Our objective hasn't been incremental rebuilding, but a fundamental reshaping of the company around programs we believe are capable of delivering meaningful patient impact and sustainable shareholder returns. On prior calls, we had discussed being encouraged by the level of potential transactions we had in our deal pipeline and our opportunity to become a unique player in the biotech deal ecosystem and carve out niches where we can be competitively differentiated.

At the same time, we have been disciplined and selective. We declared a focus on clinically derisked opportunities in the areas where we are able to bring unique insights that represent competitive advantage.

On the left side of Slide 6, you can see we've evaluated hundreds of potential opportunities since last summer, and we've conducted in-depth due diligence on a good number of them and have made nonbinding proposals to potential partners.

Our discussions with Jaideep and the team at Ouro started last fall, leveraging existing relationships our team had with both Jaideep and some of Ouro shareholders.

When we first saw some of the emerging clinical data last year, our enthusiasm strengthened, and we made pursuing a transaction with Ouro a top priority. In addition, when we highlighted gamgertamig and its clinical data to our colleagues at Gilead, they quickly saw why we were so impressed and joined us in our evaluation efforts.

Discussions picked up steam earlier this year, and we have had an opportunity to conduct extensive due diligence on the opportunity along with our colleagues at Gilead, including visiting key investigators in China.

We see an impressive clinical data from over 60 patients and received strong feedback from KOLs and our outside advisers regarding gamgertamig's potential. We are delighted to be able to make today's announcement following last week's announcement that Gilead signed an agreement with Ouro in our late-stage partnership discussions.

Our extensive interaction with Ouro's team also strengthened our conviction that there's great chemistry among our teams. And we are looking forward to welcoming the Ouro team to our company in the near future.

I hope it is clear by these remarks why we are so excited to be able to announce this transaction today and why I believe it ticks all the boxes. It's in our core focus areas of I&I. It includes a clinically meaningfully derisked asset that leverages our unique situation and relationship with Gilead. It is a long-term strategic transaction with partnership terms that significantly improve on the legacy agreement with Gilead.

Beyond these features, the transaction frees up $500 million to be used outside of this transaction, independent from Gilead. Additionally, given the efficient clinical development plan, we will still have the majority of our capital available for future deals after investing in Ouro's portfolio.

Let me now introduce Dr. Eric Hedrick, Eric was one of my first hires at Galapagos, tasked with identifying and evaluating opportunities in oncology and I&I. Eric is a hematologist and medical oncologist by training and began his career in biotech at Genentech, leading various aspects of Rituxan and Avastin development. He subsequently held roles of VP of Development and Interim Chief Medical Officer at Pharmacyclics, where he was responsible for IMBRUVICA development, Chief Medical Officer at Epizyme, Chief Adviser at BeiGene, where he played a significant role in the development of Brukinsa and Chief Executive physician at EQRx. Eric will provide some color specifically on gamgertamig and why we are excited to bring this asset and the team that progressed rapidly to Galapagos. Eric?

Thanks, Henry. It's great to be here today to share our excitement about gamgertamig, a potentially transformative immune reset treatment for autoimmune disease and to highlight the considerable progress made by the team at Ouro in its clinical development.

This Slide offers a summary of our view of the opportunity. We believe that gamgertamig represents a best-in-class BCMA directed T-cell engager, characterized by high potency against BCMA and a detuned CD3 binding arm, which significantly aggregates cytokine release.

Note that all the studies conducted to date have used the subcutaneous formulation of the drug. So far, over 60 patients across 5 distinct autoimmune indications have been treated with gamgertamig. This clinical experience has highlighted the differentiated profile of gamgertamig, characterized by the induction of durable complete responses, minimal cytokine release syndrome with the current schedule of administration and remarkable consistency in these findings across studies and disease indications.

We also believe that gamgertamig has a clear speed-to-market advantage. The initial focus on the treatment of rare autoimmune diseases has provided rapid proof of concept, enabling initiation of registrational trials as early as 2027. The program has also received Fast Track and Orphan Drug Designation in the U.S. for hemolytic anemia and ITP, further supporting an accelerated development path.

Lastly, the spectrum of diseases that may be addressable by gamgertamig encompasses over 20 separate indications, and we'll comment later in this section on the expanded opportunity. The concept of immune reset in the treatment of autoimmune disease is an exciting and rapidly evolving area of clinical investigation.

Despite the diversity of clinical presentation across diseases, a central feature is the presence of autoreactive B cells and plasma cells. These populations developed during the B-cell maturation process upon exposure to antigen and with the ultimate step in the maturation process being tissue resident plasma cells with a lifespan measured in years.

Though there are existing therapies for many of these diseases, including nonspecific immunosuppressants and B-cell modifying agents, none to date effectively reversed the central pathogenic process. The promise of the immune reset approach is the potential to eliminate pathogenic immune cell populations, allowing for the reconstitution of the immune repertoire with B cells and plasma cells that lack autoreactivity.

This approach potentially addresses a critical need in the treatment of these diseases. The need for a treatment given over a short course which can induce rapid, complete and durable remissions and thus eliminate the requirement for a cyclical or chronic immunosuppressive treatment. The availability of this type of therapy would fundamentally transform the treatment of these diseases.

A recent and highly relevant development in the field of immune reset for autoimmune disease is a recognition of BCMA expression in the B-cell maturation sequence. The potent anti-plasma cell activity of the BCMA T-cell engagers has, of course, been demonstrated by the highly efficacious first-generation BCMA T-cell engagers such as teclistamab in multiple myeloma.

More recently, it has become recognized that lower-level BCMA expression begins around the time of antigen exposure in the B-cell maturation process, the stage in the B-cell maturation process coinciding with the emergence of autoreactive T-cells. Therefore, BCMA directed T-cell engagers have the potential to eliminate all autoreactive immune cells of both B-cell and plasma cell lineage.

In contrast, T-cell engagers directed at B-cell restricted antigens such as CD19 or CD20, spare autoreactive plasma cells. In the small clinical series of patients with various autoimmune diseases, the first-generation BCMA directed T-cell engager teclistamab validated this concept.

In this series, teclistamab depleted both B cells and plasma cells and induce high-quality responses. However, most of the patients in this series experienced cytokine release syndrome about half of these patients having CRS with Grade 2 severity.

Nevertheless, the framework for a BCMA directed T-cell engager in autoimmune diseases was established. Moreover, the attributes for a second-generation BCMA directed T-cell engager optimized for use in autoimmune disease were defined. Equal or greater potency against BCMA and antibody modifications directed at lowering cytokine release.

Gamgertamig represented here is the second-generation BCMA CD3 bispecific antibody with superior potency against BCMA versus first-generation BCMA directed T-cell engagers and a de-tuned CD3 binding arm. These characteristics have resulted in a demonstration of profound depletion of BCMA expressing cells across various tissue compartments, both B cells and plasma cells and significantly less cytokine release compared with the first-generation BCMA directed T-cell engagers the preclinical characterization represented in the graph on the right.

Represented here is the current clinical development status gamgertamig. A total of over 160 patients have been treated in clinical trials, including over 60 patients across 5 distinct autoimmune diseases.

The initial experience of gamgertamig in autoimmune disease occurred in the context of now completed investigator-sponsored trials in autoimmune hemolytic anemia, immune thrombocytopenic purpura and pemphigus vulgaris and autoimmune blistering skin disease, which is often severe in nature.

The ongoing trials include Phase Ib dose-ranging studies sponsored by Ouro globally and by Keymed in China. These studies address autoimmune cytopenias and nonhematologic autoimmune diseases such as Sjogren's disease, idiopathic inflammatory myopathies and others. We anticipate either publication or meeting presentations for many of these studies, including the company-sponsored studies over the course of 2026.

The totality of the clinical trial data is notable in several ways. First, there has been remarkable consistency in the efficacy findings of gamgertamig across trials and disease indications. Rapid onset of complete responses and as the follow-up of the patients extends significant durability.

We also have confidence that the safety profile of gamgertamig, particularly the risk of cytokine release syndrome can be optimized with adjustments in the dose and schedule of treatment without sacrificing efficacy.

The next 2 slides will provide an example of the clinical profile of gamgertamig that is emerging from a rapidly progressing clinical trials program. Gamgertamig, as an immune reset therapy in autoimmune disease was initially evaluated in the context of our compassionate-use program an investigator-sponsored trial in autoimmune hemolytic anemia.

The data from the first 2 patients in this series was published in the New England Journal of Medicine in June 2025. Note that in these patients, gamgertamig was administered at a higher dose and then a longer duration than the schedules currently under evaluation.

Gamgertamig induced profound depletion of both B-cells and plasma cells in circulation and bone marrow and produced complete remissions of rapid onset that were durable. Additionally, despite the higher dose schedule used here, the safety profile was favorable in regard to the incidence and severity of CRS and the infectious risk, which is due to hypogammaglobulinemia during the transient period of B-cell depletion was manageable.

These results were particularly notable given the extent of prior treatment in these patients, which was extensive and included failure of CD19-directed CAR-T therapy.

This experience has now been significantly expanded in the form of investigator-sponsored trials in autoimmune hemolytic anemia and immune thrombocytopenic purpura. This slide provides an example of what is currently being observed in ITP patients in the ongoing Ouro sponsored study. There are several things to note.

First, despite the attenuated dose and schedule of gamgertamig used in this study, we are seeing predictable B-cell depletion and complete responses of rapid offset and significant durability. Importantly, in this cohort of patients, no CRS was observed. And as the study continues, it's become apparent that modifications to the dose and schedule of gamgertamig meaningfully reduce the incidence and severity of CRS.

I will also point out that 2 dose levels are currently being expanded and we are confident that we will identify prior to the end of 2026, a go-forward dose and schedule of gamgertamig that is characterized by durable remissions highly favorable CRS risk in the context of the robust efficacy being seen in a manageable period of hypogammaglobulinemia.

I'll conclude my section by noting that the spectrum of diseases that are associated with pathogenic B cells and plasma cells, thus potentially addressable by gamgertamig to is broad and includes over 20 separate disease indications.

Our intent with the future development of gamgertamig in the near term is to establish proof-of-concept where applicable. It is also important to note that the proof-of-concept signal that has emerged from the diseases evaluated thus far has not been subtle.

To the extent that this applies to other disease settings, it is possible that an extensive proof-of-concept clinical trials program could be prosecuted with a high degree of efficiency, both in terms of patients treated and cost expected.

Let me now pass the call to Aaron Cox, our CFO, to talk briefly about some of the key features of the agreement with Gilead. Aaron?

Thank you, Eric. Turning now to some key highlights of this transaction and how it enhances our already strong asset base. The addition of the Ouro programs represent a significant long-term value creation opportunity for our shareholders, which is consistent with our previously communicated goals and strategic focus.

More specifically, gamgertamig stands out as a highly differentiated asset that offers meaningful near-term catalysts and the potential to generate an attractive future milestone and royalty stream.

Importantly, this transaction is not just about the asset, it also brings a highly experienced clinical team from Ouro which we look forward to welcoming to our company soon. This adds critical drug development capabilities and helps us take the next step in building on our foundation as we continue to evolve into a clinical stage biotech company.

At the same time, we'll continue to benefit from a strong financial foundation. We will retain a majority of our cash after taking into account cash needed for the Ouro transaction and development costs and we continue to expect that cash to generate meaningful investment income.

Additionally, we will continue to benefit from an expected annual income stream from existing partnerships into the 2030s, anticipated tax credit receivables over the coming years and more. The transaction will also trigger a partial waiver and modification of terms of our legacy option, license and collaboration agreement or OLCA with Gilead, marking a meaningful step forward in our strategic and financial flexibility.

Under the revised terms, $500 million is now unlocked for broader use beyond the Ouro investment, enabling Galapagos to pursue new opportunities and transactions, independently of Gilead and expanding the universe of potential strategic targets.

Additionally, up to $150 million of this $500 million may be used for a return of capital to shareholders, subject to certain limitations, providing us with additional optionality to drive shareholder value. This partial waiver and modification of terms to the OLCA further strengthens our ability to deploy capital strategically and pursue additional value-accretive opportunities.

Now I'll turn it back to Henry for our closing remarks.

Thank you, Aaron. As I close, I want to thank our shareholders for their patience as we have moved through the past year. This is a seminal moment for our company, and I hope you can hear our excitement when we talk about Ouro. This transaction is transformational for many reasons.

Galapagos is positioned to become a clinical stage company with a potential pipeline in a product with gamgertamig. We believe gamgertamig represents a potential first and best-in-class T-cell engager with compelling efficacy, safety, patient convenience with a short course of subcutaneous dosing and speed to market and with multibillion-dollar potential in multiple autoimmune diseases with significant unmet medical need.

This transaction also signals our strong strategic relationship with Gilead and how that partnership provides a competitive advantage in business development. And as Aaron mentioned, the renegotiation of the legacy agreement with Gilead frees up $500 million to spend independent of Gilead, which provides us with capital to pursue further business development opportunities independently and also allows for a potential return of capital to shareholders. Finally, we think this transaction helps fulfill our commitment to creating meaningful patient impact and sustainable shareholder returns.

Thank you. And I will now turn the call over to the operator for your questions.

[Operator Instructions]

The first question comes from the line of Xian Deng from UBS.

Xian Deng from UBS. Two, please. Just wondering the first one. The first question, I mean, you have a very significant cash balance, even after the gamgertamig related spending and the cost share and outside the $500 million that you can use without Gilead. Gilead [indiscernible], you still have quite considerable cash that's left. So just wondering, could you give us some color in terms of your plan for the rest of the cash in terms of M&A strategy.

Just wondering, would you -- does the current Ouro collaboration changes your focus in the future for BD? So that's the first question. And the second one is just wondering for the gamgertamig, detuned CD3, so just wondering if you could give us some extra color on this and how this mechanistically helps to lower CRS, please?

Xian, it's Henry. Thanks for the question. I'll take the first one, and I'll let Eric answer the second one. So, on the first one, yes, you're absolutely right. I mean, one of the things that we like about this transaction is that while we're obviously quite excited about gamgertamig and the potential, it does leave the majority of our cash for other opportunities. And when we say majority of the cash, again, just to be clear, that means even after we invest in the portfolio and continue all the good work that the Ouro team has already been doing.

So that gives us really excellent optionality. I mean we'll continue to have a very, very high bar for transactions, just like on this one. It needs to be something that we think is special and can create a lot of value for our shareholders.

And I'm excited about continuing to have the team look for opportunities. We will, with this partnership, of course, have a really nice position in autoimmune with a really strong portfolio. So obviously, there's some natural opportunities to build on that, but we're not going to restrict ourselves just to that.

Again, one of the beauties of our structure is we have just enormous opportunity. And again, we'll be very, very selective. We'll be very, very focused on not just the strategic, but also the financial aspects and again we're looking forward to continuing the active BD funnel.

And I'll let Eric answer the second question.

Yes. Thanks, Xian. Yes, in regards to the question around the mechanism around cytokine release. I guess there's 2 points to make. One in the setting of autoimmune disease, the risk of CRS overall is less than what you would see in the setting of multiple myeloma with this class of agents. I think even beyond that, believe the detuned CD3 arm really prevents excessive activation of T-cells, and you see that preclinically and what we're seeing clinically is consistent with that and minimizing the CRS risk.

Your next question comes from the line of Judah Frommer from Morgan Stanley.

Congratulations on the deal. Just curious, in your consideration of deals and specifically this one, I guess, kind of circling on a deal that ended up being in relatively rare indications. Just curious how the financial versus regulatory aspects factored into this deal and how it might factor into how you're thinking about BD going forward?

Yes. Judah, it's Henry. Good question. I'll start and then maybe I'll ask Sooin to comment some more. I mean one of the things we really like about this is that the Ouro team did a great job identifying really very interesting places to take this mechanism and specifically ones that are not adequately addressed by either existing therapies or frankly, some of the other companies focused on T-cell engagers.

And so that was quite important to us to have something where we can be first to market. These are -- while they're orphan, they're actually quite large markets in our view, and that's, I think, an insight we could bring to this. And last and very importantly, what we also liked about that is that the path to market is clear and the trials are not very, very expensive.

Previous studies in these diseases have had pivotal studies of around 100 patients, just to sort of give [indiscernible]. And so that's all very attractive and that, of course, feeds right into the financial model in terms of how much or how little capital really we have to continue to put to work here to ultimately get to approval. That was very attractive. And I think while we're not limiting our search for other opportunities to those types of opportunities, that was certainly quite attractive on this one.

If there's anything you guys want to add?

Yes, I'd just like to add, I think we considered both the financial as well as regulatory considerations in evaluating this potential opportunity and in particular, having strong conviction as well as visibility on what it would take to get through the finish line and the feasibility of a company such -- with the capabilities and the size that we're at to be able to do so successfully.

So I think those were all really important considerations and give us the confidence that we're able to do this successfully.

Your next question comes from the line of Brian Abrahams from RBC Capital Markets.

This is Nevin on for Brian. Congrats on the deal. Just wanted to ask if you could clarify what the decision-making conversations will look like with Gilead, especially during the funded portion of the development of gamgertamig? And then what that collaboration would also look like when you move forward to determining regulatory alignment on what a registrational program and the study design can look like?

Yes. We -- it's Henry and Nevin. Thanks for the question. So we'll work closely with Gilead on the development here going forward. Again, as we said in the release and in our materials, we look forward to welcoming the Ouro team. We expect that team as part of our company to continue to lead this program. And they will closely coordinate with Gilead and get the best insights from them as we work together to bring this to patients hopefully in the not-too-distant future. So it will be a really nice collaborative relationship. That's what we're envisioning.

Maybe, Eric, you can comment a little bit on the sort of registrational path.

Yes. I would add that particularly in the lead indications that are on the table. I think as Henry had mentioned one of the appealing parts of this program is that there's really well-established regulatory precedent and the scope of pivotal stage development is pretty modest.

And so that was certainly attractive to us and we're confident with bringing the team from Ouro that this is something that we can accomplish within our group.

And then the collaboration with Gilead, obviously, an important part of that is will come when they're commercializing the drug. And so we want to make sure that the development programs are in sync with the ultimate commercialization. But as Henry mentioned, we imagine this to be a highly collaborative relationship and one that we can move forward within Galapagos or pretty efficiently.

Your next question comes from the line of Salvatore Caruso from TD Cowen.

This is Salvatore Caruso from TD Cowen on behalf of Phil Nadeau. Congratulations on the great deal, and looking forward to more updates in the future. Just one quick question, kind of given the updated capital envelope you guys have laid out today based on the amended agreement. How realistic is it to license in another clinically derisked program going forward versus maybe focusing future deals on a more preclinical or early clinical asset where you might have some more attractive entry valuations?

Yes. Salvatore, it's Henry. Thanks for the question. Look, we found in gamgertamig program that we believe is clinically derisked and has a really strong body of evidence with more than 60 patients of clinical data we've reviewed and seeing all the things we were looking for rapid onset, good duration, excellent safety profile, et cetera. So given that we have the majority of our capital still with us, I'm confident we could find another one of those.

And look, in addition to that, the $500 million that we have as a capital envelope now independent of Gilead also opens different deal structures that I'm also quite excited about. So it's just one example partnering deals as opposed to M&A deals, partnering deals with biotech companies, $500 million can go a pretty long way.

And certainly, there are many assets that are quite at late stages of development, where with a $500 million envelope, I think you can find some really interesting opportunities. So, we have had a very deep deal funnel, and I would continue to have that, and I'm excited about that.

Your question comes from the line of Sebastiaan van der Schoot from Kempen.

Congratulations on finalizing the terms for the agreement. I wanted to a little bit touch upon the 3 preclinical assets that were also disclosed in the agreement. Can you maybe give some insight on how far these programs are from the clinic?

Yes, Sebastiaan, thanks. I mean just stepping back, we are excited that there are these additional opportunities. I think it adds great breadth. And Jaideep and Ruth at Ouro have done a really nice job with these programs. And I think it adds a really interesting element to the story.

I'll let Sooin talk a little bit more about where they are with respect to the clinic.

Yes. I mean, we're not disclosing a lot right now, but I think what we can say is that the team is working hard to identify the candidates that would be able to enter the clinic in the near term. I don't think we've said precisely when they will be entering the clinic, but it is relatively near term.

Your next question comes from the line of Sean McCutcheon from Raymond James.

Can you speak to kind of the acute near-term path towards expanding the ongoing Australian Phase Ib and autoimmune cytopenias and levers you're able to pull to either maintain or accelerate the enrollment pace to meet that 2027 pivotal study start time line. And any other gating factors we should be thinking about for the initial indications beyond it sounds like you're aiming for a go-forward dose determination by the end of this year?

Yes. Thanks for the question, Sean. Maybe one point to clarify at front. The initial pivotal trials we envision coming out of the ongoing Ouro-sponsored trial in autoimmune cytopenias, right? And that's recruiting quite well, and that's a study for which we are confident that there'll be a go-forward dose identified over the course of this year.

In terms of additional indications, I think I mentioned in the call that there's another sort of Phase Ib dose-ranging basket study that includes a lot of autoimmune diseases, not in the hematologic realm.

We listed a few of those, but that's essentially a basket study design. I think the appeal of that in this molecule again is that the type of responses you see when you achieve immune reset are pretty obvious, right?

You tend to get complete responses, complete absence of disease activity. So to the extent that, that applies to other indications, we feel that type of approach to proof of concept should be pretty efficient. It doesn't take hundreds of patients to be able to detect the signal and then figure out how to go forward with that.

So we think that the approach that the team at Ouro has put in place to detect signal or detect proof of concept in additional indications is the right one and should be fairly efficient.

Your next question comes from the line of Jacob Mekhael from KBC Securities.

Congrats on this deal. I just have one follow-up on the cost. Given that there is a broad set of indications that you can pursue with gamgertamig, can you maybe share with us which of those indications are currently baked in, in your cost estimates for this program?

The -- for -- are you asking for the point that we made about majority of cash remaining?

Yes, yes. Correct.

Yes. So we've indicated in the slides, the initial primary focus of the 3 indications. And that's what's reflected in our forecast right now. And we'll provide further details down the road as we look at what these trial sizes may entail and what other indications could come of, it will provide cost estimates later.

Your next question comes from the line of Delphine.

I know it's hard to pronounce. Delphine Le Louet, Bernstein. Regarding the proof of concept, and I was willing to know if you can give us a bit more visibility on the dose, how many dose -- I mean, not the specific dose, but how many doses you're going to use, how many patients per trial? What about the duration time lines, just to get a frame about a potential submission date. What would be your target by the end of '27 already? Or shall we think about 2H '28?

Yes, Delphine, I appreciate the question. As we said a couple of times, we've seen more than 60 patients. I mean we've seen essentially 70 patients, and many of those were at a dose that we think actually looks quite attractive for a potential pivotal study.

We're not ready today to talk about exactly what the dosing paradigm is and so forth. But as Eric talked about, the teams at Ouro has done a phenomenal job really identifying this dose already and coming up with a regimen that does a great job limiting CRS.

And that gave us a lot of confidence. And so we are confident that as early as next year, we can be able to go into pivotal studies. And as you'll see some of this data published later this year, I think you see kind of what got us so excited. And I think you'll share our confidence that this could go into pivotal studies as early as next year.

Thank you. This concludes the question-and-answer session. I'll now hand back to Henry Gosebruch for closing remarks.

Okay. Well, thank you, Heidi. We really appreciate your time today. I hope you can hear the excitement in my voice that we are quite excited about this transaction and continuing the transformation of our company. As we said, we look forward to releasing additional clinical data later this year as we further advance the first and best-in-class program for patients in autoimmune disease with speed and urgency. Thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Hi, everybody. Thanks for coming. My name is Emily Field. I am the U.S. large-cap pharma biotech analyst here at Barclays. And we're so fortunate to have Andy Dickinson, who is the CFO of Gilead joining us today. Thanks for coming.

Of course, yes. Thanks for having us. Again, we appreciate it.

Yes. So I mean, let's just get into it. I mean, obviously, a very important year for Gilead with the Yeztugo launch, but also having done the Arcellx deal. So maybe I'll just like open it up to you and let you talk about how you're looking at the financial picture for Gilead in 2026.

Sure. Yes. I mean maybe to start overall, we had an extraordinary 2025 in terms of our base business, our clinical results, the launches. We had 2 major launches in Yeztugo and the first full year of the Livdelzi launch in liver disease, PBC, great financial performance. You also saw very strong operating expense control, disciplined, significant growth in EPS. And we feel like we're at the beginning of a long cycle with a number of product launches underway, more product launches coming and the strongest pipeline we've ever had in the history of Gilead. So it's an exciting period.

Yes. So maybe a good place to start would be that, obviously, Gilead has done a number of deals sort of a few years ago. And then the Arcellx deal that was done relatively recently, what was the reasoning behind that in terms of maybe just to control sort of the launch process of anito-cel because the data was fantastic. So how are you thinking about...

The deal?

Yes, exactly.

Yes. And maybe just to step back, for those of you that don't know Arcellx or anito-cel, Arcellx is a company that was our partner. We entered into a partnership 3 years ago on what we believe is very clearly a best-in-class BCMA cell therapy for multiple myeloma. It also has potential in other indications. But as Emily said, really extraordinarily strong data in fourth line plus multiple myeloma -- and we are -- we have a study -- a Phase III study underway in second line plus multiple myeloma that enrolled very, very quickly.

So we're really excited. At its core, and we announced a couple of weeks ago that we're acquiring the rest of the company that we don't already own for approximately $8 billion. At its core, I mean, again, we see a very significant commercial opportunity. The total multiple myeloma market by our estimates as well as competitor estimates for cell therapy is greater than $20 billion.

We -- anito-cel brings a very differentiated safety profile. At a minimum, it looks like we have efficacy that's on par with the other approved BCMA CAR-Ts, but a very significant difference in the safety profile. And that means that we don't see the neurotoxicity with a anito-cel in hundreds of patients now across both the fourth line plus study as well as the second-line plus study that at least one of the competitors sees in approximately 10% of the patients, which is really encouraging. This is a one-and-done therapy.

And as you see in the lymphoma area of cell therapy, the patients and physicians will always want to choose the cell therapy that they see as both the most efficacious and the safest. The -- there was a significant difference between our view of peak sales potential and the Street. So there's kind of a unique...

It's CVR.

Yes. Well, we had the CVR as part of that. But your question was why now. And at its core is that we see this as a blockbuster therapy for multiple myeloma. You look at drugs like Revlimid historically for Celgene, Darzalex more recently in the multiple myeloma space. We think this is the next blockbuster in multiple myeloma that has broad applicability.

For those of you that don't follow this market, multiple myeloma is by far the biggest hematological oncology market. And again, the data is really incredible. So at its core, this is about the disconnect between our view of peak sales and the Street view of peak sales and our ability to kind of have complete ownership and all of the upside for our shareholders on this product. It's actually, in many ways, an analogous to the CymaBay transaction that we did a couple of years ago, where we acquired a drug that's now called Livdelzi for primary biliary cholangitis. That was another example of a company that we knew incredibly well. We have the largest liver disease franchise. We had a differentiated view of the peak sales opportunity versus the market.

You've seen that play out in the first 6 quarters of launch where the drug is off to just a fantastic start. So it was really similar. The last thing I'll say is that to your point, there were other benefits of doing the transaction with Arcellx that weren't core to the financial model, but actually provide additional sources of value for our shareholders in the company. One is we will control the launch now outside of a partnership, which will actually streamline things, oftentimes in partnerships where you share commercial launch and commercial responsibility.

At times, it may slow you down or slow down decision-making. We now have the ability to just move forward in a very competitive market with our commercial organization. And that could actually provide some upside on the revenue side. There's significant -- the other piece of this for us is significant opportunity to use both anito-cel in other indications where we did not have the right to do that in the partnership and to use their platform technology and binders. So for instance, the BCMA binder that is part of the anito-cel construct can now be used in our in vivo CAR-T efforts, and we can use their other binders as well. So there's a whole host of reasons. But at its core, we see a blockbuster product that we have very different views of kind of peak sales potential versus where the market was.

No, that's super helpful. And actually, it's a great point in terms of like the clinical data in terms of relative to the competitor. But maybe taking a step back and thinking about oncology more broadly, which is you have some endeavors in solid tumors and obviously anito-cel and liquid tumors. How are you thinking about Gilead in a longer way in terms of just the oncology business and building out the franchise between both liquid tumors and solid tumors?

Yes. Yes, it's a really important question. Look, we are really pleased with the progress that we've made in terms of building out our oncology business across both Gilead and Kite. So to put it in context, last year, we had approximately $3 billion in revenues -- oncology revenues, which is a relatively modest portion of Gilead's total revenues. It was, I believe, roughly 12% of our total revenues. But that was starting from 0 7 years ago or 8 years ago, and it's just the beginning. So the really nice thing about Gilead now is you see our core HIV business, which I know we'll talk about, doing incredibly well, and you see significant growth. But you see now meaningful pockets of growth in our oncology business with both Trodelvy.

We have some upcoming launches in Trodelvy as well as anito-cel and the rest of the cell therapy business. And I expect that we'll add to that over time. And then in the liver disease business with Livdelzi and the rest of our viral hepatitis products. So it's a really exciting time. And I expect to your question that the non-HIV part of the company will grow consistently steadily over time, not at the expense of the HIV business, but to further diversify and help grow the top line.

Okay. Well, speaking of the HIV business, of course, so many investors are focused on the Yeztugo launch, $800 million guidance for this year. Maybe you could walk us through sort of what are the moving parts in terms of what could be maybe more conservative about that guidance? Or I know some investors are thinking that perhaps we could do quite in excess of that.

Yes. Well, the launch is off to a great start. So again, to step back, Yeztugo is our once every 6-month subcutaneous HIV prevention medicine that had really extraordinary data that was presented, I think, now roughly 18 months ago, if I remember correctly in the PURPOSE 1 and 2 studies where you saw in 1 study, 100% prevention of HIV transmission in a population that was at very high risk. And in another study, 99.9% effectiveness. So really extraordinary data.

The launch is off to a great start. The launch started at the very end of the second quarter of last year. So you really had the third quarter and the first -- fourth quarter as the first 2 full quarters of launch. We had $150 million in sales for the year, which was absolutely tracking to kind of our expectation. And all of the launch metrics that we look at are either on target or ahead of schedule. So I'd highlight, in particular, we have greater than 90% payer coverage of Yeztugo today, which came much earlier than expected. Of that 90% payer coverage, 90% of patients have no step edits or prior auths.

So it's largely unrestricted coverage. We didn't have to leverage discounts in order to open up that access, which again, is a great sign. And then there's 2 other things in the launch that are really interesting, and I'll get to your question on $800 million guidance for the year. But we're seeing more patients that are starting on Yeztugo that are naive to HIV prevention than we expected, which is a great sign for the HIV prevention market and for our business.

The low-hanging fruit, so to speak, were the 500,000 to 600,000 patients in the -- people in the United States, I should say, that are already on HIV prevention therapies, which is 2 oral therapies that Gilead developed, one of which is now generic and then another long-acting competitor. And then the second thing is when we look at the source of business for the majority of patients that are coming from existing HIV treatments, you're seeing an equal amount of patients coming from the other long-acting competitor, which is an every 2-month intramuscular injection, generic Truvada and then Descovy, which is our branded daily oral as well. So we're seeing more people coming from generic Truvada, just like more naive patients coming than we would have expected, all of which bodes well for the launch.

And then to your question on the $800 million in sales, again, that implies significant growth from the $150 million for the first couple quarters of 2025. And again, as I said, we're really pleased with what we're seeing in the launch, script data, all the trends. The big question is the persistence. How often will people come back for their next injection. And the early data that we're seeing is quite encouraging, but it's a limited number of patients because as I said, we just really launched at the end of the second quarter. So you're really just starting to see the first couple of waves of people that can come back in.

For the injectable generic, our data suggests that their persistence rate is about 50%. And at a minimum, that would be kind of our target. So we'll have a better sense of the launch and the progression of the launch over the coming quarters. But as I said, we really like what we're seeing so far, and we have very high expectations for Yeztugo in the long run.

Yes. That's super helpful. And because I have heard some investors kind of questioning whether in terms of the guidance relative to the script data, which is just phenomenal, that maybe there's like an early bolus given like increased coverage, as you mentioned, that coverage is tracking well on target that maybe there's like a bolus in the first half of the year and then the second half of the year could be a lot of just sort of talking whether the patients come back.

Yes. I mean the interesting thing is the bolus that you're seeing, you're seeing extraordinary growth in the HIV prevention market overall. But the bolus is really going to the daily orals to start. So to put this in context, if you look at the total HIV prevention market, '24 to '25, the -- our HIV prevention business, which is Descovy, our daily oral and Yeztugo, the injectable drug that was approved in the middle of last year, grew roughly 50% from '24 to '25.

A lot of that growth was in the daily oral Descovy. And then you saw the same thing from the fourth quarter of '24 to the fourth quarter of '25, where we saw even greater than 50% growth in our HIV prevention business overall. We believe that, that significant growth, again, it's just early innings for the HIV prevention market overall, which should continue to develop and grow for many, many years to come. And you should slowly see patients moving from the oral therapies to the long-acting therapies given that you see much better efficacy with the long-acting therapies and payers know that they're getting what they're paying for in terms of the very high levels of protection.

The oral pills have much lower levels of compliance, as you would expect. So we have seen a bolus in the overall market. The last thing to your question is our expectation for Livdelzi and our HIV prevention -- I'm sorry, Yeztugo and our HIV prevention business overall is steady, durable, consistent growth quarter after quarter, year after year. You've seen that in the rest of our HIV business. that is what we're expecting over the long run. So we have many, many years of growing the prevention market ahead of us, we believe.

Okay. Well, that's super helpful. And then well, maybe pivoting to the other side of the HIV market, which would be treatment. I know that you had a lot of data at the CROI conference. And then we've been getting a lot of questions about the once-weekly option that's oral. So maybe aside from the PrEP market, what are you guys focused on in terms of what could be the best thing that we could be looking for in the treatment market going forward?

Well, we do expect that like the HIV prevention market, the HIV treatment market will move to a predominantly long-acting market over time. And that will be a combination of either weekly oral pill combinations, monthly oral combinations or longer-acting injectables, which would typically mean every 3 or 4 months or every 6 months either intramuscular or subcutaneous injections.

And I think all of those will be on offer over time. We have programs in all of those areas. We have backup programs in all those areas. We have a lot of confidence in our portfolio that we're moving forward. And I think just like the prevention market, you'll see the treatment market move to that. What maybe is less well understood and appreciated is that in all major markets, including the United States today, roughly 40-plus percent. I think it's 44% of patients that have HIV in the United States today are either not diagnosed, not drug treated or not virally suppressed, which is shocking, right?

That's [indiscernible].

It's incredible. And I think of that 44%, roughly 13% of those patients are not diagnosed, which again is shocking. But in that 30% of patients in the United States that are either not drug treated or not virally suppressed, many of those would really benefit from a long-acting therapy. So I think when we think about long-acting therapies, it's not only serving the roughly 56% to 60% of the market that is currently drug-treated and virally suppressed and giving them a better option. It's also opening up the large segment of all the major markets that are not well treated by the daily oral TILs today.

So again, we see the market moving to long-acting. How it actually breaks down over time will depend on both what we bring to market and then the profile of those versus today's daily orals. But the expectation is that a significant portion of the market will move to those long-acting therapies.

Yes. And on the other hand, we have seen some headlines about certain Medicaid coverage being restricted in some states. Like how are you guys expecting coverage for those that are -- just coverage for the treatment market in general evolving in just a politically dynamic environment in the United States?

Yes. We're really not seeing restrictions that are impacting our business. You may be referring to some of the ADAP restrictions. So we're not seeing in Medicaid. I mean, even in Medicaid, for instance, we -- with our HIV prevention medicine, we had broad uptake of that by the state Medicaid agencies very quickly, including in all the largest states, which is encouraging. The AIDS Drug Assistance Program, ADAP, are a government-funded subsidy that help those at the greatest need that aren't able to get HIV therapies to get those therapies -- those are very, very heavily discounted therapies for us.

So you're reading about some of the states having funding crisis removing funding. Florida, for instance, took 2 of our therapies, Biktarvy and Descovy off formulary. Because that segment is so heavily discounted, it's not free drug, but it's close to free drug, it's not expected to have a material impact on our business. But it does present an issue because if you don't have these safety net for people that have HIV and the virus is not kept at bay, you will see an increase in infections and you'll see increased health care costs over time. So it is concerning. And at the same time, from a financial perspective, it's not expected to impact our business in any way that's material.

Yes. And since you mentioned like that in terms of our research and getting to feed on the company, one thing that was surprising is that overall infections have continued to decrease, but new infections are obviously in populations that are historically not necessarily what you would expect with HIV. So how are you thinking of reaching out to new populations or the treatment market that might not have been what was historically affected?

Yes. What -- part of what Emily is referring to is that we're actually seeing in the U.S. for instance the HIV treatment market is growing 2% to 3% in those major markets, including in the United States. But what you're seeing today that's really interesting is I believe 20% of new infections in the U.S. are heterosexual women. A significant portion of infections, there's a disproportionate number of infections in the Southeastern part of the United States, especially in African-American black populations and Hispanic populations.

Those are all populations that we are really working to get to those communities, raise awareness, reduce stigma. That comes through working through other organizations. It includes working in some cases with church organizations, for instance, social media, very targeted awareness campaigns. Our commercial team is really doing a great job, I think, of trying to fully understand that and then reaching people that are at greatest need of both HIV treatment and HIV prevention. So we are shifting as the market is shifting, our team is shifting kind of our priorities and how we're raising awareness. in particular, in making sure that people are aware of either therapies if they do have HIV or HIV prevention alternatives.

Okay. Fantastic. Well, maybe I know we're getting close to time, but -- so maybe taking a step back. Obviously, Yeztugo is driving such a strong growth in the infectious disease area for Gilead, anito-cel launching later this year. But maybe thinking about in terms of Gilead becoming a broader company in terms of therapeutic area, immunology is something we haven't really talked about. How are you thinking about maybe what could be future growth drivers outside of infectious disease? And then I know we have anito-cel and oncology outside of oncology, just in that specific category becoming just a more diversified company?

Yes. No. And as I mentioned earlier, we have the strongest pipeline that the company has ever had, much -- many more programs, much greater diversification across both virology as well as liver disease, oncology, inflammation. If you look, for instance, I mentioned that we have 2 launches underway in Yeztugo and Livdelzi, which both are going incredibly well that will drive growth. But we have up to 8 additional product launches coming this year and next year. 2 of those product launches are in HIV.

The remaining 6 product launches are outside of HIV, including Trodelvy, which is our antibody drug conjugate in first-line metastatic triple-negative breast cancer, all comers kind of PD-L1 high, [ 1 low, ] anito-cel, which we talked about, the BCMA CAR-T. So I do expect that we have a lot of growth drivers. We have -- the overall core business is doing great. We have the 2 launches.

We have up to 8 additional launches coming, and we will continue to add things to it over time. So when we look at the profile, it's just Gilead is a very different company than it was when I joined 10 years ago. We have far more diversified, far bigger pipeline. We're at the beginning of kind of a long cycle with no major patent cliffs until 2036 at the earliest and numerous launches that we'll add to. And you're also starting to see the -- with the expense discipline as well after we grew the company in the research phase, you're really seeing strong EPS growth, which I think is really encouraging as well. So it really is the beginning of an exciting new cycle.

Yes. CFO must be a very exciting time given the leverage that you're getting from the business.

Absolutely.

Okay. Well, this is pretty much right on time. So thanks, everybody, for joining. And thanks, Andy, for coming. And hope everyone has a great rest of the conference, and hope to see you all soon.

Thank you for having us.

Thank you.

Good morning, everyone. This is Daina Graybosch. I'm a senior equity research analyst here at Leerink Partners. And I'm excited to be hosting management from Gilead this morning. We have Dietmar and Andy. We have 30 minutes, which isn't sufficient time to get through that much, but I think we'll focus on some meaningful programs and strategy for the company. So thank you both for joining us.

Thanks for having us.

Thank you. We're thrilled to be here again.

We're going to start with HIV. We had a dinner last night, and we had a lot of great discussion on HIV, and I think a lot of interest there. And so -- and starting with HIV treatment because you've had some strategic decisions recently, and I think it would be great to understand that. So maybe the first question is, one, just give us an overview of how you're thinking about developing the next generation of HIV treatments. And then based on some of the data at CROI and other data, why you've prioritized for the 6-month regimens, your long-acting INSTI, GS-3242 and the bNAbs in combination with lenacapavir over the other combinations that you did also have in the pipeline?

Yes. Thanks for the question. In HIV, it's really important to focus on these 2 big areas, right? There's HIV treatment, obviously, HIV prevention, we can talk about both. In HIV treatment, we put the strategy together roughly 3 to 4 years ago. And a lot of it is about new principles in treatment, like, for example, the capsid inhibitors playing a bigger role, the integrase inhibitors playing a key role, but then also really going from daily therapies to more long-acting options, right, going from daily orals to like weekly, monthly, but then also going to injectables, for example, on a monthly or every 6-month basis, and talking about these really long acting, we have 2 approaches right now that we think will get us to once every 6-month therapy.

One is the combination of lenacapavir plus broadly neutralizing antibodies. The antibodies would be given by infusion. So people would come to the office of the physician once every 6 months, get the lenacapavir, get their infusion. And that's the len plus bNAbs. And what we presented at CROI at this really important retroviral and infection, but also HIV meeting, we presented patient-reported outcomes data on that combination. We also have Phase II data already demonstrating efficacy, but the patient-reported outcomes data really supported how important this option is for people. And remember, a lot of this is about having the right options for the right patient group, right? At this point in time, we just spoke about that. About 40% of patients in the U.S. are still either undiagnosed or are not virologically suppressed.

And that's because we don't have the right options for them. Either we don't diagnose them, that's 13% of patients or we don't have the right options for them that are patients that, for example, don't want to carry a daily pill or have stigma or don't have the right level of access and having for them a possibility to come to the physician's office once every 6 months could be a game changer. That's also why we're developing an injectable option, again, based on lenacapavir but then an integrase inhibitor with that and so-called INSTI, and that's where we had communicated actually at our HIV Day more than a year ago, we had communicated we are looking at different integrase inhibitors as a combination partner for lenacapavir in that once every 4- to 6-month injectable option.

And we had 3 options there. They all have different numbers. We had always said we pick the best one. And now we have data, and it's largely really pharmacokinetic data that led us to then pick 3242 as our option to move forward for once every 4 to 6-month treatment together with lenacapavir. And I'm saying once every 4 to 6 months because we're currently in dose escalation for that combination of 3242 plus lenacapavir. At this point, we absolutely know looking at the PK that we can do once every 4 months. We're going to higher doses. So we're also confident that we will get to once every 6 months with that combination.

Can you talk more about these 40% of patients that are undiagnosed or not virologically suppressed? I think the worry, maybe just a bias worry is those patients might not have access to pay for an every 6-month injection plus infusion. So what gives you confidence that not only will you match them compliantly and where they need it, but that you'll match their financial situation?

Yes. Maybe I'll start. I mean there's a mix of patients in that pool, but it's an enormous number of people that are infected with HIV that are not adequately drug treated today. Many of them are coming in and out of care depending on their circumstances. And then you have others that just, for whatever reason, they have access to medicines, but they're not taking them on a regular basis. So it's hard to say definitively today what percentage of that roughly 40% of patients that have HIV infection in the U.S. can be well treated with the long-acting, but it's a meaningful amount of that population and significant market for us to work on and address over time with all these long-acting therapies.

And I think it's important to note that when we speak about access, it's not that you wouldn't be able to find funding or you wouldn't find access for these people. It's more they're coming in and out of care, right? So you're speaking about people who are either unhoused or who are marginalized and who don't have the right level of care at this point in time. If they come into the system, of course, they can be treated, and there's also possibilities for funding for that.

Got it. On PrEP, you're developing Q12-month PrEP. And I thought it was very helpful last night to talk about what that regulatory path is. And so I wonder if you could summarize us for that and why that path gives you so much confidence that we could have the Q12-month Yeztugo?

Yes, yes, absolutely. And the -- so Yeztugo every 6 months, of course, is a real benefit for people, and there's a lot of excitement, and we see that the launch is going well. Based on our studies for Yeztugo once every 6 months, we understand the PK really well. And we understand what kind of target coverage do you need in order to have protection, right? So we can easily model out if we go in with a higher dose, if we go in with the right formulation, can we get that same target coverage for 12 months, right?

And we've done that, and we now have a formulation that we can give once every 12 months as an intramuscular injection. And we know that target coverage at the end of that 12-month period is actually higher than what we've seen with lenacapavir with Yeztugo once every 6 months. So the FDA has agreed to do a model-based study, really a pharmacokinetic endpoint around that study. So it's a smaller study. We don't have to do the large PURPOSE 1, PURPOSE 2 type program, several thousand patients anymore. This is a program with a couple of hundred patients where we basically show pharmacological comparability with that 12-month period. So that study is ongoing. It's recruiting well. We're expecting to have data readout in '27, and we're expecting to be able to bring that to patients in the '28 time frame.

Let's move on to Livdelzi. There's a trial, the Phase III IDEAL study. And I wonder if you could talk about how that could expand the currently treated population and what gives you confidence in that trial and the outlook?

Yes, I can start with the trial. Obviously, Livdelzi has shown really good efficacy in the PBC population, both when you look at the biomarker, right, the ALP, but then also when you look at itch, when you look at pruritus. The initial study was kind of the standard study that you do in that population, which is you look at the -- what is called the inadequate responders, right? Those are patients, and we had the RESPONSE study for that. Those are patients with an ALP value above 1.67. And that's where we saw the good outcomes. That's where we launched. That's where we see really the growth with Livdelzi right now.

There's a population that is called the incomplete responders, which when you look at the biomarkers, ALP is kind of 1 to 1.67x the upper limit of normal. The biology is the same biology. It's just like the response is not complete to the earlier lines of therapy, to the UDCA. And that's, again, where we think with Livdelzi, we can make a real difference, both when it comes to response, then also when it comes to itch, but then also when it comes to long-term outcomes. And that's the ideal study. That's a Phase III study that's currently ongoing. And if that study is positive, it would basically double the addressable patient population.

Have other compounds moved from the slate to earlier successfully?

Yes. It's not been a standard approach so far. But now as we have Livdelzi as a really active treatment option, that is a really natural path, both from a patient benefit perspective, moving it earlier or moving it to these incomplete responders, but also from a commercial perspective. You see that some other competitors are following our lead. They're trying to do the same thing. But of course, you need to have the right efficacy in that space.

And do you feel like you have sufficient understanding of the efficacy in those patients to have powered that study?

Yes, absolutely. And the biology is not different. And of course, we had some early data that also helped us to design the study.

Got it. I'd like to talk about business development for a moment. One, to the Arcellx acquisition, I think that -- is it fair to conclude that it was financially attractive. It was accretive to EPS by 2028. I think our model would agree with what you announced. But does it signal that there was a lack of other attractive acquisition opportunities because you already owned it and you're just buying the -- you're buying not having to give the gross profit to another company.

Yes. No, that's not the signal, I think. I mean, first of all, -- we think it's an outstanding acquisition for us, for our shareholders. It has a lot of benefits to the company. But first and foremost, we see a much larger commercial opportunity for anito-cel than the market saw. So there was a natural -- it was a perfect situation from a buy-side perspective. And you're right, we had a large partnership that we entered into over 3 years ago. It's been a very successful partnership. The clinical data is outstanding. For those of you that don't follow anito-cel, this is a BCMA cell therapy that's being studied in multiple myeloma.

The first approval will likely come in fourth line plus later this year with then subsequent approvals in relatively near term in second line plus. We will also do first-line studies. And the data so far is just spectacular in terms of the benefit like most cell therapies for patients, but it has a highly differentiated based on the data that we have in-house, which is not just the fourth line plus study, but the second-line plus study, a very differentiated safety profile that Dietmar can speak to.

So when we looked at it, it was relatively straightforward. We're nearing approval in the United States. There was a unique window where the company's stock price had traded to a level where we could actually pay a premium and still make a deal that -- agree to a deal that really works well for our shareholders. We're nearing launch. So we actually have the ability to control the launch. But at its core, this is really about an opportunity where we saw a significant difference in our view of peak sales opportunities and the market's view. And the easiest way to think about this is there's a competitor BCMA cell therapy that is currently on the market. Analysts project $6.5 billion in peak sales. They were projecting $2 billion to $2.5 billion of peak sales for anito-cel, and we think that we have the best-in-class BCMA cell therapy.

So the analogy, we've just talked about Livdelzi. When acquired CymaBay 2 years ago, it was a very similar situation. We knew the company incredibly well. We knew the liver disease space better than anyone. And the same thing is true here. We know an anito-cel as well as anyone. We're managing together with our partner, the regulatory discussions with the FDA. We had the file acceptance for fourth line plus, which was a significant derisking event for us. And we had a completely different view of the peak sales opportunity. The other part of your question, then Dietmar can speak to the clinical differences was we have the flexibility with our position to continue to do corporate development. We're going to be disciplined, proactive. We love the position that we're in. As we've reset the company, you've seen very strong growth the last 3 years in our base business.

We're at the beginning of what we believe is kind of a 10-plus year cycle of numerous launches. We have 2 drugs that we've launched recently, Livdelzi and then Yeztugo for HIV prevention that you highlighted. We have up to 8 additional launches this year and next year, which is really extraordinary. All of that will drive continued top line growth. You see expanding bottom line growth. And then this deal adds beautifully to that in '28 and beyond, which happens to correspond with the period where we could potentially see the impact of drug price negotiation with the U.S. on Biktarvy.

So every which way we look at this deal, we really liked it, but it really fundamentally was about the difference that we saw in terms of the peak sales opportunity to really make a huge difference for patients in multiple myeloma, and then the last thing I'll offer is that cell therapies are unique in that it's very hard to see a biosimilar cell therapy in the future. It's incredibly difficult to manufacture. It's difficult to show comparability. So these are franchises, whether it's our lymphoma cell therapy franchise or anito-cel, similar to our antibody drug conjugate for solid tumors that we think have decades of durable growth potentially ahead of us.

You've been -- this was one of your strategic partnerships. And for many years, Gilead has been a fan of strategic partnerships with smaller companies where you take seats on board, you invest in them, make sure they have enough cash to pursue what they're pursuing, but also have freedom to innovate and you have opt-in rights on those programs as they come to certain milestones. And now you've bought one of them. So I wonder looking across that one and the rest of them, how do you view that strategy? Do you expect to do more of that type of strategy? Or as you're moving into this new period, do more direct deals like CymaBay?

Sure. I'll start. I think the answer is both, but we love that strategy. We love partnering with really smart companies that have differentiated products or technologies. We like having multiple opportunities to win with those partnerships. You saw that in a number of our partnerships. We recently, for instance, in-licensed a couple of compounds from a company called Assembly. It's a small company focused in viral hepatitis and other virology indications. That was kind of an all-in partnership that we think people will grow to appreciate that deal over time. And you highlighted the Arcellx deal. But yes, we love those structures, and we will also supplement it, I think, with other deals that -- like the CymaBay deal where we just identify companies that have a lead asset that's really interesting strategically and that we acquire it.

But any time that we can enter into partnerships and use our balance sheet to push forward innovation and have options on either a product or a series of products, we think that can create a lot of value for our shareholders. And the Arcellx partnership is a great example of that. We think it's going to drive tremendous value for our shareholders over a very long period of time. And when you look at kind of our average cost of capital of acquiring that asset from the partnership and then the acquisition that we're doing, it really provides a really attractive return for our shareholders from our perspective. Anything you'd add?

No, I think the only thing different types of compounds require different types of deals, right? Sometimes you want to own it outright, you want to be able to launch it, you have all the data, you want to basically own the path forward. And that's, for example, the CymaBay, deal, right? The Arcellx is really a good example of -- there was so much more to be learned about the cell therapy approach, about anito-cel specifically. And we saw there's really good science behind it, not only with regard to anito-cel, also with regards, for example, the D-Domain binders that they have with regards for example D-Domain binders that they have with regards to the platform.

And then the data was also really maturing, right? So that was really reassuring for us. And just coincidentally, at the time when we did execute on the deal, we also had way more clinical data, and we had the FDA acceptance, right? So it was a largely derisked perspective also when it comes to the scientific data and the clarity of the path forward.

Another approach where you've actually done some acquisition already and then some partnering is an in vivo CAR-T. And I wonder what do you believe in vivo CAR-T will achieve that's not possible with auto CAR-T? And why go there in that potential disruption rather than allo CAR-T or T-cell engagers?

I'll start, maybe...

You can start.

Yes. When we acquired Kite 8 or 9 years ago, we always had the vision that, that was the beginning of cell therapy and that the cell therapy field would evolve dramatically over time, ultimately ending with kind of the in vivo CAR-T. And the 2 deals that we've done recently around in vivo CAR-T are important aspects of building our integrating in vivo CAR-T. We have separate non-integrating in vivo CAR-T programs that we're developing internally at Kite and across Gilead that are also really exciting. Why now and why have you seen a run of in vivo CAR-T deals is that we've all seen data from a number of these companies, including the company that we acquired, Interius that really show the promise, proof of concept that you can do this.

You can insert the viral vector, it gets selectively to the T cells. It's integrated into the host genome, transcribed and you create CAR-T cells in the body and the human body becomes the bioreactor. So as long as -- and now it's going to take years, right? I mean so in the next decade, people will continue to refine this. But you have clear proof of concept across many companies that this is scientifically possible. And now you have to get it to the same level of efficacy and safety that you see with autologous CAR-T. And we believe it's possible. It will dramatically change the cost of goods and delivery of CAR-T therapy over time, and we think open up CAR-T to a much broader audience.

And CAR-T continues to grow really nicely, but that's what's behind it. And as the world's leader in CAR-T, we want to stay at the forefront. We look at this as a multi-decade investment. I always use the analogy of watching the antibody space develop or the protein therapy space develop. Cell therapy over the coming decades is likely to continue to grow significantly and become a major treatment modality across a number of not only oncology indications, but also indications potentially in neurology and autoimmune.

Yes. I mean the addition here would be that Kite is really getting to a much more integrated strategy, right? You've got the ongoing business with Tecartus and Yescarta. You've got the next generation going from a CD19 to CD19/CD20 bispecific bicistronic, also getting to molecules that balance or treatment approaches, CAR-T approaches that balance much better the efficacy and safety so that you can get into the outpatient setting so that you can actually apply it in inflammatory and neuroinflammatory conditions.

So we're really excited about this next generation that's coming along. And then expanding into new indications, which is the anito-cel aspect going to myeloma, which is the biggest hematology market right now, and we feel there is real opportunity, taking it from fourth line to then earlier lines all the way into first-line and smoldering. And then there's this aspect of in vivo CAR-T, which when you talk about the differentiation, there are 2 really important things. One is the off-the-shelf characteristic. So you don't have to harvest cells, you don't have to modify them. You can literally pull this off the shelf and give it to a patient. So the turnaround time, the COGS, all of that gets much better.

And then the requirement, and that's the big differentiation versus allogeneic, the requirement for immunosuppression, right? And all the associated side effects. And I think that's also what [indiscernible] does so much as a community around the allogeneic also versus the autologous, right? So there are various benefits that we see. And just as a leader in cell therapy with the early signals that we've seen, we feel we also will need a leadership position in the in vivo CAR-T approach.

Let's talk about Trodelvy. It's been a real workhorse, and you have a very highly competitive environment in TNBC that you're launching into. How are you thinking about maintaining your position and building on it? Are you going to do novel combos? Should we expect more Phase III development from that program TNBC and beyond, really?

I'll start with the program, right? So from a perspective of the clinical program, we have a really comprehensive program. There are several ongoing really pivotal trials right now. Of course, we're building on the success we recently had with the ASCENT-03 and ASCENT-04 studies, which are taking Trodelvy into the breadth of first-line triple-negative breast cancer, both PD-L1 high and low. We have those 2 studies, which really are the basis of a new standard of care. That's why we have a broader program than some of the competitors have at this point in time, and that's going to be a real benefit together with the experience that people have with Trodelvy and the trust that they have into Trodelvy.

And then we will read out this year 2 studies. One is the EVOKE-03 study, which is in first-line PD-L1 high non-small cell lung cancer, very straightforward study design, adding Trodelvy to pembrolizumab, which I think has a decent probability of success, and then going into second-line endometrial cancer, which is the ASCENT-GYN study. And beyond that, we have a study in small cell lung cancer, which is EVOKE-04, and we also have a study in the adjuvant setting in triple-negative breast cancer, which will read out in a couple of years. So that's a comprehensive program, and we're obviously looking at other additional combinations and other additional tumor types potentially that we can take Trodelvy into. We also have a really large program when it comes to investigator-led studies or cooperative group studies, which just adds to the body of experience with Trodelvy. So we feel we are really well positioned with Trodelvy as a standard of care.

Got it. Maybe the last 5 minutes, we can talk about your early-stage pipeline, which is beyond HIV. You have a lot of programs actually in oncology and immunology. Maybe we could start with inflammation. I think you talk a lot about your alpha-4-beta-7 inhibitor. You have an oral TPL2 and you have a BTLA agonist. And I wonder if you could -- any of those we're going to see clinical data soon? And anyone you want to highlight that you're more excited about?