Gilead Sciences, Inc. (GILD) Earnings Call Transcript & Summary

Great. Good morning, and welcome to the 40th Annual JPMorgan Healthcare Conference. My name is Cory Kasimov, I'm the senior large-cap biotech analyst, and it's my pleasure to introduce Gilead and Chairman and CEO, Daniel O'Day. [Operator Instructions] So with that, Dan, thank you very much for being here. Always great speaking with you. Now let me hand things over to you for your presentation.

Great. Well, thanks, Cory. I'm really pleased to be here today and representing the colleagues at Gilead. And I want to thank you, Cory, and everybody for the quick pivot to the virtual setting. And I know that's -- that was a heavy lift. I want to start out by saying we are really looking forward to what promises to be another strong year for Gilead and frankly, a strong decade for Gilead. We're coming off a year of very positive momentum where we increased our full year total revenue guidance by 7% at the midpoint compared to the guidance we gave at the start of the year. We saw strong HIV revenues despite the ongoing dynamics of the pandemic. And we had 5 FDA approvals for therapies that included our transformative cancer medicines. In fact, 4 of those were of cancer medicines. We also continue to play and continue to play a key role in the pandemic with Veklury. What you'll see today is the basis for our confidence in sustainable growth. We believe we were at a prime point in Gilead's transformation journey as we evolve to become a growing and diversified business. You'll see a significant number of new disclosures today that demonstrate why we are confident in both our continued leadership in HIV and virology as a whole and of becoming a leader in oncology with a world-class pipeline. Before I get started, let me just remind you that we'll be making a number of forward-looking statements throughout the presentation. A detailed descriptions of the risks to our business can be found in the presentation materials and our latest SEC disclosure documents. And all forward-looking statements are based on information currently available to Gilead, and Gilead assumes no obligation to update any such forward-looking statements. Now let's get going. This slide is essentially a reminder of where we're moving from and to in our journey. Since 2019, we've been in a very focused and deliberate build phase. Now we're starting to see the growing momentum from that. You'll see us accelerate the growth of our base business, and that growth will be sustainable through 2030 and beyond. And the basis for that growth is really the expanding virology leadership that we have, especially in HIV, where we expect to see stable or growing revenue through 2030. And secondly, executing on what is now a world-class oncology pipeline. In 2019, oncology represented less than 5% of our business. And by 2030, we expect that to increase to more than 1/3 off of that stable virology base. So I'll start with our expanding leadership in virology. Gilead has decades of expertise in antivirals. This is, as you know, the company that delivered a cure for Hepatitis C and made HIV a chronic and manageable disease. We're putting that expertise to use today with our role in the pandemic. Veklury has been used to treat millions of patients around the world. We're also applying our leadership in antivirals to viral hepatitis, which remains an important franchise for us today; our emerging virology portfolio; and HIV, which remains the largest part of our virology business today. We're in a very strong position to sustain our HIV leadership. Biktarvy remains the #1 prescribed therapy in the U.S. And our total treatment market share, which includes Biktarvy stands at about 75%. Despite all the challenges of the pandemic, Biktarvy revenue substantially increased in 2021. We saw year-over-year growth of 17% for the first 9 months of 2021. HIV treatment market recovery has already begun, and we saw a return to growth in 2021, with a 2% sequential growth in quarter 2 and 3% in quarter 3. Prevention remains underpenetrated as we all know. We believe this will change with the introduction of long-acting options that really meet the needs of people who might benefit from prevention therapy. With about 45% of PrEP users on Descovy in 2021, we believe we have a strong foundation on which to build. This brings me to a fundamental question that we are often asked, do we expect to sustain and/or grow our HIV business in the coming years? The answer is yes. We believe that our HIV portfolio will deliver sustainable revenue through 2030 and beyond, and here's why. We expect Biktarvy, which has patent protection through 2030 to remain the leading oral HIV once-daily treatment. Biktarvy will remain an important growth driver for Gilead until later during the decade when we expect the HIV treatment market to be driven more by long-acting options. We are looking forward to the introduction of our long-acting orals and injectables in the middle of the decade. We're confident that all of this will allow us to manage the currents in upcoming market dynamics, including new competitive entrants. I'll say more now about the reasons for our confidence in long-acting. As you can see here, lenacapavir is the foundation of our long-acting development program in treatment and prevention. Gilead's long track record in HIV has been built on patient-centered innovation. That continues today with our work on long-acting. We are advancing options that provide what people with HIV have asked us to deliver. We have a highly comprehensive approach, as you can see on the slide. This provides a view of how we're covering each part of the viral life cycle. Today, you're seeing 10 additional molecules on this slide that haven't been disclosed before to highlight the breadth of our work here. On this slide, and you see on the treatment side, in addition to the combination with Merck's islatravir, we said we would also be exploring combinations with our own internal molecules. We're exploring 3 of these Gilead compounds partnered with lenacapavir in clinical stage studies today. For prevention, last summer and fall, we initiated 2 Phase III trials evaluating lenacapavir monotherapy for subcu dosing every 6 months, and we expect a regulatory decision in around 2025. If approved, we believe this longer 6-month dosing option will provide the added convenience to meet the preference of individuals who could benefit from PrEP, which will help to expand the overall market at that time. Ending the HIV epidemic will require treatment, prevention and cure options. Gilead is committed to all 3 of these. Our cure programs are in early stage, but we are encouraged by what we've seen so far, and it's a very comprehensive program. Gilead's leadership has been and will continue to be based on patient-centered innovation, strong standing partnerships with the HIV community and the highest standards of medicinal chemistry. You can expect to see the same high standards with all of our future working, ensuring that we are a company and we are the company that is best placed to end in the HIV epidemic. Before I wrap up on virology, let me touch on our broader portfolio, including Veklury. As the pandemic reaches the 2-year mark, Veklury or remdesivir, as most of us are used to calling it, continues to play a critical role in treatment. More than 10 million patients have now been treated globally; 3 out of every 5 patients who are hospitalized in the United States for COVID-19 are treated with Veklury. We know that Veklury works in getting patients out of the hospital faster and reducing the risk of progressing to serious disease or death. We also note that it retains activity against Omicron, that variant and every variant that we've seen so far. And importantly, that we're able to meet demand thanks to the significant investments in ramping up supply in 2020. Importantly, we recently had new data, which was published in the New England Journal of Medicine, showing that an outpatient 3-day course of remdesivir reduced the risk of hospitalization or death from COVID by 87%. We also continued to advance our oral remdesivir prodrug with a view to starting Phase I studies very soon. In addition to the continued investment in research and development related to COVID-19, we're advancing our emerging virology discovery in pipeline, spanning HIV cure efforts, viral hepatitis and respiratory and herpes viruses. Gilead has some of the best antiviral scientists in the world. I know. I get a chance to work with them every day, and we're committed to applying this expertise so that we can continue to have a positive impact on global public health. Now moving to our growing and highly promising oncology business. This is a business that is very much delivering today. Our results through September showed that we are on track to exceed $1 billion in oncology revenue in 2021. This starts to hint at the revenue potential that we have ahead of us. Some of health cell therapy highlights for the year included the ZUMA-7 data for Yescarta and second-line DLBCL. Yescarta, just to remind you, quadrupled the median event-free survival duration over standard of care. The ZUMA-1 data with 5-year data showing 43% overall survival for patients with relapsed LBCL. The life expectancy of this patient population, just to remind you, prior to CAR-T, it would have been around 6 months. It's a massive difference. The approvals for Yescarta in follicular lymphoma and Tecartus in acute lymphoblastic leukemia round out what was just a terrific year for our cell therapy business and the promise for the future. On the Trodelvy side, we received full FDA approval in second-line metastatic triple-negative breast cancer. The expansion to second line has helped to drive the continued increase in uptake with now 1 in 4 new patients in this setting receiving Trodelvy. Additionally, Trodelvy received accelerated approval in second-line bladder cancer. Looking across the potential of the oncology portfolio, we are now on track to deliver more than 20 indication approvals by 2030. As you can see here, we now have more than 30 ongoing clinical trials and that is going to increase significantly in 2022. We have a strong scientific framework that provides the basis for all this work and underpins our strategy. You'll see here on this slide, our pipeline spans the 3 main mechanisms in this framework. In the red color, you see therapies that trigger immune tumor intrinsic cell data, such as Trodelvy. In the dark blue, you see therapies that promote immune-mediated tumor killing such as Domvanalimab, Yescarta and magrolimab. And in the teal color, you see therapies that remodel the tumor permissive microenvironment like etruma. The molecule spanning this framework represents some of the most promising targets in oncology. The real potential is in the ability to combine this across categories. On the left-hand side of this slide, you see the molecules that we have in development across each of the categories, 18 today. And on the right, you see some of the potential combinations from these molecules. And this is just meant to be illustrative but you already see some that are actively studying in these combinations like the triplet that you see at the top, whereas others are either in the planning stages or under consideration. And as you may have seen, we announced today that we will study a combination with Merck's KEYTRUDA for the first-line non-small cell lung cancer setting. This follows the previous announcement we had in combining Trodelvy with Merck's KEYTRUDA in the first-line triple-negative breast cancer setting. We'll continue to explore the most attractive combinations, whether with our own molecules, in our own portfolio or with molecules from external partners where they are also standard of care. By exploring a broad range of combination opportunities, we have the potential to address many and various tumor types and lines of therapies, and that's what you see in this slide. Some of these are underway and some of them are yet to start. On the next slide, you see we have more details about how we're expanding our development programs. There's a significant number of studies here that we have not disclosed before. Let me talk you through what's on the slide. The left-hand slide summarizes the more than 30 clinical studies that are underway today. And I'd like to draw your attention to the new studies we'll be starting this year, some of which are shown on the right-hand side. We expect to initiate more than 20 new clinical trials in 2022; 15 of these will include Trodelvy and 7 of these Trodelvy trials are going to be Phase III trials. These include studies across multiple tumor types, including breast, bladder and lung. We're working with a sense of urgency to unlock the value in these molecules in combinations as quickly as possible and with thoughtful development strategies that ensure optimal benefit for patients. Before I wrap up, I want to highlight 2 opportunities to learn more about what I presented here today about our oncology and virology programs and portfolios. Our IR team will share more information on these, but briefly for now, in addition to our quarterly earnings update on February 1, we're planning virology and oncology deep-dive days featuring some of our leading experts in those areas. These sessions will provide a more in-depth view at the R&D work underway and our strategic direction. Our Virology Day is planned for Thursday, February 17, and our Oncology Day is planned for Thursday, April 14. As a reminder, by the way, and not captured into this presentation, we are still very committed to work in inflammation and fibrosis. Although we haven't covered anything today given the time and the earlier stage of our efforts here, we're excited by the promising early pipeline and look forward to sharing more updates with you as things progress into the future. So in summary, I mean, today, I hope I've given you a sense of why we believe we have all the pieces in place within Gilead for sustainable growth that is driven by world-class innovation and a diverse portfolio of therapies. In virology, we'll sustain our HIV business and expand our leadership across the entire portfolio. And in oncology, we have already started to deliver our world-class portfolio based on novel science and the strong potential for combinations. In 2022, you'll see that the momentum we have built across the business will really play out. Gilead is set for a strong year and a strong decade. I and the team look forward to keeping you up to date as we continue to deliver on our ambitions. And with that, Cory, I think we can end the presentation part of this. And I'd like to invite a variety of colleagues of mine to join us here on screen, and we can go into the question and answer.

Terrific. Thank you, Dan. I don't know if you want to introduce the team first before we get into the question.

Sure, sure. We've got Christi Shaw here, our Head of Kite; we've got Andy Dickinson, our Chief Financial Officer; we've got Johanna Mercier, our Head of Commercial; and we have Merdad Parsey, our Chief Medical Officer and Head of Development.

Terrific. Well, thank you all for being with us today. [Operator Instructions] Want to start with what's an obvious key near-term focus for investors, and that's the TROPiCS-02 near-term readout. I guess maybe just to start the conversation, if you can remind us, what underscores your confidence for this program in HR-positive, HER2-negative metastatic breast cancer?

Sure. I'll start and then maybe hand over to Merdad. I mean I just want to reemphasize our enthusiasm in Trodelvy entirely. And that's borne out by the data we've seen so far in triple-negative breast cancer and bladder cancer. And we remain committed not only to hormone-receptor positive, which we'll let Merdad speak to specifically, but also the entirety of the program around Trodelvy, which we were excited to announce yet another collaboration today with a combination therapy trial. Merdad, why don't you give a little more clinical and scientific view on that as well all relative to TROPiCS-02 and beyond.

Sure. Thanks, Cory. It's a great question. And of course, our confidence comes from a number of places. In particular, I think the history in our TNBC experience as well as the expression of Trop-2 across tumor cell types, in particular, in breast cancer, I think both underscore our confidence. As well as the fact that we have had patients who are hormone receptor positive in earlier trials where we've seen consistent efficacy in those patients compared with -- when treated with Trodelvy compared with standard of care. So for all those reasons, we remain very confident about the outcome for the upcoming TROPiCS-02 readout.

Do the -- are there any implications in your view of the recent time line shift?

No, Cory, I wouldn't read anything into the time line shift. We're confident the conduct of study is going very well, and we're looking forward to the data readout coming up.

Okay. And then when we think big picture about Trodelvy, how do you look at the ultimate commercial opportunity in breast cancer? Obviously, we can't -- it's difficult to look beyond. You saw -- you just showed in your slides how many new studies you're starting. So the potential is, obviously, pretty immense if you were to be successful there. But how do you think about it in breast cancer to begin with? And when you consider the competitive landscape for Trop-2 targeting agents as well?

Yes. Great. I'm going to let Johanna comment on this, but I just want to emphasize, I think you said it in terms of immense potential of this medicine, Trodelvy. Again, back to what Merdad said, the expression of Trop-2 and a very compelling and consistent efficacy messages in a very good tolerable package. Relative to breast cancer, Johanna, do you want to elaborate a little bit more on our current success maybe, and then also how you kind of see us expanding from there?

Yes, absolutely. Thank you. Cory, I think this is -- you said it. I think it's an incredible opportunity, not only because we're first as an ADC in metastatic triple-negative breast cancer. I think Dan mentioned earlier, 1 out of 4 patients right now in metastatic TNBC are getting Trodelvy in second line. And obviously, that's something that we need to keep growing in light of the incredible data that supports it. I think as you look at the HR positive data hopefully coming out shortly in the coming -- soon, the -- that kind of grows our market by 6x. So if you think about the breast opportunity and the potential, you look at the patient population in that setting at 6x more than metastatic TNBC. And so it really is an incredible opportunity for Trodelvy to really make a difference in a much broader patient population in breast cancer patients. So we're very excited about that. And that's only in breast. And of course, there's potential much broader than breast as well as we talked about.

Right. Okay. And...

And it's worth noting the earlier lines of therapy, Cory, in this as well, right? So we've announced the first-line triple-negative breast cancer collaboration with Merck and KEYTRUDA. Our strategy with Trodelvy is, of course, looking at single-agent activity in later lines of therapy, and then moving up into earlier lines of therapy where likely, obviously, we'll be partnering. And I think that one has to think about that also with breast cancer, about our ability to move up in lines of therapy over time.

Okay. And obviously, with your success with Trodelvy, you have -- there are copycats out there and others who are targeting Trop-2. Do you feel compelled to work on sort of next-gen agents to maintain your share? Or do you think that the data that you're building in these additional trials you're running, that's not necessary?

Merdad, maybe you want to comment on that and how we see the profile of Trodelvy?

Yes. I mean, look, Cory, we'll always be trying to innovate and come up with alternatives. However, I think the strength of Trodelvy right now is such that our focus is going to be on making sure that we get Trodelvy to every patient who could potentially benefit from it. So that's really where our focus is. And then looking at complementary mechanisms that can bolster the efficacy of Trodelvy overall in terms of combination approaches that we're going to take across the portfolio.

Okay. And then maybe on the [ overall ] oncology work, Christi, here, I wanted to ask how you look at Yescarta's earlier treatment lines. You had the really compelling second-line data. How might commercial dynamics be different compared to what we're used to seeing with the relapsed/refractory DLBCL indication?

Great. Christi, why don't you let us know how you see through the [ second-line data ]?

I'm sorry, could you repeat the question? I'm having some technical issues.

I'm sorry. I'm curious how you view the second line opportunity for Yescarta and how the commercial dynamics might be different than the relapsed/refractory DLBCL indication you launched into.

Sure. Absolutely. We're very excited and hopeful for the approval coming soon. Our PDUFA date is April 1. The market that we'll have the opportunity to play in second line is twice -- it's almost twice as many potential patients than we have today. Many of our patients are actually past the third-line, fourth, fifth, end-of-line therapy. So we do think actually, we'll start to move up to have more of our business be in the third line plus. This second-line business will first come from academic centers where patients who are high risk, they relapse in less than 12 months. That's where the first part of our business will come from where they're already in the centers, they're high risk, have been referred. And so we see that dynamic being the first step. As we continue to educate the community, we think they'll get more and more comfortable moving from later ends to earlier, which for them would be third and fourth line. And then when they're already referring for stem cell transplant, that's where we would see that transition from stem cell transplant to cell therapy instead, which would be probably post 12 months, if you will. So the first piece would be moving patients to earlier lines of therapy will be our biggest bolus. Then second-line therapy in parallel with the academic centers who have those high-risk patients who fail in less than 12 months, relapse from first line. And then the community will continue to be the biggest lift over the long run.

Okay. Do you ultimately see a place as a -- for cell therapy is either a first and/or second line therapy in the market? Do you think the marketplace could enable that with the progress that's been made?

So our ZUMA-12 data is the proof of concept that really demonstrated that there's a potential for cell therapy to be used frontline. If you look at the ZUMA-12 data, it's just remarkable. These patients, typically, they're high risk. Many of them couldn't tolerate the conditioning therapy that leads to stem cell therapy. We lose so many patients along the way. The ability to really treat those patients and provide the kind of efficacy that we've seen, we were waiting to see the durable response. But the complete response ZUMA-12, we had -- 78% of patients had a complete response, high-risk frontline. And that was a median follow-up of 15.9 months. And so we do think that there is a possibility to be able to do this. Also as we look at the authorized treatment centers, we have over 250 globally. We continue to add more closer to where patients are. We have some of the GPOs, the oncology cancer centers and the communities as we look to improve the benefit/risk profile and as physicians continue to get better at treating these patients and side effects, we do see the ability to do that in the future as an aspiration. One of the things to recall is that we also presented our 6-month -- our Cohort 6 data from ZUMA-1. So if you recall, Cohort 4 and Cohort 6 are the steroid usage. And we have Cohort 4 in the label. Cohort 6 data looks very strong, and that's the ability to really reduce significantly the CRS and neurotoxicities and, in fact, delay -- Cohort 6 delayed the toxicities by 5 days. So we can look at them starting to play in the outpatient setting. So very significant movements, I think, in the last even 6 months as cell therapy continues to evolve very quickly. Lots of opportunities for patients and a lot more hope.

And Cory, let me just -- if you just let me add on top of what Christi said. We all know that oncology is a data-driven field at the end of the day. And when one looks at the second-line data that was presented at ZUMA-7 and at ASH with the quadrupling of event-free survival in the second-line setting, I think there's no question in our minds that this will follow the general trend of oncology data driven, that this will become the new standard of care. And that's what the thought leaders are telling us. The question is over what period of time, I think, because just as stem cell transplant took some time decades ago to become the standard of care, we think this will take some time with people getting comfortable with them. But I have no question in my mind that cell therapy will become -- I mean, with those types of data and results for patients, there's no doubt that it will become standard of care in the second line. And then to Christi's point, I think also very promising as we continue our clinical trial program for first line in a subset of patients.

Yes. I agree with everything you're saying. Merdad, I wanted to ask you more about your plans with Arcus on the TIGIT program. Based on the slides, it looks like you have a lot of new trials in the works. So can you talk about the strategy there?

Sure. Yes. I think you can imagine for us, the TIGIT itself in a combination with PD-1 is going to be an important cornerstone. And as we're looking at the TIGIT, what I would call doublet combination with PD-1, we're also contemplating opportunities to differentiate further with additional add-on therapies, whether it's a triplet with adenosine inhibitors or other combinations over time. So our real goal there for TIGIT is to really establish it moving forward into potentially a new standard of care, given the profile of TIGIT agents right now and that their tolerability looks great. And if they can add efficacy to even frontline therapy, we think we have a real opportunity there. So across tumor types, we're going to be looking -- really the lead there will be with non-small cell, but we'll be looking at other tumor types in terms of those combinations moving earlier into lines of therapy and then potentially adding additional agents to the regimens to try to get to better efficacy there.

Okay. And then the last oncology related question I wanted to ask for now is on magrolimab. It hasn't been talked about quite as much by investors of late. But with some data coming up, can you kind of frame expectations for the product that you have at this particular point in time and what you're hoping to see for upcoming data?

Go ahead, Merdad.

Yes, sure. I'll take that. Yes. Well, look, I think as you've seen, the MDS area with some of the recent data that's come out is in the state of evolution, which is what you would expect for an indication where not a lot of work has been done for quite some time. So our focus is really on the pivotal Phase III study there for the MDS indication for magrolimab and really bringing a benefit there. It's also important to remember that we're also looking at magrolimab in the AML setting for a number of indications, and we have ongoing studies there where we should start to generate data in AML. Now that's our hematology focus, that sort of the bulk of the work so far. And for us, mechanistically, we do believe that there should be an opportunity here from magrolimab to move into solid tumors. And so you're seeing us now initiate a number of Phase II proof-of-concept studies looking for activity in solid tumors, which I think could be really interesting depending on how it plays out. So it's a fairly broad comprehensive program, as Dan showed in his slides, and we're really looking at that combination. A lot of confidence in hematology and really excited about the opportunity about potentially expanding into solid tumors.

Okay. So shifting gears and moving over to the base HIV business and maybe starting kind of most acutely with COVID. You guys talked a lot over the course of the pandemic about the impact this was having with HIV. What has Omicron done to that with this resurgence in COVID over the last 6 weeks or so? Is it kind of just similar to what we've seen before? Are there any differences this time around?

Well, I think the way the disease is, of course, we all know, is manifesting itself as different. But in terms of Veklury's role in this, it's very similar to the past. In other words, it tracks identical to the hospitalizations. So although there are more patients infected with Omicron, there are fewer that have been going into the hospital. But I think the best way to look at Veklury is the standard of care medicine in a hospital setting, 3 out of 5 patients in the United States are getting Veklury when they come into the hospital. And that's been consistent, frankly, throughout the pandemic accordingly. I think what we're looking forward to now is working with the FDA, and we have to file in right now on the short course outpatient use, knowing that this will need to be done in an infusion center. But infusion centers, of course, started to be set up quite geographically dispersed with the antibodies. And so I think what we see is the potential, particularly in this time period when you have Veklury, which we know the clinical benefits from. It's up to 87% reduction in hospitalization of use, that's 3-dose course of short IV therapy. It's effective against all variants so far, including Omicron, due to its mechanism of action, which doesn't affect the spike protein. And then thirdly, that we have supply available. So I think those things will be -- it will be 1 more piece of the armamentarium, if you like, in the outpatient setting for certain patients, that we think will be very helpful. And then as you saw, we announced the initiation of a Phase I trial of our oral remdesivir program, which will be starting up very shortly here. So I think it's really tracking hospitalizations, Cory, like it has in the past.

Okay. To follow up on the oral remdesivir prodrug, how might this be differentiated from Pfizer's Paxlovid?

Yes. Merdad, maybe you want to talk about the different mechanisms of action and how we see this.

Yes, absolutely. So as you know, the Pfizer drug is a protease inhibitor, and we're coming at it from a different standpoint, which is really around the replication of the virus. So as Dan mentioned, since we haven't seen a lot of resistance or any resistance so far with remdesivir, we're confident that moving into the oral space, the breadth of coverage will maintain if we can be successful with the oral version. Ultimately, I think if you play it out in the long run, we do expect that across mechanisms, there is always going to be the potential for the development of resistance. And one of the things for covering coronavirus is outpatients may end up being combination approaches where you're going to want to make sure that you don't -- the patients you're treating are not going to be resistant to the mechanism that you're giving or that you're preventing the onset of resistance over time. So really, I think -- if you think about this globally and play it out 2, 3, 5 years, we are going to need multiple mechanisms out there to be able to treat outpatients who are getting infected with coronavirus. So we really think that there's -- it's an and, not an or.

Okay. And then on the HIV development front, how are the partial clinical holds, lenacapavir, in particular, impacting the outlook here, if at all? And how complicated do you think it will be to resolve the issue?

Yes. Let me start, and then I'll hand it over to Merdad. I mean it's obviously something that we take very seriously in working with the FDA. It's around the file, and it's around -- we have been working on multiple different options around that. We stand committed to our time lines on both the HGE file and also the prevention file, but Merdad can give a little bit more granularity to what we're -- how we're approaching this.

Yes. As Dan mentioned, we've been working really closely with the FDA on this issue, and we're optimistic about our opportunity to resolve these issues. And right now, we think with what we're doing and the options that we have in hand, we should be able to resolve things hopefully in the near term. And our hope is that it doesn't impact our time line. So whether it's changes in vials or other bridges, we think we'll be able to get through this with lenacapavir. Importantly, it's not the drug, right? This is a technical engineering type issue that we need to resolve, and I think we're well on the way of getting to that resolution.

Okay. Perfect. And Andy, I wanted to be sure to ask you on just capital allocation plans overall. Of course, all is well appetite for additional business development after a pretty busy period for Gilead.

Sure. Let me add my thanks, Cory, for having us again at the conference this year. Our capital allocation priorities have not changed. So just again, to reiterate what we've said before, first and foremost, we're going to invest in our internal and external pipeline. We will continue to do corporate development deals but not at the same pace that we did in 2019 and 2020 -- or 2020 and 2021 would be our expectation. So the priority is really on ordinary course, licensing deals as well as potentially smaller acquisitions. But we have a lot in our hands from all the deals that we've done, as Dan mentioned earlier, and we're really focused, first and foremost, on execution. Secondly, we remain committed to the dividend and growing our dividend over time. We also expect to continue to pay down debt. And this year, we expect to pay down at least $1.5 billion of debt. Last year, we paid down $4.75 billion, as you know. And then finally, we'll look at share repurchases opportunistically. At a minimum, we expect to repurchase shares to offset employee stock issuance. But again, our mindset there has not really changed. So we're in a really strong, stable financial position and excited about what we can do with the pipeline that we have and also looking at new deals as well.

Okay. And then as a follow-up for you, how should we think about margin evolution at Gilead as ADCs, cell therapy, things like that take on greater importance within the company's overall portfolio?

Sorry, Cory, did you say marketing evolution or market evolution?

Margin.

Margin. Margin evolution...

Margin evolution, thank you. We expect to continue to maintain an industry-leading margin. I mean I think you've seen it with the transformation of the business over the last 2 or 3 years. We continue to have an incredibly strong gross margin and an incredibly strong operating margin. So we don't see that changing. We are making the investments in R&D, in particular, and on Johanna's side of the business and commercial that we need to make. But given the top line performance, we've been able to offset those and maintain really, really strong margins. So we don't see that changing. We'll provide more of an update on our upcoming earnings call in terms of specific expectations for 2022, but more of the same.

Okay. And I assume lenacapavir down the road would continue to contribute to industry-leading margins, no reason to think otherwise, right?

No, absolutely.

Okay. All right. Perfect. Listen, guys, unfortunately, we are out of time. Really appreciate you guys joining us for this. Always a great discussion, and good luck for the rest of the week.

Thanks, Cory.

Thank you.