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

Sessions of the Bank of America Healthcare Conference. So my name is Geoff Meacham. I'm the senior biopharma analyst here. And my colleague, Jason Zemansky, is with me on stage as well. And we're thrilled to have Andy Dickinson today, who is CFO of Gilead Sciences. Andy?

Thank you. Thanks. I'm thrilled to be here. Thank you for having us.

Yes. Just to kick it off, following the quarter, there's a lot of questions we get, Andy, about a lot of the puts and takes in the P&L from the R&D expenses that are now included, some of the changes to repatriation tax. I want to get maybe a high-level view of all the puts and takes from a P&L and a cash perspective for Gilead, and then we can get into sort of the strategy kind of questions on some of the products.

Sure, yes. But maybe I'll break it into 2 pieces and talk about kind of some of the P&L tailwinds and headwinds and then some of the cash that Gilead and other -- not issues, the topics that come up in terms of companies in our sector with repatriation tax or the changes in some of the deduction rules for R&D expenses. So again, first, on the P&L, it's relatively simple for us. There's one significant change with the SEC rule that changes the accounting treatment and upfront payments for partnerships and some asset acquisitions as well as some of the milestones associated with that with those deals. So we and other companies have always backed those expenses out in our GAAP to non-GAAP reconciliation. We will not do that going forward. So the Dragonfly deal that we just did -- that we announced last week, where there was a $300 million upfront, historically, that would not hit our non-GAAP earnings that will now -- of course, that are non-GAAP earnings. So we'll have to provide updates on a quarterly basis at least this year in terms of our non-GAAP expectations. Again, it doesn't change anything fundamentally in our business. It's the same thing, but it does impact -- it is one impact to the P&L. The other things that are happening, obviously, there's currency headwinds for every company that has operations outside of the United States. Gilead, about 1/3 of our revenues -- a little less than 1/3 of our revenues come from sales outside of the United States. So there were headwinds in the first quarter. There were significant headwinds in April that we don't typically see. Currency is usually something that is kind of a -- has a modest impact in our business. We don't talk about it. I think if you look at the growth of our core business, year-over-year, was 1.6%, if I remember. And then if you adjust for the currency, it was 3.6%. So it had a real impact on the year-over-year comparison. Other companies are facing it. Again, we'll see it in the second quarter. And then the final thing is the pandemic. I mean the pandemic always impacts our base business, our HIV sales and HCV sales in particular, but it also impacts our remdesivir, VEKLURY sales. So we had over $1.5 billion of VEKLURY sales in the first quarter. We guided to $2 billion of sales this year. So to the extent that we continue to see use of VEKLURY, as we will, we think we still see a high percentage of patients that are hospitalized in the U.S. receive VEKLURY, severe patients that are hospitalized. We're seeing increasing -- increases in use in Eastern Europe and Asia. And so that could be a tailwind for us as well. So when you net it all out, we'll provide an update at the midyear in terms of the tailwind from potentially additional VEKLURY sales, the impact of the expense from the partnerships as well as the exchange rates. But those are the 3 things that are kind of impacting the P&L predominantly as well as the potential for another surge. There will be offset. So again, that's why we didn't update our guidance. At this point, I think we want to see where that kind of shakes out. Then the other thing that companies like Gilead are facing, of course, on the -- we get the question a lot, why not do more share repurchases? We generate a lot of cash. I mean we've always generated a lot of cash. Our core business continues to be very strong. We continue to generate a lot of cash. The key difference this year for us and other companies, for us, uniquely, we are in the process of paying down debt that we incurred when we acquired Immunomedics. We paid down a lot of debt last year. We're going to pay down $1.5 billion of debt this year. We have another $1 billion to go in the coming months. We did a $0.5 billion earlier this year. But the repatriation tax for all of the cash that was sitting offshore that we brought back to the United States in 2017 goes up this year. It goes up more next year and more the following year. So that's something that should be in everyone's kind of cash models in terms of the impact of the higher repatriation tax. And then the other thing is the deductibility of R&D for tax purposes, cash tax. So again, unless the laws are repealed, companies like Gilead, we spent $4 billion to $5 billion a year in R&D. This year, we can only deduct for cash -- for tax purposes 1/5 of that. And next year, 2/5, 3/5. So we'll catch up 5 years from now. But because of the amortization of that deduction as a new rule, it has a cash impact for us this year, less so next year, but it's a real impact. So those are all the things that people should be thinking about from both the P&L and the cash perspective.

And just to keep a high level, too, when you look at the growth rate expectations for Gilead in the next several years, it doesn't really -- VEKLURY is one contributor, but it doesn't really reflect an impact from oncology or the Kite business dramatically inflecting. I want to get -- obviously, you have a lot of data to come out that kind of help support that. But walk us through kind of how Gilead thinks about where could you go if a number of the assets that are in mid- to late-stage development really play out?

Sure. Yes. That's a really important question and one that we spend a lot of time talking about both with shareholders and internally. So I think that we have an incredibly strong business, an incredibly strong base business, predominantly the HIV business. The oncology business is really starting to deliver. And you saw that in the first quarter with a really strong performance, both from cell therapy and from TRODELVY. And it's early days for both of those businesses. Those are 2 businesses that we think have a lot of durability, many, many years of growth, lots of room for expansion. And if you're a patient as an investor, you're going to see that grow. It becomes a bigger and bigger piece of the puzzle. We've guided to that being 1/3 of our total revenues by 2030 on top of a stable or growing HIV business. This is really important. It gives you a sense of the magnitude of growth that we're expecting from that business. All of that growth, we believe, is going to come from the products that we already have in our portfolio and really predominantly cell therapy, TRODELVY and magrolimab. The other assets that we have rights to, where we've opted into, some of the Arcus assets, that's including the TIGIT, they provided an update yesterday or the Tizona asset, Pionyr, we have a CCR8 antibody from Jounce. That's all upside to that kind of guidance in terms of where we see the oncology business going. So in the short run, when you look at our growth, where do we want to go, to your question, we believe with the portfolio that we currently have, that we will be, at a minimum, a top quartile growth company in the sector, if not the top growth company in the sector by the end of the decade. It's going to take time for the business to continue to mature as we get there. But we have a very clear path. We believe with the assets that we've put together, and we just need to execute on all the clinical trials now. We've tried to give people a clear sense of that through our Virology Day that we did earlier this year as well as the Oncology Day that we recently did to really pull back the curtain and give people a full sense of the portfolio and where we're going with these assets. And again, there are a number of assets that would add to that growth overall. So we have what we need. We are going to do more. We're going to continue to do corporate development where we bring in additional assets. Our focus, as you guys know, is on partnerships and maybe small acquisitions. Obviously, the macro environment is kind of helping right now from a Gilead and other large company perspective. There's greater receptivity to partnering than there was 6 months ago or 12 months ago. And maybe the final thing I'll say is your question -- is part of your question that I think is important. In the short run, I think our growth is clouded a little bit by 2 things. One is VEKLURY, so our remdesivir, the drug for COVID. The sales are going to be dynamic, just like the pandemic itself is a dynamic. So when we look at growth, we're really focusing on growth of our core business, excluding VEKLURY. That doesn't mean that VEKLURY doesn't have value. VEKLURY has a lot of value to patients. It has a lot of value to our shareholders. It generates a lot of cash. It's helped us pay down debt. So it's important. It has legs. We believe it's going to have revenues for years to come. It's just really hard for us to forecast those revenues. So when we think about growth, we're looking at our growth rate of the core business, excluding VEKLURY. Again, I think year-over-year, the first quarter was the first quarter in a long time where if you really look at the numbers, the core business was really strong, especially when you back out the impact of the TRUVADA, Atripla patent cliff and when you back out the currency headwinds, when the growth quarter over -- or year-over-year for the first quarter was over 5%. So that's like the bare minimum. I mean, I think -- we think of kind of our growth profile going forward, again, we think in the short run, we see a path to being on par with all the other large pharmaceutical biotech companies and whether that's 4% or 5% growth or greater, we're on -- moving in that direction certainly and then beyond that, much higher growth rate as these pipeline products kick in.

That was a lot.

Sorry.

No. Actually, if I could follow up on that. You bring up a nice metric, 30% -- approximately 1/3 of your revenues from oncology by 2030. How conservative is this? How -- what does this reflect in terms of the number of maybe indication expansions going earlier lines in treatment? And is there anything there that you're assuming for additional partnerships to bring into that to get to that level?

No, thanks, Jason. It's again, a really important question. So I think it's pretty conservative. Again, it really is based predominantly on the 3 main assets or areas. One, the entire cell therapy business in Kite, which is already well on track now. If you look at what we did in the first quarter, it's going to be well over $1 billion business this year if it stays on track. And it's really seeing nice growth. Obviously, moving into the second line in DLBCL with incredible data is really exciting. So we see a lot of room for cell therapy to grow. TRODELVY is the second. We had data that you'll see at ASCO and hormone receptor positive HER2 negative breast cancer, that is the third solid tumor indication where you see a very clear benefit for patients and we openly debate the magnitude of the benefit. We can talk about that separately, but it's an important indication of where TRODELVY can go for us, not only in breast cancer and, of course, in earlier lines of hormone receptor positive in lung cancer, but beyond that, and then magrolimab. So -- and it doesn't include, to your -- when we've kind of model this out, just like when we acquired TRODELVY, our model is really based on 4 tumor types, the 2 breast cancer indications in different lines of therapy, non-small cell lung cancer and bladder cancer. That doesn't mean that we're not going into or going to explore 6 other -- 7 other solid tumors or combinations potentially with the TIGIT, combinations with PD-1s. There are a lot of things that weren't in our deal model that we're going to carry forward. So I think it's conservative to your question. I think there's a lot of upside, and you're going to see a lot of this data playing out in the '24, '25, '26 time frame that I think is pretty exciting.

And Andy, to that -- to follow up on that, what I think you don't include though are the combinations of all the assets that you have from internal -- and so that -- there's a lot -- cancer and particularly heme/onc overall is a combination market, right? So you have a lot of different mechanisms that are in play that you can mix and match together. Is that fair to say?

No, that's exactly right. If you look at the slides that we put out for our Oncology Day, you get a flavor of that. We gave a lot of clarity in terms of some of the combinations we could explore. I forget -- I think we already have -- I have to come back. I don't have the -- there's a number of combination studies underway. There are many more that are going to be starting later this year in terms of exploring combinations. If I remember correctly, it's greater than 30 combinations are being explored in early stages, and that will grow over time. But that's an absolutely critical part of our strategy is finding a bunch of assets, the TIGIT and TRODELVY are a great example, together with PD-1 that we think we can explore some pretty exciting combinations. And the combination is also applied potentially to cell therapy, and taking some of our non-cell therapy assets it's combining them with cell therapy. So you're absolutely right. There is a lot to do there. And the vast majority of that is not embedded in kind of the model that we traded to provide the guidance in terms of 1/3 of our revenues coming from oncology.

Perfect. Okay. Let's focus back on the core virology business. And you mentioned upfront that you had some puts and takes for last year, the year-on-year comps. But looking forward, though, what do you think is sort of the natural growth rate for your HIV business just sort of organically, when you have share, you have the whole TAM growth? And then how much -- how strategically important is lenacapavir kind of to the long-term picture?

Yes, lenacapavir is really important. But when you look at the HIV market, you have to split it into the treatment market and the prevention market, right? The treatment market is growing again. We did see a significant decline in treatment. Unfortunately, a lot of patients left treatment during the pandemic and yet to reenter treatment. So for the last 3 quarters, the HIV treatment market is growing again, especially in the U.S. In the first quarter, it was flat in Europe, but it grew, I believe, 3.6% in the U.S. We expect the HIV treatment market to continue to grow 2% to 3% a year. The PrEP market is going to grow a lot more. The PrEP market in the first quarter grew 33% year-over-year. And that business has grown dramatically in the last 5 or 6 years since the first introduction of TRUVADA for PrEP. That's not going to stop. And we think that the PrEP market is currently maybe 20% to 25% of the market is penetrated in the United States, less so outside of the United States. We expect PrEP sales to double by the end of the decade. And lenacapavir is the obvious potential blockbuster for PrEP as once every 6 months subcutaneous injection. So when we look at our growth in the short run, I think you'll see strong growth in PrEP. Even with generic TRUVADA, DESCOVY is growing and holding its market share. It's a fantastic option for patients. And in the treatment market, growth of at least 2% to 3%. Then you'll add on top of that with lenacapavir -- introduction of -- the expected approval of lenacapavir for PrEP and then combinations of lenacapavir with other agents for treatment, our growth -- or the business growth beyond just the market growth should really accelerate as the market really becomes centered around 2 agents: BIKTARVY, gold standard, once-daily pill; and lenacapavir and lenacapavir regimen. So I think you can see pretty exciting growth in the HIV business once again, starting in 2025 when lenacapavir comes in. And BIKTARVY is going to continue to grow. I mean that's the other thing that we -- people fail to kind of recognize. BIKTARVY is still growing impressively in its fourth or fifth year post launch. I mean it's an incredible product for patients and for Gilead and our shareholders.

Just from that, to follow up on that, you have BIKTARVY's share pretty robustly high in the U.S., but you still have a lot of wood to chop with respect to Europe. I think it's always been that way, right? So are there -- is there more of an investment into European to commercial to try to grow that? Or is there any difference over the past year?

It's just fundamentally a different market in terms of pricing, too, right? So I mean, I think it's tougher for newer agents to take a bigger share in Europe than it is in the United States where there's less of a premium put on innovation. And it's harder to get the pricing difference between BIKTARVY and even Dovato in Europe is much greater than it is in the United States, and that's important in many countries, as you know. So really pleased with our progress in Europe, deeply focused. Johanna and her team are deeply focused on continuing to build the market in Europe. I think lenacapavir in Europe is going to be the next big step for us because, again, as a long-acting -- when you look at what long actings can do for patients or people at risk of getting HIV, both in terms of efficacy and assuming that it has the same safety profile of a BIKTARVY. It's a really exciting opportunity, not just in the United States. But that's what really can expand the market in Europe and beyond Europe from our perspective. But I mean, again, we still have approximately 75% of the market in the U.S., approximately half the market in Europe. I mean it's a very strong portfolio overall.

Right. Yes. And you're right, in the long-acting treatment market, a lot of our research indicates potentially really strong demand, but the limiting step, though, is having the other asset, right, to have a 2-drug or a 3-drug combo. Maybe just remind the audience where you guys are with respect to having a partner drug for lenacapavir and what are the sort of the time lines for maybe having a major derisking event there?

Yes. No, that's absolutely true. Again, I want to step back though and kind of bifurcate the prevention market and the treatment market. In prevention, we do not need a partner. So lenacapavir, as a single agent, is expected to be very effective in prevention. We expect data in the '24 time frame, approval in '25 and expect just like we saw DESCOVY cannibalize the TRUVADA market very quickly. We would expect a very significant portion of the PrEP market to move to lenacapavir quickly. That is a big opportunity. Again, if you say that the -- and if you look at what ViiV said or Merck or Gilead, everyone has said with minimum, we believe the global market is an $8 billion market for PrEP alone, if not a $10 billion or $12 billion market, lenacapavir should take a very meaningful share of that just in PrEP. So that alone is fantastic. In treatment, you're right, we absolutely need a partner for it. We have 8 agents that were moving into early stage clinical development. I think 3 are already in Phase I studies that could be paired with lenacapavir. Obviously, we did the important partnership with Merck on islatravir. Unfortunately, there were some, as you all know, issues with islatravir, reducing the CD4 T cell count. So Merck is still working through that. We'll have a sense of whether we can potentially move forward with that combination, either later this year or next year. Obviously, the bar is very high to move forward given how strong BIKTARVY is in particular. So we have -- we'll only take forward programs that we think can be as good as or better than BIKTARVY. So the bar is high. We'll see where that goes. But in terms of the partner agents, I mean, it is really hard to find a partner agent with lenacapavir because it such a unique molecule in its potency and its mechanism of action, but it's not impossible. And we have a lot of great scientists working on it and 8 programs moving into the clinic. We'll have others following that. So every confidence that we're going to be able to find at least one, if not multiple potential combination products over the coming years for treatment.

And not many products have potentially every 6-month dosing profile, which is impressive.

Right. I mean, as a result, we have to explore -- and some patients don't want every 6 months, it's interesting. I mean, again, we should step back. When you look at the HIV market, it all depends on the profile of the products that are ultimately approved. But it's roughly half the market is interested in long-acting, depending on the profile, maybe more than half the market, but not everyone wants a long-acting. So BIKTARVY may be the perfect drug for a huge portion of the market. For those that do want a long-acting, some of them want the once-weekly oral, some would like a monthly oral option, if that's possible. We're exploring all of those. And then, of course, we're exploring that every 3 months and every 6 months subcutaneous. Harder to do as you're alluding to, every 6-month subcu combination partners are difficult, but not impossible.

I think the TROPICS-02 readout is top line for many investors. Obviously, we're going to see the data in a few weeks at ASCO. But I was hoping at a high level, if you could give us a sense of where do we stand on submission -- for regulatory submission? And then following up with any read-throughs for the carrying value update that happened on your first quarter call.

Sure. Yes. I think it's relatively straightforward. So we'll start with, again, the drug showed a clear unambiguous benefit. Remember, the study was powered to show a minimum of a 30% improvement in progression-free survival. The other thing that you need to remember, these are very late stage. This is third line plus hormone receptor positive, HER2-negative patients. Most of them had metastatic disease for many, many years. So these are very late, very sick patients. Most of them have been through, in many cases, a half dozen or more prior regimens, prior to getting there. So on top of that and in that context, the drug showed a very significant benefit to those patients from our perspective. It was within the range of outcomes that we expected when we did the deal. It does -- the data though does raise the question of whether the PFS benefit, although very real and unambiguous with clear Kaplan-Meier curve is enough to get approval in the United States in the short run. So the expectation that we've set, I think, appropriately is -- and for our financial analysis, in terms of the impairment that we took in the first quarter, we assume that we'll have to wait for the overall survival data to mature. Again, we showed a clear trend towards an overall survival benefit. That data will mature over the coming months, the coming year plus. There's still a question of whether we look at that overall survival data set again later this year, which is one possibility or whether we just wait and look at it early '24, which gives you a slightly higher chance of hitting it because you don't use the statistical alpha earlier. So we need to work through that. To your question of where are we were in the standard process of going back and forth with the FDA. So we're talking to the regulators in the U.S. and outside of the U.S. The difference is it was always clear outside of the U.S. that you need overall survival data to get approval. So that hasn't changed from where we were before. In the U.S., could you get approval based on PFS data? Yes, potentially. Our base case and the assumption is we'll wait -- have to wait for the overall survival data, and you see that in the financial and updated financial analysis in terms of the carrying value, but we won't know until we talk to the FDA. So we're in the process of going through the process of preparing the briefing documents, and we'll be sitting down with the FDA later this year, and we'll have a better sense.

Just one follow-up. How much of the dynamic here is more discrete versus kind of a continuous sequencing issue? I mean if there's a clear PFS benefit to that, say, you should have NCCN 2A recommendation -- figuring out where it slots in the treatment paradigm, especially since there's a long tail for HR-positive breast cancer? Or is it kind of go/no-go?

Yes. It's hard to say until we talk to the FDA. Again, these patients don't really have any other options. I mean that's the patient population that Immunomedics started studying this drug in this tumor type. So I think that's an important part of the calculus. I mean these are really advanced late-stage patients with either no or very few other treatment alternatives. So that certainly colors how we think about it, whether it colors how the regulators think about it is an open question. So I do think it's a matter of sequencing. The other thing that we should say is the data gives us full confidence in our theory that TRODELVY as a pipeline and a product. So both in terms of what we expect to see in lung cancer as well as what we expect to see in earlier lines of therapy. So this is the third major different tumor type that TRODELVY has shown a very significant benefit to patients, whether the benefit is enough to get approved in the short run or whether we have to wait for overall survival is a short-term question. The longer-term question of can TRODELVY be a blockbuster pipeline in a product? We actually have greater confidence now given where we are. And again, as you saw, at our Oncology Day, we have an incredibly broad clinical development plan that we're pushing forward on.

Let's stick with the heme/onc line of question. So when you look at Yescarta, you guys have been very successful commercially and you essentially built the market for CAR-T therapies for DLBCL. But now you have competition, so help us out, Andy, with like -- to what degree there's having no [ branzy ] on the market, help turn the card over on what patients were maybe lagging adopters or what reimbursement or access restrictions? Does it help you peripherally to have more companies out there?

Yes, it absolutely does. It's a great question. I mean I think, look, the challenge for us with cell therapy was changing prescribing habits and changing what community physicians do. The data is crystal clear. I mean, again, if you look at our DLBCL data at 5 years, 43% of the patients are alive and disease-free. It's incredible, right? And the same thing is true with Tecartus and other indications. But it's just in LBCL. The long-term data is just remarkable. You don't see this type of data in oncology. Despite that, it's still challenging to kind of bring patients out of the community into some of the more academic centers or the larger hospital settings. We're getting there. And having BMS in the market is incredibly helpful. Having our second-line data, which showed a significant -- a 2.5x approval in progression-free survival -- I'm sorry, event-free survival over the standard of care stem cell transplant, it's incredible. All of those things are changing it. When we acquired Kite, we always assumed that cell therapy adoption would be slow in study, and that's exactly what we're seeing. So -- and to your point, again, of having BMS in the market, in particular, is really helping, it's lifting the entire kind of market. The best way to think about it is of patients that -- we're talking third-line patients that have very few treatment options for DLBCL. Only 4 out of 10 were being referred to CAR-T despite the fact that it appears to be curative in close to half of the patients. And only 2 out of 10 were actually getting it because 2 of the 4 that were referred to late for them to actually get CAR-T treatment. So that will change over time. And I think having BMS and their sales force there is going to lift the overall CAR T marketplace and as a result, lift our business. You saw a little bit of that in the first quarter. Again, I mean, it's just an early kind of taste. But -- and the second-line launch so far has been really strong. So we're excited about where it's going.

And what are the challenges in moving even further upstream? So earlier, I know clinically, it's tougher. It's a population for which there are standards of treatment, right?

Yes, I think that you have to find the right patient group to go after, right? So our first-line study and just taking DLBCL, again, is in high-risk patients that are already known to be at risk for aggressive quick disease progression. I think that's the right place to go. And again, Merdad, our Chief Medical Officer is better suited or Christi Shaw, the CEO of Kite, to talk to it. But we're trying to be selective about where we go into the first line. Second line was pretty clear here. The benefit is really large. But you're absolutely right, depending on the disease type in the first line, we're going to have to think about whether it applies to all first-line patients or a subset of them based on kind of the aggressiveness of their disease.

It seems like, I mean, Gilead, with your acquisition of Kite, you were one of the first to see kind of the cell therapy as a platform. And you've grown Yescarta, you've grown the business. To tie up the conversation we had earlier on sort of BD and M&A, there's a lot of companies out there available that are in the sort of gene therapy, cell therapy that may be bolt-ons or maybe sort of accretive to your existing platform, I know these are not going to be big ones, but like to what degree does that level of sort of external innovation...

Yes, it's really important, actually. We've always assumed when we did the deal that the cell therapy market in many ways is more of a -- more similar to the med tech market than many of the pharmaceutical markets. So as many of you know, in the med tech markets, you often times see because these companies are so intimately involved with what's happening in the hospital, whether it's knee replacements or pacemakers, you oftentimes see 2 or 3 companies having those relationships with the hospitals and the providers and kind of consolidating the market. We expect the same thing will happen with cell therapy, not in every part of cell therapy, but in many parts of cell therapy, given the incredibly complicated relationship that you have with the hospitals and the providers in terms of scheduling and the delivery of the cells, the maintenance of the patients. So it'll basically see -- we absolutely see it. There's an incredible amount of research and interest in cell therapy and explosion of companies that is really exciting for us. We have been doing partnerships in that area. We expect to continue to build the Kite business, both through internal research and external partnerships and acquisitions just like the Gilead business. And we expect to kind of serve as one of the major consolidators in that area over the coming years and the coming decades. So -- that's absolutely part of the business premise from day 1, and we see that playing out now.

Got you. And let's -- just remaining a few seconds here, just talk a little bit about remdesivir and kind of the next events that come up here. You're right, the pandemic is going to wax and wane, but how strategically important is remdesivir in the oral formulation?

Well, first of all, it's great for patients, right? I mean so it's incredibly important to us and to patients. I mean the benefit -- and again, with additional studies, it just becomes clear and clearer how important remdesivir, VEKLURY, is for patients. It provides for -- from a CFO perspective, it provides incredibly important cash flow. It's a natural hedge, if you will, or an offset to the impact of the pandemic on our base business, which has been great. And it's more than offset, I think, the impact of the pandemic on our base business to be clear. So it provides cash. It is dynamic. It's hard to forecast. The oral COVID antiviral that we have, is exciting. I mean we're in Phase I clinical development. I think it's hard to tell how companies are going to be able to do clinical development going forward. There are a lot of discussions with regulatory authorities. I think you heard another big pharma company talking about this yesterday in terms of it's not entirely clear what the FDA is going to require or whether they're going to require works for company. So we need to work through that with the FDA and other regulatory authorities. But I think that there is a real opportunity for that in the long run. Same thing for VEKLURY, but the oral, I think, had carried out even further.

Perfect. Okay.

Thank you, Andy.

Thank you. Thanks for having us.