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

All right. Good morning. Thank you, everyone, for joining us for our next company presentation. My name is Do Kim. I am one of the senior biotech analysts here at Piper. And we have with us Gilead. And it's my pleasure to welcome CMO, Merdad Parsey. Merdad, thank you for being here.

My pleasure. Thanks for having me.

So Gilead has always had a tremendous R&D effort in maintaining its leadership in HIV and viral diseases. But you're always pursuing expansion in other therapeutic areas like oncology and inflammatory diseases. Just so starting out with your oncology efforts. Normally, Trodelvy would be the initial topic, but you put out a press release on your TIGIT interim fourth look, ARC-7 and were expected detailed data in -- toward the second half of December. Maybe you could talk generally about the enthusiasm you have for that TIGIT data. And what gives you confidence or what will instill confidence in us and investors, given how Roche has struggled with their TIGIT program?

Sure. So we have a lot of confidence. We're really excited about the data, and it will be really great when we can share the data with everyone, and we can have a data-driven discussion. And we've said all along that as we've been watching the data mature in the prior interim analyses that the data were showing us what we wanted to see. And we were seeing the responses that we were hopeful to see. And that's why we've already started our Phase III trials with domvanalimab in non-small cell is based on that confidence. This is another cut of the data. This will be -- you will all be able to see all of those data. And importantly, I think when you think about the Roche, I think the struggles for Roche have been really focused on their announcement about their PFS miss, if you will. And I think it's important that that's a Phase III study with an interim for PFS and the final OS readout. And they -- it's hard to know how much alpha they attributed to that PFS readout. And so I think a lot of folks have interpreted that the PFS must have been negative. But I think what's more likely is that the PFS was different. They were looking -- the alpha span was so small that the difference would have had to be really huge to trip the wire there. So we're really excited. We think the mechanism has shown consistent clinical activity, and we're really excited about what we're going to be able to do from here on out.

And you mentioned that you saw clinical differentiation in ORR and PFS. But the PFS, should we expect that to be mature enough to see a median. I believe that Roche had a medium PFS in their Phase II over 16 months, and you've been running your study for 2 years.

Yes. We -- I would not expect our PFS to be mature. We've said that, I think, all along, the last patients were enrolled in August. So yes, some people were enrolled early, but we've -- this study has continued to accrue. So this data cut will involve about 133 people who have at least 13 weeks of follow-up. So that's the dataset that we'll be sharing. And you'll see -- and what will be apparent when you see the data is the PFS data still has a ways to go to achieve maturity. So we think that there's -- that those -- the data you'll see will continue to improve over time, and we'll continue to see the PFS data play out more. And remember that this dataset is larger than the Cityscape dataset, the Roche Cityscape. This is 150-people randomized in 3 groups. And so we do anticipate that that will go out longer, and we'll see more, and ultimately, that will translate down the road to mature PFS.

Great. And your confidence that's translated into starting the Phase III program, you, Arcus, and there are 4 studies. How is that program different than your competitors. There are a lot of companies pursuing TIGIT.

Yes. We're very sensitive to the fact that we want to move very quickly, especially in our lead indications in lung. So our strategy is really -- there are really three things. One is obviously, the speed is critically important. For us, our focus is going to be on differentiating our TIGIT asset. We are going to be somewhat agnostic to the PD-1 component. Even though we'll be combining with zimberelimab alone, our focus is really on making domvanalimab successful. And domvanalimab is the only Fc-novel TIGIT inhibitor that's out there right now. And we think that should translate into some differentiation there. And then lastly, I think in addition to all of that, when I talk about the second bit, we will be looking at other tumor types. Our plan will be to expand the footprint of TIGIT fairly aggressively to be able to differentiate in the marketplace.

Great. Well, we're looking forward to that data definitely.

I look forward to talking to you about it after you see the data, yes.

So going to Trodelvy. It was exciting to see that the second interim survival analysis on TROPiCS-02 reach survival benefit. But you are still planning or in the planning stages for development in earlier lines of treatment. Could you talk about what are the factors that you're considering? I understand there's a changing landscape, but it appears that that opportunity is quite open for you.

Yes, we are -- first of all, I think we're really happy with how the data played out the benefit in overall survival. 3.2 months, I think, is -- in these late-line patients is really important. And when we look in that data set, there are some patients who are not quite as late line. They're a little bit less treated. And we see consistent PFS and OS -- and/or OS data in that population. So we have a lot of confidence that moving into earlier lines will continue to bring benefit. As you say, the landscape is changing, and it's really important that people remember that the IHC-0 population in the HR-positive, HER2-negative space is a place where we've shown very robust data. And so I think that is -- that's really very important to remember that population is about 35% of the HR-positive population. And so we've demonstrated efficacy in a population with a nice large clinical trial. So for us, expansion here is really in triple negative. We're going to continue to push into triple negative and move earlier into lines of therapy. That's where we started, and that's where we continue to go. And then for HR positive, to your point, we want to make sure that we design our trials to anticipate where things are going as opposed to where they are today. And so we are really thinking hard and working with our advisers to make sure we design those studies in a way that we are providing information that's going to be incremental and helpful to treating earlier lines of therapy for the HR-positive population. And then as you know, for Trodelvy, we do believe this is a product that will have benefit across a number of tumor types. We're already in frontline lung as well there. We have our bladder accelerated approval, and we will continue to look for other tumor types where we can see Trodelvy benefit as well as moving into earlier lines of therapy. So there's a lot of work that you'll see us doing for Trodelvy in terms of expansion of tumor types and earlier lines of therapy. That will be distinct from sort of the one area of HR-positive where I think the focus of TROPiCS-02 has been.

And when you think about further development in HR-positive, do you take in consideration what HER2 has done in HER2 low? Or since it really hasn't moved to first -- second line HER2 -- I mean, HR positive, could you just look at the standard of care that's being used there?

Yes, very much. So it is -- I think, to your point, we think there's a lot of space there still for us to look -- moving up into very early lines of treatment as well as looking at sequencing in that post-hormone therapy space. So there's a lot of patients who still have a lot of need in there right now. We are really focused on making sure that we design the studies that can address those areas where there is opportunity and need. And again, I think the HER2-low population is a very broad population and the HER2 negative are really, I think, a key place where we think -- we know we have activity wherein HER2 hasn't shown quite the same data.

And as we look across your lung cancer, non-small cell lung cancer, Phase III studies, is it important for you to show benefit in the second line plus study to read into the frontline lung cancer?

Yes. It's a great question. We have moved into the Phase III -- in the frontline space into Phase III. Of course, the data that gets generated along the way is going to help us both with our confidence but also to ensure that we are powering the studies appropriately and things like that. We have a great deal of confidence based on what we already know, what we've already seen in earlier phase studies and the expression of Trop-2 in lung cancer, where I think that's really encouraged us to move very early in lines of therapy. And of course, any supportive data along the way will help us to keep moving that forward.

Okay. Great. And touching on HIV, Biktarvy is a dominant player currently, and you have a long patent life. But you're looking to grow -- potentially grow that franchise with lenacapavir, the long-acting drug, and really focusing on the PrEP study. But as you think about combinations with lenacapavir, when -- or do you start focusing on the earlier stage combos versus a later stage, like Merck's isla. And how does data play into that?

Yes. So to your point, we really think that long-acting is going to be an important part of the market. We know that there's a population of people living with HIV who prefer the daily oral, and we think Biktarvy is the best solution, and I think our market share really reflects that. When we think about long-acting, it is -- for us, the bar is reasonably high, where we believe we want to get to long-acting regimens that are well tolerated and give us a good interval. And so we are looking at those sorts of opportunities, really every 3 months, aiming for subcu. So when you look at the long-acting, then to your point, you're absolutely right, you should separate out prevention from treatment. In prevention, lenacapavir monotherapy is our approach. Those studies are ongoing and are -- and we do anticipate that in the 2025 time frame, we'll be able to look at those data and file. So I think lenacapavir for PrEP is going to be, I think, fairly important there. This is -- a population that only takes intermittent PrEP, the ability to dose every 6 months, I think, will be really important, especially in terms of the epidemic itself. I think it's the unanticipated exposure that we will be able to cover with the 6-month coverage. And the convenience factor, I think, you can't argue with. So I think that on the PrEP side we're really excited about in terms of what we're going to be able to provide. On the treatment side, it is a little bit more challenging. We have lenacapavir as a backbone. We are -- in a highly treatment experience population, we think we derisk that q 6 months part a lot and are now able to, pending the approval, provide an option for people living with HIV that have multidrug resistance, so they can get lenacapavir plus a slightly reduced burden -- somewhat reduced burden on their oral intake for other anti-retrovirals. And our hope is that on the treatment standpoint, we can get to longer-term therapy, and we're really looking at two approaches there. The first is oral. And for oral, as you point out, we have islatravir as a potential combination. And then in terms of injectable, islatravir is also a potential combination partner for lenacapavir. We always wanted to work with islatravir and the Merck team because we think that's the fastest way for us to provide an option for people living with HIV where we will have lenacapavir as a part of that combination. And we have a number of internal efforts ongoing, where we'll have multiple programs going into the clinic now and into next year, looking at both oral and injectable long-acting agents. And we are really in search for something that will be as game-changing as lenacapavir where we will be able to look at longer dosing intervals for the treatment landscape. And so that's our approach. We're going to be going in that direction. In the long run, we believe we can develop agents that will be that partner for lenacapavir from our internal pipeline, and that's the effort we're undertaking. Those are early trials. And it will be incremental, right? I don't believe -- I think it would be -- we'd be lucky to be able to go directly to q 6 months with a partner. So I think the question will be, as we -- in a data-driven way, as we see the data from these Phase I trials, we'll know whether we have the tolerability and the PK to enable, let's say, q 3 months dosing or something like that.

If you were able to accomplish a combination q 6 months for HIV treatment, what kind of impact would that have on the treated population in terms of compliance, resistance? And could they grow the addressable population just on those factors alone more than the 2%, let's call it?

Yes. It's an excellent question that I think will depend, in part, on the dynamics of the HIV population as a whole. As you know, HIV infections even in the U.S. are continuing to grow, unfortunately. And so we do hope that the ability to have something that would be associated with better compliance would result in better, more consistent therapy in the population who does use long-acting and, hopefully, less resistance as well, to your point. And we do think -- we see that as part of the overall strategy that we have to really try to get at the -- at HIV from both a prevention standpoint and a treatment standpoint, so we can complement the two. We do think if we can get to longer term that that would be really important, especially if we can get into the cadence of people going in to see their health care provider. If they can go in quarterly or they go in every twice a year to see their health care provider, then getting their injections there would be, I think, really powerful for those folks, and they don't have to think about it.

That would be great. Jumping back to oncology. Yescarta has gained a lot of momentum moving into second-line LBCL. How do you think about development into the frontline setting when 5, 6 years ago, we thought this will be a salvage line therapy given the toxicity? But physicians have become more comfortable with it. Tell me your thoughts on moving to frontline and how cell therapy could be part of the initial treatment for other cancers.

Well, you're absolutely right. I think the 5-year data and the ZUMA-7 data, where we looked at second line, has really helped patients and caregivers really think about using cell therapy earlier. And I think part of the growth we're seeing is partly the expansion to the second line. But in fact, a lot of people from third line who weren't being referred earlier are now being referred for cell therapy. We find that of every 10 eligible patients, only about four get referred and only two get actually treated with cell therapy. So even in that eligible population, there's a lot of room for growth and better -- providing better outcomes for patients because we know the outcomes are really impressive with CAR-T therapy and with the Yescarta. We do think that as caregivers, especially in the community, get more comfortable, and they start to see the outcomes more and more. This is one of those things that changing clinical practice is hard, and it's arduous. And I think the momentum we're seeing is that start to play out where people are more comfortable referring their patients and are seeing better outcomes. And so as that builds and we generate data in earlier lines, we should see -- we hope that we should be able to get into earlier lines. We are -- we will be looking both at direct head-to-head studies with frontline therapy with CAR-T, and we have data in combination with frontline therapy, where we're looking at really 89% response rates and really quite impressive data. So all of those, as they evolve and they mature, I think really give us the opportunity. And I think because we're the market leader, because we have 96% delivery of the cells to patients who get apheresis, I think that allows us to continue to work on our manufacturing, our delivery to reduce the turnaround time and to make it easier for people to get treatment, including in the earlier lines of therapy.

And you do have a lot of competition out in the industry, next-generation cell therapies, different approaches, how do you prioritize putting clinical development on autologous CAR-T, which has worked and commercially successful versus moving into allogeneic or TCR, T-cell therapy? How do you think about that strategy?

Yes. We think about it a lot. And look, at the end of the day, the way we think about it is that Yescarta has kind of set a bar, right, and Tecartus has set a bar for efficacy and tolerability that we have to be with whatever is coming behind it. We have this amazing data set, long-term data, early lines of therapy. And we believe that that efficacy, in particular, really will drive a lot more adoption. There's no doubt that as more people get comfortable with whatever cell therapy they're using, it's a good thing for patients, and it's a good thing for all of us in the marketplace because, as I mentioned, only for 4 out of 10 are getting referred. So if we get more referrals, it's a rising tide raises all boats scenario. And if we can find a therapy that provides a better outcome for patients, whether that's from an efficacy standpoint or a tolerability standpoint, that's a good thing. We continue to be interested in those new modalities. We continue to watch the market and be very thoughtful, but our bar is high. We have a couple of partnerships that we are doing, where we are looking at things like allogeneic. And we continue to monitor the data that are being generated. If that hits our bar, we're always going to be pursuing that. But we believe we're the leaders right now in cell therapy, and we want to maintain that leadership.

Great. Running out of time. So last question touches on magrolimab but more in relation to how you think about a fairly broad oncology pipeline and incorporating magrolimab and Trodelvy in combination approaches and bringing in your partners like Arcus and TIGIT and their anti-PD-1.

Yes. We really think about it is in 3 pillars, and I'll try to be fast because I talk too much. We really think about it in 3 pillars. We really think about that direct cell death, the Trodelvy intrinsic cell death column, then we have the immuno-oncology column, which does include the TIGIT, PD-1, CD-47, all of those things that are enhancing the immune response. And then there's the -- how we think about the tumor microenvironment and permissive tumor microenvironment. So when we think about combinations, we really think about depth within IO, where we see the opportunity to combine TIGIT, for example, with PD-1 and potentially other combinations where we can deepen the immune response in either hot or warm tumors where you can get, hopefully, deeper responses and maybe a broader population. But then we also think about whether we can deepen or broaden the population by adding a tumor and intrinsic cell death. And so those are the -- that's the way we think about the combinations and trying to be rational around combining mechanisms as we go. Of course, I think on the microenvironment side, we're early as most people are, and we're looking for mechanisms that can move the needle. And if we can move the needle there, of course, that would be something that we would also consider adding in to potentiate responses.

Maybe next, you look at resistance mechanisms...

Absolutely. I think it's a really important part of it, especially if you think about sort of people who may like initially respond and then lose responsiveness. It's a key question around the depth of response, whether you can get that depth of response by -- with TIGIT, for example, or with CCR rate or other potential mechanisms that could add on and intensify the immune response.

Great. So we're out of time. Great conversation. I appreciate you being here. Thank you so much.

Thanks very much.

Thanks for the audience for listening.