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

Good morning, everyone. Is this slide over? Is there an interference from the speaker? I guess it's just loud. All right. Well, again, good morning. Tyler Van Buren here, senior biotech analyst at TD Cowen. Thanks again for coming to TD Cowen's 43rd Annual Healthcare Conference. For our next session, we're privileged to have a fireside chat with Gilead. And from Gilead, we have Andy Dickinson, the Chief Financial Officer. Andy, thank you very much for being here.

Thank you. We're thrilled to be here. I appreciate you having us.

Of course. And if you guys have any questions, feel free to raise your hand, and we'll do our best to get it asked. So for an opening question, Andy, maybe you could just start with the earnings guidance for 2023, it assumes a 5% year-over-year decline, but that's obscured by the unfavorable year-over-year impact from Veklury. So can you speak to Gilead's core earnings growth and what you expect for the next several years?

Sure. Yes, I'd be happy to. Maybe I'll just back up and start by talking -- I think when you think kind of going forward, it's helpful to talk about 2022, just to frame where we are. We're still one of the companies that is in a unique situation of having a fantastic COVID-19 therapy Veklury. And I think we're at a point, and clearly, in '22, we got finally to the point where investors really look at our base business and then they look at Veklury separately. So I think the vast majority of investors today focus on the growth in the base business. We saw really strong growth in the base business last year. It was the first year really since 2015, where you saw strong growth in the base business, not only in our HIV business, but in the oncology business that we're building is really exciting. And really the first tangible evidence of all the work that we've been putting in over the last 4 or 5 years, we had a new CEO, Dan O'Day joined 4 years ago, almost 4 years ago to the day, and we've made a lot of progress. So the real focus is on the base business. So there's less of a focus on the overall revenues. I would say, in 2022, the other interesting thing was our total sales were roughly on par with 2021 at $27 billion despite the fact that we had a little bit less than a $2 billion decline in Veklury for COVID, meaning that the base business, you saw the extraordinary growth of the base business, again, both kind of equal contribution from the early and emerging oncology business and the HIV business. So then your question on kind of where we are and where we're going forward. We're expecting that we're entering a new growth cycle and that this is just the beginning of it. So we have a lot of confidence in where we are over the next decade. It's clear from our perspective that our HIV business should continue to grow through at least the end of the decade and hopefully beyond. And then again, we have a great oncology business with both our cell therapy and then Trodelvy as product in a pipeline that are both growing beautifully, and we expect to continue to grow. So it's a really exciting period. And then to your question, specifically on what does that mean for earnings growth? The earnings growth when you include Veklury, it will be a little bit variable given that it's hard for us to forecast Veklury sales or the progression of the pandemic. There will be what is clear to us with very is that there's a continued demand. It's the absolute standard of care for hospitalized patients. We're guiding to $2 billion of sales this year versus the roughly $4 billion in sales we saw last year for Veklury. And a lot of that will just depend on the progression of the pandemic. So there's a greater variability of that business, which will impact our EPS. If you model out EPS excluding Veklury, again, it's not something that we can present as a company, but a lot of our investors look at it that way. We expect our EPS to grow over the coming years year-over-year and to really see continued acceleration in that growth given the leverage in our business as we get additional momentum or carry forward the momentum that we have from 2022.

Okay. So you touched on the durability of the HIV franchise. Obviously, you guys have the settlement, which pushed the LOEs into the early 2030s. But -- maybe you could just elaborate on how healthy the HIV business is coming out of the pandemic? And what do you expect revenue growth to look like over the next few years? And what are some of the pushes and pulls?

Sure. Yes, the HIV business is really healthy. I mean, I think that the pandemic had a greater impact on HIV treatment than we and I think others in the market would have expected. You've seen a number get recovered. Now in 2022, we are really back to that 2% to 3% growth in the treatment market that we expected and that we're seeing going forward, there are some tailwinds in pricing, especially the government mix in 2022. So the HIV business overall grew at 5% last year, really strong growth. The major pushes and pulls for the HIV business are relatively straightforward. We expect the treatment market to continue to grow. We don't have any major patent cliffs through the end of the decade or beyond the first major patent cliff for us is really 2032 or 2033 on some of the TAF patents in Biktarvy, and we have new product launches that we're expecting. So there's probably a handful, at least, of new treatment product launches, and that would include once-daily product options, once weekly oral product options potentially and then every 3 or every 6-month injectable options, preferably sub-q option. So a number of new products that should come and drive additional market share gains for Gilead over that period of time, which we're excited about that would add on to the 2% to 3% market growth. And then, separately, in the HIV prevention market, which is a really exciting opportunity. We launched our first prevention drug 10 years ago, the efficacy of prevention once-daily pills is remarkable. But we really expect that the prevention market will -- there will be a step function change in the size and ability to treat patients in prevention with a long-acting therapy and in particular, Sunlenca, which is an every 6-month subcutaneous injection. It's a product that's already approved for highly treatment-experienced HIV patients. So a lot of times when we're talking to shareholders. They think of the every 6-month subcutaneous product as something that's more theoretical. In fact, it's real. It's approved in both the United States and Europe for highly treatment-experienced patients, and we're in the middle of our Phase III studies for prevention. That should -- we should have data at the end of next year or early the following year, and that should be a real catalyst for continued growth in the HIV business as well.

Okay. And -- and just to continue on Sunlenca, you mentioned the heavily treatment experienced patient population, the approval. It's small PrEP could add. In terms of treatment and treatment combinations, what's the current strategy there? And when might we get data from those combinations?

Sure. So we're exploring a number of different combinations for lenacapavir. So again, lenacapavir is our novel HIV capsid inhibitor that is the generic name for Sunlenca. It's really an incredible molecule in terms of its potency and this ability to be formulated as a once-daily pill, a once-weekly pill or a subcutaneous long-acting injection for at least every 6 months and potentially longer. So the key, as you know, in treatment is finding another agent to pair with that. We today have 7 programs in early stages of clinical development of potential partner programs. We have another 3 that we expect to be entering the clinic over the next 12 to 24 months. So that gives you a total of 10 potential partner agents. 5 of those are integrase inhibitors. One partner agent or set of partner agents are nuc or novel non-nuc. There's a number of programs. The integrase inhibitors are the ones that given where they are today in treatment and the efficacy and resistance profile that you see with the integrase inhibitors that are probably the most obvious partnering agents, but we're really excited about all the programs. So to your question of where are we, I mean, there will be a lot of data generated in all these long-acting potential partner agents. Over the next year or 2 years, and we'll have a much better sense of which programs we're going to take forward and what their competitive profile looks like.

Got it. Okay. And you touched on Veklury, and you guys have guided to $2 billion in sales for this year. And hopefully, it's stabilized. But I guess, can you talk about your level of confidence that maybe it has stabilized that this could be a sustainable number as we look out over the next few years. And how might think the oral program contribute?

Yes. So Veklury is unique. And that again, the data is exceptional. So maybe we should just start with the benefit for patients and the data. And I think there are a lot of real-world data sets that have been coming out, recently, not from Gilead, but from others that just reinforce how important and effective this treatment is for patients. And again, it's an infusion. So this -- we're talking about an infusion in the hospital. It is approved for infusions outside of the hospital as well, but it's predominantly used in the hospital. You still see today that greater than -- in the U.S., greater than 50% of hospitalized patients get Veklury. The challenge in forecasting Veklury is just -- it's forecasting the progression of the pandemic, where, again, if you look historically, we had $5.8 billion of sales in '21. We had 4 -- roughly $4 billion. I think it was $3.9 billion in sales last year. We're forecasting $2 billion this year. It's not because the product is not being used. In fact, we're seeing increasing use in Europe and Japan and consistently strong use in the United States. It's just that you see less in terms of surges from COVID-19 in the U.S. as a result of both natural and acquired immunity. That could change over time. So to answer your question, we expect Veklury to have a much longer product life than the market would have expected when we launched the product 3 years ago. And it's still difficult for us and for you and others to forecast it. So we'll have a much better sense of where we are in terms of -- as we -- what we've pledged to shareholders that we'll provide updates throughout the year. But when I look forward, I expect the cash flows and the revenues to be durable, but I also expect them to be dynamic year-over-year. But the best analog, as many of you know, is another molecule that Gilead developed, which is Tamiflu that we out-licensed years ago to Roche. And that's a great analog for -- it provided sales for Roche, benefit for patients for years, but it was highly variable. And I think it's a good proxy for what you're likely to see with Veklury. It'll have a long product life it'll generate a lot of cash flow for the company. It will benefit a lot of patients, but it's going to be dynamic year-over-year. Hence, why I think most of our investors focus on the base business and the growth of the base business and then Veklury is icing on the cake, so to speak.

Okay. And with 5245, the oral, you've got the Phase II BIRCH and Oaktree trials ongoing. When could we see data from those programs or just a rough estimate of when it might be able to get to market if all goes well.

Yes. I'm sorry, I didn't answer that question earlier. It's a great question. The -- both of the studies are running. So again, this is a novel COVID nuc. It's a prodrug of the parent nucleotide of remdesivir, if I remember correctly. We have 2 studies running. One is in standard risk patients, which includes sites in the U.S. The other trial is in high-risk patients where we're only doing the study outside of the U.S. given some of the regulatory feedback, both of those studies are just getting underway. So it's hard to give you a sense of the completion date. It's all going to depend on the progression of the pandemic and the ability to find patients in the U.S. or outside of the U.S. So these could be trials that take a long time. If we see a surge in the pandemic, we may be able to enroll them quickly, but it's just way too early for us to give you any sense. There are exciting opportunities for patients and for Gilead in the long run, it will just take certainly many more months, if not through the end of the year and until next year before we really have a sense of how the studies are going to enroll in more specific time lines.

Okay. Let's -- let's move to oncology. So for cell therapy, you guys have stated that Yescarta -- still the majority of Yescarta growth is coming from the third-line plus indication despite the ongoing second-line launch. So I guess, my question is, when do you expect second line to become the majority of growth? What's the inertia perhaps that you're experiencing in the second line? And how can you overcome that?

Yes. So this is our -- so Yescarta is our cell therapy product that's approved, if I remember correctly, for 2 or 3 indications. We have 2 approved cell therapy products approved for 5 indications. Yescarta is a CD19 cell therapy and the primary indication is DLBCL. We had some incredible data from the ZUMA-7 study and then an approval last year that resulted in a significant increase in our cell therapy sales from the first quarter to the second quarter, and then we've grown sequentially kind of back at the more normal 5% to 8% growth rate from there. The -- what should you expect? It's a little bit different in the U.S. and Europe. We are seeing physicians change their treatment behaviors in Europe faster than the United States. So in third-line plus, DLBCL, the percentage of patients that get cell therapy in Europe is higher than it is in the United States. It's growing in the United States as well, but it's far below where you would expect it to be for a therapy that appears to be curative. Remember it, at 5 years, 43% of the patients, and these are patients that were third-line plus from the ZUMA-1 study, 43% of the patients have no sign of disease or residual disease. It's too early to say, to call it a cure, but it appears to be curative. And yet you still have kind of the low to mid-20 percentage points of patients in the United States that are getting cell therapy in the third-line plus and less than that in the second line. So to your question, it is going to grow, we expect more, not only in the third line and the second line. Cell therapy for us and I think for the competitors is much more about the class usage increase than the individual market share of the companies. And we expect that -- and we did when we acquired the company 5-plus years ago that this is a slow, steady build over time. Your -- oncologists are getting used to, especially the community oncologists, sending their patients away, in some cases, to academic treatment centers for treatment and then understanding that some of those patients will come back. So you're slowly changing the behaviors of physicians. And again, it's been a little bit slower in the U.S. We think that over the next 3 or 4 years, 5 years, certainly, you're going to see substantial increase in both third-line and second-line usage for Yescarta. It's just going to take time. It's a slow and steady build, which is fine.

Just out of curiosity, why is use significantly higher in Europe versus the U.S.

It's a great question. I mean the -- I think that it's hard to say that there's one reason specifically. I think in the U.S., many physicians are so used to sending patients off a stem cell transplant. You also have in the U.S., many of the physicians have an economic interest in the treatment centers that they have, whether that has any impact. It's hard to say. In Europe, I think the data, they just really embraced the data, the curative -- potentially curative nature of the therapy and have moved to more quickly to adopt it broadly. I think that's going to change, and you'll see the U.S. catch up. The best proxy is stem cell transplant to some extent. It took, as I understand it, decades, for stem cell transplant to slowly really become the standard of care in second line. It didn't happen overnight. So there is a good proxy for kind of the slow consistent change in prescribing or treatment behaviors over time.

What do you think is the likelihood that we see approvals or use in that first line or post first-line setting and potentially even outpatient?

Well, post first-line setting, we're already there with the second line approval with the spectacular data, again, that was head-to-head against stem cell transplant showing very, very substantial improvement in outcomes for patients versus stem cell transplant. . In the first-line setting, R-CHOP, as I understand it, and I'm not a physician, works very well. It's a generic regimen, low cost. So it's going to be hard to overcome R-CHOP in the first line with the exception of patients that are high-risk patients. So we're -- our study is focused in the first line on high-risk patients that have certain markers of disease or more explosive disease that suggest that they should go to cell therapy immediately. So I do think over time, not only in DLBCL, but other indications for the higher-risk patients, we expect that you could see some cell therapy usage, but it's not going to be in the majority of first-line patients, at least not today in terms of how we see it.

Okay. And maybe we'll move to Trodelvy. So I guess, do you believe that people are under-appreciating the opportunity in the TROPiCS-02 patient population? And what's your outlook for that launch?

Yes. Yes. I mean the answer is, I think, simply, yes, we think that the market is under-appreciating the opportunity for Trodelvy and the importance of TROP2 ADC, and kind of the broad scope of the opportunity. And it's up to us to demonstrate that over time. So we have a number of studies underway, not only in breast cancer. Remember, let me just again step back or for people that are listening. Again, Trodelvy is an antibody drug conjugate targeting TROP2, which is an antigen that's broadly expressed across most solid tumors. The data from Trodelvy has been spectacular. We have 3 approvals in triple-negative breast cancer, our third-line plus, if I remember correctly, bladder cancer, and now second-line plus hormone-receptor positive HER2 negative breast cancer. Again, 3 very impressive data sets, and we have studies running to move up in earlier lines of therapy. There's some data from a Phase I basket study that Immunomedics did before we acquired the company, showing some activity in lung cancer. It's an obvious area to move in. We're in the middle of the pivotal studies in lung cancer. There's another TROP2-directed antibody called Dato-DX from AstraZeneca and Daiichi Sankyo that will have lung cancer data that reads out quickly. Even though the ADCs target the same antigen, they have slightly different constructs, which we think could lead to benefits, especially in earlier line patients for us down the road in terms of side effect profile. So it will be interesting to see how the data develops over time. But we're very excited about Trodelvy. We see Trodelvy as a pipeline in a product, an absolute blockbuster product we had nearly, if I remember correctly, off the top of my head, nearly $700 million in sales last year. Sales are still growing well north of 50%, and we think this is an important growth franchise for patients and for us over a very long period of time. So it's early days, but it's pretty exciting. Made a lot of progress since we acquired the company.

So what's the longer-term vision for Trodelvy? Is it combining it with standard of care in various solid tumors or agents within your own pipeline or both.

Yes, it's both. I mean that's -- what's so exciting about Trodelvy for us is when we look at Trodelvy, it has the potential to replace older generations of chemotherapies in all the different lines of solid tumor treatment and in many solid tumors. So the real vision is that including in first-line non-small cell lung cancer for people that have lower PD-1 expression that you would see Trodelvy used with PD-1. Beyond that, we have a TIGIT program. And I think as you know, we really expect that for high PD-1 expressors, you're likely to see the standard of care move over the coming years to TIGIT plus PD-1 and for lower PD-1 expressors, the vision is that it would be PD-1 TIGIT plus Trodelvy. So it's a really exciting time in lung cancer. There's a number of exciting programs that we have in our pipeline and a lot of data that will read out over the next 2 or 3 years. That's the vision. And again, it's not just restricted to lung cancer. The same thing is true for earlier lines of breast cancer and other solid tumors we're doing exploratory work in a number of new solid tumors. The other obvious combination partner for Trodelvy is a PARP inhibitor potentially. So there are so many ways for us to take Trodelvy. It's a pretty exciting opportunity for us and our team and patients.

So on TIGIT or domvanalimab, maybe you could reflect on the data that was shown in December and what we should expect with the upcoming ASCO presentation. And if there might be anything new that we're not anticipating?

Sure. Again, our TIGIT antibody, that provides some background is partnered with Arcus. It's an important partner of ours in the Bay Area. They have a number of great programs, including the TIGIT program. the ARC-7 study, which is a Phase IIb/III study in 150 patients, and this is in first-line non-small cell lung cancer in combination with PD-1 versus PD-1 head to head. So reasonably big Phase II study of 150 patients. The data set -- Roche had a data set in a study, I believe it was Skyscraper, if I remember -- that people were really excited about. That was a 50-patient study, but they had on a retrospective analysis, 28 patients that were PD-1 high that showed a very significant benefit in the similar patient population from a TIGIT antibody in addition to a PD-L1, I believe, in that case. So our study was significantly bigger. The first -- this is another interim analysis. The study has 5 interim analysis, I believe this is the fourth interim analysis, really exciting data that showed a meaningful hazard ratio in PFS at the interim. Again, it's a bigger study. It's well powered. The study was presented at the monthly ASCO plenary. And what it showed is that when you look at -- it was less about the response rates and more of the really strong PFS data gives us a lot of comfort that the TIGIT is showing additive efficacy benefit on top of PD-1 in these patients, PD-L1 high-expressing patients and you're not seeing additive toxicity, which is really exciting. So there will be an update of that data at ASCO this summer, which will just be more patients, I think, of the 150 patients off the top of my head, I think it was maybe 130 were evaluable or a little bit more than that were evaluable. So you'll have more patients this summer, and you'll have a longer data set. You'll see whether we get a sense of whether you see deepening and increasing responses over time. There is an overall survival endpoint for the study. You wouldn't expect to hit it for this small of a study down the road. So we'll keep following these patients over the long run. We've already started the Phase III studies at risk together with Arcus. So we are committed to TIGIT. We see a real opportunity here. and we're moving forward aggressively. It's a competitive landscape.

How long might those Phase III studies take or that Phase III program?

The Phase III program, I don't know that we've said anything specifically, the studies are enrolling very quickly, as you might expect. I mean there's a lot of enthusiasm across academic centers, and globally. So I don't think, Tyler, we've provided any specific update, but what I can say is the studies are enrolling very quickly. We're making great progress, and we're looking forward to sharing a much more comprehensive data set over the next 2 years.

Okay. On the business development front, what is Gilead's capacity to do deals? How large would you be willing to go?

Yes. We have a lot of capacity. I mean we -- and that's not the focus. I think the key where I would take you is what we've done over the last 5 years, we've done over 100 deals, including some very large acquisitions. We've completely reset and rebuilt our pipeline. We believe that we have one of the most the strongest pipelines in the industry. We have a diverse pipeline. We do need to add more programs in the early stage part of the pipeline. We've made some really good progress in 2022. I think you'll see that going forward. . So when I think about corporate development going forward, what I would focus people is that what you saw in the last 5 years, was needed and necessary to rebuild the pipeline, to diversify the company and to drive the growth that you're starting to see. So the benefits that you saw in our base business growth in 2022 are kind of a tangible evidence of the work that we've been putting in to really broaden our research focus and to invest more in R&D. Historically, Gilead substantially under-invested in R&D. I would say, last year, we invested -- reinvested 18% of our revenues in R&D. That's still well below the industry average. This year, our guidance suggests that we'll invest about 20% of revenues on R&D. So we're finally getting to what I view as a more healthy level that will sustain our growth ambitions going forward? And what does that mean then for BD to your question is like the next 5 years are going to look very different than the last 5 years going back. Maybe 2022 is a pretty good proxy for what you should see. But we're focused on ordinary course partnering small deals, a good example like the MiroBio deal that we did last year. Miro was a small company in Oxford in the U.K. that had 4 preclinical. One was moving into the clinic immune agonist for immunology that we are excited about. That's a great example of the type of deals that we're focused on. From time to time, we will do a bolt-on acquisition. So I use our Forty Seven deal a couple of years ago as a good example of a bolt-on acquisition. But when you saw us deploy over $50 billion of capital over the last 5 or 6 years in corporate development, the future, at least from my perspective, as I look down the road is very different. We build a lot of cash. We'll continue to build cash that we can return to shareholders. But we're going to, first of all, make sure that we have the pipeline right in the R&D spend, right? Secondly, we're committed to our dividend and growing our dividend and then we have flexibility on whether we want to pay off some more debt, we're very comfortable with our gross debt and our net debt. We've paid off all the debt from the Immunomedics acquisition. We can selectively return money to shareholders through either onetime dividends in addition to our annual dividend growth or share repurchase but we'll be flexible. So I think you should expect we'll continue to build the pipeline, but the amount of capital that's going to be required going forward is very different than what we used over the last 5 years from my perspective.

Yes. And I imagine you will continue to be active in oncology, of course, the Arcellx deal was a great deal. But I guess on cell therapy, in particular, do you anticipate that it will be CD19 and BCMA for the foreseeable future? Or do you plan to augment that with additional external deals?

Yes. Well, we will definitely augment it with additional external deals. I can't tell you what those are now. I mean there's so much happening in the cell therapy space that's really exciting. I do think -- we expect that the cell therapy space, a number of these partners, or potential partners we'll be looking to work with a company like Kite. I think Kite is clearly the partner of choice in the cell therapy space in terms of our expertise, not only on the commercial side and how we work with the hospitals and the treatment centers, but certainly on the manufacturing side and on research and development. So I think there's going to be a lot of opportunities. And we want to broaden the cell therapy business beyond just CD19 and BCMA. I mean to be clear, the CD19 and BCMA CAR-T markets are large, very attractive. We think we're going to build a great business there. We already have in CD19. It will continue to grow in BCMA. We have a great partnership with Arcellx that you highlighted that we did at the end of last year, and we're moving into solid tumors. We think that people will make a lot of progress in solid tumors. Companies will and researchers over the next 5 to 10 years. So it's excited to see where that goes. And then, of course, there's always the potential of taking cell therapy into immunology or to virology over the long run. So we will continue to do deals in Kite, not only next year and the next couple of years, but for the long run is my expectation.

Okay. And a last business development question. You mentioned MiroBio, right, which is, I guess, associated with the INI space, which is becoming a very hot space. NASH is staging a comeback. Should we expect you guys to be active in those 2 areas as we look to the future?

Yes. We're -- I mean the MiroBio deal is a great example. We're going to be active in the INI space. There are a couple of areas of primary interest in focus. RA, UC. Lupus are good examples. . We have a couple of exciting internal programs that I think people are sleeping on that are all moving into Phase II or at least 2 of them are moving into Phase II and the other -- so one is an oral alpha-4-beta-7 program. There's a small company in Boston called Morphic that has a competitive program, but we think we have a great program. It's moving into Phase IIb. We have a TPL2 inhibitor that we're excited about. There were some new kind of -- people are working out, as I understand it, some of the TPL2 biology. And as a result, I think there's a lot of interest in our program there. And then we have an IRAK-4 inhibitor that's moving out of Phase I, hopefully, knock on wood into Phase II. So again, it's early days with all those programs, but we're probably doing more in INI than people appreciate. MiroBio in that deal, we think, is a great one in terms of building it out. We will do more in the short -- in the long run, we will build that franchise. There's no urgency to go out and do a big deal in INI. I think that we're doing a great job of kind of building it slowly and thoughtfully given where we are. But we're excited about the internal portfolio and some of the plans that we have for development there.

Got it. So I take it -- Terry? Yes.

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Sure. Maybe to repeat the question. So thanks, Terry, for the question. So on the first part of the question, sorry, was what, on the IRA, there's the second part.

IRA impact on your franchise overall and then Biktarvy in particular.

Yes. So on the -- there was the first part. I'm sorry, Terry [Indiscernible]...

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All right. Yes, yes, I'm sorry. Okay, yes. So the question is, will the IRA change how we do drug development in oncology. I don't think so. I mean, again, we're one of the few companies that has a focus across the entire therapeutic spectrum. So we're a world's leader in small molecule drug development combinations. We obviously have been building over the last couple of years, our antibody bispecific and protein capability. Obviously, with the ADCs and self therapy we have that end of the spectrum. Scientifically, we will always take the approach of applying whatever mechanism of action, we think, makes the most sense, Terry, against a given target. We do -- of course, it will impact how we value opportunities, both internally and externally when we think about the IRA as it's currently constructed. And again, we'll see whether it changes over time. And then in terms of the Biktarvy impact, again, we're one of the few companies that has a very novel and kind of new pipeline. So the IRA in terms of the mandatory price negotiation is expected to have -- it will have a potential impact on our business, but probably more modest than many companies. Biktarvy, which is our gold standard HIV treatment therapy could conceivably be subject to price negotiations starting in 2028, we believe, at the earliest based on the letter of the law. And I would say between now and then a lot of things could change. And then the last part, Terry, of your question was Medicare. Across our HIV treatment, Medicare is about low 20 percentage points of the HIV treatment market in the United States. I would also highlight that we already operate in HIV is -- the same thing is true for our competitors in a heavily discounted market. Remember, in the government segment, the ADAP and the 340B segments in addition to Medicaid are already significantly discounted. So there could be an impact on our business and it's manageable, and it doesn't change the overall growth profile of the business through the end of the decade and beyond from our perspective.

[Indiscernible]

It's too early to say. So Terry is asking the question, could it have a knock-on effect of your other discounted sectors. I don't know is the answer. I think we're still working through it. But whether -- the question is could it have effect on the commercial business or otherwise, we'll work through it. Again, our expectation is a lot could change over the next 4 or 5 years, and we'll all have a better sense of how it's going to work out. But again, when we kind of step back and look at the big picture, even though it will impact our business, we expect to kind of grow through it and we're excited, especially with the youth of our portfolio, we think the setup from here is really attractive for investors and for the company.

Yes. When I did the work, I was surprised by how limited the impact was relative to the IRA. I think people don't appreciate that Medicare spend as a proportion of Biktarvy and EPCLUSA sales are actually lower than what some of the other products are. But anyways, we're well over time and lunch is coming up. So Andy thank you very much.

Thank you for having us.