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

Good morning, and welcome to Day 2 of the Barclays Global Health Conference. My name is Carter Gould, Senior Biopharma Analyst. Please welcome Gilead to the major screen here, Merdad, if you probably can't see it or maybe you can, you're about 20 feet tall here, behind us.

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Thank you for still agreeing to do the chat, even though you couldn't be here in person. Merdad Parsey, CMO of the Gilead and excited to do a Q&A. But Merdad, want to give you the opportunity if you wanted to make any opening comments first.

Well, first, Carter. I really apologize. I was looking forward to joining you all and I threw out my back and have been essentially unable to walk for the past couple of days. So I'm really sorry not to be there in person and look forward to chatting this morning. Thanks for accommodating me.

Great. So I didn't know if you wanted to make any additional comments or we can just hop into Q&A on this one.

Look, I just -- maybe I'll just say, as most of you know, we've been on a journey at Gilead. It's been a great few years since I've joined. It's about 3.5 years for me and about 4 years for Dan. And hopefully, everyone is starting to see the transformation we're partway through. We're really excited about where we are and where we're headed with the expanding of the portfolio beyond HIV into oncology and our inflammation business as well. So I'm happy to be talking with you today and catch everyone on Gilead.

Perfect. Okay. Maybe to get started, I want to touch on HIV first. I think we've just kind of come up on the anniversary of your HIV deep dive. You made progress on a number of fronts. Sunlenca approved. First off, I say, congratulations there. But that was really -- I mean, that's really just the start of sort of this next wave of opportunity for Gilead in HIV. So I guess the opening question here is, as you think about combination approaches, whether it's treatment, whether it's PrEP, how has that evolved over the past year? And maybe you can talk about some of the progress you've made on that front?

Yes. Great. Thanks, yes. It's been quite a busy year for us. And as you know, we view the HIV long-acting space as really important to where we want to be and what we want to offer for people living with HIV on the treatment side and on the PrEP side. And of course, when I think about it that way, it's really important in the past year now that we have Sunlenca approved for treatment in highly treatment experienced individuals, that really sort of validates our pathway on the product path PrEP for lenacapavir. And of course, on the treatment side, looking for that partner to match up with lenacapavir for long-acting. And to your point, we are pursuing it both on the oral approach, where we're hoping to get at a minimum once-weekly, maybe as long as once-monthly oral therapy. And then on the parenteral side trying to get to every 3 months or hopefully again longer as we move forward. So with those goals in mind, you've seen also our -- the [ KOL ] data we presented, the NIAID data for long-acting HIV therapy, which allows us to dose every 6 months. That was a Ib study, and so we'll be moving that into Phase II. And then on the preclinical space, we added 2 end stage to the development portfolio. So those are looking very promising, and we're really excited about getting those into the clinic as quickly as possible. So overall, we have a number of programs in the early stage. And the thing that's important to remember when we talk about those is that those programs, we can determine their suitability for this long-acting approach very early on in their development cycle, right, really Phase I. Because -- we know that these mechanisms are effective, the question we have to ask in these is, is the PK in humans is what we hope it can be to give us a long-acting exposure? And then are we able to get tolerability when we're thinking of parenteral and [ subcu ] formulations. The tolerability that will allow us to match it up with lenacapavir and have an offering for people who want something that is long acting. So we should be seeing data emerge from certainly the studies that are already in the clinic, the molecules that are in the clinic. And then we have all these follow-on molecules. And our approach is going to be, take a fairly broad number of programs and looking for the optimal molecule that will allow us to move into the Phase II and beyond area. So we're really excited about how things have progressed over the past year or so. So we look forward to sharing more data hopefully as it starts to emerge.

Okay. Just wanted to follow up on 1 or 2 aspects there. So as we think about whether it's the orals or the long-acting injectables, I think, the way you portrayed it, I think, is kind of how we think about it, right, the plethora of Phase I data and early stage data allow you to make some calls there. But if you think about those later-stage studies, could we see Gilead take multiple oral combinations into Phase III? Or will there be just an inherent prioritization and you're going to pick one or some small number to advance into later-stage studies?

Yes. I think we'll be open to that depending on the characteristics of what we see. I think it will be really a data-driven decision. So our preference will be to move -- find the one, right, the molecule that will get us the right combination to move forward. But if we have to make trade-offs, we'll certainly consider doing more than 1 molecule. So it will be very much a data-driven decision as we start to see how the PK -- what the PK looks like and what the tolerability looks like.

Okay. Maybe just a good segue to move on to the -- on the PrEP side a little bit there. And I think what's overlooked a bit is PURPOSE 1 and 2 are not that far away, these were sort of the key PrEP studies. And having lived through sort of the DISCOVER data coming out and a lot of the discussion then, are there key learnings in terms of event rate, which I think going back to DISCOVER. I think we had been all anchoring on PrEP studies that were far long ago. So maybe people are better kind of -- better expectation of kind of where event rates are today, but also just representation? I guess it's really an open -- broader question around learnings from DISCOVER as you think about PURPOSE 1 and 2 just given the importance of the portfolio.

It's such an important question, Carter. And I think you're right, a lot of people have forgotten how the field has evolved and how important it is. Look, we're really focused on that issue. We want to make sure both for people living with HIV for the community as well as for the regulators that we are able to see that data that really is applicable to all the people we're trying to serve. As you remember, as you mentioned and as you were discussing, DISCOVER was really focused on management of men and transgender women who were having sex with men, and those are the populations that were being studied. We've really built the PURPOSE program being much, much broader and vary intentionally. And I think it's probably the most diverse group of people going to be enrolled in a trial ever for evaluating PrEP. And so not only do we have men and transgender women who have sex with men, but we've also included people with -- who are -- with HIV who weren't in the DISCOVER population. So transgender women, people who inject drugs, adolescents are really included in these trials as well. In addition to diversity in terms of background, so we are really focused on the [ information ] that we have, Black, Hispanic, Latino transgender, nonbinary people involved in trials. So that we can make sure that we can go behind that information to everyone is. So there are 4 PURPOSE trials, really focused on trying to make sure we cover all of our bases. 1 and 2 will be the primary large approval trial. But 3 and 4 will allow us to expand the data to include in the U.S., people who inject drugs. So I think that will -- that's certainly our goal. And we're working very hard and very intentional on it as we go forward.

And just a real quick follow-up and then we can move on. Just we should think about PURPOSE 1 and 2 as being the regulatory package, then the rest are supportive? Okay. Great. Perfect. That's a great segue. Now we can move to sort of COVID. Late last year, you have announced your plans with the next iteration after the success with remdesivir. You are moving into, I guess, Oaktree when it came out, I had a lot of questions around sort of this setting. And I'd love for you to kind of just talk through sort of your conviction here given enrollment challenges, endpoint challenges involving disease backdrop. I mean, standard risk has not been for the faint of heart. So what gives you conviction here to move forward?

No, it's a great point that you're making. And we've definitely gone in with our eyes open. I think maybe the place that started our conviction around the molecule, 5245, given from an activity standpoint it's related to remdesivir in terms of the target and the part of the virus that we're inhibiting. So we're really confident in the molecule itself. The challenge as you pointed out, is really the epidemiology right now and the course of the disease. And so you know, in our -- if you think about it is that with a molecule like 5245 we believe that the new phase we build for mechanisms over time, to provide treatment to people who get infected that we have an obligation to move this program forward with the uncertainties that you laid out. And I think it really falls into 2 major categories. The first is the course of the pandemic and how many cases there actually will be. We've launched as long as we have the -- how the case load has been changing and the intensity of the disease has been changing. That can change at any moment, right? We're aware of that. We want to be prepared. We don't want to react. We want to be prepared so that if there is another wave, if there is a severe version of the COVID endemic or pandemic that we have, our eyes are open and our studies is ready to go. And then second is the design of the trial and how we look forward that -- we're powered and what the endpoints are. Both the standard and the high risk, we talk to the regulators a lot to make sure that we're on the same page with them. But more of the point -- from a pure study design standpoint, we don't know what the event rate is going to be any more. I think that is a major challenge. I completely acknowledge that. And so the way we've designed the study to have interim checks to be pursuing the -- to evaluate the event rates as we go along. And then that way, we can modify primarily the sample size depending on the underlying event rate. Based on our assumptions, if they're lower, we would be -- we would [indiscernible] the study. If they are higher, we might be able to pull it in. And I think with those -- that approach, hopefully, we'll be able to get there. And of course, I completely acknowledge that it will be a challenge. I think I would not -- everyone [indiscernible] role. And so -- but I don't think we have an option, right? I think it's something that we feel obligated to do. And hopefully, we'll be able to provide another treatment for people.

Okay. So we have about 10 minutes left, and I think there's no area of Gilead that has had more of a transformation since you joined than the oncology side of the business. I guess maybe to start on Trodelvy, I'm going to ask you to -- it's sort of unfair where you sit. But given in the early days of the HER2 negative launch, just how Trodelvy is sort of coexisting with HER2? Is that sort of playing out as you expected? And maybe talk about that positioning in the IHC-0 population.

Yes. Look, we're really happy with the data that you've all seen and the OS benefit we [indiscernible]. It's only been a month. So I think it's really important to keep that in mind, and we're very pleased with how things are going for us. Probably too early to give -- to really understand directionality. I think it's important though -- I think implicit in your question is sort of competition between HER2 and Trodelvy. And actually, I think the biggest competitor we have right now is chemotherapy. I think all of us have the opportunity to go help patients who are -- we can demonstrate a survival benefit with Trodelvy and have physicians not use chemotherapy and instead use something that has demonstrated OS benefit. That's probably the biggest challenge right now, is awareness and getting the caregivers to transition from chemotherapy to these newer agents and Trodelvy.

Okay. As we think then about Trodelvy's potential relevance in lung and being able to move into earlier lines, the commentary there against chemotherapy, I think, is -- so on one hand, is still sort of that view. On the other hand, you haven't seen the ILD that some of your competitors have. Kind of given that balance, how do you think about the ability to move into earlier lines of lung? Is that a possibility? Just some kind of balance there.

Yes. It's a spot-on question. And I think that if you think about the patients who are not getting chemotherapy today, certainly for those patients, we're going to need to demonstrate, I think, an efficacy profile is going to be compelling. Having said that, it's also important that -- to note that with Trodelvy, the adverse event profile we see is neutropenia and diarrhea that the oncologists are used to managing. It is different than managing ILD, which can be more challenging. So for us, I think that if we can demonstrate a meaningful benefit on top of, say, PD-1 inhibitors in parts of the population that we bring manageable adverse events along, I think that could still be compelling. In other groups though in our patients who are getting chemotherapy even in the front line, and the question really becomes both the tolerability of either combining -- and in the long run our hope of completely substituting for chemotherapy and really bringing an adverse event profile [ in reality ] that is not dissimilar from what people are experiencing right now and hopefully brings substantial benefit, which we really -- we feel that is highly likely given the profile we've seen with Trodelvy so far. So I think you're absolutely right that tolerability is going to be very important, especially in frontline. We are -- that's why we're doing some of the second-line work where we're doing to make sure that we got the right dose as we go forward and tolerability in combination with chemotherapy is going to be there. And I think that will all set us up really nicely for the frontline studies.

Okay. So I guess with that in mind, how should how people in the room sort of think about read-through from TROPION lung study and good and bad, competitive, but also potentially derisking for the...

Yes. Our conviction on Trodelvy is really high, and it is driven by our multiple approvals already with Trodelvy in bladder and triple-negative and HR-positive. And you're absolutely right. We know the Trop-2 directed ADCs are showing really exciting efficacy across the board with our own data as well as what others are doing. So we have a lot of conviction there. And I think that's part of why we're moving so aggressively into the space. And moving forward in front lines, non-small cells was always second line work that we're doing. And lung is very important for us. If I add to that, that what we're doing with the TIGIT program, we are taking a very all-in approach with lung cancer both with Trodelvy and domvanalimab, which is another -- I consider ourselves really fortunate to have 2 highly -- 2 molecules that we have a lot of [ traction ] in and have a high probability of success in lung cancer. And I think that makes our portfolio fairly unique in terms of having that -- those combinations available to us. So with the contingent assets moving those forward aggressively as well, I think it is a good place to be data driven in our approach.

That's a very good lead in to if you think about potential read-through from competitor TIGIT data, and I guess the point of question there is what a negative result in Skyscraper coming from Roche would mean for you and the program on your side?

Yes. I've been around long enough not to read through too much positive or negative with from other people's trials. The real question is why if they have a challenge and I think understanding study design and population issues. We are approaching our program with -- very aggressively. I think -- remember that our approach is going to be using a PD-1 instead of the PD-L1. So we really want to see what the data looks like against the Skyscraper data as they roll out to really decide what we're going to do about it. I'm again really very bullish in terms of the data we've seen so far. Remember that we'll be showing more ARC-7 data coming up this year. And I think that should show -- we should have [ hundreds of mutations ] worth of data impact in that data set with longer follow-up times and more mature data. So hopefully, that will continue to bolster our efforts with things moving forward. And we're going to be driven by our own data, and that's how we design our studies and that's what we'll be moving forward with. So of course, we'll look at those data for understanding why they failed, would probably be more important thing to make sure that we don't make the mistake -- I don't want to say they're making mistakes. If there's something in there from a design standpoint that we learn from, we incorporate it.

And just to be clear, the updates that we're going to see at ASCO for that program will be above and beyond data that have already been presented, it's not going to -- okay.

Yes, yes. So the data we showed in December was an earlier data cut. It was about 130 to 135 patients, not everyone who enrolled -- because many of them who have been enrolled -- have just been enrolled in August, they were not completely scanned. So at ASCO, we should have data from all 350 patients who enrolled. We could have had the opportunity to have some scans and then all the more mature data from the initial 135. So all those data together, we'll be able to see the test data and additional information from the project as we go forward. So I'm excited to see this data myself, and we'll be excited to share them with everyone.

Okay. In these final minutes, I wanted to ask you a bit of an overarching question. Again, kind of it feels like, I think with success -- certainly the success that stock has had and sort of the portfolio having kind of advanced in the past 4 years, still a lot of people who are kind of taking stock of all the changes within Gilead. And as we talked about the portfolio, it's meaningfully different than it was 4 years ago. Can you talk about at this point kind of the process of evolution, where we are in sort of overhauling that pipeline, how you feel about the group, the different bets you made, I guess, holistically within oncology?

Yes. It's been quite a journey. And I think I would say we're not done with our journey. I think there's more work to be done. Our focus right now, I would say largely is to ensure that we're building our earlier-stage portfolio for the long run. We don't want to be in a situation where we have to find late-stage assets, we'll always be opportunistic about late-stage assets. But we really want to set ourselves up against the long run, and just do a number of early investments for a variety of programs that are in Phase I, Phase II, and that's both oncology and inflammation, right? The MiroBio acquisition, all of these are designed to build a portfolio for '26, '27, '28. We'll be talking to guys about Phase III studies with some of those assets in a few years' time. So I think we still have [ room ], we'll always be opportunistic on the later-stage side. If there's something that looks great. We have the capacity and the capability to do it now. Our team buildup has gone incredibly well in terms of building our oncology team. I'm really proud of the team that we put together and what we've been able to accomplish in such a short time. Probably like me, there have not been a lot of instances where a company has been able to do what we've done. We're really proud of this work. And we're not done. We have a lot more to do. So we're excited to continue on the journey.

Perfect. With that we're out of time. Thank you very much for joining us. Best of recovery on your back.

Thank you so much.

Thank you very much.

Take care. Thank you.