Gilead Sciences, Inc. (GILD) Earnings Call Transcript & Summary
May 15, 2024
Earnings Call Speaker Segments
Brian Abrahams
analyst[Audio Gap] senior biotech analyst at RBC Capital Markets. We're really pleased to have our next presenting company, Gilead, represented by their Chief Commercial Officer, Johanna Mercier. Johanna, thanks again for joining us.
Johanna Mercier
executiveThanks, Brian and hi, everybody. Good morning.
Brian Abrahams
analystSo maybe we can kick things off on the HIV franchise. I know you've been in the space, you're the innovators in the space. You're the leaders. You've been there for such a long time. What are you seeing in terms of the intrinsic growth for the HIV franchise? And how should we think about go-forward growth contributors with regards to the overall market growth in both therapeutics and maybe also in PrEP market share growth and then pricing dynamics.
Johanna Mercier
executiveAnything else? So let's talk a little bit about HIV and take a step back. And I think the HIV market is a really interesting one. And at Gilead, as you said, we've had the opportunity to be leaders because we've continuously innovated in this marketplace and we will continue to do so. As I think about the market itself, I would split it between the treatment -- the HIV treatment market and then the HIV prevention market. And so let's start with treatment. Here's where we are today. Today, we are leaders in this marketplace with over 70% of the HIV market share. Most of that is driven by Biktarvy, which is the standard of care in daily oral market, continuing to grow that market. The market grows every year about 2 to 3 points. We also are continuing to grow Biktarvy in that marketplace. Year-on-year, in the first quarter, we announced a 3% market share growth, continuing to grow faster than any of our competitors despite the volume that we already have established. So we're at about 49% share right now with Biktarvy. So that's the daily oral. I think your HIV treatment is going to expand, right? It's going to look a little different in the future because we have opportunities, not only in the daily oral market but when you see another -- other players come in and we expect to lead here as well in the long-acting oral market, which is something that is basically every week. So we have a couple of them, once a week pills for HIV treatment coming around the corner, namely with lenacapavir, islatravir combination as well as a lenacapavir integrase inhibitor, which will be a fully owned combination. And then you think about the long-acting injectables. And in that marketplace, we're looking at kind of lenacapavir being the foundation with a whole bunch of clinical candidates that we're testing against it, whether it's every 3 months, every 6 months, we showed just recently at CROI, Phase Ib data with our bNAbs that would be every 6 months with lenacapavir. So lot more to come. And as you think about the growth, think about growth in 2 ways in the treatment market. One is the market itself, how we differentiate and be -- are competitive in the marketplace. And then there's another piece of the puzzle as you think about the longer actings, which is adherence, right? Adherence is still pretty high in HIV treatment. But as you think about something every 6 months or even a weekly pill, you're going to get higher adherence, which also gives you additional growth. That's the treatment market. So I think that's sustainable growth for HIV moving forward. And we've guided this year at about 4% year-on-year growth for HIV. As we think about prevention, which is another piece of the puzzle, it's about 10% of our total HIV market today, as we think about prevention. It's a market that grows much faster and it grows even faster when there's new entrants because it increases the awareness in the marketplace. So right now, the market is growing at about low double digit, around 11% year-on-year. We've seen it in the 20s, high 20s in the past when you have new market entrants. We expect lenacapavir for PrEP, which is a twice yearly subcutaneous injection to play out as early as late 2025. Now this is an important piece of the puzzle because this is transformational. So basically, people will go -- so these are not patients, these are people that are at risk of HIV. So very different population. These are also people that don't want to take a pill every single day because they're not sick. And so anything twice yearly subcu, it's pretty much what people are waiting for to really make the difference. And how you look at the marketplace is going to be important. And this is where it's incredibly underestimated today and we talked about this before. The PrEP market today is, if you took it as a branded market, it's about a $3 billion market opportunity. We own over 40% of that with Descovy. The rest of it is mostly generics. Those are all daily orals. We have an opportunity with something every 6 months to basically probably double that marketplace pretty quickly because we haven't penetrated. We've only penetrated about 1/3 in that marketplace versus, I think we can get north of 50%, 60% in the marketplace itself. Most of the people currently treated in PrEP are white men, so MSMs, affluent in the commercial marketplace. If you look at the incidence of HIV, that's not where it is. The incidence of HIV is often women, it's also Black, Latino areas. And so we have a responsibility and an opportunity to truly expand this marketplace. So that's one piece of the puzzle that we expect that we'll have some inroads with lenacapavir for prevention. In addition to that, I would also say that the CDC currently defines it as about 1.2 million people. And then you look at the guidelines and it's anybody who's sexually active with more than 1 sexual partner. I think that's more than 1.2 million people in the U.S., just saying and an opportunity for people that have been diagnosed or having discussions around STD testing or diagnosis. The number of STD diagnosis in 2023 was 13 million people, not 1.2 million. And so I think we have a real responsibility and opportunity to make sure that we expand this market and offer such a treatment. So that's where I think you're going to see sustainable growth in HIV treatment and there is going to be transformational growth in HIV prevention.
Brian Abrahams
analystThat's really helpful. And then, Johanna, on the last earnings call, you spoke a little bit about the potential impacts from the IRA in 2025. Can you elaborate a bit more on that, I guess, what should we expect in terms of some offsets to growth in 2025 and beyond from the IRA?
Johanna Mercier
executiveYes, sure. So what we talked about in our last earnings call is giving a bit of direction around the impact for the Part D redesign in 2025. And what we've said is that our HIV growth, that we just talked about, right, in the treatment market is going to offset the Part D impact. So roughly, we believe our growth band for HIV will be flat in 2025 and that's basically a reset to growth in 2026. Our total business, obviously, is not only HIV. It's also inclusive of oncology with cell therapy, Trodelvy, both growing at double-digit rates as well as seladelpar launch coming up later this year. And so all of that will continue to drive the total growth for our business in 2025. And so we believe 2025 is a bit of a reset for HIV and then continues on. So that's where we see...
Brian Abrahams
analystOkay. So that's a onetime impact effectively, in terms of the impact to growth.
Johanna Mercier
executiveOnetime effectively. Exactly right. Now we haven't really -- we modeled just the math of the Part D redesign. We haven't modeled anything. Lot of folks are talking about potential upside as you think about out-of-pocket costs being less and maybe you'll have better adherence, so you'll have more persistency on drugs. So we haven't modeled any of those potential benefits for a potential upside. But at this point in time, that's kind of at least general guidance.
Brian Abrahams
analystGot it. Maybe we could shift gears and talk about solid tumor oncology and Trodelvy. As we continue to see the data roll out for that drug across multiple indications, including from additional -- some additional data for lung cancer at ASCO, what are the indications that you're most excited about? Where do you see the most growth opportunities? And what do you think are the highest likelihood shots on goal?
Johanna Mercier
executiveOkay. So in oncology -- and I'm going to touch on Trodelvy, right, specifically. We believe today, we still have enormous opportunity in the indications that we are currently labeled for. So we have set the standard of care for second-line metastatic triple-negative breast cancer. We are, by far, the leading share here. But that's -- only about 1/3 of the patients are getting Trodelvy in this line of setting. There's still 2/3 of patients that are not and they're getting chemotherapies. We've clearly shown overall survival data over chemo here. And so we still think we have a lot of room to grow just in triple-negative breast cancer. Let alone as we move up earlier line setting as you think about some of the data with [indiscernible], some of that playing out later this year. But right here and now, we still think we have a great opportunity in second line to continue that leadership there and unlock a little bit that chemo piece, that stickiness of chemo. In HR-positive HER2-negative setting, our label is in later lines of therapy and we are doing well in those later lines of therapy. We're also doing incredibly well in the IHC 0 status in patient population and we assume that with other data like [indiscernible], that's in the next couple of years, we'll move up lines of therapy as well. So a lot of room to grow in HR-positive, which is also a bigger market play versus TNBC. Then you have bladder. We currently have a conditional approval in the U.S. for bladder. This is something a lot of time on, to be totally frank with you. Our focus has really been on the breast indications and the reason for that is the conditional approval is based on PFS, not OS. And so we were a little bit and more -- although we have a second line indication, we were kind of relegated a little bit to third line. We believe that we have TROPiCS-04, that data readout is basically in the next couple of months. We believe that if that reads out with OS, that's an opportunity to really truly establish ourselves in the second-line setting for bladder, which right now is only about 10% of our total revenues and an opportunity for growth there as well. So that's the here and now to your question, let alone moving up earlier lines of therapy. And then we have lung cancer. We announced earlier this year with the EVOKE-01 data that we missed our primary endpoint but we had some really interesting data in those PD-L1 nonresponders or fast progressors, maybe is a better way to say it. And so that data will be shown at ASCO this year in June. And then, of course, we're looking forward to having discussions not only with our KOLs but with regulatory agencies to see what kind of path forward does that look like. Either way, we believe there's a path forward in second-line lung, not necessarily with the EVOKE-01 data but potentially another trial as well as you think about kind of with a very specific patient population, which represents about 50% to 60% of the second-line lung non-small cell lung cancer setting. And so we think there's a real opportunity there for us to kind of grow. And then, of course, we have trials and other indications, whether it's endometrial, that's a little later out. And then we have a lot of combination trials with our TIGIT, with the Arcus collaboration and looking at that as well in lung and other indications.
Brian Abrahams
analystHow do you foresee the competitive landscape playing out across some of these indications, especially considering in HER2 potentially moving into earlier and broader breast cancer lines and competitor Trop-2 ADC potentially coming out to the market?
Johanna Mercier
executiveSure. So today, we are the only Trop-2 ADC on the marketplace, I would also say that not all ADCs are alike, not all Trop-2 ADCs are alike. We've shown that already with our safety profile being quite differentiated. And so I still think we are incredibly competitive in the marketplace. I think as new data comes out, you were referring to some data that -- we'll see more at ASCO. I'd also say it's great for patients. It's great for women with breast cancer as you see some of this data play out. So I think that's a good thing. I also think some of that data is in earlier lines with -- which supports Trodelvy moving up a little bit, right? So it opens up the market. So I see this as opportunity. And this was something that was definitely part of our planning as well as we think about our studies in earlier-line settings. So more data to come with potentially a differentiated profile, namely on the safety front that we've seen.
Brian Abrahams
analystGood. Shifting gears. Now that the CymaBay deal has closed, what's your latest view on the size and penetrability of the PBC market? Where you're expecting seladelpar to be positioned and how you can leverage your existing liver-focused salesforce and infrastructure?
Johanna Mercier
executiveYes. So we're really thrilled to have the opportunity to work with seladelpar. This is a compound that is basically for a disease called PBC, it's liver inflammation. It's right up our alley in light of our expertise in liver. We've obviously been more focused on liver within a virology setting [indiscernible] sorry about that. And from a virology setting and then this is inflammation, which is also we have a lot of expertise here but although much earlier from a pipeline standpoint. Our footprint covers about 80% of total prescribers right now for PBC today. And so we have an opportunity to obviously expand that a little bit to make sure we cover all -- most of the additions are GI specialists. So that's something that we will be doing. This is a rare disease or an orphan drug but it's a large disease. It's about 130,000 patients today in the U.S., about 125, 000 in Europe. And so we believe that unfortunately, Urso or UDCA that currently is in first-line setting, many people don't respond and unfortunately get to the second line setting and have very limited options. So we will be indicated, we hope, as our label comes through, PDUFA is expected this mid-August, so a couple of months. We assume a label in second-line for ALP normalization, which is basically cost of entry. We believe our label will be differentiated because our data is differentiated. The data clearly shows that we have very positive impact on pruritus. So pruritus is unfortunately a symptom of the disease of PBC. And unfortunately, some agents that have come to market are also showing exacerbation of pruritus. So you can appreciate -- for anybody who's had it, this keeps you up at night, right? It impacts mental health, it impacts how you work. It's basically you want to scratch your skin off, is the impact of this. And so there's a real opportunity here to make a difference here with seladelpar. The opportunity that we see and we've said it's basically modest for 2024, right? We're going to launch in Q3. We realized that, obviously, from a payer standpoint, there will be -- it will take a little bit of time for patients to get access to this drug. So we think really the uptake will happen more so in 2025. We believe that will be a breakeven proposition for us in 2025 and accretive in '26. So very excited about the opportunity in second line, with opportunities potentially, that's really for inadequate responders to Urso and with an opportunity with other studies like the IDEAL trial to look at partial responses as well and move into a little bit a broader patient formulation. So more to come on that but I think we're incredibly well positioned with a differentiated profile to make a real difference for patients here.
Brian Abrahams
analystGreat. There have been some recent updates in terms of the go-forward path for anito-cel. And so I guess I was wondering if you could talk a little bit about what the market opportunity could be like for additional CAR-T entrants in the myeloma space. And where you see this drug potentially being most differentiated versus other approaches where it might fit in?
Johanna Mercier
executiveSure. So this market -- the multiple myeloma market is quite a large market, right? You're talking about a $12 billion market opportunity. There are agents today. Unfortunately, they can't serve everyone. And so this is a real nice opportunity with the collaboration with Arcellx to -- we've just finalized actually the tech transfer to really leverage the expertise from Kite -- Gilead from a manufacturing standpoint as well as clinical development and commercial execution to really make a difference here in this marketplace. IMAGINE 1 data for later lines of therapy, so fourth line plus, should read out towards the end of this year with a launch in 2026. So that's around the corner. And then we also just announced, I think you were referring to IMAGINE 3 trial design, which is looking at earlier lines of treatment in second line plus and really looking at a broader patient population versus current agents to really make a difference here. We believe that because of the leadership that we currently have in cell therapy by far and the manufacturing reliability as well as turnaround time, we're at about 14 days. We can really make a difference here for these patients, both obviously still continuing the growth in lymphoma in DLBCL with Yescarta but also bringing that into play for multiple myeloma. And so excited about that opportunity to really make a difference here and accelerate the path. And I think that's what -- the whole intent of the acquisition of Kite some time ago was all about, right? It's about leadership in cell therapy, which is tough to establish and then playing that up to make sure we are the best partner of choice as well for future opportunities.
Brian Abrahams
analystGreat. At the beginning of our discussion, you talked about the -- just how robust the PrEP opportunity could be. We're going to be coming up on this Phase III -- the initial Phase III lenacapavir data in PrEP by the end of this year. I know it's somewhat of a -- and a unique trial design. Can you maybe help us understand, I guess, exactly what we should be looking for in the study? What's the bar? And what are you hoping to show that would really enable you to capture this potential market opportunity subset?
Johanna Mercier
executiveSo let me take a step back. So lenacapavir for prevention is looking at 2 trials. It's called -- one of them is called PURPOSE 1, the other one PURPOSE 2, very original. And we basically need those 2 trials to file for an approval and that's how we're expecting approval by -- as early as late '25. Lenacapavir currently on the market under the branding Sunlenca for heavily treatment-experienced patients, in a twice yearly subcu injection. So it has already been proven from an efficacy standpoint in the treatment setting. So these are very complex regimen. These are patients that have nothing else, have shown resistance to other classes. And because lenacapavir is a capsid inhibitor, comes in, in place, very small market opportunity for us here but a huge unmet medical need, first and foremost. And then secondly, it's an opportunity to get this drug on the marketplace and kind of understand kind of the ins and outs from the pathway. So it gives us experience as we go into it. That's also why in prevention, we believe monotherapy is where that, that will be successful but we also believe that our chances of success here are very high. And so the PURPOSE 1 trial, the counterfactual design that you were referring to, just think about it, this PURPOSE 1 trial is being -- is happening in sub-Saharan Africa. It would be unethical for us to have a placebo arm, right? We have to make sure that everybody gets protected from HIV, if appropriate. And so the way it's designed, it's basically designed that you have an arm with lenacapavir for PrEP, you have an arm with Descovy once a day and you have an arm with Truvada once a day. And all of that is going -- the primary endpoints are lenacapavir for PrEP versus background HIV incidence. And that's the difference, a little bit, right? It's almost like think about it as a hypothetical placebo arm that you're comparing to. The primary endpoint is superiority for lenacapavir versus that hypothetical arm and also looking at Descovy versus that hypothetical arm. And you'd ask why Descovy, it's already approved. But right now, it's only approved in cisgender gay men, transgender men and women. We have a post-marketing commitment for women. So this trial, PURPOSE 1 is with cisgender women, adolescent girls and younger women. And so that's the focus there. So I see that as 2 opportunities because those are the 2 primary end points. There is an opportunity, obviously, for lenacapavir for prevention. There's also an opportunity for Descovy. As I mentioned before, Descovy right now is really mainly used for MSMs and so there's an opportunity to even grow that marketplace, to expand to women who would need prevention as well. So that's the part of the PURPOSE 1 trial. And the secondary endpoint to PURPOSE 1 is lenacapavir for PrEP superiority versus Truvada. So that's how that plays out. PURPOSE-2 trial is in cisgender men and transgenders, as well as -- and only looking at lenacapavir versus the background HIV incidence in a primary endpoint superiority as well as secondary endpoint superior to Truvada. So we believe with those 2 trials, those 2 pivotal trials, we have an opportunity to file not only for lenacapavir for PrEP, in a very broad patient population but also with the potential update of a label for Descovy. So great opportunities.
Brian Abrahams
analystGreat. Well, in the last 2 minutes, I would love to touch on sort of business development and capital allocation plans. I know -- you mentioned -- you guys have mentioned recently, it's unlikely that you'll be doing any sort of major transformative acquisition this year. But I guess I'm curious, how are you thinking about external opportunities in deploying capital overall? And are there particular therapeutic areas or clinical development stages that you believe would fit in most with your current vision and go-forward strategy?
Johanna Mercier
executiveAnd you are talking to the commercial person. So clinical stage, I might be -- I might have a bias. So we've been very clear at Gilead around our areas of focus. It's around virology, it's around inflammation and oncology. And so we've been kind of agnostic to modalities and whatnot. But we have a real opportunity to continue to be opportunistic and we will continue to do that. I think the CymaBay deal is a perfect example of what that could look like in the future. Those are the kind of things we're looking at. We continue to do on a regular basis, early research and early development collaborations, acquisitions, et cetera and that you'll continue to see that. I think where it gets a little more opportunistic is when you think about a later-stage kind of play. But we're always looking at them and what the right fit is. And the most important thing for us, is not only obviously the molecule, the differentiation in the marketplace. But what expertise do we bring to that? And that's why those 3 areas of focus are really critical for us. The last piece I would say is the current pipeline that we have today is actually one that we're really excited about, right? We've talked a lot -- not all the pieces but many of the pieces that we have that will play out in the next 5 years but let alone 10 years. We feel incredibly confident with our current pipeline and our growth opportunities that we have what we need today. We will always be looking and we're always interested in opportunistic plays and we'll continue doing that but very specific to those 3 therapeutic areas.
Brian Abrahams
analystGreat. Well, this was super insightful Johanna. Great to catch up, as always. Thanks for coming and joining us.
Johanna Mercier
executiveThanks for having me. Appreciate it. Thanks, everyone.
Read the full transcript via the API
You're viewing the first half of this call. Get the complete Gilead Sciences, Inc. transcript — plus 248,000+ transcripts from 12,000+ companies, speaker segments, AI summaries and full-text search — through the EarningsCalls.dev API.
Get the API View API docs →For developers and AI pipelines
Programmatic access to Gilead Sciences, Inc. earnings transcripts and 248,000+ others is available through the
EarningsCalls.dev REST API. Plans from $24.99/month — full transcripts, speaker segments,
full-text search, and the recently-added /api/v1/transcripts/recent polling endpoint for ETL pipelines.