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

Good morning, everyone. Welcome to our next panel discussion with Gilead Sciences. We have a couple of important members of the executive team from Gilead here up with us. To my left, Dietmar Berger, who's the new CMO. And I'd like to say, running the hot seat of R&D in front of Wall Street to talk about, obviously, everything going on in the pipeline as well as Cindy Perettie. She's Executive Vice President of Kite and runs everything at cell therapy, which is obviously a very important part of Gilead as well.

So we're going to talk about both of those organizations. And maybe I just first thought we could start with Dietmar, you've now been at the role for 6 months. I'd like to think at this other broker conference in January in San Francisco, where we first got introduced to you. And it's an important role at Gilead to oversee everything in the pipeline. So maybe you could just tell us a little bit about in your first 6 months, how you're thinking about Gilead's pipeline in the near and the midterm. Obviously, HIV is a part of that, but also non-HIV. So how should we think about Gilead's R&D pipeline now that you've been in the seat?

Yes, great. Thanks a lot for having us and really happy to be here and to speak about the pipeline. And what I've seen over the last 6 months is really the story is coming together very nicely. The focus is on virology, oncology and immunology. That's really -- those are the key therapeutic areas that are at the center of what we're doing. I very much agree to that focus. This is really where we want to double down. And in all of those areas, you see the pipeline nicely progressing, right? On the virology side, we have lenacapavir as kind of the biggest event coming, especially in prevention for HIV. The PDUFA date for that is June 19. So we're really looking forward to that.

As you said, it's a holiday, so maybe June 18...

Yes, maybe June 18, but let's see how this turns out exactly. June 18 is a holiday. Then we've got on the oncology side, most recently, we had positive data with Trodelvy in the first-line setting for triple-negative breast cancer. That, of course, gives us really good validation on the oncology side. The first-line triple-negative setting is a setting of large unmet medical need. This is the most severe setting of breast cancer. And going from second line to first line really gives us access to about double the patient population really gives us a possibility to serve those patients in need and duration of therapy is also longer in the first line. So that gives us a real opportunity. And we have other studies coming for Trodelvy. So that story is also nicely coming together. On the oncology side, also, you've got a anito-cel, right, and we can talk more about that from the Kite perspective in myeloma. And then we have an emerging and I believe really interesting immunology portfolio with an oral alpha4beta7 with an IRAK4 with a STAT6 degrader. So I believe that's also a really important piece of the portfolio. So overall, if you look at the portfolio, in my view, there's a lot of opportunity. The focus on virology, immunology, oncology is the right focus for us, and you'll see us build and grow in all of those 3 areas.

Perfect. Okay. So with HIV, since that is, as you said, quite timely, counting on the days to June 19, Marty Makary will be here later this afternoon. Maybe you could just talk to the audience about how FDA interactions are going on lenacapavir. You have breakthrough therapy on this program, but it's been a review process certainly over the last few months during the new administration and people are a little bit nervous about review. So maybe just tell us a little bit about how that's been going and you fully expected an approval in just a few weeks?

Yes. The interactions that we had with FDA on lenacapavir have been going absolutely as planned. No surprises, no irregularities or concerns. So we are reassured, right? We're sticking with the PDUFA date at this time. We have no other information. Really looking forward to bring that opportunity to the prevention setting to the community. We are ready for that launch. And it's a really important component also of our overall approach to virology, where we have the potential to have up to 9 additional launches, right, before 2033, which really is an important piece of the portfolio, adding more optionality, both on the prevention side and on the treatment side. So really think on the -- from a longer-term perspective, there's a lot of opportunity there. Talking about that broader interaction also from a development perspective, also when we think about clinical trials and clinical trial interactions, all of those with FDA have been going well.

Okay. Okay. Well, we'll find out in a few weeks. And hopefully, that's all settled away. Now to just add on that, obviously, again, very important this year is that Gilead and Johanna have been quite bullish, at least that's our perception of the potential launch of this drug post June 19. So what should the messaging be for investors in terms of how you think -- how Gilead is expecting the launch of this important new PrEP drug to be?

Yes. We are ready. We worked a lot on that launch. And obviously, Johanna would be much better to answer those questions. But we are approaching the launch in a very cross-functional way as well. So we're really building capabilities around the prescribers and the sites. So all the way from -- coming from a sales perspective, from a medical perspective, from a reimbursement perspective, nurse coordinators, really thinking about the different aspects that are necessary to have a successful launch with a once every 6-month subcutaneous prevention approach, right? The feedback that we're getting from the community, from the -- both the people who received the prevention, but then also the prescribers has been really positive, both with regards to the data, but then also with regards to how we are approaching this space. So we feel we're ready.

And that actually leads to a second question, which you're overseeing, which is the other developments within PrEP. So if the once every 6-month injection is successful, then you are still working on actually a broader portfolio in PrEP, and we'll get to treatment in a second, which includes a once every year injection. It's not once every 6 months, you got once every year injection. And that actually, I learned recently has already started Phase III. So is that another start -- new start, you tell me. I don't know.

It hasn't started yet. Just to be very clear, right? For the current launch, what's important to also note is, I mean, it will, of course, take some time, just to be clear about that, right, because you will need reimbursement and you will need to reach out to all those different sites. So we're basically saying within the 6-month period, we're going to have access then to roughly about 75% of the sites. So I think that will take some time, just to be very clear about that. But talking about the broader prevention space, we had at CROI, that's the big retroviral conference in San Francisco earlier this year, we had data with a once every year injection of lenacapavir. That's an intramuscular injection. The study that we presented, the data that we presented is largely pharmacokinetic data, but it shows us that coverage at that level from a PK perspective is actually even stronger than what we've seen with a 6-monthly subcutaneous injection. So we're very confident that we can offer the same prevention benefit with a once every year intramuscular injection. And again, hearing back from the community, hearing from prescribers having a once-and-done shot once a year is actually what people are really waiting for, and that will be an additional option that we bring to that community.

It's all about adding more options.

And the Phase III will start later this year.

Will start, okay, will start, teaser. Okay. And now interesting about that one, too, is because as I think back at the development of PrEP programs, even going back to Descovy, that was interesting because the endpoint on Descovy was obviously infections, but it's unique because these are prevention. So you have to look for HIV cases. And then with lenacapavir, that it was also a unique trial design and it was comparing to expected natural case history as well. So without getting all the details here, they can take years. So it can take years from starting enrollment and then finishing out. Now is this a program that you could actually bridge PK data to the lenacapavir once every 6 months? Or we need to have FDA discussions, but that's not completely out of the -- out of this, could be quicker than expected?

You're absolutely right. There are opportunities for different types of study design, especially in a case where you have lenacapavir. We know lenacapavir. We know the efficacy. We know the pharmacokinetics. And we are, of course, in discussions around what's the right study design and the possibility of a PK bridging design is there, and we're going to communicate that as we start the Phase III, really what type of design we've chosen.

Last question on HIV before we get to oncology is the idea that you are -- the company is quite bullish on the new opportunity for treatment. Now just to be clear, treatment of HIV is the vast majority of the HIV commercial market. My estimate is this is 80% of the business, certainly for you guys as well. And you guys are trying to transition to also offering options that are coming soon for longer-acting treatment options, not PrEP treatment. And tell us about your maybe top 2 or 3 most important ones that starts with a pill, long-acting pill, but you also have longer-acting injections that could be for the treatment of HIV.

Yes. We think also in treatment, optionality will be really important, right? We have efficacy at this point. We have safety. optionality for the community is really important with regards to dosing frequency, with regards to what kind of tablet or what kind of approach do they have. And we're working on basically daily, weekly, monthly and every 6-month approaches. And that's just for different types of patient populations, right, different types of people with HIV. For example, also at CROI, we had data with a combination of lenacapavir plus 2 broadly neutralizing antibodies that would be a once every 6-month therapy, right? And we will not compromise on the quality of the response, right? Biktarvy is really the measure that we have to live up to, right, with no resistance development, et cetera. So we want to see that type of efficacy. And we've presented the data, and that's another program that we will move forward, obviously, into later-stage studies. That would be for those people, just to give you that example, for those people who want to come to a site once every 6 months, there's still a lot of stigma with -- associated with the pills, with carrying the pills around, with going to the physician frequently, et cetera, et cetera. So having a once every 6-month possibility, go to the site, get your infusions, be done with it is really attractive for part of the population, right? But we're working on these other possibilities as well. We're working, for example, on an oral combination of bictegravir and lenacapavir, 2-drug combination for people who are currently on really complex regimens where they already develop some resistance and they need different drugs in combination. And we believe that has the possibility to give them a much simpler regimen and again, to make therapy better for them basically. And we're working on the weekly, we're working on the monthly, and we feel moving that forward is really going to be important in the future as well.

I'm particularly excited about the once every 3-month and once every 6-month injection with the longer-acting integrase to go along with your capsid. And that's a real big development if you can get it in long-acting integrase with that.

Exactly.

And so we'll track that. Okay. So that would bridge us then to if you're excited about the potential blockbuster of PrEP, that's coming, hopefully, after June 19, and that launch goes well, then you've got treatment options that you guys are working on. And then we have oncology. So let's talk about oncology, near term, medium term. So first, I'm going to give Cindy an opportunity to talk about this before I get to Trodelvy because we were both at ASCO. But obviously, in a couple of weeks, you're going to have new updated data for anito-cel. So this is the Arcellx BCMA CAR-T. It looks as compelling, more compelling than CARVYKTI from Legend, but they're ahead. So tell us about your view of Arcellx anito-cel BCMA program. What data is coming at EHA in a couple of weeks? And is this a compelling option versus CARVYKTI?

Thanks for the question. So maybe I'll start with the data and then I'll talk about our market preparation. With the data that we're going to share next Saturday, it is, I think, yes?

Next Saturday, yes, I think.

At EHA, what we've been able to show is an improvement on our complete response rate. So the last data cut we shared was at ASH of last year. And so this data cut is about 6 months more mature. We have a 97% overall response rate, and we're seeing 68% of patients having a complete response rate, which is maturing over time, and we expect that, that will continue to mature. We have a 93% minimal residual disease. And so we're excited about the data. We're slightly better than what we saw with CARVYKTI at the exact same time point. And from a safety perspective, we continue to see a differentiated safety profile. So for Grade 3 and above, CRS or ICANS, we're at 1% for both. And then below that, we're in the low single and double digits, which is perfectly leaning itself towards an outpatient therapy. We don't see the onset of CRS and ICANS until day 4. And as I think we've shared previously, that 72-hour window in which patients can remain out of the hospital. So those patients who end up having a CRS event or an ICAN event that would need to go to the hospital, we're not observing that for 4 days. And so it lends to a really nice therapy that could be delivered in the community. We've not seen any of the long-term or delayed neurotoxicity, so no Parkinsonism, no Guillain-Barré, no cranial nerve palsy. And the other piece that we haven't observed, which is now something that's being looked at a little more closely from regulators is enterocolitis. And so those are the differentiators as I think about the safety profile overall, safer product, no long-term delayed neurotoxicities and that later onset of the CRS and ICANS allows us to think about this therapy as an outpatient therapy. As we move forward, we are getting ready for launch, just as we talked about lenacapavir as well. So today, the Kite footprint around the globe is in 30 markets. And in the U.S., as an example, we have 160 authorized treatment centers, and we continue to grow that number every year. Globally, we have 550 authorized treatment centers. And again, we would continue to grow that between now and launch. So we have the largest footprint of centers that can deliver CAR-T so we're excited about that.

Is that significantly greater than J&J CARVYKTI footprint?

We don't comment on that, but I'd encourage you to look at it.

Okay.

Okay.

It's bigger.

The second component is as it relates to our manufacturing. So we have begun manufacturing when we completed the tech transfer late last year. We're now manufacturing out of our Maryland facility for the clinical trials. So for the material necessary for iMMagine-3, as an example, it's coming out of our Maryland production facility. And what we're observing in that is that we have turnaround times that are equivalent to what we see with our commercial products today in lymphoma and leukemia. So that 14- to 17-day turnaround time globally. We also -- it's early days, and we'll continue to monitor it.

Which you think is faster than the competitor?

Which is faster than the competitors. And we also have a higher reliability rate. Of course, it's early days for us, so we'll continue to look at that, but we're again on par with what we see in leukemia lymphoma, which is that 96% reliability in our manufacturing. So coupling the manufacturing efficiency and our ability to serve a number of markets and our footprint, we feel really great about the launch coming up. We're really excited about the data that we're going to share at EHA and stay tuned.

So when are you filing or what's the timing of the next steps if this data at EHA is good?

So we are continuing to monitor those patients on iMMagine-1, and we will do 1 more final data cut before filing, and we'll share that data at a congress later this year. But our goal is to file this year and to launch in 2026.

And how should we think about the regulatory endpoints for that? What is the hurdle for approval given what has been seen as a precedent, obviously, to CARVYKTI and also, I guess, bispecifics as well. But then on the other hand, FDA or specifically Vinay Prasad has commented about BCMA CAR-T and MRD negativity. So how does that commentary align with your confidence on being able to get approved because the Head of CBER has made comments in the past?

Yes. So obviously, many of us have taken the time to read the publications. I think we did on Trodelvy as well as well as listened to the podcast. I think what we're observing from the FDA is honestly no change in the interactions that we continue to have with them. So we did just recently changed our primary endpoint to a co-primary endpoint on the iMMagine-3 study, incorporating minimal residual disease and received FDA and global approval on that dual endpoint. So we'll continue to move forward with that. And with the iMMagine-1 study, of course, we'll have progression-free survival, so we can -- we'll have a different set of data that we file on. The minimal residual disease becomes really important in iMMagine-3 and as we move into the newly diagnosed population because, as you know, in multiple myeloma, what we're seeing from CAR-T is that those patients can actually have a single dose of CAR-T and not progress for, let's say, 7 or 8 years. So progression-free survival, you wouldn't want to wait that 7 or 8 years to have the data to file. So minimal residual disease is really important as an endpoint. And I believe the agency recognizes that. And there's been comments, as you know, in the public domain from interviews on how the regulators are thinking about that. We have a chance in a week or so to have informal interactions with the agency per the industry. I forgot what he's calling it, but the...

The listening tour.

Listening tour.

The listening tour. Okay. Okay, okay. So yes. So in other words, you believe that there's been no change and that ultimately a lot of the provocative stuff in the past needs to ultimately be more pragmatic now that they're in the seat. So you're confident about no major changes from a...

We haven't observed any is what I want to share, and we'll obviously continue to have dialogue with the agencies.

Okay. Can we talk also about your $2 billion Yescarta franchise. So if you are going to be bullish on anito-cel and launching, and you think there's differentiation there. You are currently the leader in CD19 CAR-T, but the products have actually been, as I'm a financial analyst, declining either sequentially or year-over-year. So why would that be? And are you -- are these going to grow? Because consensus numbers have these at billions of dollars, but they're declining -- they were declining.

So what we've shared is that we continue to face headwinds in the -- with Yescarta and Tecartus, and that's from both in-class and out-of-class competition. There was a number of new approvals last year, the second half of last year for both for both Yescarta and Tecartus in-class competition and then certainly, the bispecifics is out of class. And so the piece that we're looking at with Yescarta and Tecartus is not that different from what I described with anito-cel. It's about how do we get into the community. Today, we know in lymphomas, 1 or 2 out of 10 patients are seen in the community. In myeloma, it's greater. It's -- sorry, 8 out of 10 patients are seen in the community. In myeloma, it's 9 out of 10 patients. And so our ability to unlock the community is something we've been really focused on. But we've continued to message that with the in-class and out-of-class competition, this year, we think we'll be roughly flat. I think the piece we're pretty excited about is we've just shared data at ASCO this year of 1 of our 3 next-generation constructs for lymphoma and leukemia, which is the KITE-363, where we've been able to show much improved in a Phase I quite ill population. So these are very late-stage and aggressive patients, but we were able to show a 78% complete response rate in that study, and we're showing safety that we believe will be in line with being able to move therapies like this closer to where patients are in the community. So we're excited about what's coming. We have 3 different constructs. We're going to be making a decision on which one we advance into pivotal studies in the next 2 months. And so we look forward to sharing more of that data at a congress later this year.

Okay. All right. So flattish, but can resume growth after that based on getting more into the community. Okay. What about -- let's shift to Trodelvy. So we're at ASCO. I think it's safe to say that one of the more consensus positive presentations was a lot of the commentary in the presentation, but the commentary and discussion around the ASCENT-04 study with first-line triple-negative breast cancer with Trodelvy, a very strong survival benefit. They called it potential standard of care now. And then you've also announced in a press release that the PD-L1 negative population also read out positive, that's going to be presented. So you basically have covered the space here. So what does that mean for Trodelvy growth? Because Trodelvy also has had some slowing, but you have a new opportunity for growth here with triple-negative, but then there's also competition coming. So what do you see are the push, pulls for Trodelvy in triple-negative breast cancer and in HR-positive breast cancer, too. Why don't you...

Yes. So let's first talk about the triple-negative breast cancer setting, which is where we have the data exactly as you said, right, ASCENT-04 was here, ASCENT-03 is going to be at a meeting later this year. This gives us access to the entire first-line triple-negative breast cancer setting, right? And this is a setting of high unmet medical need, not a lot of change over the last 20 years. So this was very clearly voiced as a potential new standard of care in that setting. What that does for us is the patient number between second line going to first line roughly doubles. About half of the patients who were treated in first line never get to second line because the disease is so progressive -- rapidly progressive and because patients are doing really poorly. So moving into first line roughly doubles the number of patients. it also leads to a longer duration of therapy that -- which then further adds to the opportunity. Also, we have additional studies coming for Trodelvy in breast cancer. And as you said, right, we have a study in first-line hormone receptor positive breast cancer coming and that's ASCENT-07, and we also have a study that's in the adjuvant setting, ASCENT-05 in the adjuvant setting of triple-negative breast cancer. So overall, we feel we are well set up for more growth in the breast cancer setting. In addition to that, we have a study in non-small cell lung cancer, the first-line setting, PD-L1 high. We have a study in small cell lung cancer where based on strong Phase II data, we've received breakthrough therapy designation from the FDA. And we have a study in endometrial. So overall, the program for Trodelvy should enable additional growth and in the near term clearly in the first.

Is Dato-DXd a competitor in triple negative because they are coming as well, and they have a TROP-2 construct from AstraZeneca, and they're also approved in HR breast cancer. Now their triple-negative data is coming. So are you...

Yes, they have studies coming, that's very true. At this point in time, it's important to think about the differences between the molecules, right? So we -- for example, we have overall survival benefit, significant overall survival benefit in the second-line setting, which Dato-DXd has not demonstrated. So we believe the molecule is differentiated. And we believe the data that we have demonstrated and you've seen ASCENT-04 really clinically meaningful progression-free survival benefit and a trend also in overall survival, I think that sets up really well for that.

Okay. In the last 2 minutes, maybe just 2 R&D questions. So inflammation. You mentioned inflammation at the beginning of this talk. You mentioned STAT6. I believe you have an IRAK4 as well. You have alpha4beta7, so for alpha beta suit. These are psoriasis and atopic derm products, potential orals. Kymera had some data this week in STAT6. Where is your STAT6? What are the inflammation programs that you guys have that pretty much nobody is talking about right now, but you have been building and brewing in that space?

Yes, I know the -- and the inflammation portfolio is earlier very clearly, but it's important for me to mention because it's one of our focus areas, and it's an area where I believe we're making good progress building it, right? The alpha4beta7, the oral is currently in Phase II. So that's the one that's furthest ahead. That will get enrolled...

When we will get data on that one?

Sorry?

When can we get data on that one, alpha4beta7 oral, really, Morphic...

It's currently in Phase II, right? So it will take a little bit of time to see the data. But having an oral alpha4beta7, the pathway is derisked. It can be a really good basis for combinations in inflammatory bowel disease, and that's where the -- we are moving to combinations and there are other orals that would be good combination partners. Then you got the IRAK4. There's an inhibitor and a degrader. The inhibitor is in the clinic at this point in time.

Okay.

The IRAK4 degrader is moving into the clinic and the STAT6 is also moving into the clinic. So we're not in the clinic yet, but we feel -- we have announced the deal, right, earlier this year around JPM.

For STAT6.

It's for STAT6, it's basically with LEO Pharma. And we believe the molecule has a really good preclinical profile, and we're currently preparing it to enter into the clinic. And that, of course, gives us a strong opportunity in type 2 inflammation, which at this point is, I would argue, partially derisked based on the other...

What was it specifically you see a greater potency, just a greater molecule than the Kymera program?

We looked very carefully at the different programs, and we feel this is a program that, from a potency perspective and from what we've seen as preclinical characteristics is a differentiated program.

So Kymera is still, I think, holding out. So you looked at all these programs.

We did.

Very good.

We're also moving our CAR-T363i our...

We should talk about that.

We have filed in rheumatology, and we'll be filing in neurology.

I.e., CAR-T for lupus, et cetera.

Lupus myositis, scleroderma on the rheumatology side.

Fantastic. Well, guys, thank you guys very much for the time together. Great portfolio...