Gilead Sciences, Inc. ($GILD)

Good afternoon. Thank you for attending today's Gilead Sciences update on proposed Tubulis, Ouro and Arcellx acquisitions call. My name is Tamia, and I will be your moderator for today's call. [Operator Instructions] I would now like to pass the conference over to your host, Jacquie Ross, SVP, Treasurer and Head of Investor Relations.

Thank you, Tamia. Good afternoon, everyone, and welcome to today's call to discuss this morning's announcement of Gilead's definitive agreement to acquire Tubulis in addition to other recently announced transactions with Arcellx and Ouro. A press release, in addition to the presentation slides from today's call are available on the Investors section of our website at gilead.com. The speakers on today's call will be our Chairman and Chief Executive Officer, Daniel O'Day; our Chief Medical Officer, Dietmar Berger; the Executive Vice President of Kite, Cindy Perettie; and our Chief Financial Officer, Andrew Dickinson. After that, we'll open the call to Q&A where the team will be joined by Johanna Mercier, our Chief Commercial and Corporate Affairs Officer. Before we get started, let me remind you that we will be making forward-looking statements. Please refer to Slide 2 regarding the risks and uncertainties relating to forward-looking statements that could cause actual results to differ materially. With that, I'll turn the call over to Dan.

Thank you, Jacquie, and good afternoon, everyone. We're really excited to connect with you following this morning's announcement regarding our definitive agreement to acquire Tubulis. We believe the Tubulis' lead program could be transformative for ovarian cancer patients and combined with all our existing internal programs and the recent announcements with both Arcellx and Ouro, the quality of Gilead's pipeline has never been stronger. Even prior to these announcements, 2026 was already an exciting moment in Gilead's history. Building on our recent consistent track record of commercial, clinical and financial execution, Gilead's portfolio is the most robust and diverse ever. In 2026 alone, we expect 5 Phase III updates across virology, oncology and inflammation, highlighting the productivity of our clinical pipeline. Our pipeline is also driving up to 10 ongoing and potential new launches through 2027 across our 3 therapeutic areas of focus. This reflects the success of the strategy that's been shaping Gilead over the last 6 years. Combined with strong commercial execution and no major LOEs until 2036, we believe that this sets us up for a period of sustained and robust growth, establishing Gilead as one of the top growth companies in our sector. From this position of strength, we are mindful of the opportunity for thoughtful business development to ensure that Gilead enters the 2030s with an even more differentiated portfolio that is expected to contribute additional top and bottom line growth and scale our patient impact. Given the strength of our existing pipeline and our commitment to financial discipline, the bar for acquisitions is higher than ever before. We've been disciplined and patient and have passed on dozens of deals that didn't meet our high bar. Indeed, Gilead has not completed a larger deal since early 2024 with the acquisition of CymaBay that led to the successful commercial launch of Livdelzi. The proposed acquisitions of Tubulis, Ouro and Arcellx are driven by and consistent with our strategic priorities. Each built-on or extends capabilities and patient impact in 1 or more of our 3 therapeutic areas of focus. Each offers unique and sizable commercial opportunities that potentially extend the longevity and growth of Gilead's pipeline while also contributing to our financial goals. Each meets the high bar we set for the quality of science, potential to address unmet needs and expected contribution to Gilead's growth ambitions. And as a group, these acquisitions bring potential best-in-disease and first-in-class blockbusters in addition to broader research and development platforms. The fact that 3 acquisitions are expected to close in the second quarter did not reflect any change in the confidence we have in our existing clinical pipeline nor any change in our philosophy regarding M&A. Rather, it simply reflects the fact that 3 companies met our high bar in quick succession. Recognizing the pace of business development activity over the last few months, we expect to take some time now to focus on integration activities and more ordinary course business development transactions. Andy will discuss the financial impact of the 3 transactions and our capital priorities in more detail, but there is no change to our commitment to operating expense discipline nor to our focus on execution across our existing commercial and clinical portfolios. We look forward to sharing our first quarter results on May 7. In the meantime, I'll hand the call over to Dietmar and Cindy to share more about our recent announcements regarding Tubulis with its lead asset in ovarian cancer, Ouro with its lead asset in autoimmune diseases, and Arcellx with its lead assets and multiple myeloma. Dietmar?

Thanks, Dan, and good afternoon, everyone. Since 2019, Gilead has undergone an incredible transformation, building the most robust and differentiated pipeline in the company's history. In virology, Gilead's team and our partners have a long history of world-class innovation, resulting in the most exciting commercial portfolio and clinical pipeline in the industry and a proud legacy of Global Health impact. Moving to our growing inflammation and oncology businesses, we are well on our way to delivering similar impact for patients with autoimmune diseases and cancer. While our existing pipeline sets a high bar, we continue to refine and add to it with the best science where the new breakthrough therapies are discovered through internal or external research. Tubulis, Ouro Medicines and Arcellx, each offer potentially best-in-disease assets that I believe will build up and accelerate the progress made to date by our internal oncology information research and development teams. We shared this morning that we reached an agreement to acquire Tubulis, a privately held clinical-stage biotechnology company that has developed what we believe is an industry-leading platform for antibody-drug conjugate or ADC development. ADCs represent one of the most promising modalities in cancer today. Gilead has had a long-running interest in this area and already has a leading ADC with Trodelvy, which is a standard of care regimen in metastatic triple-negative breast cancer and pretreated hormone receptor positive HER2-negative metastatic breast cancer. Additionally, we have deep late-stage clinical programs for Trodelvy with several important Phase III updates expected later this year. Building on our experience with Trodelvy and years of diligence, we first partnered with Tubulis in 2024 to apply their ADC platform to a Gilead provided antibody with an undisclosed target. This Gilead-owned ADC is currently in preclinical development. Our experience working with the Tubulis platform has provided us with great insights into the platform's capabilities. In addition, the compelling clinical data that Tubulis has recently shared have increased our confidence that Tubulis has the right technology to meet our aspirations. Tubulis adds complementary ADCs in new tumor types and a potentially industry-leading platform for continued development of next-generation ADCs. Specifically, Tubulis has developed proprietary P5 conjugation, which combined with a highly potent exatecan payload for their Tubutecan platform. This platform produces highly differentiated ADCs with consistent and high drug-to-antibody ratios that are extremely stable in circulation compared to other ADC platforms. It is the sum of these properties that has unlocked a broad range of new targets for ADCs, including NaPi2b that have been elusive with prior ADC attempts. Additionally, Tubulis has developed proprietary Alco5 conjugation, which takes it a step further by allowing for development of ADCs with new classes of payloads, including various cytotoxins, protein degraders and immune modulators. By combining the capabilities unlocked by these technologies with our industry-leading medicinal chemistry, we see an opportunity to drive an unprecedented wave of innovation in the ADC space across oncology, inflammation and virology. Moving to Slide 5. You can see why we believe Tubulis's investigational lead asset, TUB-040 has the potential to substantially transform ovarian cancer treatment. First, TUB-040 targets NaPi2b, which is expressed in approximately 90% of ovarian cancer cells while having minimal expression in normal cells. This allows TUB-040 to deliver extremely potent tumor killing payloads directly to the ovarian cancer cells expressing NaPi2b and still spare healthy cells to avoid toxicity. Second, TUB-040's efficacy data is compelling compared to approved and investigational ADC options, especially given the patients were not selected for high NaPi2b expression or any other biomarker. At ESMO in October 2025, Phase I data in 46 patients with platinum-resistant ovarian cancer showed a confirmed overall response rate of 50% or 59% including unconfirmed responses. These responses occurred early and deepened over time. Further, since ESMO, this data has matured promisingly with over 130 patients treated to date, and we look forward to sharing updates at a future medical congress. Third, TUB-040 showed potential for clear safety and tolerability differentiation versus other approved or investigational ADCs in ovarian cancer patients. In the Phase I data, TUB-040 showed potentially lower rates of Grade 3 plus treatment-emergent adverse events and no discontinuations due to adverse events. Additionally, there were no clinically relevant bleeding, pneumonitis, ocular toxicity, stomatitis or neuropathy observed. TUB-040 has already advanced to the Phase II portion of its trial in platinum-resistant ovarian cancer patients and is expected to enter registrational Phase III studies for this population in 2027. Overall, we are very excited by the potential of TUB-040 in this difficult-to-treat cancer. Now moving to Slide 6, we are equally excited by our recent definitive agreement to acquire Ouro Medicines, a privately held biotechnology company with a portfolio of potential best-in-class and first-in-class T-cell engager therapies under evaluation for certain autoimmune conditions. We are delighted to be partnering with Galapagos on this transaction where the efficient use of capital and shared investment and expertise add value to both Gilead and Galapagos. Ouro Medicine's lead asset, OM336 or gamgertamig, is a clinical stage BCMAxCD3 bispecific T-cell engager with potentially superior potency and lower CRS than other BCMA T-cell engagers. In addition, OM336 is administered subcutaneously and has shown clinical proof of concept in approximately 60 patients across immune-mediated diseases. OM336 is an ongoing development for multiple orphan autoimmune indications with high unmet need, including autoimmune hemolytic anemia, immune thrombocytopenia, pemphigus vulgaris, pemphigus foliaceus and idiopathic inflammatory myopathies. These indications potentially accelerate Gilead's expansion in inflammation with potential Phase III registrational trials starting as early as 2027. Beyond its initial indications, OM336 could have development potential in more than 20 immune-mediated diseases that are driven by pathogenic B and plasma cells such as myasthenia gravis, rheumatoid arthritis, Sjogren's disease and systemic lupus erythematosus, just to name a few. OM336 reflects a compelling approach to achieving deep and sustained reduction in B and plasma cells. Anito-cel, a BCMA-directed CAR T, reflects a complementary approach. Together, OM336 and Anito-cel or potentially also other CAR constructs could enable a paradigm shift in the treatment of autoimmune diseases from chronic symptom control to potentially durable immune reset. And with that, I'll hand the call over to Cindy to highlight further Gilead and Kite's strategy in this rapidly developing and transformative field of medicine.

Thank you, Dietmar, and good afternoon, everyone. Moving to Arcellx on Slide 7, the acquisition follows more than 3 years of our highly productive collaboration on Anito-cel, a transformative and potentially best-in-disease asset in BCMA cell therapy. Strategically, the acquisition allows us to maximize the long-term blockbuster potential of Anito-cel, notably in earlier-line settings. We are excited by this opportunity to unlock the over $20 billion CAR-T multiple myeloma market and believe that Anito-cel's potential here is underappreciated. We are now less than 9 months away from our FDA PDUFA date in fourth line plus multiple myeloma, and our preparations for the potential launch are well underway. We are also -- we also have an ongoing pivotal trial in the second line plus population. In addition, we are preparing for the clinical program in the newly diagnosed setting, where there's an even more sizable population of patients that could benefit. Our confidence in Anito-cel's potential to reach across lines of therapy is underpinned by the exceptional ASH data from the iMMagine-1 study in fourth-line plus multiple myeloma. The data demonstrated clinically meaningful, deep and durable efficacy as well as a differentiated safety profile, including no delayed or non-ICANS neurotoxicities and enterocolitis. Importantly, Anito-cel complements our portfolio and leverages our end-to-end expertise in cell therapy. In addition to our commercial footprint and our network of authorized treatment centers, we believe that our track record of manufacturing reliably has yet to be matched in the industry. This positions us well to scale rapidly as needed at launch. Bringing the development of Anito-cel fully in-house also enables streamlined decision-making. This allows us to rapidly explore emerging opportunities such as smoldering multiple myeloma and community studies. Beyond Anito-cel, the acquisition of Arcellx earlier-stage clinical programs, in addition to differentiated and scalable technology platform built on the proprietary D-Domain binders. These binders have the potential to expand our pipeline and research efforts to next-generation autologous CAR Ts, in vivo CAR Ts as well as T-cell engagers over time. Following the acquisition, we will capture the full economics of Anito-cel sales by eliminating cost sharing and royalties, as well as up to $1.5 billion in anticipated regulatory and development milestone payments. Combining Arcellx and Ouro acquisitions with our internal programs, I'm more excited than ever about the potential of CAR T and T-cell engagers to deliver therapeutic innovation and potentially immune reset. With that, I'm going to turn it over to Andy.

Thank you, Cindy, and good afternoon, everyone. Before we get to your questions, I wanted to touch on the P&L impact of these transactions on Slide 8. With these acquisitions, we continue to evolve our clinical and preclinical programs with the company's long-term growth firmly in mind. At the same time, we remain committed to operating expense discipline to ensure that we are appropriately balancing shorter-term goals including upcoming product launches with longer-term goals, including the progression of earlier-stage clinical assets that are also fundamental to Gilead's sustainability and continued growth. The acquisitions of Tubulis, Ouro and Arcellx are all currently expected to close in the second quarter, and we will update our full year 2026 guidance in due course. In the meantime, and excluding transaction-related IPR&D, I can share that we do not expect a significant increase in operating expenses in 2026. This reflects the careful prioritization of operational spend, consistent with our track record over the last several years, in addition to the share development expenses with Galapagos and the existing collaboration agreement with Arcellx. With regards to R&D specifically, we expect a modest and manageable dollar increase compared to our start of the year guidance for 2026, and expect R&D as a percentage of total revenue to be less than 20% for the full year. As noted previously, and excluding the IPR&D impact of the transaction, we expect the Arcellx acquisition to be modestly dilutive to non-GAAP EPS in 2026 and 2027, and accretive thereafter. Given the significantly smaller scale of the Ouro and Tubulis transactions, the additional operating expenses are expected to be manageable and within our broader research and development budget, which is relatively constant even as Phase III programs roll on and new programs progress into the portfolio. Moving to Slide 9, and in terms of funding the acquisitions of Arcellx and Ouro, we are using cash and adding liquidity to our balance sheet through a short-term $5 billion loan that we expect to repay before the end of 2026. Additionally, we expect to issue senior unsecured notes to fund the acquisition of Tubulis in the second quarter of 2026, after which our total long-term debt is expected to be approximately $24 billion or flat with our long-term debt level at the end of 2025. As we look forward and considering the pace of our activity in the first 4 months of 2026, our business development focus in the near term will be closing and ensuring the successful integration of these programs with a commitment to maintaining strong clinical momentum. At the same time, we will continue to pursue ordinary course business development transactions. It's less likely that we will pursue more sizable M&A this year, although we will always leave the door open to consider strategic acquisitions if a compelling opportunity emerges. With that, I'll invite the operator to begin the Q&A.

[Operator Instructions] The first question comes from Tyler Van Buren with TD Cowen.

Congratulations on the recently announced string of transactions, which were very exciting. I'm going to ask about Tubulis since that's the most recent. So is it fair to assume that the clear majority of the 3.15 upfront valuation comes from TUB-040 in ovarian? Or is lung included? And specifically, what have you seen in the ovarian data since ESMO to increase your confidence in its best-in-class potential with a particular focus on durability and would love to hear anything you have to say about what we should expect to ASCO as well.

Tyler, it's Andy. Maybe I'll start and then hand it over to Dietmar for the second part of your question. In terms of the opportunity, we are excited by the fact that Tubulis is more than just the lead asset. There's a number of additional assets and then there's the very strong platform that you heard us talk about in the prepared remarks. In terms of the upfront valuation, it is supported by the ovarian cancer indications alone. So there's a significant opportunity, not only in the PROC, but also in other forms of ovarian cancer and earlier lines that we're excited about. So the deal value represents the entirety of the transaction and the platform, but the opportunity in ovarian cancer alone is really significant. Do you want to talk about the clinical data, Dietmar?

Yes, of course. So thanks for the question. When you look at the data and the data that has been presented at ESMO in 2025, that data is already really exciting. But when you look at, yes, unprecedented efficacy, looking at the objective response rates, the disease control rate, coming with a really strong safety profile, none of the major toxicities that you see with some of the other ADCs around really low neutropenia rates, et cetera, and good efficacy actually across a variety of dosing spectrum and also good durability of that efficacy, all validate the platform, but also more importantly, validate the opportunity in ovarian cancer. What we've seen, obviously, is further maturation of that data in these 130 patients that we spoke about. We cannot share details on that data at this point in time. But let's say these data, we also see those as encouraging and further validating the data that have been seen before. And yes, absolutely, you will see more data during the year in upcoming medical conferences.

[Operator Instructions] The next question comes from Geoff Meacham with Citi.

Congrats on these deals. I had one on Arcellx. I know obviously you guys have been a partner here for quite a while. Maybe just curious what the tipping point was to ultimately consolidate all the economics. Did you see something in the emerging clinical data set? Was it just confidence in the differentiation as you look to opportunities and newly diagnosed or first or second line? And I want to get your -- maybe your perspective of the where we are from an FDA perspective about more rapidly looking at things like MRD negativity as an approvable endpoint in earlier stages of myeloma?

Yes, terrific. Thanks, Jeff. I'm going to start, Dan, and I'll certainly turn it over to Cindy. But just to frame this, I mean, obviously, Arcellx is a company and an opportunity that we have full knowledge about. And really what's important here is I think when we look at Anito-cel, we see a transformative and potentially best in disease asset in BCMA cell therapy with an opportunity that's underappreciated by the Street. In particular, I would say, to your question about why and why now. I think the opportunity to really accelerate and achieve the full potential of Anito-cel across the populations in multiple myeloma. By combining this into -- fully into Gilead, it allows us to move with speed, both in the initial launches but also very importantly, as we expand into the earlier lines of therapy, we're seeing and we have the potential to see really transformative changes in terms of this disease course. And that's really driven quite a bit of this in our ability to make sure that we can maximize the potential of this. And what I would say is why now, I think we are kind of at the right point of the risk continuum. We had seen the significant derisking of the data at the end of last year in terms of the profile of the product and in a relatively large term of patients over a long period -- a longer period of time. That, combined with the fact that the acceptance of the FDA BLA allowed us to really take this opportunity and believe this was the right opportunity to fully acquire and maximize this. And then finally, I'll say, the opportunity to look beyond just the pure Anito-cel concept in the platform and the D-Domain profile allows us to consider this contract in other types of platforms for future diseases, including, of course, oncology, but other diseases as well. With that, I'll have Cindy give a greater granularity on a couple of these things.

Yes. No, I think you highlighted the points that are important as to why now. And of course, our launch plays into that as well, and we wanted to have ample time for preparation in addition to what Dan has shared. You saw the data at ASH. It's incredibly compelling. And we think that this has significant commercial opportunity that may be underrepresented today, particularly in the early lines. I think the second piece I would talk about is you've asked about the second-line study and our filings. Starting with our filing, we continue to have good dialogue with the FDA and none of the questions that we're receiving today are what we would consider surprising. So the filing is going really well. We also are in the process of completing this quarter, the enrollment in iMMagine-3, and we're excited as that continues to progress and read out in the 2027 time frame. The discussions with FDA on the iMMagine-3 protocol occurred when we submitted it, and they understand the dual endpoints. And obviously, we'll continue to have that dialogue when we get the data.

The next question comes from Michael Yee of UBS.

Congrats on the transactions. On Ouro, can you talk a little bit about how you think about the competitive landscape versus, say, other, say, directly competitive BCMA TCs like candid, which seem to have strong efficacy and safety as well. Do you view yourself as best-in-class or first-in-class or just different indications and targets. How do you think about comparing that given the competitive landscape?

Yes. Michael, this is Dietmar. Thank you for the question. Obviously, as you can imagine, we looked at the landscape really carefully, and we have experience in the landscape also from a CAR T perspective, right, really focusing on the target of BCMA. We decided to really look at Ouro and do the acquisition there because we think it's a really well differentiated asset with a lot of potential across the board in different B and plasma cell-driven disease. And what really helped us in there is also some of the early data that we've seen. You may know that there has been a case study that has been published in the New England Journal of Medicine [ named with ] -- 2 patients with autoimmune hemolytic anemia. That showed rapid improvement with a short course of treatment, which was very encouraging. And of course we have additional data that have not been shared so far. That could also lead to OM336 entering registration trials as early as 2027. So all of these factors, the efficacy that we've seen, the safety that we've seen, the broad applicability and also the data that we have that could lead to rather short term also regulatory upside has really led us to go with Ouro in a, yes, granted, rather competitive field.

The next question comes from Salveen Richter with Goldman Sachs.

You highlighted in the press release that Tubulis' next-generation ADC technologies combined with your capabilities could unlock new classes of payloads and drive ADC innovation across additional categories, including I&I and virology. Could you just speak to that? And also talk to how this platform compares to industry leaders like AstraZeneca or emerging players, such as Immuno?

Yes. Thanks, Salveen, for the question. The Tubulis platform really has 2 very specific types of innovation that we feel are broadly applicable. One is the P5 conjugation, which is really phosphorus-based chemistry, which is very different from anything else in the ADC space. And that allows, together with a highly potent exatecan payload, now to have this broader application of this Tubutecan platform in oncology with various targets, right? So there's a lot of combinability on that basis. And then you have -- on top of that, you have this Alco5 conjugation, which expands that even further. And what that does is it does allow to actually enter entirely new classes of payloads into the mix. And this is where it gets really interesting where you could have cytotoxin, you could have protein degraders, you could have immune modulators and other types of payloads, which then become really attractive, for example, in immunology or in virology. Think about potential antiviral payloads, think about potential immunologically modulating payload. So that's where we see the real opportunity, and that's also where our chemistry and medicinal chemistry, but also biological capabilities come in, in combination with this unique platform that Tubulis has developed. So we're really excited about those opportunities. Yes, of course, oncology, ovarian cancer and then other areas in oncology are the first directions, but there is real opportunity to build out and move into information and into virology.

The next question comes from Carter Gould with Cantor.

Congrats on the announcements. Dietmar and team, I guess you alluded to it a bit, but how did you get comfortable with 040 given the prior track record of agents targeting NaPi2b? Your early efficacy data are compelling, but were there other aspects of your own ADC capabilities that gave you insight into explaining the failure and setbacks of prior agents here and how that helps give you confidence in the fidelity of the data?

Thank you for the question, Carter. I'm well aware of some of the other attempts to target NaPi2b. And obviously, they were most limited by the therapeutic index that they saw, right? What we've seen here with TUB-040 is, first of all, the data is really encouraging from an efficacy perspective, from a safety perspective, from a durability perspective. But also when you look at the characteristics of the molecule, it is -- due to this new linker technology, it is highly stable in circulation, which really leads to a situation where you do not get a lot of leakage, where you do not get a lot of unwanted toxicity by release of the payload into the circulation and systemic toxicity. You get the efficacy really where you need it, which is obviously in the tumor where the target is expressed. And you also see this long-standing durability. And we try to describe that really as, as you know, the mix of these different characteristics leads to a different type of therapeutic index. So I think the biological basis for it, the chemistry and the biological basis really underpins what we see clinically from an efficacy and safety perspective. And that's where we think the differentiation really is.

The next question comes from Brian Abrahams with RBC Capital.

Congrats on all the deal activity. Back on Ouro, I was wondering if you could talk about what are the key additional data that you're looking for here to drive what indications to prioritize for the initial pivotals? And when and how might you look to explore some of those broader indications that you mentioned? Is there an optimal population or a safety bar to generally think about?

Yes. Thanks for the question. There are ongoing studies. And obviously, I'm speaking here about also the collaboration with Galapagos, and we will do that together with a partner. When you think about addressing B cells and plasma cells with a BCMA-targeted molecules, you're thinking largely autoantibody-driven disease, right? And that's what we're looking for obviously, more information from the ongoing studies on efficacy, on safety also on durability of the effect. The question of what you need to do to get to a real immune reset. For example, do you need to retreat? So all of those are ongoing questions that you're currently exploring. How can we strategize between the ongoing CAR T portfolio that we have and the overall opportunity with the T-cell engagers. How I'm thinking about this, there are some immediate and we've spoken about that, there are some immediate indications that are heavily driven by autoantibodies and literally by the plasma and B cell component. That's the autoimmune hemolytic anemia. We have seen some early data published in the New England Journal of Medicine. But also ITP, also pemphigus vulgaris, foliaceus, et cetera, the indication that we've mentioned. And then going into further and larger indications like SLE, like rheumatoid arthritis that are also driven obviously by B cells, by autoantibodies, that's again where we need to see further data. We have actually some of those data are currently generated and we're really looking forward to share those with you, and then to share a broader update on the overall strategy for the molecule and the overall strategy that we have in addressing B cell-driven diseases through deep B-cell depletion.

The next question comes from Daina Graybosch with Leerink Partners.

I'm wondering if you could talk about strategically 2 of these acquisitions were of current partners. And you have a lot of other partners. In fact, you've really prioritized doing a broad set of collaborations and partnerships. What makes a partner acquirable versus making more sense to continue the partnership or collaboration?

Sure. Maybe I'll start, Dan, and then ask any others to add. The first thing I would say is one of the real strengths of Gilead is that in addition to believing in our own innovation, we believe an outside in innovation. In other words, we have a lot of partnerships. And I think in all different stages of risk, in all different stages of development, that allows us to make sure we're tapping into the best science at all different periods of time. And there is no one size fits all for how those partnerships will eventually evolve. Some of them progress, some of them dissolve because of a result of the science. And some of them, we feel just would be helpful for us to fully integrate into the further strength of Gilead. I've already mentioned on the call, Cindy and I, the Arcellx transaction. And I think the Tubulis one is just another really nice example of having our scientists to really appreciate the benefit that each other brings. I mean the opportunity to have complementary skill-sets on a scientific level is another rationale for why we felt that by combining the 2 companies, we get the best of both world. As Dietmar said, on the Tubulis side, our really strong chemistry and biology in different therapeutic areas combined with really the unique chemistry and capabilities of Tubulis as it relates to the specific attributes that Dietmar mentioned in both the linker and payload capability. So I think it really depends. I would say that this does not mean that every partner that we have ends up with an acquisition. That is not the right size, and there is no one size fits all. But where we think the synergies combined can be a bigger impact for patients or accelerate that type of development, I think that's where we'll lead into the opportunity.

The next question comes from James Shin with Deutsche Bank.

I'm going to keep Dietmar busy for a bit. Dietmar, has you thought about applying Tubulis' P5 and Alco5 tech to improve Trodelvy stability? Or are there any plans to rebuild the TROP2 from the ground up with Tubulis? And then as it relates to TUB-040, ovarian is very competitive. Any thoughts on including Elahere's comparator and stratified by FR-alpha level at subsequent ovarian trials?

James, thank you for the questions. In thinking about the capabilities that we have with Tubulis and that we're now newly applying to different areas, I look at this as like several tiers of activity, right? The first tier really being with TUB-040 with a very promising molecule that you do want to move forward as quickly as possible, right? That's one of our priorities, and we want to do that obviously with the team that's there, but also with our team and apply those capabilities also on a global scale, right? Then you've got an earlier portfolio that's coming out of Tubulis. We haven't spoken about TUB-030, right, the 5T4-targeting ADC, and then there's actually a slew of additional ADCs that they have in development. That we will also focus on how can we maximize those and how can we really build on that capability. And then I think the world is actually wide open. But we can look at a variety of targets and we will evaluate a variety of targets. And obviously, TROP2 is an important target. We haven't taken any decisions about which targets to work on. But I think with those capabilities and those technologies, we have the possibility to address really a large spectrum of really important targets and TROP2 could be one of them. Thinking about would you include specific competitors? We will inform you about our clinical plans as those evolve. Please keep in mind that folate receptor alpha doesn't show the same expression level in ovarian cancer as NaPi2b does, right? So just thinking clinically, when you have a highly expressed target, where you basically don't need a biomarker, you don't necessarily want to compare to a target that's expressed only in part of the population, right? So in principle, we will, of course, very carefully choose the clinical plan. We will inform you about it as it emerges. But we think there is a key opportunity for TUB-040, just also based on the fact, besides efficacy and tolerability, just based on the fact that we do not expect to run a biomarker-driven program here. The activity that has been seen is in an unselected population, and we think that's the right approach of the ovarian cancer population.

The next question comes from Evan Seigerman with BMO Capital.

One for Cindy. So with whole ownership of Anito-cel, how do you think you'll be able to accelerate the launch of the asset once approved? Do you see a meaningful kind of streamlining in these efforts once you have that fully in-house?

Thank you, Evan, for your question. I think there's a couple of aspects of it that are going to be really important as it relates to the launch. The first is if you think about our field-facing personnel, we'll have one team focused on that launch. And what we've seen with some of the other constructs in the space, when you have two teams going to market, it can create sometimes confusion with the HCPs and who they follow up with. So we really think having one field-facing team will make a huge difference. It also allows us to target both academic centers as well as community is one. So in some cases, getting referrals. In other cases, we may be able to unlock the community, as we shared before, because of the safety profile and tremendous efficacy that we see with the need to sell. So in our go-to-market strategy, we're very excited to be a single company who is well established in the space going to market and leveraging our current infrastructure. The piece that we're also excited about is around the development and how we expand rapidly and have single decision-making in-house and be able to move into new areas as we suggested like our newly diagnosed studies coming forward, the smoldering population. And then being able to leverage a lot of the great science coming out of Arcellx with their D-Domain binders more broadly in next-generation autologous therapies as well as our in vivo therapies and now within our T-cell engager platforms.

The next question comes from Akash Tewari with Jefferies.

This is Amy on for Akash. Congrats on all the recent transactions. So what's interesting to us about the Tubulis deal, and you've also emphasized it several times on this call is that you're getting a fairly combinable asset. So BioNTech ovarian cancer data suggests an improved response rate with their TROP2 ADC and PD-L1 VEGF combo. How should we think about your combination strategy from here? Can we anticipate Gilead entering the PD-1 VEGF space at some point? And finally, how are you thinking about ADC-ADC combinations with the Tubulis platform?

Thank you, Amy, for those questions. I mean obviously, we are not commenting on really in detail right now what is the clinical development plan for TUB-040. You're absolutely right. One area that really attracted us is the tolerability of TUB-040, which then translates into what we expect to be a good combinability. And that combinability obviously can play out in different ways. Most importantly, combined ability with current standard of care, right? And that then gives us the possibility to potentially also move into earlier lines of therapy. And out of the platinum-resistant into more of a platinum-sensitive space. And then beyond that, beyond combinations with standard of care, of course, we will aim to combine with the most promising agents that are out there. And that can play a role to further lead to benefit in the ovarian cancer patient population. PD-1 VGF is one opportunity. These are active principles, obviously, in ovarian cancer. Another ADC could be another opportunity. ADC-ADC combinations is an interesting question in that, again, you need to look at therapeutic index and tolerability. And that's, of course, what we're trying to bring to ovarian cancer patients is really efficacy benefit and good tolerability. And that's what we need to see is that possibly in the ADC plus ADC space. If it is, we think TUB-040 with the safety profile and the efficacy could be an ideal combination partner in that space as well.

The next question comes from Louise Chen with Scotiabank.

Congratulations on all the deals. I wanted to ask you about Ouro, Tubulis and Arcellx and how you think about R&D spend in 2027 and beyond in addition to your existing pipeline, maybe just high-level thoughts would be helpful. And then secondly, as you start to think about these products, when do you expect to commercialize product from Ouro and Tubulis?

Louise, it's Andy. Thanks for your question. We appreciate it. And I hit on some of this in our prepared remarks. But for R&D, when you look at all of these together, we expect a modest and manageable dollar increase in R&D as compared to our guidance from the start of the year. And we continue to expect that R&D as a percentage of total revenue would be less than 20% for the full year. We also highlighted that going forward we always have programs that are rolling off. So at a high level, Louise, we had an opportunity to add to our portfolio because we had room in the R&D budget, certainly in '28 and beyond. So the overall message is very manageable in the short run, and we were going to need to add to kind of our mid- to late-stage portfolio in any event, and these are 3 incredibly exciting deals that allow us to leverage that R&D spend and the capacity that we had against what we believe are blockbuster opportunities.

And Louise, thank you also for the question on the -- when would these potentially come to patients. Of course, for all of these 3, we are trying to bring these to patients as quickly as possible, and we will use the fastest, both clinical and registrational pathways possible to do that. As discussed during our prepared remarks, for both Tubulis and Ouro, we expect to enter registration studies in 2027, which then we haven't commented on what kind of launch that would lead to, but we'll try to bring these to patients as quickly as possible. That's a high priority for us.

The next question comes from Gregory Renza with Truist Securities.

It's Anish on for Greg. Congrats on the deals. Just first, as you consider the broader CAR T strategy for Gilead with the integration of Arcellx, how are you framing your positioning in niche within the competitive landscape of in vivo CAR T? And just a quick one for Andy. Just playing off the Tubulis acquisition, how policy set under the current administration, such as tariffs and tax treatments for offshore developmental programs factored into your appetite for ex U.S. assets and BD?

Thanks so much. As it relates to the Arcellx question and the context with which we considered the acquisition, it is broad. And as we suggested earlier, we have a number of next-generation [ autologous concerts ] that we're looking at where you would do dual targeting part of that. The in vivo opportunity is also one, but it's earlier in development and the T-cell engager. So it was a broad position. But just to be clear, we are really excited about the data that we've seen out of Arcellx and the potential of Anito-cel and we do believe that will -- it is a best-in-disease opportunity for patients as we come to market.

And [ Anish ], maybe I'll just add to Cindy's comment. Obviously, the acquisition of Arcellx also allows us then to use the D-Domain binders in our in vivo efforts as we've highlighted before. And then on your question on ex U.S. business development, look, our business development deals are focused on the quality of the science and the clinical data. And you've heard Dietmar comment on why we're so excited about and Cindy, all 3 of these opportunities. We have a large global supply chain with all of our products. We look at manufacturing, and we have time to kind of think about where we want to place manufacturing and potentially having multiple different sources of manufacturing globally. But it really -- so to answer your question, it hasn't changed anything. If we find great science in Europe, or in Asia, it's no different than finding great science in the U.S. And we are really excited about the quality of science that we're seeing and our ability to bring these programs in and benefit patients globally.

The final question comes from Brian Skorney with Baird.

This is Luke on for Brian. On Tubulis and 040 in particular, given the impressive therapeutic index thus far, do you think there's headroom on the dose response curve to go even higher? Or are you fairly comfortable with the current range?

Thanks for the question. The -- when you look at the data that was presented at ESMO, the efficacy across the dose range started -- across the dose range studies was actually really convincing, right? And we need to see as we move forward, how can we further optimize that. We have tested higher doses or Tubulis have tested higher doses as well. So we'll absolutely optimize the dose both in monotherapy as well as in combination so that we can bring the best benefit risk to patients.

There are no more questions at this time. I'll pass it back over to Jacquie for closing remarks.

Thank you. As always, the Investor Relations team is happy to help with any additional questions you have on our recent acquisition announcements. Otherwise, as Dan mentioned, we're planning to share first quarter of 2026 results on Thursday, May 7. We appreciate your continued interest in Gilead, and thank you for taking the time on short notice to join our call this afternoon.

This concludes today's conference call. Thank you for your participation. You may now disconnect the line.