Q1 2025 Earnings Summary
- Lenacapavir’s imminent launch for PrEP: With a regulatory decision expected by June 19 and robust provider engagement—including extensive training and readiness plans for both buy‐and‐bill and specialty pharmacy channels—lenacapavir’s twice‐yearly dosing profile could significantly transform the PrEP market and drive substantial patient uptake.
- Strong HIV portfolio performance: The HIV segment continues to deliver solid growth—with overall HIV sales up 6% year-over-year and Descovy sales climbing 38%—demonstrating that demand-driven volume increases and effective commercial execution can overcome headwinds such as Part D redesign impacts.
- Accelerated launch momentum for Livdelzi: Early clinical and market data show that Livdelzi achieved $40 million in sales in its second full quarter, with market share rapidly expanding from about 80% to an anticipated >90% in commercial coverage, underscoring its competitive positioning in liver disease.
- HIV Sales Headwinds from Medicare Part D Redesign: Despite robust underlying demand, the redesign is expected to have a $1.1 billion impact overall—with roughly $900 million affecting HIV—which may continue to obscure true volume growth and pressure margins in an already competitive HIV market.
- Regulatory and Uptake Uncertainties for Lenacapavir in PrEP: Although the team is preparing for the imminent launch, any delays or slower-than-expected market uptake—compounded by reliance on medical exceptions and evolving reimbursement processes—could temper the anticipated upside from lenacapavir for PrEP.
- Competitive Pressures on Cell Therapy and Oncology Products: Increased competition both within cell therapy (e.g., from bispecifics and in-class products) and in the oncology space (with inventory dynamics impacting Trodelvy sales) could intensify pricing pressure and erode market share, negatively affecting revenue growth.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | –0.3% (Q1 2025: $6,667M vs. Q1 2024: $6,686M) | Total Revenue remained nearly flat as improvements in key segments (e.g. HIV) were counterbalanced by sharp declines in others (notably Veklury), indicating overall stable product performance compared to last period. |
HIV Segment Revenue | +5.6% (Q1 2025: $4,587M vs. Q1 2024: $4,342M) | HIV revenue grew by approximately 5.6% due to strong underlying demand and a shift towards higher realized prices, building on previous performance improvements in the HIV portfolio. |
Veklury Revenue | –45.6% (Q1 2025: $302M vs. Q1 2024: $555M) | Veklury sales plunged by 45.6% primarily because of significantly lower COVID‑19 hospitalization rates compared to the prior period, marking a steep downturn from previous reliance on pandemic-driven demand. |
Royalty, Contract & Other Revenues | +38.5% (Q1 2025: $54M vs. Q1 2024: $39M) | These revenues jumped 38.5% as improved performance in partner agreements or the timing of milestone recognitions contributed to a higher base compared to the relatively low previous period. |
U.S. Revenue | Virtually no change (Q1 2025: $4,631M vs. Q1 2024: $4,633M) | U.S. revenue remained nearly constant reflecting stable market demand and balanced outcomes—gains in some product lines offset by declines in others—consistent with trends seen in the previous period. |
European Revenue | Approximately –7% (Q1 2025: $1,073M vs. Q1 2024: $1,159M) | European revenue declined by about 7% likely due to pricing pressure and weaker market dynamics in Europe relative to the previous period, where higher sales figures were previously achieved. |
Operating Income | Turnaround from a loss of $4,322M to a profit of $2,237M | Operating income reversed dramatically because Q1 2024 was heavily impacted by high IPR&D charges and impairment expenses, which were substantially reduced in Q1 2025, coupled with better cost management. |
Net Income | Swing from a loss of $4,170M to a profit of $1,315M | Net income improved sharply following the turnaround in operating income, as lower non-recurring and impairment charges in Q1 2025 allowed underlying operational strength to reemerge relative to the prior period. |
Cash and Cash Equivalents | +68% increase (Q1 2025: $7,926M vs. Q1 2024: $4,718M) | Cash surged significantly due to enhanced cash collections and favorable financing activities, building on previous operational successes and a deliberate focus on liquidity management compared to Q1 2024. |
Stockholders’ Equity | +9.3% increase (Q1 2025: $19,078M vs. Q1 2024: $17,455M) | Equity grew by over 9% as improvements in net income, combined with additional paid‑in capital from equity issuances and stock‑based compensation, offset historical reductions from dividend payouts and repurchases seen in the prior period. |
Operating Cash Flow | –21% (Q1 2025: $1,757M vs. Q1 2024: $2,219M) | Operating cash flow declined by about 21% mainly due to lower cash generated from operations and variations in working capital movement, reflecting a drop from the previously higher operational cash collections despite overall better profitability metrics. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Total Product Sales (Overall) | FY 2025 | Approximately $28.2B to $28.6B | Approximately $28.2B to $28.6B | no change |
Product Sales Excluding Veklury | FY 2025 | $26.8B to $27.2B | $26.8B to $27.2B | no change |
Veklury Sales | FY 2025 | Approximately $1.4B | Approximately $1.4B | no change |
Product Gross Margin (Non‐GAAP) | FY 2025 | 85% to 86% | 85% to 86% | no change |
R&D Expenses | FY 2025 | Expected to be roughly flat from 2024 | Expected to be roughly flat from 2024 | no change |
Acquired IP R&D | FY 2025 | Approximately $400 million (≈$250M and $150M breakdown) | Approximately $400 million (including $253M in Q1 and commitments) | no change |
SG&A Expenses | FY 2025 | Decline by a high single‐digit percentage (mid‐single‐digit when excluding litigation accrual) | Decline by a high single‐digit percentage | no change |
Operating Income (Non‐GAAP) | FY 2025 | $12.7B to $13.2B | $12.7B to $13.2B | no change |
Effective Tax Rate (Non‐GAAP) | FY 2025 | Approximately 19% | Approximately 19% | no change |
Non‐GAAP Diluted EPS | FY 2025 | $7.70 to $8.10 | $7.70 to $8.10 | no change |
GAAP Diluted EPS | FY 2025 | $5.95 to $6.35 | no guidance | no current guidance |
Dividend | Quarterly | $0.79 per share with a 2.6% increase | no guidance | no current guidance |
FX Impact | FY 2025 | $250 million headwind | no guidance | no current guidance |
HIV Sales | FY 2025 | no prior guidance | Approximately flat compared to 2024 with demand‐driven growth offset by Medicare Part D redesign | no prior guidance |
HIV Revenue | Q1 2025 | Expected to decline in the mid‐teen percentage range QoQ | no guidance | no current guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
HIV Revenue | Q1 2025 | Expected to decline in the mid-teen percentage range quarter-over-quarter from Q4 2024 (5,452) | 4,587, representing a ~15.9% decline from Q4 2024 (5,452) | Met |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Lenacapavir for PrEP | In Q3 2024, Gilead expressed strong optimism about lenacapavir’s potential—with plans for regulatory filings, breakthrough signals, and a focus on its twice-yearly injectable profile, while also noting potential cannibalization of Descovy. In Q4 2024, the discussion reinforced optimism with Breakthrough Therapy designation, detailed regulatory progress, and similar cannibalization and uptake themes. | In Q1 2025, executives maintained optimism over lenacapavir’s launch—highlighting the FDA decision timeline, immediate post-approval launch plans, robust commercial readiness, and reiterated concerns regarding Descovy cannibalization and gradual uptake challenges. | Consistent optimistic tone with growing emphasis on detailed regulatory milestones and market access strategies while still acknowledging competitive dynamics. |
HIV Portfolio Performance | Q3 2024 discussion focused on robust growth—showing a 9% year‐over‐year increase—and noted pricing variability and emerging concerns over Medicaid exposure. In Q4 2024, the narrative highlighted strong underlying demand even while external pressures like Medicare Part D reform (with a $1.1 billion impact) were expected to mask growth. | In Q1 2025, the theme of strong HIV sales growth continued with a 6% year‐over‐year increase; however, there was increased emphasis on the headwinds from the redesigned Medicare Part D and Medicaid-related challenges affecting reported revenue. | Consistent strong performance but with an increased focus on external pricing and reimbursement pressures affecting near‐term revenue visibility. |
Trodelvy in Small Cell Lung Cancer | In Q3 2024, Trodelvy was discussed in the context of promising Phase II data, with plans to advance to Phase III testing in extensive-stage SCLC. Q4 2024 expanded on this by noting its Breakthrough Therapy designation, reiterating encouraging Phase II outcomes, and addressing the competitive landscape. | In Q1 2025, there was no mention of Trodelvy for SCLC, with the focus instead on other pipeline priorities. | No longer mentioned in the current period, suggesting a possible deprioritization or temporary pause in updates on this asset relative to other focus areas. |
Livdelzi Launch in Liver Disease | In Q3 2024, Livdelzi was introduced as a promising new opportunity with early but modest uptake in PBC, emphasizing its differentiated profile. Q4 2024 detailed strong early sales ($30 million), positive clinical feedback on ALP and pruritus improvements, and progress in international approvals (MHRA and CHMP feedback). | In Q1 2025, the momentum strengthened further with reported sales reaching $40 million, expanded commercial coverage (exceeding 80% and moving toward 90%), and active steps toward European market expansion. | Accelerating growth and market uptake, with the narrative evolving toward robust commercial execution and international expansion. |
Competitive and Regulatory Environment | In Q3 2024, challenges were noted across pricing, reimbursement, and market access—with specific mentions of barriers in cell therapy (e.g. CAR T accreditation), competitive dynamics for Trodelvy, and early regulatory filing updates (e.g. lenacapavir). In Q4 2024, the discussion sharpened on external pressures including Medicare Part D reform, FX headwinds, and pricing/reimbursement issues, alongside ongoing regulatory progress for several assets. | In Q1 2025, the focus continued on navigating a complex environment—now with added details such as adjustments within the 340B channel mix and further elaboration on competitive pressures in cell therapy—alongside persistent issues from Medicare Part D redesign affecting HIV revenue. | Sustained complexity with evolving emphasis: while external regulatory and competitive challenges remain a constant concern, new details (like 340B channel shifts) have emerged in the current period. |
Robust and Diversified Pipeline | In Q3 2024, Gilead emphasized a diversified pipeline aimed at long-acting treatments across HIV, oncology (including Trodelvy and anito-cel), and liver disease, underscoring its commitment to innovation. In Q4 2024, similar themes were reiterated with expanded pipeline numbers, a variety of clinical programs (54 ongoing studies), and continued focus on long-acting therapies and cell therapy frontiers. | In Q1 2025, the narrative remained consistent—highlighting an enduring commitment to innovation with multiple anticipated HIV product launches, upcoming regulatory decisions (e.g. lenacapavir for PrEP), and advancing oncology and cell therapy programs—all reinforcing long-acting treatment developments. | Steady and consistent strategic focus with minor enhancements in highlighting upcoming regulatory milestones and long-acting product benefits across therapeutic areas. |
Reduced Emphasis on Specific Cell Therapy Products | In Q3 2024, there was clear enthusiasm for cell therapy—particularly anito-cel—with encouraging Phase II data and plans for a Phase III study, and no suggestion of reduced focus. In Q4 2024, the positive discussion around anito-cel and Kite’s cell therapy portfolio continued robustly, with mention of strong sales and treatment numbers. | In Q1 2025, the narrative similarly indicates an ongoing commitment to cell therapy development (including anito-cel), with no signals of a shift away from these products in the company’s strategy. | Stable focus on cell therapy products, with no diminished emphasis noted over time. |
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PrEP Launch Timing
Q: When will PrEP launch drive market growth?
A: Management is poised for a timely lenacapavir PrEP launch with a planned ramp-up so that about 75% access is achieved in the first six months and nearly 90% by year-end, underscoring a robust market outlook. -
PrEP Impact & Patient
Q: What’s the potential PrEP patient base?
A: They estimate the current U.S. PrEP market at around 400–450K patients, with expectations for exponential growth post–lenacapavir launch while not immediately cannibalizing existing treatment. -
USPSTF Coverage
Q: When will USPSTF mandate include lenacapavir?
A: Management expects the inclusion process to take about 6–12 months post-approval, relying on lenacapavir’s clear value proposition to drive uptake. -
Provider Readiness
Q: Are physicians set for lenacapavir launch?
A: High provider awareness is evident with extensive training on both “buy-and-bill” and specialty pharmacy models, ensuring capacity and readiness at launch. -
Part D Impact Timing
Q: When will Part D redesign benefits emerge?
A: While current impacts keep reported HIV growth flat, any positive offset from lower patient costs is expected to materialize later in the year. -
340B Impact
Q: How will the 340B channel affect HIV pricing?
A: Despite ongoing growth in the 340B channel, management sees no major new impact on HIV pricing compared to past quarters. -
Livdelzi Launch
Q: How is the Livdelzi launch progressing?
A: Livdelzi is gaining traction with a notable market share increase—around 10 percentage points in one quarter—and coverage improving from about 80% toward over 90% soon. -
Trodelvy Demand
Q: Why is Trodelvy demand lower quarter-over-quarter?
A: The decline is attributed primarily to inventory dynamics following a strong Q4, even though underlying demand remains robust. -
Trodelvy Competition Mix
Q: Is HR-positive competition affecting Trodelvy?
A: Management indicates there is no significant competitive pressure, as Trodelvy’s use in triple‑negative breast cancer remains distinct from later‑line HR‑positive settings. -
Descovy Growth
Q: Does Descovy’s growth hint at lenacapavir’s future?
A: With Descovy showing 38% growth driven by higher prices and demand, the market momentum is expected to support lenacapavir’s forthcoming launch. -
Macro Funding Risks
Q: Will NIH or Medicaid cuts impact Gilead?
A: There is currently no cause for concern; existing HIV programs and access channels remain solid despite macro funding discussions. -
Long-Acting Testing Design
Q: Could PK/PD studies expedite once-yearly dosing?
A: Management is exploring various trial designs, including a PK‑based approach, though final plans will hinge on regulatory strategy. -
Messaging & Education
Q: Will HHS/CDC cuts disrupt launch messaging?
A: Despite industry-wide cuts, integrated internal initiatives and active policymaker engagement should keep launch messaging steady. -
Cell Therapy MRD
Q: What MRD improvement is needed for anito‑cel?
A: While specifics aren’t disclosed, the dual primary endpoint strategy—linking MRD negativity with progression‑free survival—forms the basis for regulatory discussions. -
Cell Therapy Dynamics
Q: How is competition affecting cell therapy share?
A: There is a mixed competitive impact with varying dynamics between products like Yescarta and Tecartus, especially across different geographies and indications.