Gilead Sciences Q2 2026 Earnings Call - Base Business Surges 10% as HIV PrEP Crosses $1B and M&A Charges Compress Reported Margins

Rebecca, Call Host, Gilead Sciences: Good afternoon, everyone, welcome to Gilead’s second quarter 2026 Earnings Conference Call. My name is Rebecca and I’ll be today’s host. In a moment, we’ll begin our prepared remarks, followed by our Q&A session. To ask a question, please press star one, to withdraw your question, press star one again. Now, I’ll hand the call over to Jacquie Ross, Senior Vice President, Treasurer, and Head of Investor Relations.

Jacquie Ross, Senior Vice President, Treasurer, and Head of Investor Relations, Gilead Sciences: Thank you, Rebecca. Just after market close today, we issued a press release with earnings results for the second quarter of 2026. The press release, slides, and supplementary data 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 Commercial and Corporate Affairs Officer, Johanna Mercier, our Chief Medical Officer, Dietmar Berger, and our Chief Financial Officer, Andrew Dickinson. After that, we’ll open the call to Q&A, where the team will be joined by Cindy Perettie, the Executive Vice President of Kite. Let me remind you that we will be making forward-looking statements. Please refer to slide two 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.

Daniel O’Day, Chairman and Chief Executive Officer, Gilead Sciences: Thank you, Jackie, thanks everyone for joining us on today’s call. As you’ll see from today’s results, Gilead has delivered another quarter of commercial excellence with base business sales up 10% year-over-year. Our strongest second quarter growth in three years, driven by our HIV portfolio, Trodelvy and Livdelzi. This was also an exciting quarter of clinical execution with positive updates across our core therapeutic areas. Turning to HIV performance this quarter, sales grew 12% year-over-year, driven by impressive Biktarvy and PrEP business growth. Yeztugo has quickly become the leading long-acting PrEP option for new patient starts. Quarterly PrEP sales doubled year-over-year, exceeding $1 billion for the first time. With a $4 billion annual run rate for our PrEP business and Biktarvy’s continued strength, we are raising our full-year HIV growth expectations to 9%-10% year-over-year from prior guidance of 8% growth.

We continue to advance our extensive HIV pipeline with potential new daily, weekly, monthly, twice yearly, and yearly options. Later this month, we expect an FDA decision on our once daily oral treatment combining bictegravir and lenacapavir. BicLen has the potential to become the first dedicated switch regimen within our treatment portfolio, expanding the options we offer for virally suppressed people with HIV and further strengthening our leadership in the switch market. We shared detailed data from our positive phase III ISLEND-1 and ISLEND-2 studies at the 2026 International AIDS Society meeting. These data are expected to support the filing and potential launch of the first once-weekly oral HIV treatment regimen, islatravir plus lenacapavir, in 2027. In oncology, Trodelvy sales were up 26% year-over-year, reflecting strong demand across both triple-negative and pre-treated HR-positive, HER2-negative metastatic breast cancer.

We also secured additional approvals for Trodelvy this quarter in first-line metastatic triple-negative breast cancer across PD-L1 status. The acquisition of Tubulis has now closed, providing Gilead with an industry-leading ADC platform and promising clinical-stage ADCs. At ASCO, we have shared encouraging phase I efficacy and safety data for GS-8824, formerly known as TUB-040, in platinum-resistant ovarian cancer. In cell therapy, launch preparations are fully underway for anito-cel, with just five months to go until the PDUFA date. The completed acquisition of Arcellx has given us full ownership of anito-cel, enabling faster, more focused execution in multiple myeloma, as well as the D-domain binder platform for future opportunities in both autologous and in vivo CAR T. This was a strong quarter for our liver disease business, with Livdelzi sales more than doubling year-over-year. Livdelzi continues to gain momentum as the leading second-line treatment for primary biliary cholangitis or PBC.

The recent positive phase III IDEAL data further strengthened the opportunity for Livdelzi to reach more patients with PBC. We also launched Hepcludex in the U.S. this quarter as the first and only FDA-approved treatment for chronic hepatitis delta virus or HDV. In summary, it’s been a very strong first half and second quarter with impressive revenue growth across therapeutic areas, two commercial launches, and three positive phase III readouts. In the second half, we expect another two commercial launches in HIV and oncology while continuing to deliver clinical and commercial excellence across the portfolio. With that, I’ll hand it over to Johanna.

Jacquie Ross, Senior Vice President, Treasurer, and Head of Investor Relations, Gilead Sciences: Thanks, Dan, and good afternoon, everyone. This was another exceptional quarter of commercial execution across our core therapeutic areas. Starting on slide seven, total product sales, excluding Veklury, of $7.6 billion increased 10% year-over-year, driven by strong growth in Biktarvy, Descovy, and Yeztugo in HIV, Trodelvy in oncology, and Livdelzi in liver disease. Sequentially, base business sales were up 12%, driven by strength across each of our therapeutic areas. Including Veklury, second quarter total product sales were $7.6 billion, up 8% year-over-year and 10% sequentially. Moving to HIV on slide eight, second quarter HIV sales of $5.7 billion were up 12% year-over-year with strong performances for Biktarvy in treatment as well as Descovy and Yeztugo in PrEP, driven by higher average realized price and higher demand.

Sequentially, HIV sales increased 13%, primarily driven by inventory build and higher average realized price, both typical in the second quarter following first quarter seasonal dynamics. Given the strong performance in the first half of the year, we now expect full year 2026 HIV sales to grow between 9% and 10% compared to 2025, up from our prior expectation of 8% and driven by continued strong growth in Biktarvy, Yeztugo, and Descovy. Looking at HIV treatment in more detail on slide nine, Biktarvy sales of $3.8 billion were up 7% year-over-year, driven by higher average realized price due to channel mix, in addition to inventory build and higher demand. Sequentially, Biktarvy sales increased 12%, driven by typical seasonality, partially offset by lower demand due to market dynamics, including a greater-than-expected impact associated with changes in the Affordable Care Act.

As people with HIV navigate these changes, we did see a slowing in HIV treatment market growth in the second quarter, although we expect to see this trend back to the typical 2% to 3% rate of annual growth. BIKTARVY continues to lead as the regimen of choice for both naive and switch patients across major markets and once again, increased share year-over-year in the second quarter. We’re excited to bring new, potentially highly effective and differentiated therapies to further expand Gilead’s leadership in the switch market. U.S. launch preparations are currently underway for bictegravir plus lenacapavir, our once-daily single-tablet regimen, where we expect an FDA priority review decision later this month. We’re also anticipating islatravir plus lenacapavir, the potential first once-weekly single-tablet regimen to launch next year, continuing to build on Gilead’s HIV leadership.

Moving to slide 10, our HIV prevention or PrEP business doubled year-over-year in the second quarter, and for the first time exceeded $1 billion in quarterly sales. With our expanding portfolio of PrEP options, Gilead continues to gain market share in a rapidly growing market. The U.S. PrEP market grew approximately 14% year-over-year, marking another quarter of double-digit percentage growth on an increasingly larger base of users. Gilead PrEP sales growth of over 100% has once again significantly outpaced the market, driven by strong commercial execution. Yeztugo has already established itself as the leading long-acting injectable for PrEP-naive individuals. In the PrEP switch market, Yeztugo is now the overall leader across oral and injectable options, an impressive achievement after only four full quarters of launch. Now, with 12 months of data, we are pleased to share Yeztugo’s persistency rate.

More than 70% of users so far have returned for reinjection at six months and extended their protection against HIV to a full year. We’re very excited to see such a high level of persistency at a rate that we believe is well above available PrEP options. Overall, we continue to be very pleased with the progress of the launch and with second quarter sales of $232 million, up 40% sequentially, and continue to target full year 2026 sales of approximately $1 billion. Moving to Descovy, PrEP sales of approximately $801 million, which accounts for around 80% of total Descovy sales, were up 60% year-over-year, driven by higher average realized price due to channel mix and demand growth. Sequentially, Descovy for PrEP sales were up 23%, driven by second quarter seasonality and higher demand.

We continue to expect robust full year growth for Descovy, driven by pricing favorability as well as demand growth and an expanding U.S. PrEP market. Our total PrEP business is already operating at an annual run rate of $4 billion. With our diverse pipeline of new prevention options in development and a growing PrEP market, Gilead is well-positioned for significant long-term growth. Moving to Livdelzi on slide 11, sales of $167 million more than doubled year-over-year, primarily driven by increased U.S. demand as well as continued uptake in Europe. Sequentially, Livdelzi sales grew 26%, driven by increased demand, partially offset by lower average realized price. Livdelzi continues to be the leading second-line PBC regimen, driving encouraging second quarter market growth as we move beyond first quarter seasonality.

We also announced new positive results from the phase III IDEAL study evaluating Livdelzi in patients with inadequately controlled disease and ALP between one and 1.67 times the upper limit of normal. We look forward to potentially expanding Livdelzi’s leadership in the second-line PBC population as early as next year. More broadly, in liver disease, sales of $877 million were up 10% year-over-year, reflecting increased demand across PBC, HBV, and HDV, partially offset by lower HCV starts. Sequentially, sales were up 14%, reflecting increased demand and inventory build, partially offset by lower average realized price. In the U.S., Hepcludex was granted FDA accelerated approval in May, becoming the first and only treatment for chronic HDV. We look forward to bringing Hepcludex into the small but deeply underserved patient population, and it is expected to be a modest growth contributor in our liver disease business.

Moving to slide 12, Trodelvy delivered an exceptional quarter of growth, with sales of $457 million, up 26% year-over-year and 13% sequentially, driven by strong demand across both triple-negative and pretreated HR-positive, HER2-negative metastatic breast cancer. Building on Trodelvy’s success in second-line plus metastatic TNBC, we were thrilled to receive back-to-back FDA approvals of Trodelvy in first-line metastatic TNBC across PD-L1 status. With an addressable population almost double that of the second-line setting and a longer median duration of treatment, this represents an opportunity to further extend Trodelvy’s reach and benefit for patients. Following NCCN guideline updates earlier this year and our recent approvals in first-line metastatic TNBC, we have seen increasing breadth and depth in the adoption of Trodelvy.

We look forward to further cementing Trodelvy as the backbone of treatment in metastatic TNBC through our ongoing launch while continuing to strengthen our position in later-line HR-positive, HER2-negative metastatic breast cancer. Moving to slide 13, and on behalf of Cindy and the Kite team, second quarter cell therapy sales of $417 million were down 14% year-over-year, reflecting the expected ongoing in and out of class competition across regions. Sequentially, sales were up 2%, reflecting increased YESCARTA demand in the U.S. and internationally, partially offset by increased competitive pressures for Tecartus. In preparation for anito-cel’s December 23rd PDUFA date in fourth-line plus relapsed or refractory multiple myeloma, we have already begun extensive launch readiness activities.

This includes optimizing and mobilizing our sales, medical, and access teams, conducting pre-activation work, including initiating contractual reviews and quality training at the majority of our authorized treatment centers, building momentum with KOLs around unmet medical needs, and engaging with a range of payers to ensure broad and timely access. We are confident in the profile of anito-cel, which we believe is a compelling and differentiated option in multiple myeloma, and we are very encouraged by the strong interest we have received ahead of the potential launch. Building on momentum of the launches of YESCARTA and Livdelzi, this continues to be an exciting and unprecedented period for Gilead’s commercial organization. In 2026 to date, the launches of Trodelvy in first-line metastatic TNBC and Hepcludex in HDV are already underway, and we expect potential launches for BIC/LEN in HIV treatment and anito-cel in multiple myeloma before year-end.

With additional anticipated launches in 2027 and beyond, the teams are energized and focused on delivering continued commercial excellence. With that, I’ll hand the call over to Dietmar.

Dietmar Berger, Chief Medical Officer, Gilead Sciences: Thank you, Johanna, and good afternoon, everyone. We delivered another strong quarter of clinical execution across our 53 ongoing clinical programs, reflecting both the continued growth of our pipeline and our disciplined approach to portfolio prioritization. We expanded the breadth of our innovation engine through the acquisitions of Arcellx, Tubulis, and Ouro Medicines, adding differentiated and potentially best-in-class cell therapy, antibody drug conjugate, and bispecific T-cell engager assets. These acquisitions further complement the broadest and most diverse pipeline in Gilead’s history. Starting with HIV on slide 16, Gilead continues to expand and advance our industry-leading HIV pipeline. In treatment, we continue to evaluate six potential new daily and longer-acting orals and injectables for people with HIV. We anticipate once daily bictegravir plus lenacapavir or BIC/LEN will be the first new addition to our treatment portfolio for virally suppressed people with HIV or the switch population.

Combining two orthogonal mechanisms of action, each with high potency, BIC/LEN has the potential to deliver long-term viral suppression for people with HIV, including those switching from complex regimens. As previously shared, FDA has granted BIC/LEN priority review, we continue to anticipate a decision by August 27th. Turning to our once-weekly oral portfolio, we are making significant progress on another novel regimen for virally suppressed people with HIV. At the International AIDS Society Conference held in Brazil last week, Gilead shared data from 54 abstracts, highlights included oral presentations with a simultaneous publication in the New England Journal of Medicine on Gilead and Merck’s once-weekly oral regimen, combining islatravir plus lenacapavir or ISLEN. In the phase III ISLEND-1 and two trials, ISLEN met the primary endpoints of non-inferiority versus both Biktarvy and physician’s choice oral antiretroviral regimens, respectively.

We continue to work towards global regulatory filings as quickly as possible, with potential for launch of the first weekly oral in 2027. Beyond the switch population, we are developing two different potential once-weekly oral combinations of lenacapavir with our investigational, wholly-owned, long-acting integrase inhibitors or INSTIs. Which we believe could be a preferred option across a broad range of people with HIV, including treatment-naïve. We expect to initiate new phase II trials in both the switch and naïve populations, with a first study evaluating once-weekly oral lenacapavir with oral GS-3242 starting before the end of the year, a second study testing once-weekly oral lenacapavir with oral GS-1720 starting in early 2027. We are pleased that GS-1720 has recently been cleared for further clinical studies by the FDA, we’re now able to move two phase II clinical programs forward.

We expect to advance the combination with the most compelling profile to phase III. Focusing on twice-yearly treatment intervals, we are now initiating our phase III trial evaluating lenacapavir with two broadly neutralizing antibodies, TAB and SAB. This regimen takes a novel approach targeting the HIV viral reservoir and could be the first complete twice-yearly treatment regimen for virally suppressed people with HIV. We view this as a differentiated opportunity for a subset of the virally suppressed population and, with potential for launch around 2030, it could establish an important early presence in the twice-yearly treatment market ahead of our INSTI-based regimen currently in development. As you may recall, we first shared phase I data for GS-3242 injection at the CROI meeting in February. Preliminary data showed the potential for dosing intervals longer than four months, with additional data from the higher dose cohorts expected later this year.

We started our first program of GS-3242 injection in combination with lenacapavir in June. For HIV prevention or PrEP, we have the broadest and most differentiated portfolio in the industry that we believe is uniquely positioned to meet individual preferences and needs. At the same time, we are investing in the next generation of PrEP innovation that we believe could continue to broaden the reach of PrEP and potentially accelerate progress towards ending the HIV epidemic. In June, the FDA accepted our filing for once-weekly oral lenacapavir for PrEP. The submission is supported by the robust and established clinical profile of Yeztugo for PrEP from the pivotal phase III trials, in which more than 99.9% of participants did not acquire HIV infection. We anticipate a regulatory decision by February 2nd, 2027, and look forward to the opportunity to add the first long-acting oral prevention option to our industry-leading portfolio.

Looking beyond daily, weekly, and twice-yearly options, we have completed recruitment for PURPOSE 365, evaluating once-yearly intramuscular lenacapavir for PrEP. We expect to provide an update in 2027, with potential to launch in 2028. Taken together, we believe our HIV portfolio provides a strong foundation for long-term leadership and durable growth. With multiple opportunities to expand choice across both treatment and prevention, a deep pipeline of differentiated innovations, and a steady cadence of catalysts ahead, we are well-positioned to create value for patients, healthcare systems, and shareholders while advancing our vision to end the HIV epidemic. Turning to liver disease on slide 17, we continue to build on our longstanding commitment to advancing innovative therapies and generating additional clinical data aimed at improving the lives of people living with serious liver conditions.

This quarter, we reached an important milestone in HDV with the FDA’s accelerated approval of Hepcludex, the first and only FDA-approved treatment of chronic hepatitis delta virus infection based on data from the phase III MYR-301 study. Chronic HDV is considered the most severe form of viral hepatitis due to rapid disease progression towards liver failure and liver-related death, and impacts between 40,000 and 80,000 people in the U.S. As a reminder, Hepcludex has been available in the EU since July 2020. We also announced positive top-line results from the phase III IDEAL study evaluating Livdelzy in patients with primary biliary cholangitis, or PBC, whose disease remains inadequately controlled with alkaline phosphatase or ALP levels between 1 and 1.67 times the upper limit of normal. Treatment with Livdelzy demonstrated statistically significant composite ALP normalization.

This is a particularly important finding, as these patients have been underrepresented in prior randomized trials. We’re looking forward to sharing the detailed results at a future medical congress this year. Moving to oncology on slide 18, we remain focused on disciplined execution of our core clinical programs and continued development of our research platforms that complement our ADC and cell therapy leadership. Specifically, we closed our acquisitions of Tubulis and Arcellx, adding Tubulis’ next-generation ADC platform with its novel linker and payload technologies, alongside Arcellx’s differentiated D-domain binder platform for future cell therapy development. At ASCO and EHA, we shared more than 25 abstracts spanning both ADCs and cell therapy that reinforce Gilead’s long-term position in oncology.

Focusing first on our ADC programs, we shared additional analyses from the phase III ASCENT-03 and 04 studies, which continue to strengthen the evidence supporting Trodelvy with or without pembrolizumab in first-line metastatic triple-negative breast cancer. We are pleased that FDA have now approved Trodelvy for first-line treatment of metastatic triple-negative breast cancer based on results from the phase III ASCENT-03 and 04 trials. These regulatory decisions provide a new potential standard of care for the most aggressive form of breast cancer in the first-line setting when it may have the greatest potential to provide a durable response and delay disease progression. Shortly following close of the Tubulis acquisition in May, we were pleased to present updated safety and efficacy data from the phase I NaPiSTAR-101 study evaluating TUB-040, now known as GS-8824, in platinum-resistant ovarian cancer at ASCO.

Across select doses, GS-8824, a NaPi2b-directed ADC, demonstrated deep and durable responses with a confirmed objective response rate of 61%, a clinically significant median progression-free survival of 11 months, and a low rate of hematological toxicity. We believe GS-8824 has the potential to be transformative in ovarian cancer given these results in biomarker-unselected and heavily pretreated platinum-resistant ovarian cancer patients who have limited effective treatment options and short survival. Our pipeline now includes a phase I/II clinical program in platinum-resistant ovarian cancer, and we continue to expect entering registrational development in platinum-resistant ovarian cancer as early as 2027. Further, we have added phase I clinical programs in platinum-sensitive ovarian cancer and other advanced tumor types. In parallel, we are continuing to evaluate GS-8823, previously known as TUB-030, a 5T4-directed ADC, as well as other potential research stage candidates utilizing Tubulis platform technologies.

Altogether, Gilead is positioned to be a leader in ADC innovation long term. Moving to cell therapy on slide 19, and on behalf of Cindy and the Kite team, with the completion of the Arcellx acquisition in April, we now have full control of anito-cel’s development, enabling us to move with greater speed and focus in maximizing the long-term potential of anito-cel, including in earlier lines of multiple myeloma, as well as the full potential of the D-domain binder platform. With its deep and durable efficacy, as well as a differentiated safety profile observed in the phase II iMMagine-1 study, we continue to believe anito-cel has best-in-disease potential, and we look forward to a regulatory decision later this year. We completed enrollment of iMMagine-3 in second-line multiple myeloma this quarter and look forward to potentially filing in this indication as early as 2027.

Reinforcing Kite’s enduring operational and technical leadership across novel cell therapies, we presented data at ASCO showing a 98% first-pass manufacturing success rate and global median turnaround time of 18 days across anito-cel patients with multiple myeloma. As such, we are confident that we can quickly meet the needs of multiple myeloma patients that are awaiting potential anito-cel launch. In addition to our work on anito-cel, we are excited to unlock the broad potential of the D-domain binder platform, which has applications far beyond autologous multiple myeloma CAR T. Combining Kite’s extensive experience in CAR T clinical development with strategically selected business development, we are rapidly advancing our updated in vivo CAR T platform. We are developing a differentiated in vivo program that not only addresses class challenges of durability, safety, and manufacturability, but also provides scalability for broad expansion across oncology and autoimmune diseases.

Specifically, our smaller D-domain binder enables bypassing payload challenges associated with viral vectors to target multiple antigens simultaneously. The plug-and-play modular in vivo platform allows Kite to optimize CAR constructs and vector targets by diseases. Our collaboration with Pregene enables speed to clinic, where we will start exploring our updated in vivo platform in two investigator-sponsored studies later this year. Moving now to our milestones on slide 20, I would like to recognize our research and development teams at Gilead and Kite and our partners whose tireless efforts have contributed to the significant progress we have made across our key clinical milestones. Since our last quarterly update, we shared four phase III clinical trial updates and three FDA approvals.

For the remainder of the year, we anticipate FDA regulatory decisions for BIC/LEN in virally suppressed people with HIV and anito-cel in fourth line or later relapsed and/or refractory multiple myeloma, as well as a phase III ASCENT-GYN-01 update for Trodelvy in advanced or recurrent endometrial cancer. In addition to these milestones, we expect to share updates from our broader information portfolio this year, including the phase II SWIFT study evaluating GS-1427 or emvistegrast, our investigational oral α4β7 inhibitor for inflammatory bowel diseases and the phase II-A COSMIC study evaluating edecesertib, our investigational IRAK4 kinase inhibitor in cutaneous lupus erythematosus. Taken together, these updates reflect the strength of the portfolio we have built and the opportunities that lie ahead. I will turn over the call to Andy.

Andrew Dickinson, Chief Financial Officer, Gilead Sciences: Thank you, Dietmar, and good afternoon, everyone. Once again, our quarterly results demonstrated the strength and durability of Gilead’s portfolio, underpinned by our disciplined operational execution. As shown on slide 22, our base business grew 10% year-over-year to $7.6 billion, driven by continued growth across HIV products, Trodelvy and Livdelzi, partially offset by lower sales of cell therapy and HCV products. Sequentially, sales were up 12%, driven by growth across HIV, liver disease, and oncology. Total product sales of $7.6 billion were up 8% year-over-year, reflecting the 10% growth we saw in our base business, partially offset by lower Veklury sales due to fewer COVID-19 related hospitalizations. Other revenue of $176 million included $156 million related to an increase in future estimated royalties associated with a prior IP asset sale. This is a non-recurring and non-cash item reflecting an accounting change.

Moving to our non-GAAP second quarter results on slide 23. Product gross margin was 87%, flat year-over-year and in line with our full year guidance. R&D expenses were $1.4 billion, relatively flat year-over-year, reflecting lower oncology clinical study activity, partially offset by higher R&D costs associated with our newly acquired entities. Acquired IPR&D expenses were $11.2 billion, primarily reflecting our acquisitions of Arcellx, Tubulis, and Ouro Medicines. SG&A expenses were $1.5 billion, up 12% year-over-year, primarily due to expected promotional activities related to Yeztugo. Second quarter operating margin was -94%, reflecting our acquisitions of Arcellx, Tubulis, and Ouro Medicines. Excluding the $11.1 billion in acquired IPR&D expenses associated with the three acquisitions, our second quarter operating margin was approximately 49%.

This is consistent with the strong margins we’ve delivered in prior quarters and firmly in the top quartile of our peer group, underscoring our disciplined operating model. The non-GAAP effective tax rate was -11.4% in the second quarter, primarily driven by the acquisitions of Arcellx, Tubulis, and Ouro Medicines. Excluding these acquisitions, non-GAAP effective tax rate was approximately 19%. On slide 24, our non-GAAP diluted EPS was -$6.75. This reflected higher acquired IPR&D expenses, tax, and SG&A expenses, partially offset by higher revenue. Excluding these acquisitions and the non-recurring other revenue, non-GAAP diluted EPS was $2.27. I’ll highlight that for both the second quarter and the first half, illustrative EPS has grown approximately 13% compared to the same period last year.

This compares favorably to total product sales growth of 8% in the second quarter of 2026, and 7% in the first half of the year, highlighting the leverage in our business model as we continue through this period of sustained growth. Moving to our full year guidance on slide 25. We had strong second quarter base business performance and are updating our full year sales and EPS guidance as follows. We now expect base business sales to grow approximately 6% to 7% year-over-year and range between $29.8 billion and $30.1 billion. This represents an increase of $350 million at the midpoint compared to our May guidance and an increase of $750 million at the midpoint compared to our initial 2026 guidance.

Within HIV, we now expect full year sales to grow between 9% and 10% year-over-year, up from 8% previously, driven by continued strong growth in BIKTARVY for HIV treatment, as well as Yeztugo and Descovy for PrEP. We continue to expect approximately $1 billion for Yeztugo sales for the full year. We now expect cell therapy to decline mid-teens percentage year-over-year. Moving to total product sales, we have raised the lower end of our range and now expect total product sales in the range of $30.1 billion and $30.4 billion. Included in total product sales, we now expect Veklury sales of approximately $300 million compared to approximately $600 million previously, reflecting lower COVID-19 related hospitalizations.

With regards to our non-GAAP P&L, we now expect acquired IPR&D of $11.5 billion, reflecting $300 million lower second quarter expenses associated with the accounting treatment of potential future milestones related to the Tubulis acquisition. We continue to expect both R&D and SG&A expenses to increase a mid-single digit percentage on a dollar basis compared to 2025. Moving to tax. We now expect full-year 2026 effective tax rate to be between 140% and 115% reflecting the nondeductible acquired IPR&D expenses associated with the Arcellx, Tubulis, and Ouro Medicines transactions. Excluding these transactions, our effective tax rate would be 20%, no change from our February guidance. Overall, we expect full-year non-GAAP EPS between negative $0.65 and negative $0.30. Turning to slide 26.

Excluding approximately $9.15 per share relating to the acquired IPR&D expense and full-year financing costs associated with the Arcellx, Tubulis, and Ouro Medicines transactions, as well as non-recurring other revenue, our full-year non-GAAP diluted EPS would be $8.50 to $8.85, raised $0.05 on the bottom end from our May illustrative guidance due to higher base sales, partially offset by lower Veklury sales. On slide 27, we returned close to $1.4 billion to shareholders in the second quarter of 2026, including $355 million of share repurchases. Combined with our dividend, we have returned approximately 49% of our free cash flow to shareholders in the first half of 2026. As we look ahead, and given the acquisitions completed during the first half of 2026, our near-term priorities are centered on integrating the new programs and platforms into our business. Therefore, we do not currently anticipate pursuing additional sizable M&A transactions this year.

That said, we will remain opportunistic and continue to assess strategic opportunities to further enhance our portfolio and create value. In summary, Gilead has delivered another quarter of strong clinical and commercial execution and continued operating discipline. We believe Gilead is well-positioned for both near-term and long-term growth, and we remain fully focused on executing on our strategic commitments. With that, I’ll invite Rebecca to begin the Q&A.

Rebecca, Call Host, Gilead Sciences: Thank you, Andy. At this time, we’ll invite your questions. We ask that you be courteous and limit yourself to one question so we can get to as many analysts as possible during today’s call. Again, to ask a question, press star one, and to withdraw your question, press star one again.

Our first question comes from Tyler Van Buren at TD Cowen. Tyler, go ahead. Your line is open.

Tyler Van Buren, Analyst, TD Cowen: Hey, guys. Thanks so much for the presentation and for taking my question. It’s impressive to see the continued performance of the PrEP franchise overall between both Descovy and Yes2go. To be specific, can you help us better understand the growing delta in recent Yes2go prescription trends versus sales that are being reported by outlets like IQVIA? Maybe outline what you believe are the biggest growth drivers for Yes2go through the end of the year.

Jacquie Ross, Senior Vice President, Treasurer, and Head of Investor Relations, Gilead Sciences: Thanks, Tyler. It’s Johanna. I’ll take that question. We’re really excited about the performance thus far in the first half of the year for the overall PrEP franchise. At this last quarter, just about over a $1 billion run rate for $4 billion for the ask for the year. That’s very exciting. In your question about IQVIA, now that we’re about a year into the launch, we won’t be commenting on how IQVIA captures the data. We’ll obviously be commenting on our data, which has all the pieces of the puzzle pulled in together.

For Yes2go, as you think about the back half of this year, really building on a really strong first half. I would say that we expect strong continued launch momentum because we’re still in launch mode. That’s really driven by the strong uptake we’ve been seeing in both naive and switch market, the growing confidence that we’re seeing with our healthcare professionals with access pathways, logistics, experience with Yes2go. Of course, the PrEP market itself growing at 14% and building on a larger base. That’s not by chance. That’s a lot of the work that Yes2go and Descovy teams are ensuring around education awareness across many different communities. Last but not least, as we’ve shared, is the more than 70% persistency that we’ve been seeing as people return for their second injection and get protection for a full year.

We’re really excited about the numbers we’re seeing, the numbers we’ve shared today, and obviously, very much confident in our guidance of approximately about $1 billion for Yeztugo this year.

Rebecca, Call Host, Gilead Sciences: Our next question comes from Evan Seigerman at BMO Capital Markets. Evan, go ahead, your line is open.

Evan Seigerman, Analyst, BMO Capital Markets: Kyle, thank you so much for taking my question. One more on PrEP, specifically talking about Yeztugo and your once-weekly option. The value proposition for Yeztugo was built around eliminating the need for multiple pills every week, yet now you’re investing behind a once-weekly oral PrEP option, which, yes, is better than Descovy. I’m curious as to what has changed. Are you seeing that people just aren’t as enthusiastic about a twice-yearly injection as you originally thought, or is there something else going on here that we should be aware of?

Jacquie Ross, Senior Vice President, Treasurer, and Head of Investor Relations, Gilead Sciences: Thanks, Evan. Johanna again. I would say nothing has changed. On the contrary, I think what we’re seeing is incredible excitement for the long-acting. We’ve always suggested that we felt that long-acting options, longer was better in a PrEP setting, especially. What we do know, however, is that you still have about 80%-85% of the total market that are daily orals, both Descovy as well as generic TDF. There’s still a huge opportunity, and with a weekly oral, not having to think about it every single day and moving to a once-weekly, is a really nice opportunity for us to make sure that we capture the market of folks that do want to be on an oral, maybe don’t enjoy an injectable, and want to make sure that they don’t have to think about it every single day.

We think that’s a huge opportunity. I don’t think one substitutes the other. On the contrary, there’s an opportunity for a market expansion in light of this, especially if you think about how there’s still 40% or more of folks on generics as well. There’s a real nice opportunity here for patient optionality, not only with the Q6 monthly, the Qweekly oral, potentially the full year as well, injectable by 2028. All of those pieces come together to support that leadership for Gilead in HIV prevention.

Rebecca, Call Host, Gilead Sciences: Our next question comes from Michael Yee at UBS. Mike, go ahead. Your line is open.

Michael Yee, Analyst, UBS: Great. Thank you. Just thinking about the strength of Yeztugo, I think, Johanna, you mentioned there’s a 70% compliance. How are you thinking about things that you could do to get it higher? Are there things that you’re seeing in the channel and in the marketplace and patient feedback? What are the factors that could consider making it lower? Thank you.

Jacquie Ross, Senior Vice President, Treasurer, and Head of Investor Relations, Gilead Sciences: Thanks, Michael. I think it’s about making it higher. I totally agree with you. Over 70% is definitely by far the strongest persistency rate that we’ve seen across all the options in PrEP. To your point, of course, the team is trying to make sure that we continue to challenge ourselves. We’ve done a lot of programs already at the HCP level to make sure that the right reminders, leveraging the EMR system, the HR system, to make sure that they’re part and parcel of your logistics. The team had just recently launched in the last month or so a support program for individuals on PrEP. It’s actually called Ready to Go, and this program was actually designed with PrEP consumers. It’s really taking in their input as to what would be helpful.

This program basically is really focused on making sure that Yeztugo individuals start, but also stay on Yeztugo for long term. It’ll include SMS reminders, educational resources, links to patient support, friendly nudges along the way, and probably the most important piece of the puzzle is having a nurse inbound and outbound call center so that people can actually have somebody to talk to. That’s what the team has actually just launched in the last month or so to continue to drive forward the Yeztugo persistency. I think all the pieces coming together in addition to all the campaigns that are out there around awareness about HIV PrEP and the long term of a Q6 monthly and what the protection that it offers you, I think are all going to be very positive to continue to support our persistency rates.

Rebecca, Call Host, Gilead Sciences: Our next question comes from Geoff Meacham at Citi. Geoff, go ahead. Your line is open.

Geoff Meacham, Analyst, Citi: Great. Afternoon, guys. Thanks for the question. Had a bigger picture one for Dan or perhaps Andy. When you look at Gilead’s core therapeutic areas, you guys have clearly diversified the business today in terms of pipeline, but you’re not really there yet with respect to sales. You guys used to talk about this a lot, but is lowering the concentration of HIV still an intentional long-term goal at Gilead? Or has that become less of a priority as long as you just have strong growth, cash flow, improving margins, et cetera? Thank you.

Daniel O’Day, Chairman and Chief Executive Officer, Gilead Sciences: Thanks, Geoff. I’ll start and then I’ll invite Andy to give some quantification to it as well. Clearly, our objective is still to diversify the business, but in two different ways, just to clarify. One is within virology and the second one is outside of virology. I think that’s developed over time, and I think clearly what we’ve talked about on the call here today within HIV, for instance, to be able to diversify our HIV business across multiple different options. In the treatment area, of course, it’s going to start with this BIC/LEN, we expect approval by the end of this month. Another daily oral option to capture the switch market within Gilead.

Of course, once-weekly, once-monthly, once every six months, and once a year across the treatment and PrEP portfolio, which we think is durable and long-lasting well into the end of the next decade. That’s job number one is to diversify that. Secondly, to diversify in oncology and immunology. You’ve seen some of that work, obviously with Trodelvy and our cell therapy business, but now expanding with acquisitions like Tubulis, as Dietmar mentioned in his remarks as well. Finally, we’re going to be giving you a lot more on our inflammation portfolio coming up over the course of the rest of this year and into next year, and that’s developing really nicely. We’ll continue to follow the science, but we believe that our diversification strategy is progressing very well. Andy, I don’t know if you want to give any figures.

Andrew Dickinson, Chief Financial Officer, Gilead Sciences: Yeah, Geoff, maybe just a couple of things to reiterate that you heard in the prepared remarks. One, just within HIV itself, the PrEP business being at a $4 billion run rate and growing is very exciting. When you look at the HIV franchise overall, where we are today is the result of an incredible amount of work from the clinical development and the commercial teams over the last five or six years to really build out the long-acting portfolio. We’re thrilled with the growth that you’re seeing, and we’re really happy with the progress that we’re making outside of HIV and other areas of virology. For instance, Trodelvy, you saw that Trodelvy grew 26% year-over-year in the quarter. It is approaching a $2 billion run rate with $450 million, plus or minus of sales in the quarter.

Jacquie Ross, Senior Vice President, Treasurer, and Head of Investor Relations, Gilead Sciences: You know that there’s a lot of excitement for anito-cel and the launch there, as well as the other acquisitions that we just did. I think we can do both. We continue to diversify and grow the HIV business, including in PrEP, but also in treatment. We can continue to

Andrew Dickinson, Chief Financial Officer, Gilead Sciences: Build out in oncology and inflammation, and we look forward to sharing more information later this year. Dietmar mentioned some of the inflammation data, for instance, that’ll be presented later this year. We look forward to sharing that and discussing it at that time.

Rebecca, Call Host, Gilead Sciences: Our next question comes from Brian Abrahams at RBC Capital Markets. Brian, go ahead. Your line is open.

Brian Abrahams, Analyst, RBC Capital Markets: Hey, good afternoon. Thanks so much for taking my question. It sounds like the earlier line anito-cel study enrolled really quickly and filing could happen as early as next year. I know there’s been a lot of changes in FDA leadership, and in some of the principles put forth around CAR T registrational requirements with the position paper a few months back, and the recent backtracking by the current acting commissioner. I’m just curious how consistent your regulatory interactions have been, at least in the lead line and maybe your latest impressions of what the filing requirements might be for the earlier 2nd line to 4th line patients. Thanks.

Dietmar Berger, Chief Medical Officer, Gilead Sciences: Thanks a lot, Brian. We continue to have interactions with the FDA as part of normal course of business and questions during a filing, and have not seen major changes at this point. I think the components that you’re referencing on the earlier lines of therapy, again, we have a dual primary endpoint of both minimal residual disease and PFS, and are continuing to progress those endpoints and would plan to file based on the dual primary, with FDA and haven’t had any conversations that would indicate differently.

Rebecca, Call Host, Gilead Sciences: Our next question comes from Courtney Breen at Bernstein. Courtney, go ahead. Your line is open.

Courtney Breen, Analyst, Bernstein: Hi team. Thanks so much for squeezing in a question from us. I really wanted to just understand a little bit more about the HIV treatment strength, specifically kind of looking at BIKTARVY, we saw performance beyond consensus expectations. This is in the context of insurance coverage losses in the U.S., wanting to get your context around how we should think about the drivers of those different volume dynamics relative to the mix and other pricing dynamics that are playing out for a product like BIKTARVY.

Jacquie Ross, Senior Vice President, Treasurer, and Head of Investor Relations, Gilead Sciences: Yeah. Sure, Courtney. This is Johanna. BIKTARVY sales were about $3.7 billion for Q2, growing year-over-year about 7% and quarter-over-quarter at 12%. What you’re referring to, I believe is what we’ve been watching very closely since January of this year is with the ACA tax subsidies being eliminated, there’s some folks that have basically fallen out of insurance plans. Most of those are health exchange plans where the patients are actually either now become uninsured or underinsured, and they’re kind of navigating the channels to understand where they go next. There’s a little bit of a transition. We kind of saw that directly impact the HIV treatment market. It was a little softer in Q2.

We believe that’ll bounce back to the 2%-3% that we’ve seen in the past and that we expect to see in the future. That was definitely what was going on there. Having said that would’ve had a bit of an impact on the volume in Q2. We think that bounces back and of course, as you’ve seen by the guidance, being raised to 9%-10% for HIV overall, that’s really driven by the strength of BIKTARVY and of course, our PrEP business. Those are the kind of the pieces that play together for Q2. Hopefully that was helpful.

Rebecca, Call Host, Gilead Sciences: Our next question comes from Simon Baker at Rothschild. Simon, go ahead. Your line is open.

Simon Baker, Analyst, Rothschild: Thanks so much for taking my question. One on GS-8824, if I may. You alluded to the fact that it is under evaluation in non-small cell lung cancer. I just wonder if you could give us your thoughts on the potential there in the non-squamous setting. It looks a particularly interesting application given that NaPi2b expression seems to be disproportionately in areas where checkpoint inhibitors perform less well, namely, women and non-small cell, never smokers. Any thoughts on that would be great. Thanks so much.

Dietmar Berger, Chief Medical Officer, Gilead Sciences: Yeah, Simon, this is Dietmar. Thank you for the question. You’re exactly right. It’s one of those targets that is expressed in non-small cell lung cancer in the non-squamous setting specifically. Obviously, this is early days for us, but what we’ve seen with TUB-040 in ovarian cancer really encourages us quite a lot. The efficacy that we see, the tolerability that we see, we really feel there is an opportunity for GS-8824 or TUB-040, in non-small cell lung cancer. As I said, it’s early days, and we need to generate more data.

Rebecca, Call Host, Gilead Sciences: Our next question comes from Tazeen Ahmad at Bank of America. Tazeen, go ahead. Your line is open.

Tazeen Ahmad, Analyst, Bank of America: Okay, great. Thanks. A quick one for me. Are you still planning on sharing a phase II update for your α4β7 program in IBD? If you are, what level of data should we expect to see there? How could it differentiate from other programs that are looking at the same indication using that similar mechanism? Thanks.

Dietmar Berger, Chief Medical Officer, Gilead Sciences: Yeah. Thanks for the question, Tazeen. Yes, of course. We’re planning to share an update at a medical conference later this year. Expect kind of a phase II normal type of update, with data on clinical remission, with data on histological remission, et cetera, just IBD endpoints. Obviously as you know, α4β7 is a validated target. We hope to show you data that are really demonstrating the potential there. Wait for the update later this year.

Rebecca, Call Host, Gilead Sciences: Our next question comes from Greg Renza at Truist Securities. Greg, go ahead. Your line is open.

Greg Renza, Analyst, Truist Securities: Hi. Thanks so much for taking our question. This is for Anto Greg. I have one question on HIV. How should we think about Islend’s net economics relative to BIKTARVY or your next gen BIC/LEN? Could migration from wholly owned regimens be dilutive for patients and requiring competitive share gains to create value? Thank you so much.

Jacquie Ross, Senior Vice President, Treasurer, and Head of Investor Relations, Gilead Sciences: Sure. I’ll start. I’ll take that one. We’re excited about Islend, and the potential launch in 2027. We just shared phase III data at IAS. I think physician response was incredibly positive for our first once-weekly oral option. Of course, this is in partnership with Merck, as you pointed out. We believe that this is an opportunity in the switch market where we do have leadership today with BIKTARVY. Obviously when you have the lion’s share of the naive market, you can’t really switch back to BIKTARVY if you’ve already started on BIKTARVY. This is an opportunity with islatravir/lenacapavir, as well as with BIC/LEN, to be honest, to really expand or switch leadership in this space. That’s why we believe this is an incredible opportunity for us to continue to drive that leadership in HIV treatment. islatravir/lenacapavir is an exciting one.

It’s something that we’ve already started working with our partner, with Merck, to prepare for the launch.

Rebecca, Call Host, Gilead Sciences: Our next question comes from Chris Schott at J.P. Morgan. Chris, go ahead. Your line is open.

Chris Schott, Analyst, J.P. Morgan: Great. Just a two-parter on Descovy. Obviously seeing very healthy sales growth and pricing dynamics here. Just maybe the first part, as we think about the rest of the year, should we think about this level of year-over-year price benefit we’ve seen in the first half of the year continuing? Then as we look forward on Descovy and with the weekly Yeztugo coming to market next year, do you see weekly Yeztugo as a product that can more meaningfully cannibalize Descovy? It seems like so far the injectable’s not been cannibalizing as much, and I was wondering if that dynamic changes next year with the weekly. Thank you.

Jacquie Ross, Senior Vice President, Treasurer, and Head of Investor Relations, Gilead Sciences: Yeah, sure. Hi, Chris. It’s Johanna. A couple of things. On Descovy, we have been seeing really nice growth, right? 60% year-over-year. That’s driven by a couple of different pieces. One is favorability in price, as you mentioned, due to the panel mix. Also, of course, demand driving with Descovy. It’s just helping further support Descovy demand. We do believe that we will be able to maintain that as we move forward with Descovy to a point, right? Obviously, I do think Yeztugo, to your comment, I would just say Yeztugo is picking up from a source of business, is picking up in the naive market slowly but surely.

Our focus has obviously been switch. From that switch, we’re seeing probably roughly about a third, a third, a third across Apretude, Descovy, and generics, maybe a little bit more heavily weighted towards the daily orals, which you would assume because that’s the biggest proportion of the market, and that’s exactly our focus. To your point about the opportunity with the Q-weekly oral, we do believe the Q-weekly oral for people that have been on Descovy, and comfortable with the daily oral and not necessarily seeking to go for a longer-acting in an injectable setting, we do believe the Q-weekly oral is going to be a really nice opportunity for both Descovy, but also for generics to move over to the Q-weekly Yeztugo option. We’re excited about that, and that’s why we see it as a real complementary opportunity as we think about this launch.

Rebecca, Call Host, Gilead Sciences: Our next question comes from Terence Flynn at Morgan Stanley. Go ahead, your line is open.

Terence Flynn, Analyst, Morgan Stanley: Thanks so much for taking the question. On 3242, your long-acting integrase, can you just confirm the dosing interval in the phase II trial? It was a little unclear based on your comments, if it’s exploring four months or six months, or if there’s still more data you’re waiting on to expand to a six-month interval. Thank you.

Dietmar Berger, Chief Medical Officer, Gilead Sciences: Yeah, Terence. Thanks for the question. This is Igmar. Obviously, there’s a lot going on with 3242. We got both the oral application as well as the injectable. That shows you how versatile this is as an integrase inhibitor. What we’ve always said, the ambition here is to bring this to once every six months. We’re going to have to increase the dose, and it’s currently in a dose escalation study. At this point in time, we’re sure that this can be dosed once every four months. We’re currently testing the higher doses in the phase I study, and we’re confident that after the completion of those higher doses, we can take it up to the six-month level. Of course, we need to see the data from the phase I study first. The ambition is absolutely to take this to a once every six-month dosing paradigm.

Rebecca, Call Host, Gilead Sciences: Our last question comes from Salveen Richter at Goldman Sachs. Salveen, go ahead. Your line is open.

Salveen Richter, Analyst, Goldman Sachs: Great. Thanks for the question, and congrats on the quarter. This is Matt on for Salveen. Maybe on the HIV pipeline, specifically the weekly orals. I guess as we think about the profile of your Merck partnered program and kind of how that compares to available treatments or some of the newer daily options hitting the market, is there anything you all would flag out outside of the dosing difference, of course, either with regard to the molecules or the mechanism or anything in the full phase III data we saw this week, either pros or cons that may factor into patient or physician preferences when considering switching to this treatment? Thank you.

Dietmar Berger, Chief Medical Officer, Gilead Sciences: Yeah. Thanks, Matt, for the question. This is Dietmar again. Obviously, we’re excited, as you heard from Johanna as well, about the first weekly oral that we have together with Merck, the islatravir lenacapavir combination. We are also excited to share about these two new weekly oral options that we’re exploring, which combine lenacapavir with either GS-1720 or GS-3242, both integrase inhibitors. Right? We feel combining our breakthrough capsid inhibitor with really today’s standard of care backbone, which is an integrase inhibitor, could be a preferred option. Everything we’ve learned from physicians based on the HIV treatment guidelines, INSTI-based regimens are really important to people based on the mechanism is well understood, they have strong safety profiles, they have high barriers of resistance.

That’s where we’re really encouraged by the possibility to develop these two different phase II regimens forward and then selecting the most compelling one and bringing that into phase III.

Rebecca, Call Host, Gilead Sciences: That completes the time that we have for questions. I’ll now invite Dan to share any closing remarks.

Daniel O’Day, Chairman and Chief Executive Officer, Gilead Sciences: Well, first of all, I’d like to thank the Gilead teams for a very strong second quarter in the first half of the year. Hopefully, you can all see that we continue to deliver against our strategy with significant progress and impact across really all of our therapeutic areas, driven by both the clinical and commercial excellence that we spoke about today. The second half of the year promises to be just as productive. Actually, we expect the potential of two additional launches, one in HIV with Piclan and one in oncology with anito-cel. We’re fully preparing for those in addition to continuing all the commercial and clinical excellence that we have. We look forward to keeping you informed on our progress. Please continue to reach out to our investor relations team on any additional questions you may have.

Thank all of you for joining us today on I know what was a very busy day. Thank you.