Gilead Sciences, Inc. (NASDAQ:GILD) Q1 2025 Earnings Conference Call April 24, 2025 4:30 PM ET Jackie Ross Company Participants Jacquie Ross - SVP, Treasury & IR Daniel O'Day - Chairman, CEO Johanna Mercier - Chief Commercial Officer Dietmar Berger - Chief Medical Officer Andrew Dickinson - CFO Cindy Perettie - EVP, Kite Rebecca Good afternoon, everyone. And welcome to Gilead Sciences, Inc.'s First Quarter 2025 Earnings Conference Call. My name is Rebecca, and I'll be today's host. In a moment, we will begi ...

Core Viewpoint - Gilead Sciences reported quarterly earnings of $1.81 per share, slightly missing the Zacks Consensus Estimate of $1.82 per share, but showing improvement from a loss of $1.32 per share a year ago [1][2] Financial Performance - The company posted revenues of $6.67 billion for the quarter ended March 2025, which was 2.46% below the Zacks Consensus Estimate and a slight decrease from $6.69 billion in the same quarter last year [2] - Over the last four quarters, Gilead has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Performance - Gilead shares have increased by approximately 15.2% since the beginning of the year, contrasting with the S&P 500's decline of 8.6% [3] - The stock currently holds a Zacks Rank of 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.01 on revenues of $6.98 billion, while for the current fiscal year, the estimate is $7.92 on revenues of $28.71 billion [7] - The outlook for the Medical - Biomedical and Genetics industry is positive, ranking in the top 32% of over 250 Zacks industries, suggesting potential for outperformance [8]

Q125 Financial Results 10 December 2024 April 24, 2025 Forward-Looking Statements Statements included in this press release that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Gilead cautions readers that forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include those relating to: Gilead's ability to achieve its f ...

Financial Performance - Total product sales for Q1 2025 decreased 1% to $6.6 billion compared to Q1 2024, while product sales excluding Veklury increased 4% to $6.3 billion[4] - Total revenues for Q1 2025 were $6,667 million, a slight decrease of 0.3% compared to $6,686 million in Q1 2024[27] - Product sales decreased by 1% to $6,613 million in Q1 2025 from $6,647 million in Q1 2024, with significant declines in Veklury sales, which dropped 45% to $302 million[29] - Operating income for Q1 2025 was $2,237 million, a significant recovery from an operating loss of $4,322 million in Q1 2024[27] - Net income attributable to Gilead for Q1 2025 was $1,315 million, compared to a net loss of $4,170 million in Q1 2024[27] - GAAP net income attributable to Gilead for Q1 2025 was $1,315 million, compared to a loss of $4,170 million in Q1 2024[33] - Non-GAAP net income attributable to Gilead for Q1 2025 was $2,285 million, while it was a loss of $1,644 million in Q1 2024[33] - Diluted EPS for Q1 2025 was $1.04, a significant increase from $(3.34) in Q1 2024, primarily due to prior year charges that did not repeat[6] - Non-GAAP diluted EPS for Q1 2025 was $1.81, compared to $(1.32) in the same period in 2024, driven by the prior year IPR&D expense related to the CymaBay acquisition[6] - Gilead expects full-year 2025 product sales to be between $28.2 billion and $28.6 billion, unchanged from prior guidance[12] - Gilead anticipates diluted EPS for 2025 to be between $5.65 and $6.05, revised from a previous range of $5.95 to $6.35[12] Sales Performance by Product - HIV product sales increased 6% to $4.6 billion in Q1 2025, driven by higher average realized price and demand, with Biktarvy sales rising 7% to $3.1 billion[5] - Veklury sales decreased 45% to $302 million in Q1 2025, primarily due to lower rates of COVID-19 related hospitalizations[8] - Biktarvy sales in the U.S. reached $2,474 million, showing a significant increase compared to $2,315 million in the same period last year[40] - Total HIV sales in the U.S. amounted to $3,664 million, up from $3,405 million year-over-year, reflecting a growth of approximately 7.6%[40] - Total HIV sales in Europe were $5,535 million, compared to $5,596 million in the previous year, indicating a slight decline of about 1.1%[40] - Genvoya sales in the U.S. were $305 million, while in Europe, they reached $404 million, demonstrating strong performance in both markets[40] - The total sales for liver disease products in the U.S. were $3,353 million, with Europe contributing $1,681 million, showcasing robust demand[40] - The company reported a total of $1,993 million in sales for Veklury in the U.S., with European sales at $2,270 million, highlighting its continued market presence[40] - The overall revenue from other HIV products in the U.S. was $506 million, with European sales at $314 million, indicating stable performance[40] - The total revenue from liver disease products worldwide was $2,562 million, reflecting the company's strong position in this therapeutic area[40] Research and Development - Research and development expenses were $1.4 billion in Q1 2025, down from $1.5 billion in the same period in 2024[11] - Acquired in-process research and development expenses were significantly reduced to $253 million in Q1 2025 from $4,131 million in Q1 2024, a decrease of 94%[31] - Gilead Sciences is focusing on enhancing its research and development efforts to innovate new therapies and improve patient outcomes[41] Cash Flow and Assets - Gilead generated $1.8 billion in operating cash flow during Q1 2025 and paid dividends of $1.0 billion[6] - Total assets as of March 31, 2025, were $56,434 million, down from $58,995 million as of December 31, 2024[36] - Cash and cash equivalents decreased to $7,926 million as of March 31, 2025, from $9,991 million at the end of 2024[36] - Net cash provided by operating activities for Q1 2025 was $1,757 million, down from $2,219 million in Q1 2024[38] - Free cash flow for Q1 2025 was $1,653 million, compared to $2,114 million in Q1 2024[38] Taxation - The effective tax rate for Q1 2025 was 20.2%, compared to 7.0% in the same period in 2024[11] - The effective tax rate for Q1 2025 was 20.2%, compared to a negative effective tax rate of 7.0% in Q1 2024[27] - Projected non-GAAP effective tax rate for 2025 is approximately 19%[34] Market Outlook - The company anticipates continued growth in its HIV portfolio, driven by new product launches and market expansion strategies[41] - The company continues to focus on expanding its oncology portfolio and enhancing its cell therapy offerings[43]

Company Overview - Gilead Sciences is a pioneer in developing drugs for the treatment of human immunodeficiency virus (HIV) and has a broad portfolio that includes drugs for liver diseases, hematology/oncology diseases, and inflammation/respiratory diseases [12] - The company's flagship treatment, Biktarvy, is driving growth within its strong HIV franchise, which generated total sales of $19.6 billion in 2024, reflecting an 8% year-over-year increase [12] Financial Performance - For fiscal 2025, five analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.06 to $7.86 per share [13] - Gilead Sciences has an average earnings surprise of 19.5%, indicating a strong performance relative to expectations [13] Investment Ratings - Gilead Sciences currently holds a 3 (Hold) rating on the Zacks Rank, with a VGM Score of B, suggesting a solid overall performance [13][14] - The company also has a Value Style Score of B, supported by attractive valuation metrics such as a forward P/E ratio of 13.31, which may appeal to value investors [13]

Core Viewpoint - Analysts expect Gilead Sciences to report quarterly earnings of $1.73 per share, reflecting a year-over-year increase of 231.1%, with revenues projected at $6.83 billion, up 2.2% from the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised upward by 0.9% in the past 30 days, indicating a reassessment of initial estimates by covering analysts [1][2]. Revenue and Product Sales Projections - Total product sales are expected to reach $6.75 billion, indicating a year-over-year change of +1.6% [4]. - Royalty contract and other revenues are estimated at $40.04 million, reflecting a +2.7% change from the prior year [4]. - Product Sales for HIV (Genvoya) are projected at $375.96 million, showing a decline of -6.7% year over year [4]. - Product Sales for HIV (Odefsey) are expected to be $294.72 million, down -4.9% from the previous year [5]. - Oncology product sales (Tecartus) are forecasted at $56.12 million, indicating a +2% change [5]. - Liver Disease product sales (Sofosbuvir/Velpatasvir) are estimated at $238.12 million, down -4% from the year-ago quarter [6]. - Other product sales (Other) are projected at $40.07 million, reflecting a significant decline of -32.1% [6]. - Total HIV product sales in the U.S. are expected to reach $3.56 billion, indicating a +4.6% change year over year [7]. Additional Product Sales Insights - Product Sales for HIV (Genvoya) in the U.S. are projected at $299.29 million, down -9.9% from the previous year [7]. - Liver Disease product sales (Vemlidy) are expected to be $96.60 million, reflecting a +1.7% change [8]. - Other product sales (AmBisome) are projected at $11.31 million, down -19.2% from the prior year [8]. - Product Sales for Veklury are expected to be $277.30 million, indicating a -12% change year over year [8]. Stock Performance - Gilead shares have experienced a -1.3% change over the past month, compared to a -6.9% move in the Zacks S&P 500 composite [9].

Core Viewpoint - Gilead Sciences, Inc. is set to report its Q1 2025 results, with sales and earnings estimates at $6.83 billion and $1.73 per share, respectively, reflecting a positive trend in earnings estimates for 2025 and 2026 [1][4]. Financial Performance - The earnings surprise history shows Gilead has consistently beaten estimates in the last four quarters, with an average surprise of 19.47% [2][3]. - The current earnings ESP for Gilead is +3.07%, and it holds a Zacks Rank of 3 (Hold) [4]. Factors Influencing Q1 Results - Gilead's HIV franchise, particularly Biktarvy and Descovy, has been a significant driver of revenue, with estimated sales of $3.2 billion and $479 million, respectively [6][8]. - The new Medicare Part D model may have negatively impacted sales due to required discounts for Medicare patients [7]. - The Liver Disease portfolio is expected to benefit from increased demand for viral hepatitis medicines, with new drug Livdelzi contributing positively [9][12]. - Sales from Cell Therapy products are anticipated to decline due to competitive pressures, with estimates at $491 million [10]. - Trodelvy is expected to show strong demand, with sales estimates of $354 million [11]. Recent Developments - Gilead's application for lenacapavir is under review in the U.S. and EU, with a target action date set for June 19, 2025 [12]. - The company has received conditional marketing authorization for seladelpar in the EU [12]. Market Performance - Gilead's shares have increased by 14.4% year-to-date, outperforming the industry and the S&P 500 [13][14]. - The current price/earnings ratio is 13.13x forward earnings, higher than its historical mean but lower than the large-cap pharma industry average [16]. Investment Thesis - Gilead's strong HIV portfolio and ongoing innovation efforts are viewed positively, although there may be slight pressure on HIV sales in 2025 [18]. - The oncology portfolio, including Trodelvy, is diversifying the business, but the Cell Therapy franchise faces competitive challenges [19]. - Strategic deals and collaborations, such as with Merck, are seen as encouraging for future growth [20].

Core Viewpoint - Gilead Sciences is showing resilience in its stock performance compared to broader market indices, with upcoming earnings expected to demonstrate significant growth in EPS and stable revenue growth [1][2]. Company Performance - Gilead Sciences' stock closed at $112.39, reflecting a +0.45% change, outperforming the S&P 500, which fell by 4.84% [1]. - Over the past month, Gilead's shares have decreased by 3.08%, better than the Medical sector's decline of 4.6% and the S&P 500's drop of 4.7% [1]. Earnings Forecast - The company is set to release its earnings report on April 24, 2025, with an expected EPS of $1.73, indicating a 231.06% increase from the same quarter last year [2]. - Revenue is projected at $6.8 billion, reflecting a 1.67% increase year-over-year [2]. Annual Estimates - For the annual period, earnings are anticipated to be $7.87 per share, representing a +70.35% change, while revenue is expected to be $28.56 billion, showing a slight decrease of -0.67% from the previous year [3]. Analyst Sentiment - Recent adjustments to analyst estimates for Gilead Sciences indicate positive sentiment regarding the company's business operations and profit generation capabilities [4]. - The Zacks Rank system currently rates Gilead Sciences as 2 (Buy), suggesting favorable analyst outlook [6]. Valuation Metrics - Gilead Sciences has a Forward P/E ratio of 14.22, which is lower than the industry average of 17.83, indicating a potential undervaluation [7]. - The company also has a PEG ratio of 0.73, compared to the industry average of 1.43, suggesting that Gilead's stock may be undervalued relative to its expected earnings growth [7]. Industry Context - The Medical - Biomedical and Genetics industry, to which Gilead belongs, ranks in the top 31% of all industries, indicating strong performance relative to peers [8].

Core Viewpoint - Gilead Sciences is set to report its financial results on April 24, 2025, with significant expected growth in earnings per share (EPS) and revenue compared to the previous year [2][3]. Financial Performance - Gilead Sciences' stock closed at $111.88, reflecting a +0.54% change from the previous day, underperforming the S&P 500's gain of 0.67% [1] - The company is forecasted to report an EPS of $1.73, representing a 231.06% increase year-over-year [2] - Revenue is anticipated to be $6.8 billion, indicating a 1.67% increase from the same quarter last year [2] - Full-year estimates project earnings of $7.87 per share and revenue of $28.56 billion, showing year-over-year changes of +70.35% and -0.67%, respectively [3] Analyst Projections - Recent shifts in analyst projections for Gilead Sciences are important indicators of changing business trends, with positive revisions suggesting a favorable outlook [4] - The Zacks Consensus EPS estimate has increased by 0.16% over the last 30 days, and Gilead Sciences currently holds a Zacks Rank of 2 (Buy) [6] Valuation Metrics - Gilead Sciences has a Forward P/E ratio of 14.14, which is lower than the industry average of 17.2, indicating a potential undervaluation [7] - The company has a PEG ratio of 0.73, compared to the industry average of 1.41, suggesting that Gilead may be undervalued relative to its expected earnings growth [7] Industry Context - The Medical - Biomedical and Genetics industry, which includes Gilead Sciences, has a Zacks Industry Rank of 72, placing it in the top 29% of over 250 industries [8] - Strong industry rankings correlate with better stock performance, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [8]

Core Viewpoint - Wall Street analysts are showing renewed confidence in the healthcare sector, particularly with Gilead Sciences, indicating a potential shift in sentiment and highlighting the sector as a safe haven for investors [1][5]. Gilead Sciences - J.P. Morgan upgraded Gilead Sciences, marking a pivotal endorsement and signaling optimism in the company's valuation and the broader healthcare sector [5]. - Gilead's stock has outperformed the S&P 500 by 27% over the past quarter, trading at 93% of its 52-week high, which has attracted institutional interest [4][7]. - Analysts forecast a 12-month price target of $105.12 for Gilead, with a potential upside to $130, representing a 16.1% increase from current levels [4][7]. Pfizer Inc. - Pfizer is viewed as a value-based, defensive opportunity, trading at 80% of its 52-week high, with a 12-month price forecast of $31.92, indicating a 30.17% upside [9][10]. - Analysts project a significant increase in Pfizer's third-quarter EPS to $1.00, a 51.5% rise from the current 66-cent EPS, supporting the bullish outlook [10]. - Pfizer offers a 6.8% annual dividend yield, providing stability and income in a volatile market [11]. Hims & Hers Health Inc. - Hims & Hers is positioned as a contrarian growth play, with a 12-month price forecast of $37.31, suggesting a 20.20% upside [12]. - The stock has attracted $739 million of institutional capital over the past quarter, indicating growing interest despite trading at only 38% of its 52-week high [13]. - Hims & Hers trades at a high P/E ratio of 66.1, reflecting market expectations for future outperformance in the digital healthcare space [14].