The operator welcomes everyone to the conference call for Gilead's second quarter 2024 earnings. The speakers for the call will be the Chairman and CEO, Chief Commercial Officer, Chief Medical Officer, and Chief Financial Officer. The call will also include a Q&A session with the Executive Vice President of Kite. The company had a strong quarter with growth in HIV, Liver Disease, and Oncology. They also showed disciplined expense management and raised their guidance for the full year. The CEO highlighted the importance of their Virology and Inflammation therapeutic areas.

The article discusses the success of Gilead's Phase 3 trial for lenacapavir, a potential HIV prevention drug with twice-yearly dosing. The results showed 100% efficacy and generated excitement at AIDS 2024. The PURPOSE program will include over 9,000 participants and is expected to launch commercially in 2025. Other updates at AIDS 2024 highlighted Gilead's innovation in HIV prevention and treatment, including data from their daily oral combination and long-acting program. The company also plans to start Phase 2 studies for a once-weekly oral combination and has a PDUFA date for seladelpar next week.

The company is excited about the growing body of evidence supporting the use of seladelpar for PBC and is preparing to launch it for patients. They are also gearing up to manufacture anito-cel for multiple myeloma and support a Phase 3 trial for it. New data from a Phase 2 trial showed promising results for Trodelvy in combination with pembro for lung cancer, and the company is also assessing its potential for other types of cancer. Trodelvy remains the only approved TROP2-directed ADC on the market and has served over 40,000 cancer patients. The company also shared positive data for domvanalimab plus zimberelimab and chemotherapy in first-line upper GI cancers and is looking forward to upcoming updates from Phase 3 and Phase 2 trials.

The ASCENT-03 trial is evaluating Trodelvy in first-line PD-L1 negative metastatic triple-negative breast cancer patients, and a positive outcome could lead to global filings for Trodelvy in earlier lines of treatment. The iMMagine-1 trial could support regulatory filings for anito-cel in later-line relapsed or refractory multiple myeloma. Overall, the second quarter was a strong performance for Gilead, with revenue growth across therapeutic areas, successful cost management, and preparations for the launch of seladelpar. Total product sales, excluding Veklury, were $6.7 billion, up 6% year-over-year, with growth in HIV, Liver Disease, and Oncology. HIV sales were up 3% year-over-year, driven by strong demand, and Biktarvy sales were up 8% year-over-year due to higher demand.

Gilead Sciences' Biktarvy remains the leading HIV treatment in the U.S., with a 49% market share and 24 consecutive quarters of year-over-year market share gains. Their other HIV treatment, Descovy, saw a 6% decrease in sales due to lower average realized price, but maintained over 40% market share for PrEP in the U.S. The HIV PrEP market continues to grow, and Gilead's pivotal Phase 3 trial for Descovy showed 100% efficacy in preventing HIV infections in cisgender women, including those who are pregnant or lactating.

Gilead Sciences is launching a new program called PURPOSE to increase access to PrEP for underutilized populations. Lenacapavir is expected to be the preferred option for those who need long-acting prevention. Their Liver Disease portfolio saw a 17% increase in sales, driven by higher demand and a leading share in HCV. The company is also preparing to launch seladelpar for PBC in the U.S. and is awaiting a regulatory decision in Europe. Veklury, their treatment for COVID-19, continues to be an important part of standard care for hospitalized patients. Oncology sales were up 15% year-over-year.

In the second quarter, Gilead and Kite's oncology medicines have had a positive impact on over 60,000 patients. Trodelvy, the only approved TROP2-directed ADC, has shown significant survival benefits in metastatic breast cancer and is being adopted in other cancer types. Plans are underway to expand its reach to new markets and indications. Sales for Trodelvy and Kite's cell therapies have shown solid growth, with efforts being made to educate providers and patients on their curative potential. However, competition remains a challenge in the U.S. market.

The company has made progress in expanding the reach of cell therapy, particularly in working with national payers for reimbursement. Demand for their therapies remains strong internationally, and they are excited about the potential for two new therapies to come to market. In the second quarter, they had two publications in the New England Journal of Medicine and positive readouts from their portfolio, including a Phase 3 trial for lenacapavir that achieved 100% efficacy for HIV prevention. The second registrational trial for lenacapavir is expected to provide an update in late 2024 or early 2025.

The company plans to file for approval of lenacapavir based on positive data from two trials, with the goal of making it available for HIV prevention by late 2025. They are also conducting Phase 2 trials in diverse populations and are focused on developing next-generation HIV treatment options. Recent updates include positive data for a once-daily oral combination and the initiation of a Phase 2 trial for a once-weekly oral regimen. They are also on-track to begin Phase 3 trials for a once-weekly oral treatment option.

The company expects to provide updates on their longer-duration treatments, including Phase 1 studies for their every 3-month injectable programs and potentially every 6-month integrase inhibitors. They also presented positive results from their liver disease portfolio at a recent conference, with promising data for their PBC and HDV treatments. In the oncology field, they shared mature data from their Phase 2 trial for Trodelvy plus pembro in first-line lung cancer, which exceeded the historical performance of PD-1 monotherapy and supports their ongoing Phase 3 trial.

The company is conducting Phase 3 studies for dom plus zim in non-small cell lung cancer and upper GI cancers. They have also presented positive data for the use of this combination in gastric cancer. The company has multiple Phase 3 programs in earlier settings of breast cancer and is currently assessing next steps for Trodelvy in second-line treatment for non-small cell lung cancer. Updates were also provided for Yescarta and Tecartus at recent scientific conferences, including encouraging data for the use of Yescarta in central nervous system lymphoma. The company is engaging with regulators to expand the use of Yescarta for these patients.

At the EHA conference, the company shared positive results from the ZUMA-3 and ZUMA-24 trials for Tecartus and Yescarta, respectively. They also discussed their promising clinical development program for anito-cel, a potential best-in-class BCMA CAR T treatment. The iMMagine-3 trial for anito-cel will include a broader set of earlier-line, relapsed or refractory multiple myeloma patients, and the tech transfer and IND transfer to Kite have been completed. The company has completed all of their first half milestones and is looking forward to upcoming updates and milestones in the second half, including the FDA decision for seladelpar in PBC and updates on other trials.

The company has a strong pipeline of potential treatments for inflammatory diseases, including a once-daily oral alpha-4-beta-7 integrin inhibitor and an oral TPL2 inhibitor. The company's base business saw a 6% increase in the second quarter, with growth in HIV, Liver Disease, and Oncology products offsetting the expected decline in Veklury sales. The company's non-GAAP results showed a 5% increase in product sales and a 47% operating margin, the highest since 2022. The effective tax rate was 18%, reflecting a settlement with a tax authority. Non-GAAP diluted EPS grew 50% year-over-year.

The company had a $525 million legal settlement in the second quarter of 2023 that did not repeat in the second quarter of 2024. Excluding this settlement, EPS grew 21% year-over-year, driven by higher product sales and lower expenses. The first half of the year saw strong performance in each of the company's core franchises, leading to base business growth of 6%. For 2024, the company expects total product sales in the range of $27.1 billion to $27.5 billion, and total product sales excluding Veklury in the range of $25.8 billion to $26.2 billion. The company is monitoring various factors for the second half of the year, including variability in HIV business, cell therapy competition, uncertainty with Trodelvy bladder revenue, and potential FX headwinds. Overall, the company expects strong volume growth across all therapeutic areas for the rest of 2024, assuming the approval of seladelpar.

Gilead is expecting continued growth in HIV product sales and is focused on managing operating expenses. There is no change to their non-GAAP gross margin range and R&D expenses are expected to increase by a low to mid-single-digit percentage. SG&A expenses are expected to decline compared to last year. The company has been able to absorb expenses from the CymaBay transaction. They are increasing their operating income and non-GAAP diluted EPS guidance, even after factoring in a $320 million expense from buying out the seladelpar royalty from Janssen. This transaction removes Gilead's royalty obligation and highlights their financial discipline. The company has sufficient flexibility in their balance sheet for their capital allocation priorities.

In the second quarter, Gilead returned $1.1 billion to shareholders, repaid $1.75 billion of senior notes, and paid $1.2 billion for the federal transition tax. They believe they are well-positioned for growth and are focused on commercial execution, expense management, and strategic commitments. The Q&A session then discussed the potential of TIGIT, with Gilead having a differentiated molecule and focusing on areas with the best chance of activity. They have not initiated any trials with small cell lung cancer.

The speaker discusses the company's progress in their trials for TIGIT and their enrollment in a Phase 3 trial for gastric cancer. They are cautiously optimistic about the results and are approaching it in a data-driven manner. The next question is about expectations for the Purpose 2 trial and steps the company can take to alleviate payer roadblocks for branded PrEP use. The speaker explains that Purpose 2 is a different trial population and is ongoing, with the primary endpoint being superiority over the background HIV rate. The secondary endpoint is superiority over truvada.

The company hopes to combine positive results from Purpose 2 with Purpose 1 and quickly file data for lenacapavir for PrEP. The market for PrEP is currently growing at 12% annually, with over 90% of lives covered for Descovy. There may be some access challenges with medical benefits versus pharmacy benefits. However, lenacapavir's profile as a twice-yearly subcutaneous injection could redefine the PrEP market and lead to growth in market size, market share, and endurance. This includes reaching more users, prescribers, and countries beyond the United States.

Gilead's Descovy is currently the leading branded daily oral for HIV prevention, with over 40% market share. The company believes that its new drug, lenacapavir, will also be a leading long-acting option for prevention. Gilead is focused on improving adherence and access to both drugs, and is working with CMS to ensure greater access for patients. The company is also conducting trials for its drug Anito-cel, with enrollment completed for Imagine 1 and plans to present data at ASH. In Imagine 3, Gilead is taking steps to address the higher risk of death observed in competitor trials by implementing bridging therapy.

Daina asks a question about the potential of Anito-cel and the follow-up data that will be presented at ASH. Cindy Perettie, who is excited about the product, will follow up with her once the data is available. She also mentions that Anito-cel will be supplied from a Maryland facility and that bridging therapy is an option for patients in the Imagine 3 trial. Umer Raffat asks about the potential of lenacapavir plus bictegravir to replace Biktarvy, and Johanna Mercier responds that they are still in the early stages of testing and cannot make any conclusions yet.

The combination of len-bic is a promising treatment for HIV, with studies showing potential for a broader label indication. While Biktarvy remains the standard of care, there is also potential for growth in the switch segment. However, there were some concerns about nodules in patients treated with Purpose 1, but they tend to decrease in size over time.

The speaker addresses concerns about discontinuation of Purpose 1 due to nodules, but believes there will be flexibility in injection sites. They also discuss the potential for a Q6 month long-acting HIV treatment, but caution that more clinical data is needed before moving forward.

The company has been aggressive in moving their long-acting HIV treatment and prophylaxis programs forward. They are also working on a bNAb program and expect Phase 2 data soon. They have a preclinical oral GLP1 agonist for weight management and other metabolic diseases, and plan to start a Phase 1 study to evaluate its potential. They will make decisions based on data and prioritize best-in-class options.

The operator introduces a question from Chris Schott at JPMorgan regarding the company's US CAR-T franchise. Schott asks about the company's growth and engagement with community physicians, and the operator directs the question to Johanna Mercier. Mercier explains that the company's strong growth is due to their US refresh strategy, which includes restructuring the sales team and focusing on referrals between lymphoma specialists and CAR-T specialists. The company is also working on educating community practices and national payers about the curative potential of CAR-T. However, due to competitive headwinds, the company remains cautious for the second half of the year.

The company has seen new indications and cost competition in the oncology market, but remains focused on execution and raising awareness of the potential for CAR-T therapy. Progress is being made with community practices, but it is taking longer than expected. The company still expects oncology to make up one-third of sales by 2030, but this target is probability adjusted and subject to change depending on the success of various programs. Currently, oncology sales are already more than one-third of the way towards this goal.

The company is expecting a 12% increase in product sales in quarter two of 2024, highlighting their progress towards their goal. The company is also diversifying their business and solidifying their base in virology. The upcoming ASCENT-03 trial will provide a side-by-side comparison of their drug, trodelvy, against Astra's TROPION-Breast02. Trodelvy has shown great efficacy in triple negative breast cancer and is currently the only approved Trop-2 ADC in that space. The company expects trodelvy to continue to be successful in this area.

The company acknowledges that there are areas where their programs are not differentiated, but they are confident in the success of their drug Trodelvy due to its predictable and manageable adverse event profile. They are looking forward to upcoming data and believe it will solidify their position in the triple negative breast cancer market. In terms of their long-acting program, they see potential read through from Purpose 1 to Purpose 2 and believe there may be differences in responses to HIV drugs in different patient populations. They also discuss their strategy to expand the PrEP market and explain why they have not been able to reach these patients yet.

The speaker discusses the diversity of patient populations in their Purpose program and how it has helped bring PrEP to a variety of populations early on. They also mention the different levels of awareness and compliance in different populations. Despite this, the data from Purpose 1 gives them confidence in the effectiveness of their product. The second speaker highlights the growth of the prevention market and the challenges of marketing a daily oral pill to a market of asymptomatic individuals.

The speaker discusses the challenges of taking a daily pill for PrEP and the potential for lenacapavir to be a game changer in HIV prevention. They also mention the move to PARPI as a positive step for access and the potential for lenacapavir to be both a pharmacy benefit and a buy and bill option.

Gilead had a strong quarter with impressive revenue and bottom-line growth. They made progress in extending their HIV leadership, preparing for the launch of seladelpar, and advancing in oncology. They are well positioned for the second half of 2024 and plan to continue strong execution. They tentatively plan to release their third quarter earnings on November 7th, with the possibility of a date change. They appreciate the interest in their company and will provide updates on their progress.

This summary was generated with AI and may contain some inaccuracies.