Gilead Seeks Expansion Opportunities Amid Strong HIV Performance and Veklury Decline

Gilead Sciences, a leading pharmaceutical company, is actively pursuing expansion opportunities across multiple therapeutic areas while navigating a mixed financial landscape. The company's recent third-quarter earnings call revealed a complex picture of growth in key sectors offset by declines in others, prompting a strategic focus on dealmaking and portfolio diversification.

HIV Portfolio Drives Growth as COVID-19 Treatment Falters

Gilead's HIV franchise remains the cornerstone of its success, with sales climbing 4% year-over-year to $5.27 billion in Q3. The daily HIV pill Biktarvy led the charge, growing 6% to generate nearly $3.7 billion. In contrast, the COVID-19 treatment Veklury experienced a dramatic 60% year-over-year decline, bringing in only $277 million.

The company's newly approved twice-yearly pre-exposure prophylaxis drug, Yeztugo, showed promise in its first commercial quarter, earning $39 million. Gilead projects Yeztugo's full-year sales to reach approximately $150 million, signaling optimism for its future performance.

Strategic Dealmaking and Portfolio Expansion

CFO Andrew Dickinson emphasized Gilead's commitment to active dealmaking across various therapeutic spaces. The company is particularly interested in late-stage and de-risked assets, with a goal of adding significant therapies every two to three years at minimum.

Gilead's recent $4.3 billion acquisition of CymaBay Therapeutics has already yielded positive results. The FDA's approval of seladelpar, now marketed as Livdelzi for primary biliary cholangitis, has contributed to the company's liver disease franchise growth. Hepatology sales reached $819 million in Q3, up from $733 million in the same period last year.

Financial Performance and Future Outlook

Despite challenges in some areas, Gilead reported a 3% year-on-year increase in overall revenue, totaling $7.8 billion for the quarter. However, product sales dipped 2% to $7.3 billion, slightly below consensus estimates. The company has narrowed its 2025 forecast, now expecting full-year product sales between $28.4 billion and $28.7 billion.

Cell therapy products Yescarta and Tecartus experienced declines, falling 12% and 10% below expectations, respectively. This underperformance in the cell therapy segment contributed to the mixed financial results for the quarter.

As Gilead continues to navigate a complex pharmaceutical landscape, its focus on strategic acquisitions and portfolio diversification aims to offset challenges in certain areas while capitalizing on strengths in others. The company's ability to adapt to changing market conditions and leverage its robust HIV franchise will be crucial in shaping its future trajectory in the competitive pharmaceutical industry.