Gilead Sciences Inc ($GILD) Q1 2026 Earnings Call

Good afternoon everyone and welcome to Gilead's first 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. Please note that the process for queuing questions has changed this quarter. To ask a question, press star one. And to withdraw your question, press star one again. Now I'll hand the call over to Jackie Ross, senior vice president, treasurer, and head of investor relations.

Thank you, Rebecca. Just after market closed today, we issued a press release with earnings results for the first quarter of 2026. The press release, slides, and supplementary data are available on the investor section of our website at gilead.com. The speakers on today's call will be our chairman and chief executive officer Daniel Oday, our chief commercial and corporate affairs officer Joanna Mercer, our chief medical officer Demar Berer, 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 Pereti, 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.

Thanks, Dan, and good afternoon, everyone. It has been a remarkable start to the year from a commercial perspective, reflecting the innovative nature of our portfolio and our strong execution. Beginning on slide 7, first quarter total product sales, excluding Vl. up 8% year-over-year driven by continued growth across our key products in HIV, breast cancer, and PBC, partially offset by HCV and cell therapy. Including Veccary, first quarter total product sales were $6.9 billion, up 5% year-over-year. Sequentially, sales were down 12% in line with normal first quarter seasonality. Moving to slide eight. Our HIV commercial teams drove firstart quarter sales of $5 billion up an impressive 10% year-over-year. This growth was driven by strong demand across betariest and disco favorability. Sequentially, HIV sales were down 13% primarily driven by Q1 seasonality in line with our expectations. These typical first quarter factors included inventory draw down following a year-end build in the prior quarter and lower average realized price due to channel mix. Looking at HIV treatment in more detail on slide 9 sales of $3.4 billion were up 7% year-over-year driven by higher demand and average realized price partially offset by inventory drawown. Sequentially, sales were down 15%, reflecting the first quarter seasonality that I just discussed. Victarvey continues to lead as the regimen of choice for both naive and switch patients across major markets. In the US, Varvey's share was once again more than 52%, continuing its record of year-over-year gains in every quarter since launch. This market leadership is a testament to betar's differentiation and continued physician confidence. We also continue to innovate with BCavir plus lenicapir or bicklen our once daily single tablet regimen. We are targeting a potential launch in late August for people with virally suppressed HIV including those on complex regimens. Building on our long-standing track record of delivering highly effective differentiated therapies for people with HIV, we believe that Bicklan is an exciting addition to our HIV treatment portfolio and has the potential to further expand Gilead's leadership in the switch market. Moving to slide 10, our US HIV prevention or prep business grew 87% year-over-year, comprised of the market leading branded daily oral disco and the first and only twice yearly injectable Yesgo. This performance was driven primarily by commercial execution and the strong product profiles of Discovi and Yesgo. We believe we have the most compelling portfolio of prep products on the market and expect to retain and grow our leadership in the rapidly expanding prep market in both the near and long term. In the first quarter, the US prep market grew approximately 14% year-over-year, and we look forward to further growth as we expand the reach of HIV prevention over time. Disco first quarter sales of $87 million were up 38% year-over-year driven by higher average realized price and demand growth. Sequentially, Disco sales were down 1% due to typical first quarter seasonality and partially offset by favorable channel mix. Specifically within prep, which accounts for about 80% of Disco's business, first quarter US sales were up approximately 50% year-over-year. Yes. Tugo continues to show an unprecedented launch trajectory for a new long-acting prep product. First quarter sales of $166 million were up 72% sequentially, exceeding our expectations. I am pleased to share we continue to see strong performance across our key Yesgo launch metrics. This includes access where now approximately 95% of individuals are covered in the US of which 95% can access with 0 copay market share where we are now the leading long-acting injectable in switch and we continue to see a higher than expected number of naive prep users initiating on yeso with early signs of growing momentum in this segment. Persistency where our initial experience of return users is encouraging. Although it's still early, we expect yes togo persistency to be the highest in the HIV prevention category and the impact of our direct to consumer campaign where we are creating strong brand awareness and interest in Yes2Go through our omni channel approach focusing on communities and geographies with the highest needs. Given the outperformance of Yes2Go in the first quarter and our growing confidence in the trends we're seeing, we're increasing our 2026 Yesgo guidance to $1 billion, potentially achieving blockbuster status in its first full year. Beyond 2026, we continue to expect a steady and durable build in sales over many years as we work to eliminate stigma associated with HIV prep and broaden adoption to all communities and individuals who can benefit. Both yes togo and disco for prep sales are expected to meaningfully grow in 2026. Reflecting this increase to our yes togo guidance in addition to first quarter strength across HIV, we are now expecting 2026 total HIV sales including both treatment and prevention to grow approximately 8% year-over-year compared to the 6% previously shared in our February guidance. This is inclusive of headwinds of approximately 2% associated with the drug pricing agreement with the US government to lower Medicaid pricing for some of our products and proposed changes to the Affordable Care Act. Turning to slide 11. Lived sales of $133 million more than tripled year-over-year as the launch continues to generate strong and growing demand in the US as well as across Europe. Demand growth continues to be driven by expansion in prescriber adoption, confidence in Livli clinical profile and broader utilization among appropriate secondline PBC patients. Sequentially sales declined 11% largely driven by inventory draw down. As we previously highlighted, fourth quarter sales included a bolus of switches associated with the discontinuation of a competing product which has normalized in the first quarter. As we enter the second quarter, Lived's rapid market capture continues to impress, maintaining its position as market leader with more than 50% share of the US second line PBC market. More broadly, in liver disease, first quarter sales of $767 million were up 1% year-over-year, primarily reflecting the continued launch of Lived Lel, partially offset by inventory drawdown across the portfolio and lower HCD patient starts. Sequentially, sales were down 9% reflecting seasonality, partially offset by higher average realized price for HCD products. Moving to Tradel on slide 12, sales of $42 million were up 37% year-over-year and 5% sequentially with growing demand across breast cancer indications in all regions. Tradelv is already approved in over 60 countries and has been firmly established as the leading regimen in second line metastatic TNBC across major markets. Turning to the first line metastatic setting in the phase 3 ascent 03 and 04 trials, Chelv demonstrated highly statistically significant and clinically meaningful improvements in progressionfree survival over the standard of care both as a monotherapy in PDL1 negative patients and in combination with peerlyab in PD1 positive patients. Ahead of potential FDA decisions, the NCCN updated their guidelines with category 1 recommendations across firstline metastatic TNBC, which reinforces the strength of the data in First Line with a potential launch in the US in the second half of 2026. Moving to cell therapy on slide 13 and on behalf of Cindy and the Kite team, first quarter cell therapy sales were $47 million, down 12% year-over-year and down 11% sequentially, reflecting the expected ongoing in andout of class competition across regions. We continue to pursue expanding access and global reach of our cell therapies. For example, in April, Ticarditis received full FDA approval in adult relapsed or refractory mantle cell lymphoma, adding data on patients who are BTK inhibitor naive. This important work of increasing awareness and physician comfort with CARTT helped set the stage for the potential launch of our next generation products. Turning to Antoell and with the close of the Arcelix acquisition last week, we are ramping up our detailed launch preparations for what we believe could be a best in disease multiple myoma therapy. Adding Kit's endtoend expertise in cell therapy to Unto Cell's demonstrated deep durable efficacy and differentiated safety profile positions to maximize its potential in the $3.5 billion fourthline plus parti market. With a late December Padufa date and factoring in the time needed for site activation, we expect revenue from Antoell to begin in early 2027. As we wrap up the first quarter and look forward to up to four additional launches this year shown on slide 14, I want to recognize our commercialization teams for their exceptional execution in driving another strong quarter in Q1 and thank them for their commitment to growing patient impact in the second quarter and beyond. And with that, I'll hand the call over to Dar.

Thank you Joanna and good afternoon everyone. I'm pleased to share that the strong momentum across our research and clinical programs has accelerated since our fullear earnings in February. This is supported by discipline portfolio prioritization and strong execution. With a close of the Celix acquisition, our pipeline now consists of 47 clinical programs spanning our portfolio of first-in-class or best-in-class assets. The completed acquisition of our celics and pending acquisitions of oral medicines and tubilis add potential best-in-class cartis T- cell engagers and antibbody drug conjugates as well as capability expanding technologies through the novel doomain binder and next generation ADC conjugation platforms. Starting with HIV on slide 16 we shared 60 abstracts at CR in February continuing our track record of showcasing our comprehensive and innovative ative HIV pipeline at this flagship conference. This year we highlighted new data across our suite of licapiber based regimens for treatment and prevention as well as our other investigational programs for HIV treatment. Updates across our HIV portfolio include our once daily oral biggravir plus lenac or biglen for treatment of virally suppressed people with HIV has been filed with FDA and we expect a regulatory decision based on priority review in August. At Croy, we highlighted that big demonstrated viral suppression in people switching from a multi- tablet regimen in artistry 1 or from big tarvy in artistry 2 with no clinically meaningful emergent resistance. Moving to our once weekly oral programs, we continue to target updates from the phase three island one and two trials in collaboration with Merc later this quarter. These trials are evaluating is later plus lenac for virally suppressed people with HIV and if successful this could result in the first ever long acting oral treatment regimen. We also continue to develop a wholly owned weekly oral treatment regimen combining a capsid inhibitor with an integrace inhibitor for treatment of people with HIV. With multiple alternative molecules in our portfolio, we are finalizing the selection of the capsid inhibitor and integrates inhibitor for the new combination and look forward to updating you in due course. Moving to even longer acting options, we're excited to be initiating a phase 2 trial combining our investigational integrace inhibitor GS3242 with len capir in the second half of this year. This followed phase 1 data shared at CROY that showed potential for injectable dosing every four months. The higher dose phase 1 cohorts with potential for twiceearly dosing are ongoing. In HIV prevention, we continue to drive innovation building on the exceptional clinical profile of Yesgo and I'm pleased to share that enrollment in our phase 3 purpose 365 study evaluating one's yearly intramuscular lenapir is complete. This registrational study is testing PK safety and tolerability across a diverse set of participants indicated for prep. We expect these data along with the unprecedented efficacy and safety results from purpose one and two to form the basis of regulatory submission with target US approval in 2028. Transitioning to oncology and starting on slide 17, we have announced several strategic investments over the last few months that we believe further strengthen our ADC and cell therapy capabilities and portfolios. ADCs are one of the most promising modalities in cancer today as highlighted by the incredible impact Odelvi has demonstrated for patients with secondline metastatic triple negative breast cancer and pre-treated hormone receptor positive hero to negative metastatic breast cancer. We continue to expect regulatory decisions from FDA for firstline metastthetic TNBC in the second half of 2026 and we now also anticipate European Commission decisions later this year. Further, we continue to expect phase three updates from Evoke03 in first line PDL1 high metastic nonmos lung cancer and ascent in second line plus metastatic endometrial cancer in the second half of this year. Given our foundational ADC experience with COVID, we're excited to expand our portfolio and capabilities with the acquisition of Tubilus. The lead asset top 40 is a potential firstin-class nappy 2B directed ADC that we believe has transformative potential in platinum resistant ovarian cancer, a challenging and aggressive condition with a poor prognosis for many women. At the Asmo conference last year, Top 40 phase 1 data showed early treatment responses that deepened over time in a broad ovarian cancer population without any biomarker selection. This is a potentially meaningful differentiation from other approved ADCs. Also in the shared data, top 40 was generally well tolerated across a wide therapeutic index with no clinically relevant bleeding, pneumonitis, ocular toxicity, stomatitis, or neuropathy observed. In the immediate future, we look forward to more mature phase one data on top 40 in ovarian cancer at this year's ESCO meeting in June and expect to enter registrational phase three studies for plasm resistant ovarian cancer in 2027. Looking longer term, tubilis pipeline includes top 30, a potential first-in-class ADC targeting 5T4 being evaluated in a phase one basket trial in multiple solid tumors including head and neck cancer and non small cell lung cancer. Further, Tubilus has multiple preclinical assets that utilize its next generation ADC platform. We're excited by the potential to develop ADCs that incorporate novel payloads, including ones developed by Gilead's industry-leading medicinal chemistry group. Moving to cell therapy on slide 18 and on behalf of Cindy and the Kite team, we are pleased to have closed our acquisition of our Celix at the end of April, which formally brings anel's entire program and the broader doomain binder portfolio into our R&D organization. We have long believed a needle cell has a potential best in disease profile in multiple myyoma and this is supported by clinically meaningful deep and durable efficacy as well as a differentiated safety profile. This includes no delayed or nonicans neurotoxicities and entrocolitis in our clinical program. Given our confidence in Antoid's clinical profile, we are evaluating an cell in earlier treatment lines including second to fourth line relapse or refractory multiple myyoma in the phase 3 imagine 3 trial. This trial is recruiting ahead of expectations with enrollment completion expected in the second quarter. We are also planning to develop a needle cell in newly diagnosed multiple myyoma. Beyond Anidel, the Arcelix acquisition brings an array of promising research assets and we are particularly excited to explore the broader applications of the unique D-dain binder platform across a variety of targets in oncology and autoimmune diseases and notably for invivo cell therapies. With our increasingly differentiated cell therapy pipeline, we look forward to bringing CARTT to even more patients in the years ahead. Moving to slide 19. Our inflammation pipeline has nearly doubled since 2019 and now consists of 10 clinical stage assets spanning small molecules, antibodies including bio specifics and cell therapies that enable a diverse array of approaches to address challenging autoimmune diseases. We are excited about the pending acquisition of Oruro medicines and its lead asset Gamto a clinical stage subcutaneously administered BCMA CD3 bicep specific T- cell engager that we expect to develop in collaboration with Galapagos together with kite's portfolio of anidocell and next generation biccistronic RTS we believe we could achieve durable immune reset shifting some autoimmune diseases from chronic symptom control to a transformative long-term treatment effect. Each asset offers unique potential advantages that could allow us to target different patient populations. Specifically, Gamormic has shown rapid deep and sustained plasma and B cell depletion while maintaining low rate and lowgrade CRS with no eye cans to date in over 60 patients with immune mediated diseases. We are focusing first on orphan autoimmune indications with established proof of concept and high unmet need including autoimmune cytoenas, pmpigus and idiopathic inflammatory myopathies. We're targeting phase three registrational trials in select autoimmune diseases as early as 2027. Longer term, we believe gamormic has potential in more than 20 autoimmune diseases that are driven by pathogenic B and plasma cells. Additionally, this year we plan to share updates from our broader inflammation portfolio including the phase 3 ideal study evaluating lift in PBC patients with incomplete response to UDCA. The phase 2 swift study evaluating GS1427 or Mistigrst, our investigational oral alpha 4 beta 7 inhibitor for inflammatory bowel diseases and the phase 2a cosmic study evaluating assertib, our investigational IRA 4 kynes inhibitor in cutaneous lupus arythmatitosis. Finally, reviewing our 2026 pipeline milestones on slide 20, we remain on track across all our key deliverables. We expect an FDA regulatory decision for Blevertide as a treatment for chronic HDV infection later this quarter. Boulevertide has been approved as headludex in the EU since 2020 and we look forward to making this available to patients in the US. Additionally, we expect FDA regulatory decisions for big len in August and Anidell in December of this year as well as phase three updates for island one and two in the first half of this year and for Evoke3 Ascent GIN and Ideal in the second half. With that, I'd like to thank our research and development teams and our partners whose continued strong clinical execution are driving the progress we have seen across our pipeline. Now I'll turn over the call to Andy.

Thank you Demar and good afternoon everyone. As you've heard, Gilead delivered strong first quarter results with continued commercial outperformance and disciplined operating execution. As shown on slide 22, our base business grew 8% year-over-year to 6.8 $8 billion driven by continued growth in sales for HIV products, Traelvi and Livzy, partially offset by lower sales of HCV and cell therapy products. Sequentially, sales were down 12% reflecting typical seasonal inventory dynamics in line with our expectations. Total product sales of $6.9 billion were up 5% year-over-year, reflecting lower vector laurate sales due to fewer CO 19 related hospitalizations. Moving to our non-GAAP first quarter results on slide 23. Product gross margin was 87% in line with our fullear guidance and up two percentage points year-over-year due to the expiration of a long-standing TAF related royalty obligation in addition to product mix. R&D expenses were $1.4 $4 billion relatively flat year-over-year reflecting higher investments in verology clinical manufacturing offset by lower oncology clinical study activity. Acquired IPR&D expenses were $17 million primarily driven by an upfront payment related to our GenHouse licensing deal. Additionally, we have now closed the acquisition of Arcelix and the acquisitions of Oro Medicines and Tubulus are expected to close later this quarter. The upfront payments related to these transactions are expected to be recorded in our second quarter acquired IPR&D and have been reflected in our fullear EPS guidance, which I will discuss shortly. Back to our first quarter results. SGNA expenses were up 12% year-over-year, primarily reflecting higher selling and marketing expenses related to the YZ2O launch. First quarter operating margin was 47% reflecting our continued focus on operating expense discipline and delivering top cortile margins. The non-GAAP effective tax rate was 18.3% in the first quarter. And finally, non-GAAP diluted EPS was $2.3, up 12% year-over-year. This reflected higher product sales and lower IP&D expenses incurred this quarter, partially offset by higher tax and SGNA expenses. Moving to our fullear guidance, we are pleased to share our updated expectations for 2026, reflecting revenue outperformance in the first quarter and expected momentum through the rest of the year. As a result, we are increasing our revenue ranges by $400 million. With regards to operating expenses in 2026, and as discussed on our transaction call a few weeks ago, we continue the careful prioritization of operational spend consistent with our track record over the last several years. For R&D, we expect a transaction related modest and manageable dollar increase compared to our start of the year guidance. And in SGNA, we are effectively absorbing incremental expenses associated with the acquisitions in our prior guidance. Upfront IP&D of 11.5 billion together with transaction financing expenses collectively amounting to $9.50 per share are reflected in our updated EPS guidance. We are pleased to note that excluding these transaction related costs, we are effectively maintaining our start of the year non-GAAP EPS guidance highlighting the flexibility in our operating model and our agility as we flex to accommodate the needs of the business. Looking at the details starting on slide 24, reflecting strength across our HIV businesses, we now expect 2026 HIV sales to grow 8% year-over-year ahead of our prior guidance of 6% growth. Within HIV, we now expect Yazugo sales of approximately $1 billion, up from $800 million at the start of the year. As a result, we are increasing our 2026 base business guidance and now expect a range between 29.4 billion and 29.8 billion. This increase of $400 million results in 5 to6% growth compared to 2025, up from the 4 to 5% growth expectation we shared in February. As we highlighted last quarter, our guidance includes a roughly 2% growth headwind from policy related changes this year, primarily related to the drug pricing agreement announced in December 2025 and the affordable care act. Absent this headwind, base business growth would be expected to be 7 to 8%. Our fullear VEC luri guidance remains unchanged at approximately $600 million, contributing to expected 2026 total product sales between $30 billion and $30.4 billion, an increase of $400 million. Moving to the non-GAAP P&L for the full year 2026, we are adjusting our guidance to reflect the arcelics oral medicines and tubulus acquisitions. Specifically, we expect R&D expenses to increase a mids singledigit percentage from 2025, slightly higher than the low singledigit percentage increase shared in our February guidance. This is primarily driven by our investment in clinical programs related to the announced acquisitions of Tubulus and Arcelix. Overall, we expect R&D expense as a percentage of total product sales to be less than 20% in 2026. We expect acquired IPR&D investments of approximately 11.8 billion for the year, which includes the upfront payments associated with our recently announced acquisitions. We expect SGNA expenses to remain in line with our February guidance of a mids singledigit percentage increase compared to 2025. And we expect fullear 2026 operating income of $2.4 billion to $2.9 billion. Full year 2026 effective tax rate is expected to be between 140% and 190% reflecting the non-deductible expenses from the arcelics or medicines and tubulus transactions. Excluding the 11.5 billion in upfront payments related to these recent transactions, operating income would be between 14 billion and 14.5 billion or $200 million higher than our February guidance. On slide 25, you can see that we now expect full year 2026 non-GAAP loss per share in the range of $15 to 65 per share. This includes an expense of approximately $9.50 per share relating to the upfront payments and financing costs associated with the arcellex oro and tubulus transactions. Excluding this impact, our non-GAAP diluted EPS would be $845 to $8.85 or in line with the non-GAAP EPS guidance we shared back in February. We are pleased to note that the strength in our commercial business reflected in the $400 million increase in product sales is effectively offsetting the impact primarily R&D of the three deals on an EPS basis. On slide 26, we returned greater than $1.4 billion to shareholders in the first quarter of 2026, including over $400 million of share repurchases. Combined with our dividend, we returned approximately 60% of our free cash flow to shareholders in the first quarter of 2026. Looking ahead, given the pace of our activity in the first four months of 2026, our business development focus in the near term will be closing and successfully integrating these programs and maintaining strong clinical momentum. At the same time, we will continue to pursue ordinary course business development transactions. It is less likely that we will pursue more sizable M&A this year, although we will always leave the door open to consider strategic acquisitions if a compelling opportunity emerges. Overall, we are pleased with Gilead's consistent strong performance highlighted by solid clinical and commercial execution and supported by our disciplined operating model. We continue to be very well positioned for both near-term and long-term growth and fully focused on executing our strategic commitments. With that, I'll invite Rebecca to begin the Q&A.

Thank you, Andy. At this time, we'll invite your questions. Please 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.

Hey, thanks so much. Can you talk a bit more about the tubulous feel? How much of that MPV was driven by ovarian and the signal you're seeing there for 040 versus the potential to take this into lung given the amount of nappy 2B expression there? And additionally, we're kind of seeing two steps forward, one step back with the PD1 vehs. You guys haven't been in that class so far. What additional validation would you need to see for the from the class at ASCO to look forward towards combination approaches with your ADC platform? Thank you.

Yeah, thanks Akash for the question. The tubilis platform to just expand a bit on what Dan has said right we see the value of the frontrunner molecule which was what we think is unprecedented data in ovarian cancer when you look at the data they presented at ASCO in platinum resistant ovarian cancer the objective response rate the durability of the response and also the tolerability in the patients treated we think that really stands out and on top of that this is not in a biomarker selected population. So we really see a lot of value there. Obviously also with the objective to take this into earlier lines of therapy especially into platinum sensitive ovarian cancer. Then there's a second clinical program with a 5T4 targeted top 30 program with broader potential in different tumor types currently in those escalation but already with encouraging findings when you look at expression of 5T4 and some of the early data. And then talking about the platform, these are really two technologies we're especially excited about. One is the P5 technology that is a linker technology that from a chemical perspective is entirely new. It allows for very stable linkage and allows for delivery of the payload directly at the tumor site with limited general toxicity and the toxicity profile that we see with the molecule at this point in time with no lung toxicity, no ocular toxicity etc really underpins that biological story. And then the second part of the platform being the Alco 5 platform which allows to link different types of payloads and this is also where the synergy between Tubalis and Gilead comes in. Developing novel payloads both from a tubist perspective but also from a Gilead perspective using our medicinal chemistry capabilities. We have been scouring the world for developed and really attractive ADC technologies. We have good experience obviously with Todd Delvi and we wanted to add to that and expand beyond that. And the tubilist technology is really the first that convinced us to add that to our portfolio because it's just so transformational and has so much opportunity. Regarding your second question with a VFPD1, obviously this is an interesting mechanism that we follow closely. The combinations need to be in my mind, very targeted to the individual tumor type. So you need to really evaluate does the PD1 mechanism play a role does the VGF mechanism play a role and we're also obviously looking at the data that is coming out with these different molecules currently in development across different tumor types.

And a cautious Andy maybe I would just add following what you heard from Demar and Dan there are clearly numerous sources of value in the acquisition that we're excited about. I think I said on our call a couple weeks ago the ovarian opportunity alone is very large the data is really encouraging and you know the financial return for our company and the shareholders on ovarian cancer alone can justify the transaction price. You're absolutely right. There is upside in lung cancer potentially. We'll see as the data develops. And all of these products have the potential to be a pipeline in a product, but just the ovarian cancer opportunity alone is very exciting. So leave it at that for now.

As a reminder, we ask that you please limit yourself to one question so we can get to as many analysts as possible on today's call. Our next question comes from Terrence Flynn at Morgan Stanley. Terrence, go ahead. Your line is open.

Great. Thanks so much and congrats on all the progress. This is a question for Joanna and it's one question I promise. Just on the yesgo launch, can you provide the latest mix of switch versus naive buyin bill and then anything new on the adherence assumption that's embedded in the $1 billion guidance? Thank you.

Thanks for the question. Yeah, we're really excited about what we're seeing with the strong performance in the first quarter and that's really across all the launch metrics that you were referring to. I would start with just growing confidence with health care professionals as the access pathways are getting a lot easier, the logistics, the experience is growing and we're really seeing that pickup as well as new prescribers of Yes to Go also adding every single week. From an access standpoint, we're now at about 95% of coverage with that 95% of those have zero dollar co-pays. So, we're in a really good situation, which I think is what you're seeing kind of that growth post the January 1st play because of the updates in the prescriber fees schedules for JCODE and everything else just kind of coming into play. On the market share front that you were referring to, we're obviously tracking both the naive and switch share. Switch share is obviously greater than the naive but naive is coming along really quite nicely and we're seeing strong momentum there as well. We see in the switch share we see a bit of a split across a third a third a third basically across LA other lii injectable, the chado generics as well as disco. So we're seeing a little bit of a play there and then we're seeing really strong market growth at about 14%. That is driving not just that's obviously helping Discovi as well. And then your last comment was around persistency. Still early days, right? As you think about the volume only really started in Q4, but what we are seeing we're really pleased with. Very encouraging. I think HCPs are starting the second injection and thinking it's a lot easier, access is easier as well as the experience the confidence in the injection and the experience for the people getting the injection is also better as well is what we're hearing anecdotally. We do expect Yes to Hugo's persistency to keep growing over time and to be the highest in the overall HIV prevention market. Yeah, so that basically sums up our first quarter for Yes2Go. Incredibly strong performance and explains why we've updated our guidance to the billion dollar opportunity for 2026.

Our next question comes from Saline Richter at Goldman Sachs. Go ahead. Your line is open.

My question with regard to users who haven't yet returned for second dose, do you have a sense of what's driving this? How it breaks down between users who are stopping prep versus switching to another option or just delayed in coming back from the second dose and maybe just speak to the DTC efforts as well. Thank you.

Sure. Thanks, Aline. I think what we're doing is we're tracking the claimed data pretty closely. It's not perfect data, I'll be honest with you. So, I don't have the level of detail that you're referring to. What we are seeing, however, is really good comeback on the second dose and within a certain time frame. So, as long as you give it a couple of weeks plus or minus, I think what we're seeing is really positive and encouraging. And what we're hearing as well, right, as we do a lot of market research with our health care professionals as well, the DTC only adds to that. We have a lot of efforts going on with persistency. We really leverage our specialty pharmacies to make sure that they call and remind them to make their appointments well ahead of time, but DTC helps that as well. Our DTC started late February, and what we've been seeing is a huge increase in brand awareness and visibility for Yes2Go, but it really also helps remind people to come back for their injection as well. So all those pieces are coming together, let alone additional work that we're doing to kind of accelerate that and support the DTC campaigns. As for actual results on DTC, it's still really early. We just launched late February. We're seeing social media awareness really ramp up because of those efforts, but it takes six to 12 months before we really see the outputs of the DTC.

Our next question comes from Moit Bonfal at Wells Fargo. Go ahead, your line is open.

Hi, thank you very much for taking my question and hope your BD team got some rest after the crazy first quarter. So my question is regarding the attractiveness of vehicle land treatment here with as you are about to launch so five to six% of the HIV market could still be a sizable opportunity. So could you please help us understand the opportunity here and how big this product could be even in the switch market? Thank you.

Thanks Moheit. It's Joanna. I'll take that one. So yeah we're really excited about Bicklen with a BDUFA date around the corner right late August. And the way we're thinking about Bicklen is really two opportunities within it. One is what you referred to which is with artistry one showing with viologically suppressed complex regimen there are still about 5 to 6% people living with HIV that are on multiple pills five six seven eight pills on a daily basis and this is an opportunity to simplify their regimen and move to one pill once a day and so that is something that we will be very focused on at launch. In addition to that opportunity, we also believe that in the switch market which is a dynamic market for people living with HIV there's about 20% or so that switch and that has to do with the innovation life cycle that we've seen over the years and so people want to switch to the next thing that comes on the market. So that does happen in our marketplace and so we see that as an opportunity for Bicklen. As you think about Victarvey and obviously Victarvey we believe will continue to remain the standard of care for many years to come with an LO out to 2036. We do believe though that some people do switch off big and right now they're switching off to competitor products. We believe with Bicklen there's an opportunity to play in that switch market which we haven't had in the past and move them from Bict Harvey if they're going to switch anyway to Bicklen. And as you think about Bicklen with big tech as the integrates inhibitor standard of care and lenapir as a really innovative capsid inhibitor pulling those two together that combination of two orthogonal mechanisms with really high resistance and no cross resistance makes it a really appealing option for patients. And so that's how we're thinking about the big land opportunity. I will say obviously with a late launch in 27 and late August, access will need to ramp up. So it'll be modest revenues in 2026 with a nice ramp in 27 and beyond.

Our next question comes from Carter Gold at Caner Fitzgerald. Go ahead. Your line is open.

Great. Good afternoon. Thanks for taking the question. Another one on yes to go adherence. Joanna, I appreciate your framing of adherence as sort of highest in the category. Fair to assume those comments are anchoring on apertude adherence around 50% still. And are there any reasons based I guess on the early days that the greater than 80% adherence that you outlined at HIV on HIV day 18 months ago is not still in play. Thank you. With the once yearly offering.

Yeah, thank thanks Carter. I think what you're referring to is also the adurance not the persistency at 80%. And we still believe obviously that adurance is obviously much greater because you're at 100% for 6 months. From a persistency level we do believe with a Q6 monthly and what we're seeing in early days is definitely much stronger than what the current competition is seeing in the marketplace. And so that's what's encouraging to see people coming back for their second injection and obviously potentially even third later this year. And so that's what we're tracking super closely and supporting those efforts as well. I think we, you know, what we're also very conscious of is just making sure the logistics and the schedule is happening in a timely way and working with clinics and different specialty pharmacies to make sure that happens exactly in line with that. And so I do see the opportunity for yes to go to be very persistent moving forward and of course understanding that you're in a prevention market so it's never going to be 100%. But I think it's just that balance is important as well.

Our next question comes from Jeff Meum at city. Go ahead. Your line is open.

Hey everyone. Congrats on the quarter and thanks for the question. One on Anita Cell. As you guys approach the launch and just looking at the development and earlier lines, just want to get your perspective on the safety advantage among cartis. Would we expect it to narrow or to widen as you treat patients upstream that are maybe perhaps less heavily pre-treated? Thank you.

Thanks, Jeff. It's Cindy. We actually agree with the statement you just made. We're really excited about the potential for Anita going into earlier lines, whether it's newly diagnosed multiple myoma or even in smoldering where patients aren't technically diagnosed with the disease. So, safety really matters at that point. I think it's a combination though particularly with our efficacy profile that we've seen to date coupled with the safety profile we think it's going to be a really important option for patients in earlier lines and we're working on right now the trial designs in newly diagnosed multiple myyoma and we'll be sharing more information on those as available. So we think it's going to be an opportunity based on both the exceptional efficacy that we're observing as well as a differentiated safety profile.

Our next question comes from Alex Hammond at Wolf. Go ahead. Your line is open.

Hey guys, thanks for taking the question. So obviously this year you guys have had three new acquisition integrations running simultaneously alongside multiple commercial launches. So I guess like how should we think about margins in the near term and the long term? Is there room for continued margin expansion particularly in that 27 to 28 time frame? Thank you.

Hey Alex, it's Andy. Thanks for the question. We appreciate it. I mean, look, you see in the first quarter a 47% operating margin, significant strengthening of the margin from last year. The business continues to perform really well. You see that in our updated guidance, including the increase in the revenue guidance. You also see the ability to absorb all three of these deals essentially to offset with the revenue outperformance the incremental expenses that we expect this year. So of the roughly $400 million in incremental expenses, a little over $200 million of those are R&D expenses this year. And then the remainder of them are the financing expenses. But you see our ability with the revenue outperformance and the disciplined expense management to pull those in and offset them. When you exclude the IP andd and kind of look at our EPS expectation on an apples to apples basis I will say you know we expect in 2027 to find room in our portfolio and our P&L for these as well. We spent a lot of time planning for this as we were looking at the transaction so we feel very comfortable about the ability to navigate the incremental expenses and then when you look beyond 27 you know our expectation was that we were going to have more room in our portfolio in any event as you know, we've been wrapping up a number of phase three trials across our entire portfolio. So, I think 26 and 27, these are modest increases. They're manageable. 28 and beyond we needed to add to the portfolio in any event. And these are really high quality assets that we can add and you should still expect very strong financial performance. We, you know, on the bottom line and the top line and there is room to strengthen the margin over time. Of course, it can vary from quarter to quarter, but when we look at where we are, we feel like we're in a great spot today and really excited about what lies ahead.

Our next question comes from Umar Rafat at Evacore. Go ahead. Your line is open.

Thank you guys. I was actually really looking forward to a possible update on your phase 2 ulcerative colitis trial of the oral alpha for beta 7. I think Clint trial says it wrapped up in March. I guess how should I interpret lack of any update there? Thank you.

Thank you for the question. We're really excited about the Aura Alpha 4 beta 7 and we're very much looking forward to updating you in due course. Right. Don't read anything into the current timeline. We are looking at the data and we will update you very soon.

Our next question comes from Tyler Van Beerren at TD Counten. Tyler, go ahead. Your line is open.

Hey guys. Thanks very much. For years to go. Can you discuss what regions in the US you're seeing the greatest uptake so far in the launch and how you expect that to evolve in the coming months and years?

Sure, Tyler. It's Joanna, I'll take that. Where we are seeing the greatest uptake is actually where we had already penetrated the HIV prep market. As you think about certain cities across the United States, San Francisco, LA, New York, Florida, etc. those are definitely areas where they were more comfortable with prep and so therefore it's more of a switch market there. What we're also very focused on in parallel to that kind of build has been on the naive market and making sure that we're creating awareness where there's a high unmet medical need where you see the highest HIV incidents in certain parts for example the rural south of the United States and that's obviously that's going to be over time but that's also where we're seeing more of the naive prescriptions coming through as well.

Our next question comes from Mike Ye at UBS. Mike, go ahead. Your line is open.

Great. Thank you. On GS3242, you had some great data at Croy recently. Your competitor seems to think that they are ahead, I think, publicly stating 2030 type time to market and you're saying 21 to 2031 to 33. Can you talk a little bit about your timing and what drives the difference between 31 and 33 and how you're thinking about that program? Thanks.

Yeah, thanks for the question. I mean, obviously currently in what you've seen at Croy, we're currently in the dose escalation phase, we're looking at the pharmacocinetics for different doses. We are very comfortable with the Q4 months dosing. Obviously, our ambition and we're really encouraged by the data that we've seen is to bring this to once every six months dosing. So I'm confident moving forward there. And 31 to 33 is really only a reflection and I would call it a conservative reflection of you know the different trial designs and the different clinical plans that we're currently working on. But what I do want to assure you about is we will try to bring this forward to patients as quickly as possible because we feel a once every six month injectable treatment on the basis of 3242 will really be able to make a difference for patients.

Our next question comes from Chris Shot at JP Morgan. Chris, go ahead. Your line is open.

Apologies. Our next question comes from Tazine Ahmad at BFA. Go ahead. Your line is open.

Okay, great. Thanks for taking my question. Wanted to ask your thoughts on how you're thinking about the impact to Traelv sales and triple negative. In particular in the case that Astra and Zichi's dashway is approved. I think they have a pedupa in June and they're claiming a superior overall survival benefit relative to chemotherapy that in patients that aren't eligible for imunotherapy. Does that change what you think the market opportunity is in this indication for tradine?

Thanks for the question. Listen we're really excited about tradeli performance. Let me start with Q1 right with a 37% year-on-year growth and a lot of that growth is really driven by the confidence that is building with physicians with Traelvi. So we had really been building as a standard of care and secondline setting for metastatic TNBC. What we've seen since the publications and the NCCN guidelines updating us to a category one for both first line PL1 negative as well as PL1 positive. What we've seen is a really nice uptake early in earlier lines including first line and obviously that spontaneous use that we're seeing. So we feel very confident that the offering that Traelvi is bringing to these patients to these women is really going to make a difference and I think it's the overall profile of Trudeli. I think the data speaks for itself. I think it's practice changing as we've been told both at ASCO and at ESMO when both studies were presented and we're excited about the potential approvals of both first line and second line towards the later I guess Q3 of this year. So more to come.

Our last question comes from Chris Shaw at JP Morgan. Chris, go ahead. Your line is open.

Great. Sorry, I was muted before. I just wanted to come back to Anita Cel and launch dynamics as we look out to 2027. I guess specifically, do you think you're going to need the second line imagine three data before you can broadly convert over practices or do you think there's an ability to ramp this product just based on the initial later line approvals? Thank you.

Thanks a lot for the question, Chris. This is Cindy. You know, we feel really confident about the Anita cell launch. We think that it's going to offer the one and done treatment that cell therapy has with stellar efficacy but also with not compromising on safety and that matters in every line. We're excited to bring it forward in fourth line. We're hearing from our Kos and many of our authorized treatment centers their excitement and that pans through in two ways. One is we've seen it in our enrollment for imagine three which went faster than we expected and the second is that we expect to have a majority of our authorized treatment centers activated within the first quarter of 2027 based on their enthusiasm to bring this on board. So we see an opportunity at a patient level. We know the market in fourthline plus is 3.5 billion. So there's a substantial opportunity there. We also think that Anitael offers that differentiated both efficacy and safety profile that patients and physicians are looking for.

That completes the time that we have for questions. I'll now invite Dan to share any closing remarks.