Gilead bought its next act. Now it has to sell it

The technology

Gilead is a virology company that has spent heavily to become something more. HIV drugs brought in $5.69 billion of $7.63 billion in product sales in the second quarter. The core of its HIV future is lenacapavir, a capsid inhibitor Gilead now sells as the twice-yearly PrEP shot Yeztugo and, since August, inside the daily tablet Bixlenvo. A weekly oral islatravir and lenacapavir pill matched Biktarvy and other daily regimens in phase 3, and weekly oral PrEP has an FDA date of February 2, 2027.

Outside HIV the bets are oncology and liver disease. Trodelvy, a Trop-2 antibody-drug conjugate, won first-line triple-negative breast cancer in June. The Arcellx acquisition gave Gilead full rights to anito-cel, a BCMA CAR-T for multiple myeloma. In liver disease, Hepcludex became the first U.S. treatment for hepatitis delta in May.

The odds

Most of the near-term value sits in late-stage or filed assets, where base rates are friendly. Across the industry, programs that reach a filing get approved 90.6% of the time, according to BIO, Informa and QLS data for 2011 to 2020. Anito-cel is filed with a December 23, 2026 PDUFA date, backed by a phase 2 study that Gilead says showed deep and durable responses. Phase 3 assets convert to filings at 57.8%, which is the right frame for the weekly HIV regimen, now past phase 3 and heading to regulators.

The odds are less kind further out. Oncology expansions have failed before: the EVOKE-03 lung cancer trial of Trodelvy and Keytruda was stopped in June. Earlier assets from the Tubulis deal, such as the NaPi2b ADC GS-8824, are not expected to start registrational work until as early as 2027.

The money

Gilead's base business makes money, but the quarter carried the cost of a buying spree. Excluding acquired IPR&D, operating margin was about 49%, against minus 94% as reported. It booked $11.2 billion of acquired IPR&D in the second quarter and posted a GAAP loss of $8.45 per share. Cash and marketable securities fell to $3.18 billion at June 30 from $10.6 billion at the end of 2025, after new notes and a $1.1 billion term loan. Product sales guidance is $30.1 billion to $30.4 billion for 2026. Management said it does not expect more sizeable M&A this year.

The risks

The first risk is concentration. HIV is about three quarters of product sales, and Gilead's newer HIV launches partly compete with Biktarvy. Management said HIV market growth slowed because of Affordable Care Act changes that cost some patients coverage.

The second is Yeztugo's trajectory. Leerink's Daina Graybosch flagged a "meaningful risk of return rate degradation" as the patient base widens beyond early adopters, and executives estimated 80% to 85% of the PrEP market prefers pills.

The third is cell therapy. Kite's existing CAR-T sales fell 14% to $417 million against competition, and anito-cel will launch from a Kite unit whose sales are shrinking.

Our read

Gilead has turned a single-franchise company into one with several shots on goal, and paid for it with most of its cash. The base business is growing: 10% revenue growth in the second quarter is fast for a company of this size. The next six months test whether the acquisitions earn their price, starting with the anito-cel decision in December and the first full quarter of first-line Trodelvy sales. The HIV switch to long-acting and weekly products looks well placed clinically. The open question is how much of it adds revenue rather than moving it from one Gilead product to another.