Gilead Sciences, Inc. · NASDAQ:GILD
Gilead Sciences — Q3 2020 Earnings Presentation
53 slides from Gilead Sciences's earnings presentation, Oct 29, 2020
Slide 1: Q3 2020 Earnings Results
Q3 2020 Earnings Results October 28, 2020
Slide 2: Forward-Looking Statements
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 u
Slide 3: Contents
Contents Q3 2020 Earnings & Business Update 4-16 Acquisition of Immunomedics 7-10 Additional Growth Drivers 11 Robust Core Business 12-14 Appendix 17-53 Commercial Performance 17-24 Research & Development Update 25-42 Financial Performance 43-52 3
Slide 4: Q3 2020 Earnings & Business Update
Q3 2020 Earnings & Business Update 4
Slide 5: Q3 Transformational Acquisition of Immunomedics is a Growth Catalyst
Q3 – Turning Point – 2020 Transformational Acquisition of Immunomedics is a Growth Catalyst Earnings Call Highlights – Growth Drivers – High-Quality Portfolio Provides Diversification and Additional Growth Potential – Robust Core Business – Core Business Provides Foundation for Long-Term Sustainabil
Slide 6: Q3 Earnings Call Highlights
Q3 Transformational • Trodelvy is an emerging SOC in 3L+ mTNBC, and offers transformational potential in mUC 2020 and other solid tumor types Acquisition of • Broad expansion opportunities into multiple tumor types and earlier lines of therapy Immunomedics is a • Foundational asset with significant
Slide 7: Trodelvy Offers Tremendous Potential for Patients with Cancer
Trodelvy Offers Tremendous Potential for Patients with Cancer Trodelvy is a foundational asset offering immediate transformational potential in 3L+ mTNBC Broad expansion opportunities into multiple other solid tumor types, including mUC and earlier lines of therapy Significant potential to combine w
Slide 8: Strong Trodelvy Data in Multiple Tumor Types
Strong Trodelvy Data in Multiple Tumor Types Reduced risk of death by 52% compared to chemotherapy in 3L+ mTNBC Reduced risk of disease progression by 59% in 3L+ mTNBC First therapy to significantly improve OS in 3L+ mTNBC Clinically-meaningful activity in patients with heavily-pretreated mU
Slide 9: Trodelvy Provides Multiple Expansion Opportunities
Trodelvy Provides Multiple Expansion Opportunities Earlier Lines Potential Expansion Indications of Therapy Potential Combinations HR+/HER2- mBC Checkpoint inhibitors Urothelial cancer PARP inhibitors NSCLC Other IO and Glioblastoma chemotherapeutic agents Head & neck cancer Approved for CRPC 3L+ mT
Slide 10: Progress Since Immunomedics Deal Announcement
Progress Since Immunomedics Deal Announcement • Trodelvy sales of $53.0 million in Q3’20, first full quarter of commercial availability1 Strong commercial – Total net sales of $73.0 million in first five months of commercial launch1 performance • Robust adoption continued in Q3’20 in community and a
Slide 11: Beyond Trodelvy, High-Quality Portfolio Provides Diversification and Growth Potential
Beyond Trodelvy, High-Quality Portfolio Provides Diversification and Growth Potential First multi-product Growth in China Jyseleca RA Veklury approved cell therapy In-Market and accelerating approvals with demonstrated franchise with HBV to $1 billion+ in Europe and patient benefit Yescarta and by 2
Slide 12: HIV Franchise Long-Term Robust Growth and Durability
HIV Franchise Long-Term Robust Growth and Durability 91% • Best HIV launch in history1 Treatment Gilead patients • 2033 exclusivity on F/TAF-based regimens as of • Goal to have 90-95% Gilead patients Q3’20 on F/TAF regimens by Q4’202 46% Prevention • Improved Safety Profile3 PrEP scripts for Descovy
Slide 13: Biktarvy Drives HIV Treatment Growth
Biktarvy Drives HIV Treatment Growth #1 regimen ~ 1in2 patients Biktarvy is #1 prescribed regimen ~1 in 2 U.S. patients initiating on Biktarvy in U.S., EU5 and other regions1 and ~1 in 2 U.S. patients switching to Biktarvy from non-Gilead STRs COVID-19 Insight: HIV treatment demand including Biktarv
Slide 14: Descovy for PrEP Uptake in HIV Prevention
Descovy for PrEP Uptake in HIV Prevention 46% individuals on PrEP taking Descovy for PrEP ~ 1in5 at-risk individuals on PrEP1 Continued uptake exceeded goal of 40-45% of Opportunity to reach more of the ~1.1m U.S. individuals on PrEP on Descovy by Q3’20 individuals who could benefit from PrEP COVID-
Slide 15: Financial Highlights: Q3 2020
Financial Highlights: Q3 2020 in millions, except percentages and per share amounts Q3 2019 Q2 2020 Q3 2020 YoY Change QoQ Change HIV1 4,202 4,000 4,547 8% 14% Other Products2 1,314 1,067 1,946 48% 82% Product Sales $5,516 $5,067 $6,493 18% 28% COGS 769 798 875 14% 10% Product Gross Margin 86% 84% 8
Slide 16: Full Year 2020 Guidance
Full Year 2020 Guidance in millions, except percentages and per Initially Provided Previously Updated Updated share amounts February 4, 2020 July 30, 2020 October 28, 2020 Product Sales $21,800 - $22,200 $23,000 - $25,000 $23,000 - $23,500 Non-GAAP Product Gross Margin 86% - 87% 86% - 87% 86% - 87%
Slide 17: Commercial Performance
– Appendix – Commercial Performance 17
Slide 18: Commercial Revenue Highlights: Q3 2020
Commercial Revenue Highlights: Q3 2020 in millions, except percentages Q1 2020 Q2 2020 Q3 2020 QoQ Change HIV1 4,134 4,000 4,547 14% HCV 729 448 464 4% Cell Therapy2 140 157 147 (6%) Veklury - - 873 NM Ranexa and Letairis 91 81 78 (4%) Other Products3 373 381 384 1% Product Sales $5,467 $5,067 $6,49
Slide 19: HIV Franchise Product Sales
HIV Franchise Product Sales in millions Q3’20 up 14% from Q2’20 • Increase primarily driven by higher demand for Biktarvy $4,577 $4,547 and Descovy for PrEP and favorable inventory $195 patterns as channel inventory continues to normalize in $4,202 $256 $4,134 $4,000 the U.S. following the Q2’20 con
Slide 20: HCV Franchise Product Sales
HCV Franchise Product Sales in millions $729 $674 $630 Q3’20 up 4% from Q2’20 $183 $183 • Increase driven by higher patients starts in the U.S. and $142 Europe as the HCV business continues to show signs of recovery following easing of COVID restrictions $464 $148 $448 $111 Q3’20 down 31% from Q3’19
Slide 21: HCV Patient Initiations
HCV Franchise HCV Patient Initiations in thousands 45 45 42 15 15 15 31 Q3’20 U.S. market share at ~60% 25 • Q3’20 up 18 percentage points from Jan 2019 in the U.S.1 9 7 COVID-19 Insight: The HCV business showed signs of recovery from delayed patient starts due to COVID in Q3. Market patient starts
Slide 22: Cell Therapy Franchise Business Update
Cell Therapy Franchise Business Update • Only treatment for R/R DLBCL with 47% of patients alive at 3 years; • Deep, durable and rapid responses: 87% ORR and 62% CR 4-year follow-up data at ASH 2020 • Median duration of response, OS and PFS not reached at 12.3 • Only CAR T with 3,800+ patients treat
Slide 23: Veklury Progresses in Highly Dynamic Environment
COVID-19 Therapy Veklury Progresses in Highly Dynamic Environment Veklury approved or authorized in 50 countries • FDA granted full approval on October 21 to Veklury for treatment of patients with COVID-19 requiring hospitalization1 • European Commission granted conditional Marketing Authorization o
Slide 24: Ensuring Access to Veklury
COVID-19 Therapy Ensuring Access to Veklury • Rapidly expanded Veklury supply by increasing manufacturing capacity via contract networks and reducing manufacturing timelines through process improvements • Veklury revenue recognized in Q3’20 reflects both underlying hospital demand and a portion of i
Slide 25: Research & Development Update
– Appendix – Research & Development Update 25
Slide 26: Ongoing Strategic Portfolio Review and Prioritization
Ongoing Strategic Portfolio Review and Prioritization EXPAN D OPTI MI ZE DELI VER Selectively building out portfolio Ongoing strategic pipeline review Progressing transformational therapies through internal and external and prioritization discipline and maximizing access innovation Cross-functiona
Slide 27: Overview of Clinical Pipeline
Overview Phase 1 Phase 2 Phase 3 NDA/BLA/MAA of Clinical NDA Approved and MAA Approved Phase 2/3 Viral Diseases Pipeline Today MAA Approved Inflammatory Diseases Trial Paused 51 Clinical stage programs1 14 through BD since Jan '19 Trial Paused Trial Paused NDA/BLA/MAA filings, MAA Filed (BLA Approve
Slide 28: Accelerating Oncology Portfolio and Expertise Buildout
Oncology Accelerating Oncology Portfolio and Expertise Buildout Magrolimab (CD-47) Zimberelimab (PD-1) Anti SIRP-a Domvanalimab (TIGIT) Anti c-KIT Etrumadenant (A2a/A2bR) + others JTX-1811 (CCR8) PY314 (TREM2) TTX-080 (HLA-G) Protein Degradation PY159 (TREM1) Discovery Collaboration First-in-class a
Slide 29: Broad and Growing Oncology Pipeline
Oncology Broad and Growing Oncology Pipeline Select pre-clinical Phase 1 Phase 2 Phase 3 Marketed GS-9716 Pionyr PY159 SG SG SG Sacituzumab govitecan (SG) SG MCL1 inhib. TREM1 Basket study 3L mTNBC 3L+ HR+/ mTNBC, mUC, Ovarian (+ PARPi) 3L+ UC Oncology Solid Tumors2,4 (incl. NSCLC) (ASCENT) HER2-mBC
Slide 30: ESMO Data Demonstrates 3L+ mTNBC Effectiveness
Oncology ESMO Data Demonstrates 3L+ mTNBC Effectiveness 3L+ Metastatic Triple-Negative Breast Cancer Ph. 3 (ASCENT)1 ORR (%) PFS (months) OS (months) • FDA granted accelerated HR = 0.41 HR = 0.48 approval in 3L+ mTNBC in April 2020 based on 33% ORR 5.6 35% observed in Phase 1/2 IMMU-132- 12.1 01 stu
Slide 31: ESMO Data Demonstrates Promise In Other Tumors
Oncology ESMO Data Demonstrates Promise In Other Tumors HR+/HER2- Metastatic Breast Cancer Metastatic Urothelial Cancer Ph. 1/2 (IMMU-132-01) Ph. 2 (TROPHY U-01)4 ORR (%) PFS (months) ORR (%) PFS (months) 31%1 6.83 5.5 29% 5.4 27% Historical Historical Historical Historical SOC data2 SOC data2 SOC d
Slide 32: Trodelvy Studies Demonstrate Expansion Opportunity
Oncology Trodelvy Studies Demonstrate Expansion Opportunity Trial Indication Phase 1 Phase 2 Phase 3 Approved IMMU-132-01 mTNBC (3L+) ASCENT mTNBC (3L) sBLA submission for full approval pending TROPiCS-02 HR+/HER2- mBC (3L+) sBLA submission for accelerated TROPHY U-01 Urothelial (3L+) approval expec
Slide 33: Magrolimab Update
Oncology Magrolimab Update FDA Breakthrough Therapy designation for MDS PRIME designation awarded by EMA for treatment of MDS Potential accelerated approval filing anticipated in 2021 for magrolimab + azacitidine in 1L high-risk MDS based on response rates and durability from Phase 1b expansio
Slide 34: Lenacapavir as Foundation of Long-Acting Options
HIV Lenacapavir as Foundation of Long-Acting Options Lenacapavir Capsid Inhibitor Programs Reinforce Commitment to HIV Current Clinical Programs • Weekly oral and subcutaneous options administered as infrequently as every 6 months with self-admin potential HTE P2/3 • Breakthrough Designation1 Virolo
Slide 35: Veklury ACTT-1 Data Highlights
COVID-19 Therapy Veklury ACTT-1 Data Highlights Key Efficacy Mild & Moderate Severe (86% of trial patients) Endpoints Hospitalized, Hospitalized, Low-flow oxygen Hospitalized, High-flow oxygen support no oxygen support n=1381 support n=4351 including invasive mechanical support n=4781 Recovery Reduc
Slide 36: Ongoing Remdesivir Clinical Development Program
COVID-19 Therapy Ongoing Remdesivir Clinical Development Program Reaching • Initiated Phase 3 study of intravenous infusion of remdesivir in outpatient populations at high risk for severe COVID-19 complications in Sep ‘20 additional patient • Initiated phase 1a study of an inhaled remdesivir solutio
Slide 37: Latest Filgotinib Updates
Inflammation Latest Filgotinib Updates Upcoming Phase 2b/3 Jyseleca received Type A FDA meeting Pausing enrollment SELECTION UC trial regulatory expected to inform of trials in psoriatic results presented at approvals in Europe broader development arthritis, ankylosing UEGW and Japan; launched progr
Slide 38: Viral Disease Pipeline
Viral Disease Pipeline Pre-Clinical Phase 1 Phase 2 Phase 3 NDA/MAA Updates since Q2’20 Veklury remdesivir injectable form COVID-19 NDA Approved and MAA Approved NDA Approval EV Remdesivir inhaled form (GS-5794) COVID-19 Remdesivir sub cutaneous form (GS-5794) COVID-19 Lenacapavir capsid inhibitor (
Slide 39: Inflammatory Disease Pipeline
Inflammatory Disease Pipeline Pre-Clinical Phase 1 Phase 2 Phase 3 NDA/MAA Updates since Q2’20 Jyseleca filgotinib1 Rheumatoid arthritis MAA Approval MAA Approval Filgotinib JAK-1 inhibitor (GS-6034) Ulcerative colitis Inflammatory Disease Filgotinib JAK-1 inhibitor (GS-6034) Crohn's Disease Filgoti
Slide 40: Oncology Cell Therapy Pipeline
Oncology Cell Therapy Pipeline Pre-Clinical Phase 1 Phase 2 Phase 3 BLA/MAA Updates since Q2’20 Tecartus brexu-cel MCL MAA Filed (BLA Approved) Positive CHMP opinion Axi-cel iNHL sBLA Filed sBLA filed / Priority review granted Axi-cel 2L DLBCL Axi-cel 1L DLBCL Brexu-cel Adult ALL Pivotal Brexu-cel P
Slide 41: Oncology Non-Cell Therapy Pipeline
Oncology Non-Cell Therapy Pipeline NDA/BLA/ Pre-Clinical Phase 1 Phase 2 Phase 3 Updates since Q2’20 MAA Magrolimab anti-CD47 (GS-4721) MDS P1b P3 ASCENT SG1 mTNBC (3L) Acquired from Immunomedics TROPiCS-02 SG HR+/HER2-mBC (3L+) Acquired from Immunomedics TROPHY U-01 SG2 Urothelial (3L+) Acquired
Slide 42: Upcoming Milestones
Upcoming Milestones Lenacapavir capsid inhibitor NDA submission in HTE Remdesivir intravenous Phase 3 read out for COVID-19 outpatient population Lenacapavir capsid inhibitor Lenacapavir capsid inhibitor P2/P3 read out for HIV LA HTE Phase 2 read out for virologically suppressed4 COVID-19 Impact: So
Slide 43: Financial Performance
– Appendix – Financial Performance 43
Slide 44: Financial Highlights: Q3 2020
Financial Highlights: Q3 2020 in millions, except percentages and per share amounts Q3 2019 Q2 2020 Q3 2020 YoY Change QoQ Change HIV1 4,202 4,000 4,547 8% 14% HCV 674 448 464 (31%) 4% Cell Therapy2 118 157 147 25% (6%) Veklury - - 873 NM NM Ranexa and Letairis 152 81 78 (49%) (4%) Other Products3 3
Slide 45: Total Revenue Excluding Veklury
Total Revenue Excluding Veklury in millions Q3’20 up 11% from Q2’20 • Increase primarily driven by higher HIV demand driven by Biktarvy and Descovy for PrEP and favorable inventory patterns as channel inventory continues to $5,879 $5,704 normalize in the U.S. following the Q2’20 consumption of $5,60
Slide 46: Non-GAAP R&D Expenses
Non-GAAP R&D Expenses in millions $1,186 $1,155 $1,103 $1,028 $1,004 Q3’20 down 3% from Q2’20 • Decrease primarily driven by lower remdesivir investment Q3’20 up 12% from Q3’19 • Increase driven by higher clinical trial expenses related to remdesivir for infusion and investments in magrolimab • Part
Slide 47: Non-GAAP SG&A Expenses
Non-GAAP SG&A Expenses in millions $1,204 $1,164 $1,076 $1,095 $1,045 Q3’20 down 6% from Q2’20 • Decrease primarily due to a $97 million DOJ settlement recorded in Q2’20 Q3’20 up 5% from Q3’19 • Increase primarily driven by higher expenses due to headcount growth • Partially offset by lower marketin
Slide 48: Non-GAAP Operating Income & Margin
Non-GAAP Operating Income & Margin in millions $3,452 $2,762 $2,765 Q3’20 up 73% from Q2’20 $2,155 $1,995 • Increase primarily driven by higher revenues due to sales of Veklury, higher HIV sales and lower SG&A expense due to a $97 million DOJ settlement recorded in Q2’20 Q3’20 up 25% from Q3’19 • In
Slide 49: Non-GAAP Diluted EPS
Non-GAAP Diluted EPS in millions $2.11 Q3’20 increased from Q2’20 $1.68 $1.64 • Increase due to higher operating income driven by Veklury and HIV sales, higher gross margins, lower operating expenses mainly due to a $97 million DOJ settlement recorded in Q2’20 and lower tax rate $1.10 $1.11 Q3’20 in
Slide 50: GAAP to Non-GAAP Reconciliation of Outstanding Adjusted Debt and Adjusted EBITDA
GAAP to Non-GAAP Reconciliation of Outstanding Adjusted Debt and Adjusted EBITDA in billions where applicable Sep 30, 2019 Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Senior Unsecured Notes and Floating Rate Borrowings, net $24.59 $24.59 $24.10 $24.10 $29.29 Debt Discounts, Premiums and Issu
Slide 51: GAAP to Non-GAAP Reconciliation of Full Year 2020 Guidance
GAAP to Non-GAAP Reconciliation of Full Year 2020 Guidance1 Initially Provided Previously Updated Updated in millions, except percentages and per share amounts February 4, 2020 July 30, 2020 October 28, 2020 Projected product gross margin GAAP to non-GAAP reconciliation: GAAP projected product gross
Slide 52: Revised COVID-19 Macroeconomic Scenarios
Revised COVID-19 Macroeconomic Scenarios WORST CASE BASE CASE BEST CASE Outbreak worsens as we enter 2021 Outbreak continues into 2021 with continued peaks and valleys Rapid decline in COVID with no effective vaccine nor long- Some geographies contain the virus effectively and return to normal in mi
Slide 53: Thank You
THANK YOU CONTACT US investor_relations@gilead.com investors.gilead.com