Gilead Sciences (גיליאד סיינסס)

Gilead Sciences (גיליאד סיינסס) is a biopharmaceutical company headquartered in Foster City, California, with about 17,000 employees and operations in more than 35 countries. Most revenue comes from HIV treatment and prevention: Biktarvy, a once-daily single tablet for treatment; and Descovy and Yeztugo for prevention. Yeztugo is a twice-yearly injection based on lenacapavir.

Beyond HIV, the company has three other areas. In liver disease it has medicines for hepatitis B, C and D, plus Livdelzi for a cholestatic liver disease. In oncology it has Trodelvy, an antibody-drug conjugate for breast cancer, and CAR-T cell therapies from its Kite subsidiary. The fourth area is inflammation. Revenue for the 12 months ended June 2026 was $30.5 billion. Biktarvy alone was 49.5% of product sales in the latest quarter, and the U.S. was 73.4%.

In Q2 2026 the company completed three acquisitions. The first was Arcellx, which is developing a CAR-T therapy for multiple myeloma. The second was Tubulis, which develops antibody-drug conjugates. The third was Ouro Medicines, which is developing a treatment for autoimmune diseases and was acquired in partnership with Lakefront. Gilead has no controlling shareholder. Daniel O'Day serves as both Chairman and CEO.

The quarter: a growing base business, and a quarter of acquisitions

In the April–June 2026 quarter, revenue rose 10% to $7.80 billion. Product sales excluding Veklury, the COVID-19 treatment, also rose 10%, to $7.60 billion. Revenue includes $156 million recognized in a single quarter from royalties on a past sale of intellectual property. Excluding it, growth was 8.0%.

HIV sales rose 12%. According to the company, growth came mainly from a higher average realized price and demand. Biktarvy rose 7%, and the company's explanation also cites "favorable inventory dynamics". In Q1 those inventory dynamics were unfavorable. Descovy rose 48%, and Yeztugo sold $232 million. Compared with the same quarter two years earlier, U.S. HIV sales were up 21.9%.

What needs to be separated: the company reported an operating loss of $10.4 billion and a loss per share of $8.45. The loss comes from $11.2 billion expensed immediately for acquired in-process research and development (IPR&D). That total includes $7.0 billion for Arcellx, $3.1 billion for Tubulis, and $1.0 billion for Ouro net of Lakefront's share. An additional $1.75 billion impairment was recorded on the Trodelvy lung-cancer asset after the EVOKE-03 trial was discontinued. According to the company, these charges are not tax-deductible, so the quarter's effective tax rate was negative.

It also matters what the company's adjusted measure removes and what it keeps. It does not exclude acquired IPR&D, so it also shows a loss, of $6.75 per share. When acquired IPR&D is also removed from the adjusted measure, operating income for the first half of 2026 rose 11.2% to $7.2 billion. That is our calculation from company data. But such acquisitions recur almost every year: $1.2 billion in 2023, $4.7 billion in 2024, $1.0 billion in 2025 and $11.3 billion in the first half of 2026.

The multi-year context

Revenue rose from $27.1 billion in 2023 to $29.4 billion in 2025. GAAP net income was highly volatile over the same years: $5.7 billion, $0.5 billion and $8.5 billion. The swings came mainly from acquired IPR&D and impairments. From 2023 through the first half of 2026, acquired IPR&D totaled $18.1 billion and impairments $6.6 billion.

* Trailing free cash flow includes $860 million received from Lakefront and recorded in operating cash flow. The acquisition payments themselves were recorded in investing activities. In addition, tax payments in the first half of 2025 were about $2.0 billion higher than in the first half of 2026.

The acquisitions changed the balance sheet within six months. Cash and marketable debt securities fell from $10.6 billion at the end of 2025 to $3.2 billion in June 2026. Over that period the company sold its entire debt-securities portfolio. In the same period it repaid $2.75 billion of notes, issued $3.0 billion of new notes and drew a $1.1 billion one-year term loan. The new notes carry 4.25%–4.90% coupons and mature in 2028–2034. The loan can be prepaid at any time. The original loan facility was $4.7 billion, and the company cancelled the $3.6 billion it did not draw.

Net debt (notes and term loan less cash) rose from $13.2 billion to $22.0 billion. That is 1.44 times trailing-12-month earnings before interest, taxes, depreciation and amortization, in our calculation from the adjusted measure excluding acquisitions. Operating income covers interest expense 15 times. Stockholders' equity fell from $22.6 billion to $11.7 billion, almost entirely because the acquisitions were expensed. Debt-to-equity therefore does not reflect the company's financial strength here. About $3.1 billion of debt matures over the next year: March 2027, April 2027 and October 2027.

Capital return: the quarterly dividend rose 3.8% to $0.82. In 2025 the company paid $4.0 billion in dividends, 42% of free cash flow. Over the past 18 months it bought back $2.7 billion of stock, but the share count fell only from 1,246 million to 1,241 million. In other words, buybacks mainly offset shares issued to employees. According to the company, its capital priorities are, in order: investing in the business and pipeline, business development, growing the dividend, and only then buybacks.

Contingent obligations from the acquisitions: former Tubulis shareholders may receive up to about $1.9 billion if milestones are met. Ouro holders may receive up to $500 million, half of which is borne by Lakefront. Arcellx shareholders received a contingent value right of $5 per share, about $300 million in total. It pays only if cumulative anito-cel sales reach at least $6.0 billion by the end of 2029. This is a contractual condition only, not a sales estimate.

Gilead reports a single operating segment and breaks down sales by therapeutic area, product and region.

Regions: in the quarter, U.S. sales rose 11% to $5.60 billion. Europe fell 2% and the rest of the world rose 4%. About a quarter of sales are in foreign currencies. Three wholesalers account for about 90% of U.S. gross sales.

Gilead's competitive base is its HIV franchise and the long protection period it has left. Under settlements with generic manufacturers, generic Biktarvy cannot be sold in the U.S. before April 1, 2036. Protection for Yeztugo and Sunlenca, both based on lenacapavir, runs to 2037. Patients are switching from the company's older medicines to Biktarvy, which is why Genvoya and Odefsey are declining. Lenacapavir underpins several products: a twice-yearly injection for prevention, and Bixlenvo, a once-daily treatment tablet approved in the U.S. in August 2026. In addition, an application has been filed for a once-weekly prevention tablet, with a decision date of Feb 2, 2027, and a once-weekly combination with Merck's islatravir is being studied. That combination produced positive Phase 3 results.

Where the filings show pressure:

• Cell therapy: Yescarta and Tecartus are declining because of competition. Anito-cel, from the Arcellx acquisition, awaits an FDA decision by Dec 23, 2026.
• Trodelvy: the lung-cancer expansion failed, and a trial in HR+ breast cancer missed its primary endpoint. On the other hand, it was approved for first-line treatment of triple-negative breast cancer.
• Descovy: Cipla filed an application challenging its patents, which run to 2031. Gilead sued in February 2026.

This review does not include primary-source competitor data.

Risks that emerge from the filings

• Concentration: Biktarvy is about half of product sales and HIV about three quarters. The U.S. is 73% of sales.
• U.S. drug pricing: MFN prices in Medicaid and for new products, the IRA, and Medicaid changes taking effect in 2027.
• Tariffs: a 100% tariff was announced on patented pharmaceuticals. Gilead's exemption is limited to three years and conditional on U.S. manufacturing investment.
• Acquisitions: further deals, impairments of acquired assets, and contractual milestone payments.
• Leverage: net debt of $22.0 billion, cash of $3.2 billion, and about $3.1 billion maturing in 2027.
• Patents and litigation: Cipla's challenge to the Descovy patents, HIV antitrust suits, and a Texas suit with a trial set for December 2026.
• Channel inventory: the filings point to swings in wholesaler purchasing between quarters.

Items to monitor in the Q3 report (late October 2026)