Q2 2022 Gilead Sciences Inc Earnings Call
Jackie: Thanks Jackie and good afternoon everybody.
Speaker: We really appreciate you joining today.
Becky and good afternoon everybody.
Really appreciate you joining today, we look forward to sharing our second quarter results, which highlighted a quarter of strong commercial and clinical execution.
Speaker: We look forward to sharing our second quarter results which highlight a quarter of strong commercial and clinical execution.
This was a very strong quarter for our business delivering revenue of $6 1 billion U S dollars <unk>.
Speaker: This was a very strong quarter for our business delivering revenue of 6.1 billion U.S. dollars. Excluding Vicklery, total product sales grew seven percent year over, year.
Excluding declaring total product sales grew 7% year over year.
If you look at the underlying business and also exclude the impact of the HIV low and the currency headwinds in the second quarter growth was actually 11%.
Speaker: If we look at the underlying business and also exclude the impact of the HIV LOEs and the currency headwinds in the second quarter, growth was actually 11 percent. Our HIV portfolio continued to deliver and this quarter was no exception with higher demand for both treatment and PrEP.
Our HIV portfolio continued to deliver on this quarter was no exception with higher demand for both treatment and prep.
Speaker: McTarvey sales grew by 28 percent year over year and we expect to see continued market growth for treatment and prevention with the ongoing market recovery.
<unk> sales grew by 28% year over year, and we expect to see continued market growth for treatment and prevention with the ongoing market recovery.
This was a record quarter for our oncology business revenues topped.
Speaker: This was a record quarter for our oncology business. Revenues topped half a billion dollars for the first time with a strong contribution from Tredelvi and a standout performance by our cell therapies.
Revenues top half a $1 billion for the first time with a strong contribution from <unk> and a standout performance by our cell therapies.
Speaker: The discarded was approved by the FDA for second line relapse or refractory large B cell lymphoma in April.
Yes, Scott It was approved by the FDA for second line relapsed or refractory large b cell lymphoma in April .
Speaker: This increased awareness and drove demand not only for your scar to second line patients, but also for those in later lines of treatment.
<unk> increased awareness and drove demand not only for your scarring of second line patients, but also for those in later lines of treatment.
Speaker: Yaskarta is a potentially curative therapy and kite has uniquely and effectively scaled manufacturing to meet the needs of patients through good benefits.
Yes, Scott as a potentially curative therapy and tight is uniquely and effectively scale manufacturing to meet the needs of patients who could benefit.
Speaker: Turning to our clinical progress, our NBA submission has been accepted by the FDA for Lenacathavir for heavily treatment experienced people living with HIV and we are now expecting the decision in late December. If approved, Lenacathavir will be the first approved cassette inhibitor and the first therapy with a six-month dosing schedule for HIV treatment.
Turning to our clinical progress our NDA submission has been accepted by the FDA for Atlantic catheter Veer for heavily treatment experienced people living with HIV and we are now expecting a decision in late December .
If approved <unk> will be the first approved <unk> inhibitor and the first therapy with a six month dosing schedule for HIV treatment.
Speaker: Moving to Tredelvi, we are in discussions with the FDA regarding a potential regulatory pathway for late-stage hormone receptor positive HER2 negative patients and we will update you as things progress.
Moving to <unk>, we are in discussions with the FDA regarding a potential regulatory pathway for late stage hormone receptor positive <unk> negative patients and we will update you as things progress.
Speaker: We have also begun screening patients in assent 3 and assent 4 evaluating Tredelvi in the first line metastatic triple negative breast cancer patients.
We have also begun screening patients in three and a set for evaluating <unk> in the first line metastatic triple negative breast cancer patients.
Speaker: We dosed the, first patient in our new phase 2 study evaluating Tredelvi in non-small cell lung cancer of Ope-2 and earlier this month we dosed the first patient in a new Tredelvi combination arm in our ongoing McGrill-Mab triple negative breast cancer study.
Dose the first patient in our new phase III study evaluating <unk> in non small cell lung cancer evoke too.
And earlier this month, we dosed the first patient in a new <unk> combination arm and our ongoing mcgraw about triple negative breast cancer study.
Also from a growing that we're targeting an interim analysis no later than early 2023, four enhance our phase III study in first line high risk Mds.
Speaker: Also for McGrill-Mab, we're targeting an interim analysis no later than early 2023 for Enhance, our phase 3 study in first-line high-risk MDS.
Additionally, we dosed the first patient for enhanced three a phase III Mcgraw on that study for first line unfit AML.
Speaker: Additionally, we dosed the first patient for Enhance 3, a phase 3 McGrill-Mab study for first-line unfit AML.
Moving to slide five later this year, we expect to initiate an additional five studies for <unk> and a mix of monotherapy and combination studies.
Speaker: Moving to slide 5, later, this year we expect to initiate an additional five studies for Tredelvi in a mix of monotherapy and combination studies.
Speaker: We also plan to start enrolling patients in three cell therapy trials and two Donvanillamab combination trials. The extent of existing and planned studies really highlights the scale of our ambitious oncology program.
We also plan to start enrolling patients in three cell therapy trials and two vanilla non combination trials.
The extensive existing and planned studies really highlights the scale of our ambitious oncology program.
Speaker: I want to take this opportunity to thank the teams across Gilead and Kite for a terrific, quarter of commercial execution and for the continued momentum in our clinical programs that continue to lay the critical groundwork for Gilead's future success.
I wanted to take this opportunity to thank the teams across Gilead and kite four terrific quarter of commercial execution and continued momentum in our clinical programs to continue to lay the critical groundwork for gilead future success.
Speaker: With that, I'll invite Joanna to share an update on our second quarter commercial performance.
With that I'll invite Joanna to share an update on our second quarter commercial performance.
Joanna: Thanks, Dan, and good afternoon, everyone.
Thanks, Dan and good afternoon, everyone.
Joanna: Turning to slide seven, we had a very strong second quarter with total product sales excluding, Bickleri of $5.7 billion, up 7% year over year, driven by HIV, cell therapy, and Tredelvi, and offset in part by HCV.
Turning to slide seven we had a very strong second quarter with total product sales, excluding decorate a $5 $7 billion up 7% year over year, driven by HIV cell therapy, and <unk> and offset in part by HCV.
Joanna: Sequentially, total product sales excluding Bickleri were up 14%, driven by the seasonal, pricing and inventory dynamics we see coming out of the first quarter of every year, primarily in our HIV business, as well as higher demand across our total portfolio. On slide eight, HIV sales were up 7% year over year to $4.2 billion, primarily driven, by channel mix associated with lower government utilization, leading to a higher average realized price, as well as higher demand for both treatment and prep.
Sequentially total product sales, excluding the claims were up 14%.
Given by the seasonal pricing and inventory dynamics, we see coming out of the first quarter of every year, primarily in our HIV business as well as higher demand across our total portfolio.
On slide eight HIV sales were up 7% year over year to $4 $2 billion, primarily driven by channel mix associated with lower government utilization, leading to a higher average realized price as well as higher demand for both treatment and prep.
Excluding the impact of the loss of exclusivity of Truvada Ana Checkbox HIV sales increased 11%.
Joanna: Excluding the impact of the loss of exclusivity of Truvada and Atripla, HIV sales increased, 11%. Quarter for quarter, HIV sales were up 14% due to demand and channel mix, leading to, higher average realized price, as well as the favorable seasonal inventory dynamics that we typically see in the second quarter relative to the first.
Quarter over quarter, HIV sales were up 14% data demand and channel mix, leading to higher average realized price as well as the favorable seasonal inventory dynamics that we typically see in the second quarter relative to the first.
The year over year, the HIV treatment market clear over 4% in the U S and was largely flat in Europe , it's sequentially quarter over 2% in the U S and 1% in Europe .
Joanna: Year over year, the HIV treatment market grew over 4% in the U.S., and was largely flat, in Europe, but sequentially grew over 2% in the U.S. and 1% in Europe.
We're encouraged to see the market recovering and on a year on year basis continue to expect annual treatment market growth in the 2% to 3% range.
Joanna: We're encouraged to see the market recovering, and on a year-on-year basis, continue to expect, annual treatment market growth in the 2% to 3% range.
<unk> sales in the second quarter were $460 million up 6% year over year and 23% sequentially.
Joanna: The SCOBY sales in the second quarter were $460 million, up 6% year over year, and 23% sequentially.
Joanna: We're pleased to see continued PrEP market growth with broader awareness and market volume, that are well above pre-pandemic levels. For the quarter, the overall market growth was up 25% year over year and 5% sequentially, highlighting both robust recovery and growing adoption of PrEP.
Pleased to see continued market growth with broader awareness and market volumes that are well above pre pandemic levels.
For the quarter. The overall market growth was up 25% year over year, and 5% sequentially, highlighting both robust recovery and growing adoption of prep.
Despite generic and other market participants. Please go to Sharon it's holding in the mid 40% range.
Joanna: Like generic and other market participants, the SCOBY share in PrEP is holding in the, mid-40% range.
Joanna: As awareness continues to grow and the overall market expands, we expect SCOBY to continue, to play an important role in PrEP, and really look forward to adding lenacapavir as a potential long-acting alternative for those seeking preventative care as early as 2025.
Awareness continues to grow and the overall market expands we expect it's going to be to continue to play an important role in prep and we look forward to adding <unk> as a potential long acting alternative for those seeking preventative care as early at 2025.
On to slide nine.
Joanna: On to slide nine.
Joanna: VicTARVI grew 28% year over year to $2.6 billion, primarily driven by strong demand and channel, mix.
It's Harvey grew 28% year over year to $2 6 billion, primarily driven by strong demand and channel mix.
Joanna: VicTARVI's market share in the U.S. grew from 40% in Q2 of last year to 44% in the, second quarter of 2022, and continues, by a wide margin, to be the leading treatment for HIV, as well as the fastest growing. In fact, VicTARVI's differentiated clinical profile was once again reinforced this past, weekend at the International AIDS Conference in Montreal. At five years, VicTARVI had zero cases of treatment failure due to resistance, as well, as sustained efficacy and a demonstrated safety profile in people living with HIV. Notably, this five-year trial duration demonstrating zero cases of resistance is unprecedented, for an HIV regimen.
The target market share in the U S grew from 40% in Q2 of last year to 44% in the second quarter of 2022 and <unk>.
By a wide margin to be the leading treatment for HIV as well as the fastest growing.
In fact, <unk> differentiated clinical profile will once again reinforced this past weekend at the International AIDS Conference in Montreal.
Five years, it's Harvey had their cases of treatment failure data resistant as well as sustained efficacy and have demonstrated safety profile in people living with HIV.
Notably.
It's five year trial duration, demonstrating zero cases of resistance is unprecedented for an HIV regimen.
Sure also increased sequentially up 1% from the first quarter of 2022 contributing to 19% growth in the <unk> revenue quarter over quarter. In addition to the channel mix and the seasonal inventory dynamics, we referenced earlier.
Joanna: Share also increased sequentially, up 1% from the first quarter of 2022, contributing to, 19% growth in big target revenue quarter-over-quarter, in addition to the channel mix and the seasonal inventory dynamics we referenced earlier.
Joanna: Moving to slide 10, HCV sales in the quarter were down 18% year-over-year due to the 10% channel mix leading to lower average realized price and fewer patient starts, partially offset by higher volume in Eastern Europe. Sequentially, HCV was up 12%, driven by the timing of a large order, in addition to higher, patient starts.
Moving to slide 10.
HCV sales in the quarter were down 18% year over year due to channel mix, leading to lower average realized price and fewer patient starts partially offset by higher volume in eastern Europe .
Sequentially HCV was up 12% driven by the timing of a large order in addition to higher patient start.
Joanna: Overall, in HCV, we maintained steady market share of 50% to 60%, both in the U.S. as well, as Europe.
Overall in HCV, we maintained steady market share, 50% to 60% both in the U S as well as Europe .
Joanna: For HCV and HDV, on slide 11, sales were roughly flat quarter-over-quarter and year-over-year, driven by unfavorable adjustments associated with the recent volume-based procurement updates in China, and offset by higher year-over-year demand and volume growth in all other regions.
For HBV and HDD on slide 11 sales were roughly flat quarter over quarter and year over year, driven by unfavorable adjustments associated with the recent volume based procurement updates in China, and offset by higher year over year demand and volume growth in all other regions.
<unk> revenues in the second quarter were $445 million as shown on slide 12.
Joanna: The QLERI revenues in the second quarter were $445 million, as shown on slide 12.
Joanna: As expected, sales declined both year-over-year and quarter-over-quarter, as hospitalization, rates declined in most geographies. Additionally, U.S. revenue reflected inventory drawdown in the second quarter.
As expected sales declined both year over year and quarter over quarter as hospitalization rates declined in most geographies.
Lee U S revenue reflected inventory drawdown in the second quarter.
Joanna: While COVID-19 is still prevalent, the most recent sub-variants have been less severe, and contributed to fewer hospitalized patients, although roughly 60% of hospitalized COVID-19 patients that are being treated in the U.S. are receiving VECLRI.
While COVID-19 is still prevalent at the most recent <unk> have been less severe and contributed to pure hospitalized patients, although roughly 60% of hospitalized COVID-19 patients that are being treated in the U S.
Our receiving back Larry.
We continue to be committed to supporting patients with COVID-19 globally last month, we signed our second joint procurement agreement with the European Commission that enables participating countries to purchase vickery for a period of up to 18 months.
Joanna: We continue to be committed to supporting patients with COVID-19 globally. Last month, we signed our second joint procurement agreement with the European Commission that, enables participating countries to purchase VECLRI for a period of up to 18 months. In 2020, the European Medicines Agency Committee for Medicinal Products for Human Use, or CHMP, adopted a positive opinion recommending VECLRI receive full marketing authorization for the treatment of appropriate patients with COVID-19. This builds on our prior conditional authorization, and we look forward to the final decision, by the European Commission later this year.
Additionally, the European Medicines Agency committee for medicinal products for human use of our CMP <unk>.
Adopted a positive opinion recommending declarator received full marketing authorization for the treatment of appropriate patients with COVID-19.
This builds on our prior conditional authorization and we look forward to the final decision by the European Commission later this year.
We're proud of our track record of meeting global demand for <unk> since the fall of 2020, and we will maintain our readiness to supply the coronary where it's needed and have increased our full year guidance to reflect anticipated patient need in the second half.
Joanna: We're proud of our track record of meeting global demand for VECLRI since the fall of, 2020, and we'll maintain our readiness to supply VECLRI where it's needed and have increased our full-year guidance to reflect anticipated patient need in the second half.
Joanna: Turning to oncology and beginning with Tredelvi on slide 13.
Turning to oncology and beginning with <unk> on slide 13.
Joanna: Sales of $159 million grew 79% year-over-year and 9% quarter-over-quarter.
Sales of $159 million grew 79% year over year, and 9% quarter over quarter sequentially.
Joanna: Sequentially, Tredelvi grew 41% outside of the U.S., with particularly strong growth, in Germany and France due to increased awareness and adoption.
Sequentially Qdoba grew 41% outside of the U S with particularly strong growth in Germany, and France due to increased awareness and adoption.
Sequential 7% volume growth in the U S was offset by unfavorable pricing dynamics.
Joanna: Overall, 7% volume growth in the U.S. was offset by unfavorable pricing dynamics.
Joanna: We expect to see continued growth in the second half, driven by the impact of our expanded, sales force in the U.S., as well as reimbursement approvals in the EU.
We expect to see continued growth in the second half driven by the impact of our expanded sales force in the U S as well as reimbursement approvals in the EU.
We're committed to broadening access for <unk> continue to work with regulatory regulators and payers around the world.
Joanna: We're committed to broadening access for Tredelvi and continue to work with regulators and payers, around the world.
Joanna: We're pleased with the recent decisions by both NCCN in the U.S. and NICE in the U.K., These decisions add to the building support for Tredelby's use following positive health technology assessments in a number of other countries.
We're pleased with the recent decisions by both MCT and in the U S and nice in the UK recognizing the significant clinical benefit of <unk> in patients with metastatic and metastatic triple negative breast cancer based on the phase III trial.
These decisions to add to the building support for Qdoba abuse, following positive health technology assessments and number of other countries.
Qdoba the first ADC to demonstrate statistically significant and clinically meaningful overall survival benefit in this metastatic <unk> patient population in fact, the mtc and guidelines elevated qdoba to a category one recommendation for second line and later metastatic can be fee its highest recommendation available.
Joanna: Tredelby is the first ADC to demonstrate statistically significant and clinically meaningful, overall survival benefit in this metastatic TNBC patient population.
Joanna: In fact, the NCCN guidelines elevated Tredelby to a Category 1 recommendation for second, line and later metastatic TNBC, its highest recommendation available.
Joanna: Additionally, while Tredelby is not approved by the FDA for use in HR-positive, HER2-negative, settings, we're pleased that the NCCN has issued a Category 2A recommendation for Tredelby's use for these patients with advanced disease.
Additionally, while qdoba is not approved by the FDA for use in HR positive <unk> negative setting. We're pleased that the NCC and has issued a category <unk> recommendation, which would obviously is for these patients with advanced disease.
Turning to slide 14, I am pleased to share some incredibly strong results on behalf of Christi Undercutting death.
Joanna: Turning to slide 14, I'm pleased to share some incredibly strong results on behalf of, Christy and the CHI team.
Joanna: Cell therapy sales for the second quarter were $368 million at 68% year-over-year and, 34% sequentially, given by a very strong U.S. second-line launch for Yaskarta in relapsed or refractory LBCL, which exceeded our expectations and continued strong growth in third-line plus Yaskarta.
Cell therapy sales for the second quarter were $368 million up 68% year over year, and 34% sequentially driven by a very strong U S. Second line launch forget Garda in relapsed or refractory <unk>, which exceeded our expectations and continued strong growth in third line plus Jeff Gardner.
Joanna: As a reminder, strong data and an NCCN recommendation which predated the second-line approval helped, drive our impressive early uptake, especially in large-volume authorized treatment centers with a high familiarity with CAR-T therapies.
As a reminder, strong data and an NCC and recommendation, which predated the second line approval helped drive our impressive early uptake, especially in large volume authorized treatment centers with a high familiarity with car T therapy.
Joanna: Additionally, Yaskarta's second-line LBCL is already available in two other large markets, in France through the Early Access Program and in Germany through a reimbursement decision ahead of approval.
Additionally, skip started second line I'll be cielo is already available and two other large markets in France through the early access program and in Germany through reimbursement decision ahead of approval.
Joanna: The decision on Yaskarta's second-line LBCL approval in Europe is expected later this, fall.
The decision on your scared at second line <unk> approval in Europe is expected later this fall.
Joanna: Third-line plus LBCL deliveries also increased sequentially and year-over-year, reflecting, growing overall awareness and confidence in the use of Yaskarta. This follows the presentation of five-year ZUMA I data at last year's American Society, of Hematology meeting and, more recently, our second-line approval in the U.S. For the quarter overall, Yaskarta sales of $295 million were up 66% year-over-year and, 40% sequentially. Of note, Yaskarta deliveries increased 67% year-over-year and 39% sequentially, demonstrating, the effectiveness of KITE's manufacturing expansion strategy and our ability to meet demand for our cell therapies.
Third line plus our Bcl deliveries also increased sequentially and year over year, reflecting growing overall awareness and confidence in the use of the escargot.
This follows the presentation at five years Zuma, one data at last year's American Society of Hematology meeting and more recently, our second line approval in the U S.
For the quarter overall gift card sales of $295 million were up 66% year over year and 40% sequentially of note is started deliveries increased 60%, 67% year over year, and 39% sequentially demonstrating the effectiveness of kites manufacturing expansion strategy and our ability to meet demand for our cell therapies.
We're proud of our reputation for consistent and reliable deliveries that further differentiate kite cell therapies and with a continued source of strength in Q2.
Joanna: We're proud of our reputation for consistent and reliable deliveries that further differentiate, KITE's cell therapies and was a continued source of strength in Q2.
Joanna: While we saw very strong demand in the first half of 2022, we expect this growth to normalize, in Q3 as second-line usage expands beyond the early adopters and more towards community referrals.
While we saw very strong demand in the first half of 2022, we expect this growth to normalize in Q3, our second line usage expand beyond the early adopters and more towards community referrals.
Joanna: Turning to Yaskarta, sales for the quarter were $73 million, up 78% year-over-year and, 16% sequentially, driven by continued demand and expansion into new geographies for relapsed or refractory mantle cell lymphoma, as well as uptake in adult acute lymphoblastic leukemia in the U.S.
Turning to <unk> sales for the quarter were $73 million up 78% year over year, and 16% sequentially driven by continued demand and expansion into new geographies for relapsed refractory mantle cell lymphoma, as well as uptake in adult acute lymphoblastic leukemia in the U S.
Joanna: Christy is available for Q&A later on the call.
Christie's available for Q&A later on the call in summary, this was a really strong quarter for the entire Gilead and kite commercial organization and so with that I'll hand, the call over to <unk> for an update on our pipeline. Thank you Joanna from a clinical perspective, we made solid progress in the second quarter, including a wealth of data updates spanning our oncology and neurology portfolios.
Joanna: In summary, this was a really strong quarter for the entire Gilead and KITE commercial, organization.
Mehrdad: And so, with that, I'll hand the call over to Mehrdad for an update on our pipeline.
Mehrdad: Thank you, Joanna.
Mehrdad: From a clinical perspective, we made solid progress in the second quarter, including, a wealth of data updates spanning our oncology and virology portfolios.
Starting with HIV on Slide 16, we're very pleased to share that our NDA submission for Linda cast of ear for heavily treatment experienced people living with HIV was accepted last week. We now have a <unk> date set for the end of December .
Mehrdad: Starting with HIV on slide 16, we're very pleased to share that our NDA submission for, Lenacapivir for heavily treatment-experienced people living with HIV was accepted last week. We now have a PDUFA date set for the end of December.
Mehrdad: Outside the U.S., we received a positive CHMP opinion for this indication based on data from, the Phase 2-3 CAPELLA trial. Week 26 data from this trial were published in the New England Journal of Medicine in, May with updated one-year data presented at the Conference on Retroviruses and Opportunistic, Infections earlier this year. In this very difficult-to-treat population, 83 to 86 percent of those treated with linocapavir, achieved virologic suppression at one year, sustaining the rates achieved at week 26.
Outside the U S. We received a positive <unk> opinion for this indication based on data from the phase III <unk> III Capella trial.
26 data from this trial were published in the New England Journal of Medicine in May with updated one year data presented at the conference on Retroviruses and opportunistic infections earlier this year.
And it's very difficult to treat population, 83% to 86% of those treated with <unk> achieved virological suppression at one year sustaining the rates achieved at week 26, we continue to expect a decision from the European Commission later this year.
Mehrdad: We continue to expect a decision from the European Commission later this year.
We can get to <unk> on slide 17, we shared new data at <unk> that increases our confidence in <unk> potential applicability across a broad range of tumor types.
Mehrdad: Looking to Tredelvi on slide 17, we shared new data at ASCO that increases our confidence, in Tredelvi's potential applicability across a broad range of tumor types.
Mehrdad: These positive data from the Phase 3 ASCENT study reinforced Tredelvi's survival and, health-related quality-of-life benefit over treatment of physician's choice in patients with metastatic triple-negative breast cancer.
These positive data from the phase III ascent study reinforced for Adobe survival and health related quality of life benefit.
Treatment of physicians choice in patients with metastatic triple negative breast cancer.
Mehrdad: We also highlighted positive PFS and quality-of-life data from our Phase 3 TROPICS-02 study, demonstrating, a statistically significant and clinically meaningful 34 percent reduction in the risk of disease progression or death in late-line endocrine-resistant patients with HR-positive HER2-negative metastatic breast cancer who had received a median of three prior lines, of treatment in the metastatic setting after having failed hormone therapy. This study also demonstrated a positive trend in overall survival at the first interim analysis.
We also highlighted positive PFS and quality of life data from our phase III tropics, <unk> study, demonstrating a statistically significant and clinically meaningful 34% reduction in the risk of disease progression or death in late line endocrine resistant patients with HR positive <unk> negative metastatic breast cancer, who had received a median of three prior lines.
The treatment in the metastatic setting after having failed hormone therapy.
This study also demonstrated a positive trend in overall survival at the first interim analysis.
Mehrdad: The TROPICS-02 data, coupled with the NCCN recommendations, support Tredelvi's potential, as a treatment option for late-line HR-positive HER2-negative patients.
The traffic so two data coupled with the MCC and recommendation support for Dolby has potential as a treatment option for late line HR positive <unk> negative patients.
Mehrdad: As Dan mentioned, our discussions with the FDA are ongoing on the potential regulatory, path, and we'll update you when we can.
Dan mentioned, our discussions with the FDA are ongoing on the potential regulatory path and we will update you when we can and.
Mehrdad: In the meantime, TROPICS-02 continues with patients being followed for subsequent planned, OS analyses.
In the meantime, tropics or two continues with patients being followed for subsequent planned OS analyses.
Mehrdad: Separately, we continue to expand our Tredelvi clinical program.
Separately, we continue to expand our Trudeau preclinical program, we began screening for patients in the <unk> III the value of <unk> in first line metastatic <unk> patients who are PD lone negative tumors as well as in the <unk> study evaluating first line patients with PD lone positive metastatic TWC.
Mehrdad: We began screening for patients in ASCENT-03, evaluating Tredelvi in first-line metastatic, TMDC patients who have PD-L1-negative tumors, as well as in the ASCENT-04 study, evaluating first-line patients with PD-L1-positive metastatic TMDC.
Mehrdad: Moving to Tredelvi in bladder cancer, the ongoing Phase 3 TROPICS-04 study is our confirmatory, trial designed to enable global registration for Tredelvi in patients with locally advanced or metastatic urothelial cancer.
Moving into Dolby in bladder cancer, the ongoing phase III tropics. <unk> study is our confirmatory trial designed to enable global registration for <unk> in patients with locally advanced or metastatic <unk> cancer.
Mehrdad: This study follows the encouraging data from TROPHY-U01, supporting accelerated approval, of Tredelvi in the U.S. for patients with MUC.
This study follows an encouraging data the encouraging data from trophy, one supporting accelerated approval of <unk> in the U S for patients with MSC.
Mehrdad: Pending results from our first-line expansion cohorts in the Phase 2 TROPHY-U01 study, we, plan to open two Phase 3 studies in front-line MUC.
Pending results from our first line expansion cohorts in the Phase II <unk> study, we plan to open two phase III studies in frontline <unk>.
And our treat every loan program, we initiated the phase III <unk> non small cell lung cancer study in the second quarter evaluating the combination of <unk> with merck's keytruda in patients without actionable genomic mutations.
Mehrdad: In our Tredelvi lung program, we initiated the Phase 2 EVOC-02 non-small cell lung cancer, study in the second quarter, evaluating the combination of Tredelvi with MUC's Keytruda in patients without actionable genomic mutations.
Mehrdad: Looking forward to the second half of the year, we expect to begin enrolling patients, for the Phase 3 EVOC-03, or Keynote D46, study in first-line non-small cell lung cancer with PD-L1 expression levels greater than or equal to 50 percent, in collaboration with our partners, at MUC.
Looking forward to the second half of the year, we expect to begin enrolling patients for the phase III <unk> III or keynote 246 study in first line non small cell lung cancer with PD lone expression levels of greater than equal to 50% in collaboration with our partners at Merck.
Mehrdad: Additionally, later this year, we expect to initiate several other Tredelvi combinations, including evaluating Tredelvi in castrate-resistant prostates.
Additionally, later this year, we expect to initiate several other treat ELV combinations, including evaluating <unk> castrate resistant prostate cancer.
Mehrdad: Cancer.
Moving to Gorilla map on slide 18, we're pleased that both divisions of the FDA have now lifted the partial clinical hold on the <unk> App all Monroe that programs have resumed enrolling patients without FDA, requiring any additional protocol changes.
Mehrdad: Moving to McGrillimab on slide 18, we're pleased that both divisions of the FDA have now lifted the partial clinical hold on McGrillimab. All McGrillimab programs have resumed enrolling patients, without FDA requiring any additional protocol changes.
Mehrdad: Our confidence in McGrillimab's potential efficacy, and safety profile is unchanged. At ASCO, we shared MDS and AML data from our phase 1B study, where McGrillimab continues to demonstrate high and durable response rates and high-risk MDS, with encouraging complete response rate of 33%, compared with the historical rates of azacitidine alone. We also observed promising efficacy in patients, with TP52 mutant AML, with an ORR of 49% and a CR of 33%.
Our confidence in the grownups potential efficacy and safety profile is unchanged.
At <unk>, we shared Mds and AML data from our Phase <unk> study, where Monroe lab continues to demonstrate high and durable response rates and high risk Mds with encouraging complete response rate of 33% compared with the historical rates of a decitabine alone.
We also observed promising efficacy in patients with <unk> mutant AML with an owner or a 49% and a CR of 33%.
Notably our phase III study in frontline HR Mds enhance is enrolling nicely and we expect the interim analysis no later than early 2023.
Mehrdad: Notably, our phase 3 study in frontline HRMDS enhanced, is enrolling nicely, and we expect the interim analysis no later than early 2023.
Moving to cell therapy on slide 19, and behalf of Christie and Mackay team, it's gratifying to see that more patients are benefiting from our cell therapies, given the growing body of clinical evidence bill.
Mehrdad: Moving to cell therapy on slide 19, on behalf of Christy and the CHI team, it's gratifying to see that more patients are benefiting from our cell therapies, given the growing body of clinical evidence.
Mehrdad: Building on the Zuma 7 data, we presented real-world data at ASCO that demonstrated consistent outcomes for survival and safety, regardless of race and ethnicity.
Building on the Zuma seven data, we presented real world data at <unk> that demonstrated consistent outcomes for survival and safety, regardless of race and ethnicity.
Mehrdad: And in sub-analysis of Zuma 7, patients over 65, the SCARDA demonstrated more than eight times greater median event-free survival and a clinically meaningful improvement in quality of life.
And in a sub analysis of Zuma seven patients over 65, yes got it.
Demonstrating more than eight times, greater median event free survival and a clinically meaningful improvement in quality of life.
These data further established the efficacy and safety profile of <unk> for patients with relapsed or refractory <unk> and support ongoing exploration of yes, Garda and more savings we expect to enroll our first patient presumed between for the phase II study to evaluate yes garden second line <unk> in an outpatient setting as well.
Mehrdad: These data further established the efficacy, and safety profile of the SCARDA for patients with relapsed or refractory LBCL, and support ongoing exploration of the SCARDA in more settings.
Mehrdad: We expect to enroll our first patient for Zuma 24, a phase 2 study to evaluate yes, SCARDA and second-line LBCL in an outpatient setting, as well as Zuma 23, a phase 3 study to evaluate SCARDA in first-line high-risk LBCL patients in the second half of this year.
The 23, the phase III study to evaluate <unk> in first line high risk <unk> patients in the second half of this year.
Additionally, we expect the first patient in and a new phase III trial evaluating the use of <unk> in second line HR Follicular lymphoma patients.
Mehrdad: Additionally, we expect first patient in, in a new phase 3 trial, evaluating the use of SCARDA in second-line HR follicular lymphoma patients, Zuma 22, later this year.
In the 'twenty two later this year.
Now to slide 20, as Dan mentioned, we made steady progress in the first half of the year and continuing to focus on clinical execution.
Mehrdad: Now to slide 20.
Mehrdad: As Dan mentioned, we made steady progress, in the first half of the year, and continue to focus on clinical execution.
Mehrdad: The key clinical milestones in the second half, include an update on our regulatory discussions for Tredelvi for late-line HR-positive HER2-negative patients in the U.S., a number of potential regulatory decisions, including for linacabavir, Yaskarta, and Tocardis, at least six more trial initiations spanning Tredelvi, cell therapy, and dominilumab, as well as several data updates with our partner, ARCIS, including phase 2 data from ARCIS 7.
Key clinical milestones in the second half include.
An update on our regulatory discussions for <unk> for late line HR positive <unk> negative patients in the U S.
A number of potential regulatory decisions, including four <unk> and <unk>.
At least six more trial initiation spanning <unk> cell therapy in Manila.
As well as several data updates with our partner ARCUS, including phase II data from <unk> seven.
Later this year, we also expect to have interim phase II data for a true up from the <unk> study as well as arcades phase II data for question.
Mehrdad: Later this year, we also expect to have interim phase 2 data, for Atrema from the ARC 6 study, as well as ARC 8's phase 2 data for Quemlin.
Mehrdad: We're encouraged with the early phase 1 data for GS5245, our investigational novel oral nucleoside in development for the treatment of COVID-19. We're discussing these early data with regulatory agencies, and are planning to move into the clinic.
We're encouraged with the early phase one data for <unk> 245, our investigational novel oral nucleoside in development for the treatment of COVID-19, we are discussing these early data with regulatory agencies and are planning to move into the clinic.
We're also pleased to see our earlier stage pipeline with our partners such as to zone in pioneer continues to advance nicely. For example to zone is HLA G program is currently enrolling its dose expansion cohorts and to the unexpected to share interim data mid 2023.
Mehrdad: We're also pleased to see our earlier-stage pipeline, with our partners, such as Tizona and Pioneer, continue to advance nicely. For example, Tizona's HLA-G program, is currently enrolling its dose expansion cohorts, and Tizona expects to share interim data mid-2023.
Mehrdad: With our robust internal pipeline and external partners, we're confident our portfolio across, virology, oncology, and information will deliver many life-changing treatments to help those patients in need.
With a robust internal pipeline and external partners, we're confident our portfolio across barology oncology and inflammation will deliver many life changing treatments to help those patients in need.
Andy: With that, I'll hand the call over to Andy.
With that I'll hand, the call over to Andy.
Andy: Thank you, Merdad, and good afternoon, everyone.
Thank you Brad and good afternoon, everyone.
Andy: Before I discuss our second quarter results, and starting on slide 22, I would like to, remind everyone that following the SEC guidance earlier this year, similar to our peers, acquired in-process R&D expenses, or IPR&D, including upfront payments for business development transactions, are now included in our non-GAAP financial measures and reported under acquired, IPR&D.
Before I discuss our second quarter results and starting on slide 22, I would like to remind everyone that following the SEC guidance earlier this year similar to our peers acquired in process R&D expenses or IP R&D, including upfront payments for business development transactions are now included in our non-GAAP financial.
<unk> and reported under acquired IP R&D.
Andy: As a reminder, the $300 million payment associated with the Dragonfly collaboration announced, in May is included in our Q2 results, but was not reflected in our prior 2022 full-year guidance.
As a reminder, the $300 million payment associated with the Dragonfly collaboration announced in May is included in our Q2 results, but was not reflected in our prior 2022 full year guidance.
Andy: Additionally, we have shifted prior period milestone and opt-in payments from R&D to, acquired IPR&D. We believe this presentation better reflects the total costs incurred to acquire IPR&D, projects. The most notable example is the $625 million opt-in payment we made to Arcus that we reported, in the fourth quarter of last year.
Additionally, we have shipped in prior periods milestone and opt in payments from R&D to acquired IP R&D.
We believe this presentation better reflects the total cost incurred to acquire IP R&D projects.
Most notable example is the $625 million opt in payment we made to ARCUS that we reported in the fourth quarter of last year.
Andy: There are a few other smaller payments that have been moved, and this slide highlights, the changes that you will now see reflected in our 2021 P&L.
There are a few other smaller payments that have been moved and this slide highlights. The changes that you will now see reflected in our 2021 P&L.
Andy: I'll further note that this change impacts our 2022 R&D guidance because our R&D guidance, is given relative to our 2021 results.
I will further note that this change impacts our 2022 R&D guidance, because our R&D guidance is given relative to our 2021 results I'll touch on that again later in this call.
Andy: I'll touch on that again later in this call.
Andy: Moving to our second quarter results, starting on slide 23, this was a very strong quarter, with a notable contribution from both our HIV and our oncology businesses.
Moving to our second quarter results starting on slide 23. This was a very strong quarter with a notable contribution from both our HIV and oncology businesses.
Andy: As expected, VECLRI sales were substantially lower sequentially and year-over-year, reflecting, the lower COVID hospitalization rates in the quarter. Total product sales, excluding VECLRI, were up 7% year-over-year. Foreign currency impacted second quarter sales, excluding VECLRI, by approximately $65 million, net of hedges.
As expected <unk> sales were substantially lower sequentially and year over year, reflecting the lower COVID-19 hospitalization rates in the quarter.
Total product sales, excluding <unk> were up 7% year over year foreign currency impacted second quarter sales, excluding regulatory by approximately $65 million net of hedges. If we exclude this impact as well as the impact of the HIV Eloise total underlying sales growth year over year was 11%.
Andy: If we exclude this impact, as well as the impact of the HIV LOEs, total underlying sales, growth year-over-year was 11% in the quarter. For the first half, total product sales growth, excluding VECLRI, was 5%. Also excluding FX and the impact of the HIV LOEs, underlying growth for the first half, was 8%.
<unk> in the quarter.
For the first half total product sales growth, excluding <unk> was 5%.
Also excluding FX and the impact of the HIV <unk> underlying growth for the first half was 8%.
Andy: Back to our reported results on slide 24.
Back to our reported results on slide 24, Joanne I took you through our revenue results and the drivers there.
Andy: Joanna took you through our revenue results and the drivers there.
Andy: Non-GAAP product growth margin was 85.6% for the second quarter, down 80 basis points, year-over-year, primarily due to the Big Tar V-related royalty following the settlement in the first quarter of this year.
non-GAAP product gross margin was 85, 6% for the second quarter down 80 basis points year over year, primarily due to the <unk> related royalty following the settlement in the first quarter of this year.
non-GAAP R&D, excluding acquired IP R&D expenses, such as milestones and upfront payments was $1 1 billion up 6% year over year, primarily due to increased investment in development and timing of clinical trial activities, primarily for our oncology business.
Andy: Non-GAAP R&D, excluding acquired IP R&D expenses, such as milestones and up-front payments, was $1.1 billion, up 6% year-over-year, primarily due to increased investment in development and timing of clinical trial activities, primarily for our oncology business. Acquired IP R&D for the quarter was $330 million, including $300 million related to the Dragon, Flag collaboration.
Acquired IP R&D for the quarter was $330 million, including $300 million related to the dragonfly collaborations.
Andy: Non-GAAP SG&A was $1.3 billion, up 13% year-over-year, primarily due to increased promotional and, marketing activities, including for Tredelvi, as well as higher corporate expenses, including Non-GAAP operating margin was 43%, reflecting higher operating expenses and the up-front, Dragonfly payment. Excluding the Dragonfly payment, non-GAAP operating margin was 47.5% for the quarter.
Yes.
non-GAAP SG&A was $1 3 billion up 13% year over year, primarily due to increased promotional and marketing activities, including for <unk> as well as higher corporate expenses, including investments and grants.
non-GAAP operating margin was 43%, reflecting higher operating expenses and be upfront dragonfly payment.
<unk> the dragonfly payments non-GAAP operating margin was 47, 5% for the quarter.
Andy: Moving to tax, our non-GAAP effective tax rate in the second quarter was 19.3%. Our non-GAAP diluted earnings per share was $1.58 in the second quarter of 2022, compared, to $1.81 for the same period last year, reflecting the Dragonfly payment, which represented $0.18 on a post-tax per share basis, as well as the Big Tar V-related royalty.
Moving to tax our non-GAAP effective tax rate in the second quarter was 19, 3%.
Our non-GAAP diluted earnings per share was $1 58 in the second quarter of 2022 compared to $1 81 times for the same period last year, reflecting the dragonfly payments, which represented 18 on a post tax per share basis as well as the <unk> related royalties.
Andy: Overall, we had a strong first half of the year, as shown on slide 25, with growth across, HIV, cell therapy, and Tredelvi, offset in part by HCV. Of note, currency headwinds impacted the first half total product sales by approximately, $180 million net of hedges, compared with the first half of 2021.
Overall, we had a strong first half of the year as shown on slide 25 with growth with growth across HIV cell therapy, and <unk> offset in part by HCV.
Of note currency headwinds impacted the first half total product sales by approximately $180 million net of hedges compared with the first half of 2021.
Moving to slide 26, we are increasing our full year sales guidance to reflect our year and year to date results and our expectations for the second half, including our expectations for FX.
Andy: Moving to slide 26, we are increasing our full-year sales guidance to reflect our year-to-date, results and our expectations for the second half, including our expectations for FX. In addition to the impact in the first half, we expect continued FX headwinds in the second, half, impacting total product sales by approximately $200 million in the rest of the year, compared to our initial February guidance. For revenues, we now expect total product sales of $24.5 to $25 billion, compared to, our previous range of $23.8 to $24.3 billion.
In addition to the impact in the first half we expect continued FX headwinds in the second half.
Impacting total product sales by approximately $200 million.
In the rest of the year compared to our initial February guidance.
For revenues, we now expect total product sales of $24 five to 25 billion compared to our previous range of 23, 8% to $24 3 billion. This reflects the strong performance year to date, notably very strong growth in cell therapy in HIV and it also incorporates our expectations for the broader broader macro.
Andy: This reflects the strong performance year-to-date, notably very strong growth in cell therapy, and HIV, and it also incorporates our expectations for the broader macro environment. In HIV, we expect modest sequential growth in the third quarter, keeping in mind the, strength we experienced in the second quarter. And in cell therapy, we expect flat to modestly higher revenue in the third quarter, compared, to Q2.
Environment.
In HIV, we expect modest sequential growth in the third quarter keeping in mind the strength, we experienced in the second quarter.
And in cell therapy, we expect flat to modestly higher revenue in the third quarter compared to Q2. Following the launch bolus of orders we experienced in the second quarter, we expect demand to stabilize.
Andy: Following the launch bullets of orders we experienced in the second quarter, we expect, demand to stabilize.
Moving to vet glory and with the first half revenue of almost $2 billion were increasing our expectations to approximately $2 5 billion for the year.
Andy: According to Vecluri, and with the first half revenue of almost $2 billion, we're increasing, our expectations to approximately $2.5 billion for the year. Following inventory drawdown in the second quarter, we expect sales to increase sequentially, in the United States and to continue to track hospitalization rates. Note that our Vecluri guidance assumes no significant increase in hospitalization rates, from Q2 levels.
Following the inventory drawdown in the second quarter, we expect sales to increase sequentially in the United States and to continue to track hospitalization rates.
Note that our <unk> guidance assumes no significant increase in hospitalization rates from Q2 levels.
Excluding regulatory we expect our total product sales to be 22 billion to.
Andy: According to Vecluri, we expect our total product sales to be $22 billion to $22.5 billion, representing growth of 3% to 5% year-over-year, and compared to our prior range of $21.8 billion to $22.3 billion.
The $22 5 billion, representing growth of 3% to 5% year over year and compared to our prior range of 21 eight to $22 $3 billion.
Andy: As for the rest of the non-GAAP P&L, there is no change to our product gross margin guidance, range of 85% to 86%.
As for the rest of the non-GAAP P&L. There is no change to our product gross Martin good margin guidance range of 85% to 86%.
Andy: R&D, as described earlier, will no longer include BD-related payments, such as milestones, and opt-in fees. These will be reported as acquired IP R&D, along with upfront payments. With this change, we have moved $762 million of full-year 2021 expense from R&D to acquired, IP R&D.
R&D as described earlier, we will no longer include BD related payments, such as milestones and opt in fees. These.
These will be reported as acquired IP R&D, along with upfront payments.
With this change we have moved $762 million of full year 2021 expense from R&D to acquired IP R&D.
Andy: As a result of this change, we now expect full-year R&D expense to increase by a mid-single-digit, percentage compared to the new 2021 baseline of $4.5 billion.
As a result of this change we now expect full year R&D expense to increase by a mid single digit percentage compared to the new 2021 baseline of $4 5 billion or.
Andy: Our expectations for full-year R&D expense remain largely unchanged from the start of, the year, and this guidance revision reflects only the recasting of acquired IP R&D items, including ARCIS, previously reported in R&D in 2021.
Spectation for full year R&D expense remained largely unchanged from the start of the year and this guidance revision reflects only the recasting of acquired IP R&D items, including ARCUS previously reported in R&D in 2021.
Andy: Moving to Acquired IPR&D, we are not issuing guidance for the full year, and similar to, what we did with the Dragonfly deal this quarter, we will update our EPS guidance quarterly as needed to reflect any relevant activity during the quarter.
Moving to acquired IP R&D, we are not issuing guidance for the full year and similar to what we did with the dragonfly deal. This quarter, we will update our EPS guidance quarterly as needed to reflect any relevant activity during the quarter.
Andy: What we have included here is the year-to-date acquired IPR&D amounts.
What we've included here is the year to date acquired IP R&D amounts.
Andy: For SG&A, with our continued investment across our commercial organization and expectations, for higher costs as a result of inflation, we now expect SG&A expenses to grow by a low single-digit percentage compared to 2021.
For SG&A with our continued investment across our commercial organization and expectations for higher costs. As a result of inflation. We now expect SG&A expenses to grow by a low single digit percentage compared to 2021.
Andy: Altogether, we expect operating income to be $11 to $11.6 billion for the full year, compared to $10.7 to $11.5 billion previously. Similarly, we now expect our non-GAAP diluted earnings per share to range between $6.35, to $6.75, up from $6.20 to $6.70 previously.
Altogether, we expect operating income to be 11% to $11 6 billion for the full year compared to 10, 7% to $11 5 billion previously.
Similarly, we now expect our non-GAAP diluted earnings per share to range between $6 35.
The $6 75 up from $6 20 to $6 70 previously.
On a GAAP basis, we expect our diluted earnings per share to range between $2 93.
Andy: On a GAAP basis, we expect our diluted earnings per share to range between $2.90 and $3.30, compared to $3.00 and $3.50 previously, primarily reflecting net unrealized losses from strategic equity investments. As a reminder, this revised EPS guidance reflects the $300 million upfront payment associated, with the DragonFly collaboration we announced in May, which was not included in our previous guidance, as well as our FX expectations and operating expenses for the second half.
$3 30.
Compared to $3 $3 50, previously primarily reflecting net unrealized losses from strategic equity investments.
As a reminder, this revised EPS guidance reflects the $300 million upfront payment associated with the dragonfly collaboration we announced in May which was not included in our previous guidance as well as our FX expectations.
Operating expenses for the second half.
Andy: The guidance shared today does not include additional upfront payments related to normal, course of business partnerships or licensing deals that we might announce in the third or fourth quarters. As discussed previously, we will continue to update our guidance as needed to reflect, the impact of any new business development transactions closed in the prior quarter.
<unk> shared today does not include additional upfront payments related to normal course of business partnerships or licensing deals that we might announce in the third or fourth quarters. As discussed previously we will continue to update our guidance as needed to reflect the impact of any new business development transactions closed in the prior quarter.
Andy: Finally, on slide 27, you can see there is no change to our capital allocation priorities.
Finally on slide 27, you can see there is no change to our capital allocation priorities in the quarter, we returned almost $1 billion to shareholders, including $920 million in dividend payments.
Andy: In the quarter, we returned almost $1 billion to shareholders, including $920 million in, dividend payments. And just after the close of the quarter, we repaid $1 billion of debt, fulfilling our, commitment to repay $1.5 billion of debt this year.
And just after the close of the quarter, we repaid $1 billion of debt fulfilling our commitment to repay $1 $5 billion of debt this year I.
Andy: I'm pleased to share that as of July 1st, we have returned to the same debt level we, were at prior to the Immunomatics acquisition.
I am pleased to share that as of July 1st we have returned to the same debt level, we were at prior to the Immunomedics acquisition.
Andy: And with that, I'll invite the operator to open the Q&A.
With that I'll invite the operator to open the Q&A.
At this time I would like to remind everyone that in order to ask a question Press Star then the number one on your telephone keypad. Please limit yourself to one question to help us get to as many questions as possible.
Operator: At this time, I would like to remind everyone that in order to ask a question, press star, then the number one on your telephone keypad.
Operator: Please limit yourself to one question to help us get to as many questions as possible.
Operator: Once your question has been asked, your line will be muted.
Once your question has been asked your line will be muted if you will.
Operator: If you'd like to ask a follow-up question, please return to the queue.
Like to ask a follow up question. Please return to the queue.
Operator: We will pause for a moment to compile the Q&A roster.
We will pause for a moment to compile the Q&A roster.
Sure.
Operator: Our first question comes from the line of Brian Abrams with RBC Capital.
Our first question comes from the line of Brian Abrams with RBC capital Brian . Your line is now open.
Operator: Brian, your line is now open.
Hi, there good afternoon.
Brian Abrams: Hi there.
Brian Abrams: Good afternoon, and thanks for taking my question, and congratulations on the quarter.
Thanks for taking my question and congratulations on the quarter.
Brian Abrams: I recognize that the discussions around Trudelvy and HR positive, her two negative population, are ongoing, but I'm just wondering, broadly speaking, if you can talk about the key things that you'll be focusing on with regards to the data, and if there's certain subpopulations you might expect to gear towards from either a labeling or commercial perspective.
I recognize that the discussions around got should Lv and HR positive <unk> negative population are ongoing but I'm. Just wondering broadly speaking if you can talk about the key things that you'll be focusing on with regards to the data and if there are certain sub populations you might expect to geared towards from either a labeling or commercial perspective. Thanks.
Okay.
Merdad: Thanks.
Hey, Brian Hi, This is Mary.
I guess I'll start with that.
For US right now as we go forward with this study I think we will.
Merdad: Hey Brian, hi, this is Merdad.
Merdad: I guess I'll start with that.
Continue our focus on of course.
The.
Okay.
Evolution of the trial.
And I think as we see how those data evolve over time.
Use that in our discussions with regulators as we go forward.
In terms of.
Additional subpopulations of course, we'll we'll keep an eye on.
Merdad: For us right now, as we go, forward with the study, I think we'll continue our focus on, of course, the OS evolution of the trial.
Merdad: And I think as we see how those data evolve over time, we will use that in our discussions with regulators as we go forward.
A number of things in terms of whether its line of therapy or those sorts of subpopulations or duration of prior therapy, which were all part of the original analysis, but those were it.
Merdad: In terms of additional subpopulations, of course, we'll keep an eye on a number of things in terms of whether it's line of therapy or those sorts of subpopulations or duration of prior therapy, which were all part of the original analyses.
Merdad: But those were, it's consistent with what we've already shown at ASCO in the data that we've presented and shared with you.
System with what we have already shown.
At <unk> and the data that we have.
Operator: So it will be consistent with what we've already shown.
Presented and share with you so it will be consistent with what we have already shown.
Operator: And we're ready for our next question.
Yes.
And we are ready for our next question.
Thank you.
Our next question comes from.
Operator: Thank you.
Geoff Meacham with Bank of America, Jeff Your line is now open.
Great afternoon, guys. Thanks, so much for the question.
Operator: Our next question comes from Jeff Meacham with Bank of America.
Joanne are Christie.
The cell therapy segment, which you guys called out had a huge quarter I'm.
I'm just curious how much of the demand do you think is sustainable I mean was it mostly driven by the new second line label or did the total end market.
<unk> meaningfully I guess I'm trying to figure out whether we've reached a tipping point overall for reimbursement access and cell therapy. Thank you.
Operator: Jeff, your line is now open.
Thanks, Joe Christy over to you. Please.
Operator: Great afternoon, guys.
Thanks, Jeff for the question.
I'll start with the second piece reimbursements, our reimbursement is really good we have 98% access.
Operator: Thanks so much for the question.
Medicaid Medicare and commercial even with the second line launch in less than one quarter, we already have we already had 94%.
Operator: Joanna or Christy, the cell therapy segment, which you, guys called out, had a huge quarter.
Operator: I'm just curious, how much of the demand do you think is sustainable?
<unk> four across the fleet.
The reimbursement side of it being in terms of the uptake of your first part of your question.
Operator: I mean, was it mostly driven by the new second line label or did the total end market expand meaningfully?
Uptake that we've seen since launch is.
Firstly, primarily due to second line, we've seen the patients that are going for stem cell transplant are the ones that are getting referred instead of that transplant to second line Scott.
Operator: I guess I'm trying to figure out whether we reach a tipping point overall for reimbursement access in cell therapy.
So that is our initial both about what we expected we have had this 68% year over year to grow at 34% quarter over quarter, but we do believe that this is a bolus and we expect the second half of the year going forward.
We expect that growth to normalize to historical rates as that growth comes more dependent on the referrals from the community.
And we expect it to be.
So really good growth, but we do believe that this is a volatile in the second line of the patients that exists in the ATC and the rest of the year.
To reiterate that that growth will return to more historic growth rate.
Operator: Thank you.
And we are ready for any questions.
Thank you. Our next question comes from Tyler.
Tyler Van Buren with Cowen.
Tyler Your line is now open.
Great. Thanks. Good afternoon can you guys. Please provide your latest thoughts regarding the potential impact that drug pricing reform could have on gilead business and.
Operator: Thanks, Jeff.
Operator: Christy, over to you, please.
Perhaps <unk> in particular, given the significant concentration of HIV sales for the product and its longer patent life.
Yes, Thanks Tyler.
Operator: Yeah, thanks, Jeff, for the question.
Operator: I'll start with the second piece, reimbursement.
Operator: Our reimbursement is really good.
I'll start this is Dan.
Operator: We have 98% access, and that's Medicaid, Medicare, commercial.
Operator: Even with the second line launch, in less than one quarter, we already had 94% paid for across any of those three groups.
Operator: That is our initial bullet.
I think it's important for everybody on the call to note that we have.
Operator: In terms of the uptake, your first point of your question, the uptake that we've seen since launch is first primarily due to second line.
Operator: What we expect is we've had this 68% year-over-year growth, 34% quarter-over-quarter, but we do believe that this is a bullet.
Operator: We've seen the patients that are going for stem cell transplant are the ones that are getting referred instead of that transplant to second line Yaskarta.
Operator: We expect the second half of the year going forward that we expect that growth to normalize the historical rate as that growth becomes more dependent on the referrals from the community.
Operator: Amber, we're ready for our next question.
Operator: We expect it to be still a really good growth, but we do believe that this is a bullet from the second line of the patients that exist for the rest of the year, just to reiterate that that growth will return to more historic growth rates.
The company and I think as an industry are very focused on.
Operator: Thank you.
Operator: Our next question comes from Tyler Van Buren with Cohen.
The fundamental issue in the U S, which is reducing patient out of pocket costs.
And there are lots of different ways to do that unfortunately, the current legislation.
Falls very short of making any impact on patients and in particular the negotiation part.
The proposal is really.
A.
I think a real dangerous precedent in terms of.
Potentially.
Reducing forward innovation I think in terms of how.
As you know Tyler the Bill is still.
Operator: Tyler, your line is now open.
Operator: Great, great, thanks.
Very much in discussion right now and.
Operator: Good afternoon.
It's very difficult to determine the full impact what I would say is several years away first of all from the first impact.
Operator: Can you guys please provide your latest thoughts, regarding the potential impact that drug pricing reform could have on Gilead's business, and perhaps PICD-RV in particular, given the significant concentration of HIV sales to the product and its longer patent life?
Operator: Yeah, thanks, Tyler.
Operator: I mean, I'll start.
Of course.
D area of the reform.
Operator: This is Dan.
That could have some impact on our business to also help patient out of pocket costs I think when one starts to think about the negotiation aspect of the bill is still I think too premature to think about exactly how that could affect and it is later in the decade in terms of its impact so let's take it one step at a time I think to first.
See what happens with the current legislation the discussions going on in Washington, and rest assured that we are.
We are actively involved in supporting what we think our patient oriented.
Benefits here and adjustments to the program.
And then once and we'll see where that goes over the coming weeks and months we.
We will be able to give you even more clarity on how things might might impact our business, but overall I would just emphasize the strength of our portfolio is strong I mean, we have tremendous new innovations coming out of the pipeline. We have continued growth in our HIV business and beyond.
Operator: I mean, I think it's important for everybody, in the call to note that we as a company, and I think as an industry, are very focused on the fundamental issue in the U.S., which is reducing patient out-of-pocket costs.
And I think the <unk>.
Operator: And there are lots of different ways to do that.
Operator: And fortunately, the current legislation, falls very short of making an impact upon patients, and in particular, the negotiation part of the proposal is really, you know, a, I think, a real dangerous precedent in terms of potentially reducing forward innovation.
Operator: I think in terms of, you know, how, as you know, Tyler, the bill is still very much in discussion right now, and it's very difficult to determine the full impact.
<unk> cycle.
Operator: What I would say is it's several years away, first of all, from the first impact.
Operator: And of course, in the Part D area of the reform, you know, that could have some impact on our business, but also help patient out-of-pocket costs.
Gilead is very sound.
Andrew we're ready for our next question. Please.
Operator: I think when one starts to think, about the negotiation aspect of the bill, it's still, I think, too premature to think about exactly how that could affect, and it is later in the decade in terms of its impact.
Our next question comes from.
Operator: So let's take it one step at a time, I think, to first see what happens with the current legislation.
Olivia Brayer with Cantor Fitzgerald.
Your line is now open.
Operator: The discussion's going on in Washington.
Hey, good afternoon, guys. Thanks for the question have you guys seen any impact from monkey pox on HIV business instead of a headwind you're factoring into guidance at this point for a second half of the year.
Operator: Rest assured that we are actively involved, in supporting what we think are patient-oriented benefits here and adjustments to the program.
Operator: And then once, and we'll see where that goes, over the coming weeks and months, we'll be able to give you even more clarity on how things might impact our business.
Operator: But overall, I would just emphasize, the strength of our portfolio is strong.
Operator: I mean, we have tremendous new innovations, coming out of the pipeline.
Sure Olivia Hi, it's Joanna let me take that one on.
Speaking with a lot of our specialists across the U S. But also in Europe . They have seen obviously, the rising number of monkey pox and there is a there is a correlation.
Both our HIV treatment business, but also with prevention, because the general percentage the higher percentage of folks that.
<unk> are experiencing monkey pox, our assay and Manhattan sex Mcmahon and so obviously that cash that's the overlap.
On the contrary, we're not seeing an impact to our HIV business, we're actually seeing.
More screening and diagnosis that are coming in in light of that.
And because of that closely associated and so I do think and I think people are treating the prevention piece is actually a really important piece of the possibility to try to prevent moving forward with monkey pox and gained a vaccine.
So definitely more on the positive frankly of our HIV business and however, we can support that that's where we're trying to do right now.
Operator: We have continued growth in our HIV business and beyond.
Operator: And I think, you know, the innovation cycle at Iliad is very sound.
Operator: Amber, we're ready for our next question, please.
Andrew we're ready for our next question.
Our next question comes from.
Operator: Our next question comes from Olivia Brayer, with Cantor Fitzgerald.
Well my thoughts.
Evercore.
Operator: Olivia, your line is now open.
Your line is now open.
Operator: Hey, good afternoon, guys.
Hi, guys. Thanks for taking my question I had a question on a clarification.
Maybe the question I think you hinted you are are you will be discussing early oral room desperate data with FDA I am curious.
If you saw any viral load benefit as well as whether the EC 90, how much you see 90 tracks above the fee trough and then clarification was on ticket arc seven because the slides on last quarter implied we're expecting PFS data. Please with PFS data in second half, but today's slides only say phase II data. So maybe if you could clarify if there is.
Still a chance PFS can be part of the data update thank you.
Operator: Thanks for the question.
Operator: Are you guys seeing any impact, on monkeypox on the HIV business?
Hi, yes, thanks for the questions.
Operator: Is that a headwind you're factoring into guidance, at this point for second half of the year?
So.
As far as the.
Oral <unk>.
Program for COVID-19.
The phase one study is in healthy volunteers. So we don't expect to see anything other than safety and PK.
Operator: Sure, Olivia.
In that study.
Well all I can say is I think things have gone very well with that trial.
Operator: Hi, it's Joanna.
So far both from a tolerability and exposure standpoint, so we are.
We're very happy with where we are in.
Now we will move into.
The proof of concept and.
And clinical development stage, so no no viral load data share.
And then in terms of the arc seven data.
Thank you.
I guess I would suggest not overreaching we are.
Working with artisan.
And we will.
As the data roll out we'll be sharing data markets and we will be sharing data from the <unk> study later on this year and the data that we will have we are not really detailing what those data are going to look like right now.
Be assured that we will work with them to show data later this year.
Andrew we're ready for our next one.
Operator: Let me take that one on.
Yes.
Our next question comes from Matt.
Operator: You know, speaking with a lot of our specialists, across the US but also in Europe, they have seen, obviously, the rising number of monkeypox. And there is a correlation with both our HIV treatment, business but also with prevention because the general percentage, the higher percentage of folks that are experiencing monkeypox are actually men having sex with men. And so, obviously, that's the overlap.
Matthew Harrison with Morgan Stanley Matthew Your line is now open.
Operator: So on the contrary, we're not seeing an impact to our HIV business. We're actually seeing more screening and diagnosis, that are coming in in light of that and because of that close association.
Operator: So I do think, and the same people are treating.
Operator: So prevention piece is actually a really important piece, of the puzzle to try to prevent moving forward with monkeypox and getting the vaccines in.
Operator: So definitely more on the positive front, of our HIV business and however we can support that, that's what we're trying to do right now.
Great. Good afternoon. Thanks for taking the question I was just hoping you could talk a little about <unk> demand in the U S sort of sequentially growth has slowed pretty significantly over the last couple of quarters here is that mostly a reflection that you penetrated.
Triple negative market and you need label expansion and see that growth or are there other factors there from it from a sequential growth standpoint. Thanks.
Operator: Amber, are we ready for our next question?
Thanks, Matthew It's Joanna let me, let me try to give you a little bit more context, though so as you saw from a global standpoint, we had really strong growth across the board a lot of that growth that you're referring to comes from some of the the market launches in Europe , mainly France, and Germany, where there has been a bit of a bolus, but also we are learning that too.
Operator: Our next question comes from Umer Raffat with Evercore.
Operator: Umer, your line is now open.
Operator: Hi guys, thanks for taking my question.
Operator: I had a question and a clarification.
Operator: First maybe the question, I think Merdad you hinted you are or you will be discussing, early oral remdesivir data with the FDA, I'm curious if you saw any viral load benefit as well as whether the EC90, how much EC90 tracks above the C-Trof and then clarification was on TIGID Arc 7 because the slides on last quarter implied we're expecting PFS data, phase 2 PFS data in second half but today's slides only say phase 2 data so maybe if you could clarify if there's still a chance PFS could be part of the data update.
Operator: Thank you.
Making sure that we increase awareness for <unk> on early on and so from a U S standpoint, we actually did see strong.
Operator: Hi Umer, yeah, thanks for the questions.
Demand growth quarter over quarter, we thought at about 7%.
Operator: So as far as the oral new program for COVID-19 goes, the phase 1 study is in healthy volunteers, so we don't expect to see anything other than safety and PK in that study and all I can say is I think things have gone very well with that trial so far both from a tolerability and an exposure standpoint so we're very happy with where we are and now we'll move into the proof of concept and clinical development stage so no viral load data to share.
Operator: And then in terms of the Arc 7 data, I don't think, I guess I would suggest not over reading, we are working with ARCIS and we will, as the data roll out, we'll be sharing data, ARCIS and we will be sharing data from the Arc 7 study later on this year and the data, that we will have, we're not really detailing what those data are going to look like right now but be assured that we'll work with them to show data later this year.
Operator: Amber, we're ready for our next one.
Operator: Our next question comes from Matthew Harrison with Morgan Stanley.
Unfortunately got impacted by unfavorable one time pricing dynamics.
Operator: Matthew, your line is now open.
So that's where you see that the.
Net revenues are only up 1%.
Operator: Great.
No concerns on our end because we do see the momentum actually continuing from a share standpoint, and we definitely havent.
Operator: Good afternoon.
Maximized, our opportunity and shadowy, let me tell you I think that.
With the incredible overall survival data and the only overall survival data that's shown in that patient population. There is a real opportunity for us to educate and increase the awareness that's something that we've been tracking really closely as that awareness piece that got a little slow down through the Covid era, just because offices and cancer centers, where a quite shut down.
But having said that that picked up really quite nicely over the last three to four months and we've expanded our footprint.
The call.
Close to triple our footprint as of April May timeframe now obviously as you know when you do that you are not you shouldn't expect results I would love it but you shouldn't expect results within the first month. It usually takes about six months or so to start seeing Australia, we should see those come through in the fall as well as additional countries getting reimbursement as you've seen from some of the HCA.
Decisions that have come through and launching in Europe as well so looking forward to that but definitely more opportunity ahead and definitely on track to make sure we capture that opportunity.
Operator: Thanks for taking the question.
And we're ready for our next question.
Our next question comes from.
Operator: I was just hoping you could talk a little bit about Tredelvi demand in the U.S. sort, of sequentially, you know, growth has slowed pretty significantly over the last couple of quarters here, is that mostly a reflection that you've penetrated most of the triple negative market and you need label expansion to see that growth or are there other factors there from a sequential growth standpoint?
David for singer of SBB Securities David Your line is now open.
Operator: Thanks.
Yes.
Operator: Thanks, Matthew.
Thanks very much.
Congrats on the results and thanks for taking my question. So.
We are obviously in the unfortunate situation in which the government may be working against.
Small molecule innovation in particular, but innovation more broadly and.
In light of the possibility that legislation could be.
Be signed into law could you comment on the percentage of <unk> net revenue currently comes from Medicare part D. Just so we have a sense for the potential exposure to.
Victor RV drug price controls in 2012.
Thank you.
Sure so yeah.
Let me start with that so thanks, David for your question.
I think we touched on a little bit about some of the potential impact having said that.
From a split government.
Q2, I guess commercial business, it's around depending on the different pieces you are looking at around 40% to 50%.
Versus about a 30% commercial so is that what I'm, including in that is more of your Medicaid Medicare.
On a business and that's kind of playing out tier three as long as Youre three <unk>. So I think its really I don't think you should look at it.
Just looking at it the percentage of the business I think it's going to be really interesting to see how this plays out and when it plays out because nothing is really going to impact us for quite some time I would also suggest that we look at the incredible diversity of our portfolio that we are growing year on year and also the geographical diversity as well, which I think will really.
Help mitigate some of the some of these pressures as we go forward, but just for Matt.
Government business, you are looking probably close to 50% of our total business is in the government setting.
Great. Thanks, Ryan.
And our next question.
Our next question comes from <unk>.
Operator: It's Joanna.
<unk> Richter with Goldman Sachs.
Operator: Let me try to give you a little bit more context.
Your line is now open.
Simeon Thanks for taking my question on HIV could you just comment on what's keeping the screening and diagnosis below pre pandemic levels.
Whether you would expect a full recovery by year end and then separately could you give us a quick update on where you stand with the program.
Okay.
Can you repeat the last part of that question.
Where you stand with the long acting programs, when we might see cloud wrong sorry.
Thanks, you cut out a little bit holidays. So let me hit the first part of that question and then I'll turn it over to Mary to add for the long acting.
So from an HIV screening standpoint, we're about 8% below pre pandemic levels.
So very much in line with kind of everywhere pre 2019 from a diagnosis standpoint, what youre seeing is that 37, 30% or so below pre pandemic, but that's kind of normal what.
What we've seen in the past even prior to COVID-19, we're seeing a decline of the diagnosis rate about 10% year over year and so if you think about three years, that's about your 30% so not a huge surprise there and good news right as Youre thinking about how this HIV market as it is.
<unk> is done.
Its evolution.
I would like to focus you on now.
Fact that from a treatment and prep standpoint, we are above pre pandemic levels from a market growth standpoint, and so we feel very confident that the market has recovered.
Operator: So as you saw, from a global standpoint, we had really strong growth across the board.
Operator: A lot of that growth, as you're referring to, comes from some of the market launches, in Europe, namely France and Germany, where there's been a bit of a bullet, but also real learnings as to making sure that we increase awareness for Tredelvi early on.
Operator: And so from a U.S. standpoint, we actually did see strong demand growth quarter over, quarter. We saw it at about 7%.
Operator: Unfortunately, it got impacted by unfavorable one-time pricing dynamics.
Operator: And so that's where you see that, you know, the net revenues are only up 1%.
Operator: No concerns on our end, because we do see the momentum actually continuing from a share, standpoint, and we definitely haven't maximized our opportunity in Tredelvi, let me tell you.
Operator: I think that with the incredible overall survival data and the only overall survival data that's, shown in this patient population, there's a real opportunity for us to educate and increase the awareness.
Operator: Amber, are we ready for our next question?
Absolutely in profits more than recovered, it's actually higher than it's ever been before so it's actually an expansion of the market. So I think we're in much better shape and it's taken a little bit more time for treatment, but I think as of Q2 I can honestly say that it is really in in a very good place, which is great news for patients.
Operator: That's something that we've been tracking really closely is that awareness piece.
Operator: We got a little slowed down through the COVID era, just because offices and cancer centers, were quite shut down.
Operator: Our next question comes from David Frisinger of SVB Securities.
Operator: But having said that, that's picked up really quite nicely over the last three to four months, and we've expanded our footprint, as you may recall. We close to tripled our footprint as of April, May timeframe.
Operator: Now, obviously, as you know, when you do that, you're not, you shouldn't expect results, I would love it, but you shouldn't expect results within the first month.
Operator: It usually takes about six months or so to start seeing those through, and we should, see those come through in the fall, as well as additional countries getting reimbursement, as you've seen from some of the HTA decisions that have come through, and launching in Europe as well.
Operator: So looking forward to that, but definitely more opportunity ahead, and definitely on, track to make sure we capture that opportunity.
And from a long acting standpoint I'll just.
Just to reiterate.
The <unk> date at the end of the year for <unk> in highly treatment experienced I think that'll be the first approval knock wood.
For Atlantic out of there and I think that gets us started.
After that <unk>.
Remember then we have multiple.
For its ongoing and the prep side, we have the purpose studies that are that are underway. Those are longer term stays because theyre prevention studies, so they will take a little bit longer to readout.
We're looking at.
A few years there are a couple of years at least for those studies and then on the.
Treatment side.
We are we have a number of shots on goal there both.
Oral long acting as well as subcutaneous long acting in there.
We are we have our own efforts and.
And you may have noticed we have a number of partner molecules that are coming through our pipeline that could be partnered with blended cap are there for a full treatment regimen that would include lending cathode here.
And we continue to work with Merck on the potential for learning, a Z or combinations with <unk>. So a lot of different options and a lot of work that's ongoing and as those progress farther along we will keep you updated.
And then maybe have a next question please.
Our next question comes from Michael Yee with Jefferies. Michael Your line is now open.
Operator: David, your line is now open.
Operator: Thanks very much and congrats on the results and thanks for taking my questions.
Hey, Thanks, good afternoon.
Operator: So we are obviously in the unfortunate situation in which the government may be working against, small molecule innovation in particular, but innovation more broadly, and in light of the possibility that legislation could be signed into law, could you comment on the percentage of VicTARVI net revenue that currently comes from Medicare Part D, just so we have a sense for the potential exposure to VicTARVI drug price controls in 2027?
Operator: Thank you.
One question, but two parts on <unk> maybe.
Operator: Thanks, David.
Maybe Andy or Murdo, you could remind us have you actually met with FDA on the potential filing or what's the hold up there and how soon is soon to hear back at this and I think you've already taken a write down if it was not to be filed so that would be.
A different scenario, there, but I don't think there'd be any further write downs that was the case.
And maybe just comment on lung cancer opportunity I think in your slide you say there would be phase III data in lung cancer next year and I know Dai Ichi has read out next year as well so just wanted to understand that and your confidence level.
In lung cancer. Thank you.
Thanks, Michael Thanks for the questions.
Operator: Do you want to start with that?
So on <unk>.
I think nothing has changed from what we said earlier than that.
Operator: Sure.
We.
Are excited about the data that we generate in traffic so too and.
Are having ongoing discussions with the agency.
Operator: Yeah.
And.
I think if things continue to go well, we will discuss with them the potential for filing.
Operator: Let me start with that.
Operator: So thanks, David, for your question.
Cautiously optimistic that that should be able to.
To continue to go forward and we will we'll be able to update you in due course.
In terms of lung.
The primary focus for us in lung is actually the initiation of our phase III trials in lung.
Whether it's the combination trials I referenced earlier with Merck.
Or is some of the other.
Combinations that we're doing we will have some.
Additional data in line that will be coming.
That will be generated over time.
I think the focus should be on those phase III studies that we'll be reading out and then maybe Andy do you want to address the <unk>.
Breakdown sure, yes, I'd be happy Hi, Michael Thanks for the question.
Operator: I think, you know, we touched on a little bit about some of the potential impact.
Operator: Having said that, from a split government to, I guess, commercial business, it's around, depending on the different pieces, you're looking at around 40, 50% versus about a 30% commercial.
Operator: So what I'm including in that is more your Medicaid, Medicare kind of business, and that's, what's kind of playing out as well as your 340B.
Operator: So I think it's really, I don't think you should look at it more, you know, just looking, at it the percentage of the business.
Operator: I would also suggest that we look at the incredible diversity of our portfolio that we're growing, year on year, and also the geographical diversity as well, which I think will really help mitigate some of these pressures as we go forward.
Operator: I think it's going to be really interesting to see how all this plays out and when it, plays out, because nothing's really going to impact us for quite some time.
As you recall, we took a conservative approach to the write down that we took earlier this year, we looked at the potential path forward. We will continue to monitor on a quarterly basis is as.
Operator: But just from a government business, you are looking probably close to 50% of our total, business is in the government setting.
Operator: Great.
Operator: Thanks, Rana.
As we have historically as we showed the progress on the program.
Operator: Amber, our next question?
Both in lung cancer and in hormone receptor positive <unk> negative breast cancer, both of which we are carrying value on the balance sheet IP R&D as you know so we will continue to monitor it over time.
Operator: Our next question comes from Salveen Richter with Goldman Sachs.
Operator: Salveen, your line is now open.
Operator: Salveen, thanks for taking my question.
And in each major events, whether it's regulatory discussions are filings or central approvals, we'll look at that value again, we remain confident in the program overall like where the program is going and we'll update you as soon as we can on our discussions with the FDA and other regulatory agencies. Thank you.
Andrew we're ready for our next question.
Our next question comes from.
Operator: On HIV, could you just comment on what's keeping the screening and diagnosis below pre-pandemic, levels and whether you'd expect a full recovery by year-end?
Steve <unk> with.
Raymond James Steve Your line is now open.
Operator: And separately, could you give us a quick update on where you stand with the long-acting, programs?
Operator: What's the last part?
Okay, great. Thanks for taking the question I had another one on <unk> just given the strong second line launch was wondering how you view the market size or opportunity.
Operator: Can you repeat the last part of that question?
In second line versus some of the potential upcoming opportunities assumed with 23 or 24 populations and outpatient as high risk.
First line.
Those could be similar legs up and just how you're thinking about the sort of peak overall opportunity here for you is cargo.
Operator: Sure.
Thank you Christy.
Thank you for the questions.
Operator: Where you stand with the long-acting programs when we might see...
It's really great news for patients right now not only.
Operator: Oh, long-acting.
You started being used but more importantly, we're seeing the class grow so the use of cell therapy overall is growing which means instead of just two out of 10 patients receiving cell therapy more R and that was really.
Operator: Sorry.
Operator: Yeah.
Operator: Thanks.
Operator: You cut out a little bit.
The impetus for that was really the second line approval in April also all of the data that you saw at Ash with our Zuma five year data, Jim Malone five year data overall survival.
Operator: Apologies.
Operator: So let me hit the first part of that question, and then I'll throw it over to Murdad for, the long-acting.
Operator: So from an HIV screening standpoint, we're about 8% below pre-pandemic levels, so very, much in line with kind of where we were pre-2019.
Second line CCN guidelines.
Being the only category one end CCN product approved for second line. So we do see that this momentum is starting to Hoffman.
Operator: From a diagnosis standpoint, what you're seeing is that 30% or so below pre-pandemic, but, that's kind of normal.
Operator: What we've seen in the past, even prior to COVID-19, we're seeing a decline of the, diagnosis rate about 10% year-over-year.
Operator: And so if you think about three years, that's about your 30%.
Operator: So not a huge surprise there and good news, right, as you're thinking about how this, HIV market, its evolution.
Operator: What I would like to focus you on now is the fact that from a treatment and PrEP standpoint, we are above pre-pandemic levels from a market growth standpoint. And so we feel very confident that the market has recovered.
Operator: And actually, in PrEP, it's more than recovered. It's actually higher than it's ever been before. So it's actually an expansion of the market.
It is the only curative potential that physicians have in this.
Operator: So I think we're in much better shape, and it's taken a little bit more time for, treatment, but I think as of Q2, I can honestly say that it is really in a very good place, which is great news for patients.
Operator: And from a long-acting standpoint, I'll just reiterate, you know, with the PDUVA date at, the end of the year for Lenacapivir in highly treatment-experienced, I think that'll be the first approval, knock wood, for Lenacapivir, and I think that gets us started.
Operator: After that, remember, then, we have multiple efforts ongoing.
Operator: On the PrEP side, we have the PURPOSE studies that are underway.
Graves disease state for patients.
Operator: Those are longer-term studies because they're prevention studies, so they'll take a little, bit longer to read out.
Operator: You know, we're looking at a few years there, a couple of years at least, for those studies.
Operator: And then on the treatment side, we have a number of shots on goal there, both floral, long-acting as well as subcutaneous long-acting, and there, we have our own efforts, and you may have noticed we have a number of partner molecules that are coming through our pipeline that could be partnered with Lenacapivir for a full treatment regimen that would include Lenacapivir, and we continue to work with Merck on the potential for Lenacapivir combinations, with izlatrivir.
And to the future we're very optimistic.
We're trying to get this closer to patients in the outpatient setting which.
We are doing through clinical trials and also some of our authorized service centers have already published their data on utilization.
In the outpatient setting Vanderbilt.
And as we look at the frontline setting we're in negotiations right now with the regulatory authority the exactly how do we define high risk to that trial. So I do think we're finally, starting to realize the potential curative therapy for patients and I think that this will continue I will say, though that the bulk of this is I'll reiterate what I said before.
This is a bolus and we believe with the second line and launch of this pent up demand in the HCC patients where any authorized treatment centers.
Transplant.
Having worked with him over we have a lot of work to do to educate.
Physicians in the community to ensure that they are referring patients to treatment centers at a timely fashion. So we do have work to do in education and Thats included in the community and also as we launch.
Operator: So, a lot of different options and a lot of work that's ongoing, and as those progress, farther along, we'll keep you updated.
In multiple countries across the globe. So we do would you see a steady growth continuing for the next quarters and years to come.
Thanks, Christine were ready for our next question Jeff.
Our next question comes from.
Operator: Amber, may we have our next question, please?
Carter Gould with Barclays Carter.
Operator: Our next question comes from Michael Yee with Jeffries.
Your line is now.
Great. Good afternoon, thanks for taking the questions.
Operator: Michael, your line is now open.
Operator: Hey, thanks.
Operator: Good afternoon.
I guess one question one clarification.
Operator: One question, but two parts.
First on sort of the car T business can you just talk about the phasing of the supply ramp on the manufacturing side and to the extent that might might help out. This year should we think about that really just sort of wait to year end and I guess in answering that if you could also address sort of the manufacturing side, we don't get we don't hear much on that and then on the clarification piece.
Operator: On Tredelvi, maybe Andy or Murdad, you could remind us, have you actually met with FDA, on the potential filing, or what's the holdup there, and how soon is soon to hear back at this?
Operator: And I think you've already taken a write-down if it was not to be filed, so that would be, a different scenario there, but I don't think there'd be any further write-downs if that was the case.
Operator: And then maybe just comment on lung cancer opportunity.
Joanne I appreciate the comments on sort of the 50% government.
For Rytary.
But could you could you spell out I guess Medicare versus Medicaid there just been getting a lot of incoming on that thank you.
Great Chris if you want to start and then we will move.
Happy to do so.
One of the things, we're probably particularly proud of is our ability to supply patients both consistently reliably and the high quality standards and that started with El Segundo in California, but to your point in the EU Amsterdam is now supplying all of Europe various Garda.
And they are starting to do to Carlos as well.
And so we expect all of the manufacturing for European patients to move to the <unk> site by the end of this year. In addition, we just opened the Merrill Lynch side, which is the first time, we'll actually have automation one of our one of few modules.
The automation is up and running in Maryland and that.
That Maryland size has allowed us to actually increase.
<unk> slots for patients by 50%. So we feel very confident that we not only can provide patients for what we have today, but what we have in the future and for future ramp up that we have plenty of capacity to supply them and continue to ensure that we have the high quality standards. The last piece I'll say on on supply is limited.
It isn't about $2 five years ago to bring in viral vector at Oceanside, California. So.
We're not we're not at the whim of ups.
Ups and downs, if you will.
A viral vector supply so we have both internal and external our ability to ensure that we can keep that continuity for patients who might be disrupted.
Operator: I think in your slides, you say there would be Phase III data in lung cancer next year, and I know that EG has a readout next year as well, so I just want to understand that and your confidence level in lung cancer.
Yeah. Thanks.
So just to clarify and thanks for allowing me the opportunity Carter and maybe give a little bit more insight to Davids question. I gave you some numbers on government, but obviously not all of those numbers get impacted by that to the farmer and what we think might be the reform that we're talking about and so from a Medicaid standpoint, it's less than 20% of our total business and so that's.
Operator: Thank you.
Operator: Thanks, Michael.
Operator: Thanks for the questions.
Operator: So on Tredelvi, yeah, I think nothing has changed from what we said earlier in that, you know, we are excited about the data that we generated in Trophic O2 and are having ongoing discussions with the agency, and, you know, I think if things continue to go well, we will discuss with them the potential for filing.
Operator: And maybe, Andy, do you want to address the write-down?
Operator: We're cautiously optimistic that that should be able to continue to go forward, and we'll, be able to update you in due course.
Operator: In terms of lung, the primary focus for us in lung is actually the initiation of our, Phase III trials in lung, whether it's the combination trials I referenced earlier with, Merck or some of the other combinations that we're doing.
Operator: We will have some additional data in lung that will be coming, that will be generated, over time, but I think the focus should be on those Phase III studies that we'll be reading out.
Really what we should focus on as we think about potential for impact and again that impact doesn't happen anytime soon it's really later that.
Operator: Sure, yeah, I'd be happy.
In this decade, Ken to join you again I'll just add thanks Carter I know, there's a lot of moving parts here. So I just wanted to kind of reinforce a couple of things.
Operator: Hi, Michael.
Operator: Thanks for the question.
Operator: As you recall, we took a conservative approach to the write-down that we took earlier this, year.
Operator: We looked at the potential paths forward.
Operator: We will continue to monitor on a quarterly basis, as we have historically and as we should, the progress on the program, both in lung cancer and in hormone receptor-positive, HER2-negative breast cancer, both of which we have carrying value on the balance sheet and IPRMD, as you know.
As you know.
So very pleased from the aspect of the Bill I mean, one is of course, the part D reform.
In here.
The difference from what occurs today, 10% of the catastrophic phase it goes to 20% of the catastrophic phase.
The second half of this decade, I think something from our perspective that as we look at our business is quite manageable.
The second thing is in place and rebate.
I think we would have a low to zero exposure to.
And then the third one is negotiation I just wanted to be clear on negotiations. There is a lot of moving parts here and <unk> point it does not affect the entirety of the government business much of the government business already.
Contracted and under negotiation and so I really think and I'm sure you'll find us at most companies that is extraordinarily difficult to measure that impact, but also complex later in the decade.
And theres quite a bit of ambiguity about what products and how and when and there'll be a lot of discussion should this legislation the past about the details associated with that so.
Again as much as I believe this is not the right thing to do for the industry.
I also believe that we've got a very robust underlying business here and there.
These impacts are not short term at this stage so yes.
Yes.
Thank you.
And just to be clear on that on the 20% figure.
Medicare and Medicaid.
Medicaid Medicare right.
Thank you I know we've run over by a couple of minutes, but we'll take one last question. Please.
Our last question comes from Mohit Bansal with Wells Fargo.
Your line is now open.
Operator: So we'll continue to monitor it over time, and at each major event, whether it's regulatory, discussions or filings or potential approvals, we'll look at that value.
Great. Thank you very much for taking my question.
Operator: Again, we remain confident in the program overall, like where the program's going, and, we'll update you as soon as we can on our discussions with the FDA and other regulatory agencies.
Operator: Thank you.
So maybe if you can talk a little bit about disclosing trench and prep market.
Operator: Amber, we're ready for our next question.
So I know last couple of years, you took a little bit of price decline just to maintain market share. So where do you stand on the pricing is stable. It stabilize at this point and where does the market share of <unk> <unk> versus <unk> in this market stand at this point. Thank you.
Operator: Our next question comes from Steve Seedhouse with Raymond James.
Operator: Steve, your line is now open.
Operator: Great.
Operator: Thanks for taking the question.
Operator: I had another one on Yaskarta, just given the strong second line launch.
Sure. So let me take that one.
Operator: I was wondering how you view the market size or opportunity in second line versus some, of the potential upcoming opportunities, Azuma 23 or 24 populations and outpatients, high risk, first line, and if those could be similar legs up, and just how you're thinking about the sort of peak overall opportunity here for Yaskarta.
Operator: Great, Steve.
Operator: Thanks, Christy.
So basically from a market share standpoint, we basically we lost maybe a point or so over the last year, but we are at about 44% market share for <unk>, which I think it's pretty incredible if you think about the generic competition that we've been facing.
Operator: Over to you.
Operator: Thank you for the question, Steve.
Operator: You know, it's really great news for patients right now.
Operator: You know, not only is Yaskarta being used, but more importantly, we're seeing the class, grow. So the use of cell therapy overall is growing, which means instead of just two out of ten, patients receiving cell therapy, more are.
Operator: And that was really, the impetus for that was really the second line approval in April.
Operator: Also, all of the data that you saw at ASH with our Azuma five-year data, Azuma one five-year, data of overall survival, Azuma seven second line, NCCN guidelines, Yaskarta being the only category one NCCN product approved for second line.
Operator: Vanderbilt.
The balance of that market share right now is pretty much all ciabatta truvada generics, there's about less than 1%. If you think of the opportunity and as you think about new entrants in the marketplace. So it's really a mix of <unk> for prep as well as Truvada generics citation.
Operator: So we do see that this momentum is starting to happen, where it is the only curative potential, that physicians have in this, you know, grave disease state for patients.
Operator: And as we look at the frontline setting, we're in negotiations right now with the regulatory, authorities on exactly how do we define high risk for that trial.
Operator: So as we look to the future, we're very optimistic that, you know, we're trying to get this closer, to patients in the outpatient setting, which we are doing through clinical trials.
Operator: So I do think, you know, we're finally starting to realize the potential of this curative, therapy for patients.
Operator: And also, some of our authorized treatment centers have already published their data, on utilization of Yaskarta in the outpatient setting, i.e.
Operator: And I think that this will continue.
Operator: I will say, though, that, you know, this bolus is, I'll reiterate what I said before, this, is a bolus, we believe, with the second line launch of this pent-up demand in the HCC, including patients who are in the authorized treatment centers, going to central transplant.
Operator: So the heavy lift isn't over.
Operator: We have a lot of work to do to educate physicians in the community to ensure that they're referring, patients to treatment centers at a timely fashion.
Operator: So we do have work to do in education, and that's included in the community, and also, as we launch in multiple countries across the globe.
From a pricing standpoint, what you were referring to.
It has stabilized although the rebates are definitely higher than what we were doing in the past just because theres choice now and we're really trying to ensure that <unk> is a choice for physicians when people at risk need something and so we want to make sure that.
That's an option for them and making sure that we have the best on the marketplace with if you think about the bone and renal safety profile that is because we can offer. So that's really why we've been playing in that field and that's why it.
It's put a little bit more pressure on the commercial fund specifically.
On the rebate front, and so I think that stabilizing but every year the new year as we enter negotiations so more to come as we go into 2023, but for 2022, we're in good shape and we're also leveraging the incredible market risks for prevention, that's been playing out so all of the things are very positive things for <unk>.
<unk> and prevention as well as for people at risk.
Great. So thanks, so much for joining us today.
Operator: So we do see a steady growth continuing for the next quarters and years to come.
I just want to thank you again, I just want to reinforce what a strong quarter the slides and thank the team for really significant momentum I would say our business you saw our first party or second quarter, we are committed to delivering quarter after quarter on this on both the commercial execution on the pipeline side Im really excited about where we stand right now and where we're heading.
With that I will turn it over to Jacky for some closing comments, thanks, Dan and thank you all for joining US today. Please do feel free to reach out to Investor Relations. If you have any follow up questions on the quarter.
Operator: Thanks, Christy.
Operator: We're ready for our next question.
Operator: Yep.
Operator: Our next question comes from Carter Gold with Barclays.
Operator: Carter, your line is now open.
Operator: Great.
Operator: Good afternoon.
Operator: Thanks for taking the questions.
We appreciate your continued interest in Gilead and look forward to updating you on our progress throughout the year. Thank you.
Operator: I guess one question, one clarification.
Operator: First, on sort of the CAR-T business, can you just talk about the phasing of the supply, ramp on the manufacturing side and to the extent that might help out this year?
Operator: Should we think about that really just sort of weighted to your end?
Operator: And I guess in answering that, if you could also address sort of the EU manufacturing, side, we don't hear much on that.
Operator: And then on the clarification piece, Joanne, I appreciate the comments on sort of the 50% requirement for Tarvey, but could you spell out, I guess, Medicare versus Medicaid there?
Operator: Thank you.
Operator: It's been getting a lot of incoming on that.
Operator: Great.
Operator: That concludes today's conference call.
Operator: Kristin, do you want to start, and then we'll move to the next slide?
Operator: Sure.
That concludes today's conference call you may now disconnect.
Operator: Happy to.
Operator: So, you know, one of the things we're probably particularly proud of is our ability to supply, patients both consistently, reliably, and to the high-quality standards.
Operator: And that started with El Segundo in California, but to your point, in the EU, Amsterdam is, now supplying all of Europe for Yaskarta, and they're starting to do Ducatus as well.
Operator: You may now disconnect.
Operator: And so we expect all of the manufacturing for European patients to move to the Amsterdam, site by the end of this year.
Operator: In addition, we just opened the Maryland site, which is the first time we'll actually have, automation. One of two modules of automation is up and running in Maryland, and that Maryland site, has allowed us to actually increase our number of slots for patients by 50%.
Operator: Goodbye.
Operator: So we feel very confident that we not only can provide patients for what we have today, but what we have in the future and for future ramp-ups, that we have plenty of capacity to supply and continue to ensure that we have the high-quality standards.
Operator: The last piece I'll say on supply is, you know, we made a decision about two and a half, years ago to bring in viral vector at Oceanside, California.
Goodbye.
Operator: So we're not at the whim of ups and downs, if you will, of viral vector supply.
Operator: So we have both internal and external ability to ensure that we can keep that continuity, for patients and not be disrupted.
Operator: Thanks, Christine.
Operator: Yeah, over to you, Jordan.
Operator: Yeah, thanks.
Operator: So just to clarify, and thanks for allowing me the opportunity, Carter, and maybe give, a little bit more insight to David's question, I gave you full numbers on government, but obviously not all of those numbers get impacted by this reform or what we think might be the reform that we're talking about.
Operator: And so from a Medicaid standpoint, it's less than 20% of our total business.
Operator: And so that's really what we should focus on if we think about potential for impact.
Operator: And again, that impact doesn't happen anytime soon. It's really later in this decade.
Operator: Dan, did you want to add anything?
Operator: Yeah, great.
Operator: I'll just add, thanks, Carter.
Operator: I know there's a lot of moving parts here, so I just want to kind of reinforce a couple, of things.
Operator: So there are three different aspects of the bill. I mean, one is, of course, the Part D reform. And here, the major difference from what occurs today, instead of 10% in the catastrophic, phase, it goes to 20% in the catastrophic phase.
Operator: And this is potentially in the second half of the decade, and I think something, from, our perspective, that as we look at our business, is quite manageable.
Operator: The second thing is inflation rebate, which I think we would have a low to zero exposure, to.
Operator: And then the third one is negotiation.
Operator: And I just want to be clear on negotiation.
Operator: There's a lot of moving parts here, and to Joanna's point, it does not affect the entirety, of the government business.
Operator: Much of the government business is already contracted and under negotiation.
Operator: And so I really think, and I'm sure you'll find this with most companies, that it's extraordinarily, difficult to measure that impact.
Operator: It also comes much later in the decade, and there's quite a bit of ambiguity about what's, and how and when, and there'll be a lot of discussion, should this legislation be passed, about the details associated with that.
Operator: So again, as much as I believe this is not the right thing to do for the industry, I, also believe that we've got a very robust underlying business here, and that these impacts are not short-term at this stage.
Operator: So yeah.
Operator: And just to be clear, on that 20% figure, that's Medicaid, Medicaid, Medicaid, Medicare.
Operator: Thank you.
Operator: I know we've run over by a couple minutes, but we'll take one last question, Amber, please.
Operator: Our last question comes from Mohit Bansal with Wells Fargo.
Operator: Mohit, your line is now open.
Operator: Great.
Operator: Thank you very much for taking my question.
Operator: So maybe, Joanne, if you can talk a little bit about the COVID trends in the prep market.
Operator: So I know last couple of years, you took a little bit of price decline just to maintain, market share.
Operator: So where do you stand on the pricing?
Operator: Is it stabilized at this point?
Operator: And where does the market share of this COVID versus Truvada in this market stand at this, point?
Operator: Thank you.
Operator: Sure.
Operator: So let me take that one, Mohit.
Operator: So basically, from a market share standpoint, we basically, we lost maybe a point or so, over the last year.
Operator: So we're at about 44% market share for Discovi in prep, which I think is pretty incredible, if you think about the generic competition that we've been facing.
Operator: The balance of that market share right now is pretty much all Truvada, Truvada generics.
Operator: There's about less than 1% if you think of Apertude as you think about new entrants in, the marketplace.
Operator: So it's really a mix of Discovi for prep, as well as Truvada genericization.
Operator: From a pricing standpoint, what you were referring to, it has stabilized, although the rebates, are definitely higher than what we were doing in the past, just because there's choice now.
Operator: And we are really trying to ensure that Discovi is a choice for physicians when people at, risk need something.
Operator: And so we want to make sure that that's an option for them and making sure that we have, the best on the marketplace with, if you think about the bone and renal safety profile that, Discovi can offer.
Operator: So that's really why we've been playing in that field.
Operator: And that's why it's put a little bit of more pressure on the commercial fund, specifically, on the rebate front.
Operator: And so I think that's stabilizing, but every year is a new year as we enter negotiations.
Operator: So more to come as we go into 2023.
Operator: But for 2022, we're in good shape.
Operator: And we're also leveraging the incredible market growth for prevention that's been playing, out.
Operator: So all those things are very positive things for Discovi in prevention, as well as for, people at risk.
Dan: Great.
Dan: So thanks so much for joining us today, Suzanne.
Dan: I just want to thank you again.
Dan: I just want to reinforce what a strong quarter this was and thank the team for really significant, momentum, I would say, in our business.
Dan: We saw our first quarter, our second quarter, we're committed to delivering quarter after, quarter on this, on both the commercial execution and the pipeline side, and really excited about where we stand right now and where we're heading.
Jackie: With that, I'll turn it over to Jackie for some closing comments.
Jackie: Thanks, Dan.
Jackie: And thank you all for joining us today.
Jackie: Please do feel free to reach out to Investor Relations if you have any follow-up questions, on the quarter.
Operator: We appreciate your continued interest in Gilead and look forward to updating you on our progress, throughout the year.
Operator: Thank you.