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Johanna Mercier

Thanks, Dan. Good afternoon, everyone.
We've had a solid start to the year, with our commercial execution delivering strong year-over-year sales growth in our base business.
Product sales, excluding Veklury, of $6.3 billion were up 4% year over year, primarily driven by HIV and liver disease sales, partially offset by lower oncology sales. Sequentially, sales were down 12%, as expected, mainly due to inventory dynamics, partially offset by higher sales in liver disease. Total product sales of $6.6 billion were down 1% year over year and 12% sequentially, reflecting lower Veklury sales.
Moving to slide 8. Our HIV business delivered sales of $4.6 billion, up 6% year over year, driven by higher average realized price and higher demand. Sequentially, sales were down 16%, consistent with our guidance, reflecting normal first-quarter seasonality, including lower average realized price and volume, following a particularly strong fourth quarter as well as the impact of Medicare Part D redesign.
As a reminder, quarterly HIV growth is generally more variable and less indicative of overall trends than full-year results, with normal first-quarter impacts including inventory drawdown, following a build in the fourth quarter; and channel dynamics, including the resetting of patient co-pays and deductibles, which result in lower average realized price.
Beyond these typical first-quarter dynamics, HIV revenues were also impacted by Medicare Part D redesign in the first quarter of 2025. This increased the manufacturer contribution and includes individuals on low-income subsidy for the first time.
While we are still in the early stages of this implementation, our assumptions remain unchanged. In the meantime, we continue to expect robust demand-led volume growth for the full year. Though, as shared back in February, this will be obscured this year, due to Part D headwinds, resulting in flat reported HIV sales, overall, for 2025, with a return to growth in 2026.
On slide 9. In HIV treatment, the BIKTARVY's sales of $3.1 billion were up 7% year over year, primarily driven by higher demand. Sequentially, sales were down 17%, as we expected, reflecting first-quarter seasonality, including lower average realized price and volume.
BIKTARVY, once again, increased US market share in the first quarter to 51%, outpacing the growth of alternative regimens and remains the regimen of choice across G9 markets. Overall, the HIV treatment market continues to grow in line with our expectations of 2% to 3%, annually.
Descovy's sales of $586 million increased 38% year over year, primarily driven by higher average realized price and higher demand. HIV prevention continues to represent the significant majority of Descovy's sales.
And growth this quarter was driven by broader awareness, growing unrestricted access, and associated pricing favorability, as well as focused commercial execution that contributed to approximately 16% US PrEP market growth year over year.
Additionally, Descovy maintains over 40% market share and grew more than 2% year over year. Sequentially, sales were down 5%, reflecting typical seasonal inventory dynamics, partially offset by higher average realized price and higher demand.
Growing awareness and adoption of HIV prevention is encouraging ahead of our upcoming potential US launch of lenacapavir for PrEP. I'm excited to have our field teams across market access, commercial, medical, community; and our nurse educators, mobilized, to ensure we're ready for launch.
Building on our deep expertise and success of HIV launches and with strong engagement across the ecosystem from community leaders to healthcare providers, our teams are ready to build awareness; drive adoption; and, overall, deliver a seamless customer experience.
Additionally, we're working with health authorities, policymakers, and other organizations outside of the US, as we look to bring lenacapavir for PrEP to more people, globally, once approved.
Moving to liver disease on slide 10. Sales of $758 million were up 3% year over year, reflecting increased demand across PBC, HBV, and HDV; partially offset by lower average realized price for HCV products in the US. Sequentially, liver disease sales were up 5%, primarily driven by increased demand and inventory dynamics, partially offset by lower average realized price.
For Livdelzi, first-quarter sales of $40 million reflect continued early momentum in the launch of PBC. And we're proud of the market share we've achieved, so far.
We're also pleased that in February, the European Commission granted conditional marketing authorization for Livdelzi. We've just launched in Germany a few weeks ago. And we expect to expand into other major European markets in the coming months.
Moving to slide 11. Veklury's sales of 302 million were down 45% year over year and 10% quarter over quarter, reflecting lower rates of COVID-19-related hospitalizations, due to a milder winter season.
Veklury's consistently high share of over 60% of treated hospitalized patients in the US reinforces its clinical benefit and position as the standard of care, particularly among patients with renal and hepatic impairment. Despite the variability of the path of the pandemic, we expect Veklury's important role to continue.
On slide 12, Trodelvy's sales of $293 million were down 5% year over year, reflecting inventory dynamics and lower average realized price, partially offset by higher demand. Sequentially, sales were down 17%, primarily driven by inventory dynamics and lower demand.
Trodelvy remains the leading regimen in second-line metastatic Triple Negative Breast Cancer, in both the United States and Europe, with stable share in pre-treated HR-positive, HER2-negative metastatic breast cancer.
We also look forward to potentially bringing the benefits of Trodelvy to Triple Negative Breast Cancer patients in earlier lines of treatment, given the clinically meaningful progression-free survival benefits seen in ASCENT-04 and with data from ASCENT-03 expected later this quarter.
These studies could further strengthen our position in Triple Negative Breast Cancer, with almost double the addressable population compared to the second-line setting.
Moving to cell therapy on slide 13. Sales of $464 million were down 3% year over year and 5% sequentially, reflecting accelerating competitive headwinds. Notably, outside the US. And, more specifically, for Tecartus.
Yescarta's sales of $386 million were up 2% year over year, driven by higher average realized price and increased rest-of-world demand, partially offset by lower demand in the US. Sequentially, sales were down 1%, reflecting European-pricing favorability in the prior quarter that did not repeat, partially offset by higher demand outside the US.
Tecartus' sales of $78 million were down 22% year over year and 20% sequentially, reflecting increased in- and out-of-class competition.
Our work to increase CAR T-class penetration is ongoing. And we continue to make progress in breaking down barriers to adoption in the community setting, including in accreditation and commercial reimbursement. More broadly, we continue to raise awareness of the strength of our data, the advantages of a one-time treatment, and the potential benefits of earlier CAR T.
Notwithstanding the ongoing competitive headwinds that we continue to expect to extend through 2025, we remain very excited about the overall opportunity and future for cell therapy, with the potential launch of the anito-cel in multiple myeloma in 2026 and exciting early-stage data in our next-generation products across lymphoma and solid tumors at ASCO.
Before I hand over to Dietmar, I'd like to thank the commercialization teams for delivering a great start to the year. We remain focused on expanding the reach of our current portfolio but are also very excited about the rich pipeline of near-term launches over the next 12 to 18 months.
In addition to the ongoing launch of Livdelzi and the potential launch of lenacapavir for PrEP in 2025, we're also looking forward to the potential launch of anito-cel in multiple myeloma and Trodelvy in first-line metastatic Triple Negative Breast Cancer in 2026.
And with that, I'll hand the call over to Dietmar.

Dietmar Berger

Thank you, Johanna. Good afternoon, everyone.
We have made a lot of progress in the first quarter, with some exciting lenacapavir updates at CROI and our first pivotal Phase 3 top-line readout for Trodelvy in breast cancer since 2022.
The quality of these readouts highlights the breadth and depth of clinical expertise across Gilead, with the potential to support growth in our target therapeutic areas with new commercial launches in the years ahead.
Starting with HIV on slide 15. We shared 20 abstracts at CROI, including data that showcased lenacapavir's potential, even beyond the remarkable results we saw in PURPOSE 1 and PURPOSE 2 last year.
For example, we shared our Phase 1 data that showed once-yearly intramuscular injections maintained lenacapavir blood concentrations above those shown with twice-yearly subcutaneous injections for more than 12 months. The injections were generally well tolerated.
These data were published in the Lancet. And we look forward to initiating a Phase 3 study for once-yearly lenacapavir for HIV prevention in the second half of this year.
As a reminder: for our twice-yearly subcutaneous injection of lenacapavir for HIV prevention, we have already submitted NDA, MAA, and EU medicines for all applications with FDA and EMA. Further, we've submitted filings with regulatory bodies in South Africa and Brazil and continue to make good progress in all our discussions with the global regulatory bodies.
In particular, we have not experienced any disruptions in our interactions with FDA. And we continue to expect a regulatory decision by June 19.
In HIV treatment, we shared Phase 2 data at CROI, evaluating twice-yearly lenacapavir plus two broadly neutralizing antibodies of bNabs in biologically-suppressed people with HIV genotypes that are highly susceptible to both bNabs.
At week 26, the combination regimen maintained biologic suppression with high efficacy, similar to the stable baseline regimen comparator. There were no infusion-related reactions to the bNabs and no discontinuations due to injection-site reactions.
Lenacapavir plus bNabs has already received breakthrough therapy designation from FDA. And these Phase 2 data further underscore the potential for this combination to be the first complete twice-yearly treatment regimen for virologically-suppressed people with HIV. Phase 3 planning is in progress.
Touching upon liver disease on slide 16, we announced the European Commission-granted Conditional Marketing Authorization for Livdelzi for the treatment of primary biliary cholangitis or PBC.
The decision reflects Livdelzi's clinical benefit across key biomarkers of PBC and related providers in the Phase 3 RESPONSE trial. In addition, we continue to make progress on our Phase 3 IDEAL trial, which is evaluating the efficacy of Livdelzi in PBC patients, who are partial responders to UDCA, potentially doubling the addressable patient population.
Overall, we are excited by the opportunities to bring this differentiated treatment to more patients across the world.
Moving to oncology on slide 17. I'm very pleased to share Trodelvy plus pembro demonstrated highly statistically significant and clinically meaningful progression-free survival benefit over standard of care in the Phase 3 ASCENT-04 trial in first-line PD-L1+ metastatic Triple Negative Breast Cancer.
Triple Negative Breast Cancer is the most aggressive type of breast cancer that disproportionately impacts younger and pre-menopausal women. We look forward to being able to potentially bring the benefits of Trodelvy to these metastatic Triple Negative Breast Cancer patients in the first-line.
We will be submitting these data for presentation at a future medical congress and will engage with global regulators, as quickly as possible. Further, we expect to provide an update from the Phase 3 ASCENT-03 trial, evaluating Trodelvy monotherapy in first-line metastatic Triple Negative Breast Cancer patients who are not candidates for PD-1 inhibitors, later this quarter.
We also remain focused on clinical execution of our seven other ongoing Phase 3 programs for Trodelvy and domvanalimab across six tumor types.
Moving to slide 18 and on behalf of Cindy and the Kite team, we are pleased to be sharing new data from our next-generation products at the upcoming ASCO meeting in June, including Phase 1 data from KITE-363; our bicistronic CD19/CD20 CAR T for relapsed or refractory large B-cell lymphoma; and Phase 1 data from the bicistronic eGFR IL13Ra2 CAR T for glioblastoma, in collaboration with the University of Pennsylvania - Perelman School of Medicine.
We believe KITE-363 could offer deeper, more sustained responses, with the potential to overcome certain resistance mechanisms, given its ability to target both CD19 and CD20. Additionally, we believe it's dual co-stimulatory domains balance effects, such as rapid tumor cell-killing and CAR T-cell proliferation and persistence in an optimal way. This could result in a potentially improved overall efficacy and safety profile in B-cell malignancies.
Further, we believe many of these potential benefits could translate to B cell-driven autoimmune diseases and have filed an IND to evaluate KITE-363 in this area, as well.
For anito-cel, our pivotal iMMagine-1 study in fourth-line-plus relapsed or refractory multiple myeloma is ongoing. And we look forward to providing an update in 2025.
In the second-line-plus setting, we are pleased to announce the Phase 3 iMMagine-3 protocol has been amended to include minimal residual disease negativity as a dual primary endpoint, in addition to progression-free survival.
We're excited for this positive step to potentially bring anito-cel to patients in early-line settings and remain confident in anito-cel's profile across efficacy and safety, combined with Kite's leading manufacturing capabilities.
Finally, on slide 19, we achieved several important milestones this year, including European Commission- Conditional Approval of Livdelzi; positive Phase 3 top-line readout from ASCENT-04; and initiation of the Phase 3 EVOKE Small Cell Lung Cancer study. We anticipate an update from the Phase 3 ASCENT-03 trial, later this quarter.
Additionally, in virology, we remain on track to provide an update on the data from our [Phase 2.1-1] trial, our wholly owned once-weekly (inaudible)-containing oral treatment for HIV at an upcoming medical meeting.
And, now, I'll hand the call over to Andy.

Andrew Dickinson

Thank you, Dietmar. Good afternoon, everyone.
Our first-quarter results reflect both strong operating and commercial execution.
As shown on slide 21, our base business was up 4% year over year to $6.3 billion, largely driven by growth in our HIV and liver disease business, partially offset by lower oncology sales.
Veklury's sales were down 45% year over year, resulting in a 1% decline in our total product sales to $6.6 billion.
Moving to our non-GAAP results on slide 22. For the first quarter, product gross margin was flat year over year at 85%, in line with our full-year guidance expectation of 85% to 86%.
R&D expenses were down 5% year over year, primarily due to lower clinical manufacturing activities. Acquired IPR&D expenses were $253 million, primarily driven by the LEO Pharma STAT6 collaboration we announced in January. SG&A expenses were down 6% year over year, reflecting lower corporate expenses, partially offset by incremental selling and marketing spend in the United States.
First-quarter operating margin was 43%, highlighting our ongoing commitment to continue the operating expense discipline and delivering top-quartile margins, once again.
The non-GAAP effective tax rate was 16% this quarter, below our historic average, largely driven by tax benefits from stock-based compensation. And finally, non-GAAP diluted EPS was $1.81.
Moving to our full-year guidance on slide 23, we are not making any changes to our revenue expectations or non-GAAP P&L guidance, at this time.
As we reflect on the tariffs that have been enacted, to date, these could increase some of our indirect costs but are expected to be manageable in 2025, in part due to potentially lighter FX headwinds than previously expected.
For 2025, therefore, we continue to expect total product sales of approximately $28.2 billion to $28.6 billion; product sales, excluding Veklury, of approximately $26.8 billion to $27.2 billion; 2025 HIV sales to be approximately flat compared to 2024, with demand-driven growth offset by the impact of the Medicare Part D redesign; and Veklury's sales of approximately $1.4 billion.
While the first quarter was lighter than expected, we know this can be a highly variable business. With that in mind and consistent with our approach last year, we do not expect to update our Veklury guidance until our third-quarter earnings call.
Moving to other parts of the P&L for full-year 2025, on a non-GAAP basis.
We continue to expect product gross margin to range between 85% to 86%. R&D expenses to be roughly flat from 2024. Acquired IPR&D to be approximately $400 million, including the $253 million of expenses in the first quarter, as well as known commitments and expected milestone payments. SG&A expenses to decline by a high-single-digit percentage compared to 2024.
Operating income to be between $12.7 billion to $13.2 billion. Effective tax rate to be approximately 19%. And, finally, diluted EPS to be between $7.70 to $8.10 for the full year.
Looking ahead, we will continue to monitor the macro landscape, carefully. And we expect that our disciplined approach to operating expense management positions us well to adapt as needed in the months ahead.
Finally, on slide 24, our capital priorities remain unchanged. We have already returned $1.7 billion to shareholders in the first quarter of 2025 through dividends and share repurchases. And we will continue to pursue disciplined expense management and careful investment in the most promising pipeline opportunities, both internally and externally.
I'm also pleased to note that S&P recently upgraded Gilead's long-term debt rating from BBB+ with a positive outlook to A- with a stable outlook, recognizing the outlook for our HIV franchise and other products, combined with steady revenue growth and strong cash flow generation.
Overall, Gilead is on track to continue delivering demand-led volume growth, a disciplined operating model, and strong cash flow that positions us well for the rest of 2025 and beyond.
With that, I'll invite Rebecca to begin the Q&A.

Question and Answer Session

Operator

Thank you, Andy.
(Operator Instructions)
Michael Yee, Jefferies.

Michael Yee

Hey. Great. Thanks. Congrats on the quarter and progress.
We wanted to ask about your expectations for the PrEP launch; and assuming approval on time, how you think about the dynamics in the second half, related to commercial reimbursement and Medicaid reimbursement; and whether guideline changes and other factors also need to play a role.
Thanks.

Johanna Mercier

Hi, Michael. It's Johanna. Thanks for the question.
Yeah. So we're excited about the opportunity, with the PDUFA date around the corner. We are counting -- I think Dan referred to weeks, the team is counting days. And we are absolutely ready for the launch.
From an access standpoint, what we've said is we believe that around -- it was going to take a couple of months, right as it builds access. We think about 75% or so access within the first 6 months to a peak covered lives at about 90% at a 12-month mark.
And that's going to happen month after month. And it doesn't all happen in a (inaudible).
We also believe, at the beginning, that they're going to go through medical exceptions, right? And they'll go through the process just like they do, for example, with Livdelzi, as we're building access there as well.
And we believe that just takes a little bit more time but, still, could get through the process for those people that want lenacapavir.
And so, we'll work through that. And we're excited about that opportunity, as we build out through 2025 and, of course, into 2026 with much stronger access.

Operator

Carter Gould, Cantor Fitzgerald.

Carter Gould

Great. Thank you. Good afternoon.
Following on the prior question: there've been a number of cuts across HHS, CDC to start the year, across various teams, divisions, raising uncertainty around potential disruptions to messaging, education, awareness, can you help, maybe, frame some of these and, specifically, as they might impact the launch?
And are these -- either roles or activities that Gilead could, maybe, step into to do some of the heavy lifting? And, really, your confidence that we won't be pointing to these aspects of impacting the launch later in '25 or into '26?
Thank you.

Daniel O'Day

Thanks, Carter. This is Dan. I'll start. And then, Johanna can add -- or others.
But I just want to be clear that, to date, we haven't heard or seen anything that would cause us to alter our plans or expectations for the LEN for PrEP launch or adversely affect our HIV business.
Obviously, we're staying very closely attuned to this. And, importantly, we're having discussions with policymakers to emphasize the importance of lenacapavir from PrEP and, in, particular, in relation to their stated goals of addressing chronic diseases in this country and the value of prevention. We think that LEN for PrEP is really well positioned, there.
Specifically, relative to the government support and, in particular you mentioned CDC, Carter, obviously, their responsibilities include research and surveillance of HIV. They include supporting efforts around diagnosis and linkage to care.
We're also involved in those activities. But, again, nothing we've seen, so far, suggests that those core services are in a position to change our approach to the launch.
And, maybe, with that, I'll hand it over to Johanna if she has any other questions; or Dietmar, if you want to comment on the FDA too.

Johanna Mercier

Sure. Yeah. Maybe, just to add a point card around PrEP market growth and what you ask -- what Gilead can do?
I think that Gilead's been incredibly focused on making sure we continue to have market development initiatives to ensure screening, diagnosis, for treatment; but, also, to ensure awareness and within the PrEP market and make sure there's education there, as well.
And I think you've seen that. As you think about the PrEP market growth, we had a lot of activities in Q4 of last year. And that's playing out. We saw a nice uplift of the growth of the PrEP market in Q4 and you see that come through, again, in Q1 at about 16% year over year.
So really well positioned, as you think about lenacapavir around the corner.

Dietmar Berger

And on the FDA side. At this time, all our interactions with the FDA have been on track; have been as expected, without any surprises so we've not experienced any impact on our LEN for PrEP filing or any of our clinical trials actually, to date.
And we continue to expect the lenacapavir and decision by June 19.

Operator

James Shin, Deutsche Bank.

James Shin

Thank you.
I have a question for Johanna. Johanna, the strength in Descovy for this quarter, is there any read-through or implications on -- it looks like there was some price benefits to the Descovy but is there any read-through or implications to LEN's launch?

Johanna Mercier

Yeah. There is. Thanks for the question.
Yeah. We saw a really nice growth year on year, about 38% growth for Descovy. That was driven by higher average realized price, as you mentioned, as well as higher demand. Those are the two big drivers.
And there's a couple of reasons behind that. One is definitely the PrEP market growth that I was referring to earlier, around 16% year on year, driven, really, by the market development that we've done, that we've been leading.
And second was around focused commercial execution. We've actually grown the share of Descovy year on year by about -- just over 3 percentage points, which is really amazing. And that's driven by the commercial team, which have been doing an amazing job; but, also, supported by growing unrestricted access that we've seen, even just in the last quarter, to be honest; as well as associated lower copays, which also helps our pricing.
So all of those pieces together get you to that 38% year on year. And I do believe, actually, because of that PrEP market growth; because of the set-up, from an access standpoint -- really supports the opportunity with lenacapavir, hopefully, in June.

Operator

Salveen Richter, Goldman Sachs.

Salveen Richter

Good afternoon. Thanks for taking my question.
You touched on this a little earlier. But while Gilead seems fairly -- or unexposed to tariff risk here, can you just share any details on how much of the US market is supplied by ex-US manufacturing, either API-finished product? And to what degree you can shift this to the US? And is it fair to say limited risk to the business, from a tax-transfer pricing perspective?
And if I could also just get a clarification with regard to earnings, earlier, on the redesign; with regard to whether your assumptions are unchanged here? And whether you could just comment on how this is taking shape, relative to your 2025 guide, given the dynamics to date?
Thank you.

Daniel O'Day

Great. Thanks, Salveen. Let me just start at the high level. And then, I'll hand it over to Andy or Johanna to comment a little more deeply.
Just to emphasize what you said around the tariffs: I think, at the highest level, of course, we separate them into two different categories. One is indirect tariffs, which are related to all businesses. And, for us, they are things like steel, lab supplies, chemicals, reagents.
And, obviously, there, we have some known understanding of what those tariffs will be. And what we see, so far, today, we've absorbed into our guidance, without changing our guidance for the rest of the year. And Andy can comment a little further on that.
And then, the other category of tariffs are, obviously, the pharmaceutical-specific tariffs, which are not enacted today. They've only been discussed and chatted about. We obviously haven't speculated on those nor included those.
But, to your point, I think that there is a difference, relative to Gilead's make-up and set-up that is important when you consider those tariffs. And that is that the vast majority of Gilead's IP is in the US.
And what that suggests is lower value for its pharmaceutical imports, at the end of the day, which is the value on which tariffs would be placed. In fact, more than 80% of Gilead's profits are recognized in the US.
To your question around the supply chain: it's quite a complicated answer. We do have -- the strongest footprint we have is in the United States.
Like most companies, we leverage both internal and external manufacturing on a global basis. And we're always looking to adapt that to make sure that we have good continuity of supply across the world so that we can do that, accordingly.
I'd also say that we've invested significantly in our manufacturing infrastructure in the United States, over the past many years; and our R&D infrastructure, including opening cell therapy manufacturing sites. And we have four large-scale US investment projects in progress that are expected to run through 2028.
So it's difficult to get into the detail of every product in every supply chain. But I think we're well positioned, overall.
I would ask Andy to comment and, maybe, Johanna on the Medicare part. (inaudible)

Andrew Dickinson

Hi, Salveen. It's Andy.
Just to confirm what Dan said: our updated guidance does reflect the expected impact of the increase in indirect costs that we've seen from both announced tariffs and reciprocal tariffs, as well as our general expectations for the inflationary environment that we may be moving into.
And, as you can expect, there are a number of puts-and-takes in the P&L. But, as you look, again, at another very strong quarter of disciplined expense management, that helps us absorb some of those additional costs.
There's also a bit of a tailwind, as you've heard from our peers, in terms of how the US dollar is weakened for those of us that are based in the United States. There's a tailwind, relative to our budgeted FX amounts that will help offset some of those, as well.
So we're very confident, today, that with the strong growth you saw in the base business in the first quarter; despite the Part D impact, which Joanna can speak to; even with the tariffs, we're happy to reconfirm our guidance for the year. And we feel like we're in a good spot.

Johanna Mercier

And, maybe, just specific to your Part D redesign question: although still quite early in the stages of implementation, just important to note that Medicare claims will lag by a quarter. So we're still looking for that data. And we'll get that sometime late Q2, for the first quarter of this year.
Our assumptions haven't changed. We continue to expect about that $1.1 billion-dollar that we shared for total impact; of which, about $900 million or so is specific to HIV.
And in terms of phasing, we do expect some linear progression over the quarters. That's, in part, driven by the cost of our medicines.
And then, last but not least, we're really quite pleased with our Q1 results. If you think about our HIV business growing 6 points year over year, if you were to take out Part D redesign, you'd be looking at a 9% growth year over year.
So we're really pleased with how HIV is playing out; and being able to navigate those seasonal dynamics of inventory that we always see in Q1; but, also, the Part D redesign dynamics.

Operator

(Operator Instructions)
Tyler Van Buren, TD Cowen.

Tyler Van Buren

Hey, guys. Thanks very much.
For Trodelvy, is the lower demand quarter over quarter due to bladder coming out or lower demand in breast? It'd be helpful if you could elaborate on that.

Johanna Mercier

Sure. It's Johanna. I'll take that one.
Yeah. So quarter over quarter has to do with inventory and a little bit of lower demand, just because Q4 was really strong -- performance. But if you look at our year on year, at about minus 5%, that's really just inventory dynamic and lower average realize price, due to channel mix and higher demand.
So we are trending, nicely, with Trodelvy and holding a really nice position, both in second-line metastatic Triple Negative Breast Cancer; and as well as HR-positive, HER2-negative.
So we feel confident with what's to come in 2025. Let alone with the great positive news on ASCENT-04 that just reinforces the confidence for physicians in the second-line setting, with the data that we had originally showed with ASCENT.

Operator

Daina M. Graybosch, Leerink Partners.

Daina M. Graybosch

Hi. Thanks for the question.
I wonder if we can talk about the process to add lenacapavir to the USPSTF mandate for coverage about cost sharing, assuming SCOTUS upholds the constitutionality in June.
So what's the timing of that being added? And how much impact or uplift do you expect in revenue and growth in the US, when it's added to the mandate?
Thank you.

Johanna Mercier

Thanks, Daina, for your question. Johanna, again.
I think what's important is that we are assuming that it's going to take a little bit of time for USPSTF to add lenacapavir as the process -- obviously, from a guideline standpoint, we've already seen those guidelines play out. When you think about IAS guidelines, we already have lenacapavir there, prior to even approval.
But, usually, they wait for approval. And then, we go forward with trying to get medical updates through -- including USPSTF.
We do believe, though, that despite this, we feel we're incredibly well positioned because of the transformative nature of lenacapavir to build access across the different channels that -- and we're prepared to do that.
And that's, again, going to take a little bit of time, over the next 6 to 12 months. But we feel that that would be. In line with what we've seen in the past, with other agents, including Descovy. And we're going to be leveraging all the guidelines possible to make sure that there's a real value that's displayed for access to go as quickly as possible.
USPSTF would be nice to have, to be honest with you. But in the first 6 to 12 months, we're assuming that that's not going to be in play. And our plans are really based on our value proposition of lenacapavir.

Operator

Geoff Meacham, Citigroup.

Geoff Meacham

Oh. Great. Afternoon, guys. Thanks so much for the question.
I have one for Dietmar. So on the HIV treatment opportunity and looking to your long-acting orals, the question is what's the gating factor for selecting the best Phase 3 combo?
And related to that, while you haven't seen resistance with LEN -- it hasn't really been an issue -- would it still make sense to have, in the treatment setting, a 3-drug versus a 2-drug combo, just to mitigate the lower risk of resistance?
Thank you.

Dietmar Berger

Thank you, Geoff, for the question.
That's really early in our development program, here. I think the important piece is that we're looking for optionality. We're really looking for the breadth and depth of the portfolio to deliver for people, basically, with monthly and weekly; and, in the PrEP setting, obviously, once every 6 months and, potentially, also once-every-year options.
In the immediate future, obviously, we're really looking forward, as discussed, right, to the LEN for PrEP launch. But then, we also had data at CROI, right?
We were talking about the potential of lenacapavir for once-every-year PrEP. And that, of course, is some of our focus areas.
Obviously, we will look at the overall portfolio and see the options that we want to develop, which ones we can take forward.

Operator

Chris Schott, J.P. Morgan.

Chris Schott

Great. Thanks so much.
Just was hoping to get a little bit more color on the Livdelzi launch, so far. Just elaborate a bit more on what you're seeing, from a competitive standpoint; and how that ramp is progressing, relative to your internal expectations.
Thank you.

Johanna Mercier

Thanks, Chris. Johanna.
Yeah. We're really pleased with the progression of Livdelzi, right?
In our full second quarter, [$40 million]. But, most importantly, it actually has to do with the share uptake that we've seen.
We are looking at about one-third of the market, today, out of the second-line products that are currently indicated and growing, incredibly, rapidly.
We grew about 10 points share in one quarter. So we are really building that momentum, with a lot of positive feedback that we're getting from our healthcare providers around the efficacy, both the ALP, the biochemical response, and the [pruritus].
And coverage, right, now, is in line with our expectations. So we're at about just over 80% or so coverage with commercial plans. And we think that's going to keep growing, probably, within the next couple of months to just well above 90%.
So I think, right now, we're well on our way to continue to drive Livdelzi and really differentiate it in PBC.

Operator

Terence Flynn, Morgan Stanley.

Terence Flynn

Great. Thanks for taking the question.
I noticed -- and you mentioned -- that you added MRD-negativity as a co-primary endpoint in the anito-cel Phase 3 trial.
I'm just wondering what -- if you could comment on what the regulators would want to see there to approve that, on an MRD-negativity endpoint, in terms of, like, what delta you would need or if you'd also have to have other supportive data to justify an approval.
Thank you.

Cindy Perettie

Right, Terrence. It's Cindy Perettie.
We don't comment on the delta that they're looking for. But what I would share is that this is a dual primary endpoint. And so, being able to use MRD -- we know, today, that that correlates to [PFS] and it also allows us to, assess, within months of the treatment, if the patient is having a response.
So our goal is to use the MRD-negativity endpoint, first. And then, follow that up with progression-free survival.
But the correlation between the two is what we're talking to regulators about.

Operator

Tim Anderson, BofA.

Tim Anderson

Thank you.
On Descovy, how much will in lenacapavir for PrEP cannibalize? Could US Descovy sales go ex-growth, as soon as 2026?
And then, can you just give us any ballpark estimate for how many patients could be on lenacapavir for PrEP by the end of the year?

Johanna Mercier

Thanks for the question, Tim.
Yeah. We don't give product-specific guidance. But here's what I can say: I do think that, as you think about lenacapavir and its offering of twice-a-year, there really is an opportunity when you think about a [switch-switch] strategy, right?
When you think about 95% of the market today are daily orals -- which, obviously, that includes Descovy and generic Truvada. And so, that will definitely be where I think the first patients come through.
In addition to naïve patients, naïve folks, as well, that have been waiting for lenacapavir. Because there is definitely a lot of noise in the system, from the communities, that people are hanging in there until the approval of lenacapavir. So those two pieces are what's exciting, as we think about the launch.
And as I think about the growth of this market, right, we've basically said that we're just over about 400,000 to 450,000 folks or so on PrEP, today, in the US. We think that number will definitely continue to grow, quite rapidly, especially with the acceleration -- I think it will accelerate with the launch of lenacapavir.
And I think that number could be quite exponential, as you think about the next 10 years or so. So we're looking forward to seeing a little bit more in growth.
As we're 16% year on year, today, I think you're going to see a bit of an acceleration, as you think about the lenacapavir launch around the corner.

Operator

Evan Seigerman, BMO.

Evan Seigerman

Oh. Thank you so much for taking my question.
I wanted to drill down, a little bit, on some of the dynamics we're seeing in cell therapy. Are you seeing more share or competitive-share capture from competitive cell therapy products or bispecifics?
And the flip side: once folks -- once (inaudible) might use a different cell therapy product, do you tend to see them switch over? What are the dynamics behind that?
Thank you so much.

Cindy Perettie

(inaudible) Perettie. Thank you for the question.
I think that we have shared, probably in the previous quarter and this quarter, that we're seeing the dynamics from both bispecifics as well as in-class competition. And I think it depends as you look at Yescarta and Tecartus on those dynamics.
We have a number of new, approved indications with in-class competition, outside of the US. And that's some of the dynamics you're observing, outside of the US; within the US, in some of the more smaller markets that Tecartus is competing in.
We're seeing new indications, as well, with in-class competitors. But we're also seeing new indications in the US and Europe with the bispecific. So it's both that we're observing, right now.
So, hopefully, that that answers your question.

Operator

Matt Biegler, Oppenheimer.

Matthew Biegler

Great. Thanks so much.
I had another question on Trodelvy and the decreased demand Q-o-Q. Are you seeing any headwind from (inaudible) recent approval in HR-positive?
And that kind of leads to a broader question of could you just comment on the patient mix you're treating, in terms of Triple Negative versus HR-positive? Thanks.

Johanna Mercier

Sure. Basically, with competitive impact, we haven't seen any impact, thus far, really, as we think about new entrants in the marketplace. And we continue to really see a really strong dynamic in Triple Negative Breast Cancer to HR-positive.
Remember, the indications are a little bit different. In Triple Negative, we're looking at a second-line metastatic indication. In HR-positive, HER2-negative, the later lines of therapy, fourth line.
So we're definitely the TROP2 ADC of choice in HR-positive, HER2-negative versus other ADCs that are used much earlier in line -- in first and second line, for example.
And then, in Triple Negative Breast Cancer, we are absolutely the ADC of choice in that setting.

Operator

Courtney Breen, Bernstein.

Courtney Breen

Hi. Well, thanks so much for taking the question.
I just wanted to ask a little bit about the once-yearly lenacapavir. We obviously saw the early data presented at CROI.
It seems, with the timeline associated with that press release, that there could be a different trial design than what we've seen in PURPOSE 1 and PURPOSE 2. Can you just talk about whether there is any potential for an expedited [PK] or [PD] package, relative to an efficacy trial or what might be needed to get once-yearly to market for PrEP?

Dietmar Berger

Thanks, Courtney, for the question. That's very insightful, right?
We are currently looking into the different study designs, right? We have not commented, exactly, on what we're planning on doing, at this point in time.
But you're absolutely right. There are different study designs that you can utilize. And, potentially, a PK-based approach is a possibility that we're discussing.

Operator

Brian Abrahams, RBC Capital Markets.

Brian Abrahams

Hi, there. Thanks so much for taking my question.
A question for Johanna around the potential on the ground dynamics for lenacapavir on PrEP. Can you give us a sense of the awareness, across the target physician practices of the drug, the number of sites or, maybe, proportion of your target practices that are going to be ready to order or administer the drug, at launch; and where provider stands with regards to capacity and bandwidth to administer it?
Thanks.

Johanna Mercier

Okay. I think, from an awareness standpoint, the awareness is actually quite high, both at the healthcare provider level but, also, within the community.
And I think we're leveraging both of those pieces, as we think about: how do we prepare for our launch?
We're also very targeted, right? We know that about 75% of HIV prescribers are the one prescribing PrEP, today.
So, at launch, that's really our target -- is, really, around differentiating lenacapavir versus current options, making sure that we are setting them up for success and creating a very smooth customer experience.
To your point about number of sites: we've been very targeted on our approach in the first 30 days. We have a 30-day plan, 90-day plan.
And we're also very clear -- some clinics are set-up to do buy-and-bill, today; and they, currently, do it. Those are clinics that might be a little bit more open to do buy-and-bill with lenacapavir so we know those and we're making sure that they have all the training necessary to be able to do so, at post-launch.
But then, you also have a lot of clinics that do not have that set-up. And we'll need to go through a more of a white-bagging process through specialty pharmacy.
And the optionality, here, is going to be really important. And that's what we want to make sure we offer; and that we train folks, not just the healthcare providers, to be honest with you but, actually, anybody in the clinic that's managing this.
And so, we have a team of folks ready to go. Not just our medical and sales teams but we also have nurse educators making sure people know how to inject, making sure they can help any with any questions they might have; but we also have field reimbursement managers that are going to be in the field, basically making sure that we can track-and-follow to make sure they get reimbursed, especially if you think about the first 6 months or so, as plans are just coming online. It's going to take a little bit of time.
And so, most prescriptions will get a medical exception. And we just want to make sure that we're tracking those to make sure we can help clinics and healthcare providers follow through on that so that they can get started on lenacapavir, as quickly as possible.

Operator

Mohit Bansal, Wells Fargo.

Mohit Bansal

Great. Thank you for taking my question.
I would love for you to comment on a couple of macro themes that we hear a lot, as they pertain to Gilead.
One is, of course, about the NIH funding cuts and potential for funding cuts regarding something which could help with the HIV awareness and PrEP awareness (inaudible).
And then, number 2 is potential for Medicaid cuts and how it pertains to Gilead; and if Gilead can actually operate in an environment like that.
Thank you.

Daniel O'Day

Thanks. Well, let me start. This is Dan. And then, Johanna can turn me out, as well.
I just want to repeat that we haven't seen or heard anything, to date, that would cause us to alter our plans or expectations in the HIV field, including the LEN for PrEP launch.
I think it's just too early to speculate on anything related to Medicaid, at this stage. There's no confirmed cuts, at this time.
I believe the administration understands the importance -- particularly, chronic diseases and prevention -- as they approach that.
I'd also say, at the CDC side: we're obviously strong supporters of the CDC and, also, the role that NIH plays in creating a scientific community.
But, specifically, relative to CDC, it's still too early to understand any impact on, particularly, CDC programs. They're generally focused on supporting PrEP utilization with community outreach, providing training and education. Those are also things that we do as well.
And, maybe, I'll turn it over to Johanna to say how she sees it, in terms of how some of our programs may be able to make sure that services are delivered to the people that need these medicines.

Johanna Mercier

Thanks, Dan.
Yeah. We've been tracking this, very closely; and, obviously, making sure that the work that we do continues; and, in some areas, gets accelerated or elevated where necessary -- where there might be some gaps where necessary and where HIV incidences may be higher as well, right, where there's a greater need.
So we're very targeted in our approach.
And then, just going back to -- obviously, there's nothing in sight and we wouldn't speculate about anything around Medicaid.
But I just want to remind everybody this: we're talking about HIV. These are individuals that if they need access to HIV medicines, they will find other channels for coverage. Because if they don't; unfortunately, HIV will turn into AIDS and they will die.
And so, in the past, what we have seen is if one channel is closed, they go to another. And there are many different channels where they can they can go to today, including some Federal but some state-funded approaches, as well as Gilead programs, that they can just make sure that they get over these access barriers.
So I just wanted to pause on that.

Operator

Alex Hammond, Wolfe.

Alexandria Hammond

Thanks for taking the question.
How should we think about the potential impact of the 340B channel mix on HIV pricing for '25? And how do you expect utilization to compare to what was seen in 2024?
Thank you.

Johanna Mercier

Again, at this time, there is nothing new that we are seeing for 340B. We've seen a growth, actually, of 340B over '20 -- in every quarter, from '24 into 2025. We hope that stabilizes.
We believe in the 340B channel, absolutely, for what it was designed, originally, to do. We just want a little bit more transparency because that would really help cut out some of the duplicates that we're currently seeing as well, across some of our different therapeutic areas.

Operator

Simon Baker, Redburn Atlantic.

Simon Baker

Thanks for taking my question.
Going back to the Part D redesign. We've talked about the impact. I'm just wondering if could you give us some thoughts on when you are expecting to see a potential benefit, as the lower cost to patients increases starts and increases stay time.
I'm guessing it's too early now. But as the year goes on, when should we start to see an offsetting positive impact from the changes that have been made?
Thanks so much.

Johanna Mercier

Yeah. Thanks for the question.
In terms of volume, given the number of safety nets that I was just referring to earlier, there's so many programs that are available, today, that exist for HIV.
We're not expecting to see a material uptick from the Part D reform. We're obviously going to track it super closely.
If we were to see it, it would be later in the year. And just to remind people: when you look at Biktarvy, for example, the level of abandonment of Biktarvy is incredibly low today. And so, very different, maybe, than other therapeutic areas that you might see in chronic diseases, just because of the consequences of not being on an HIV treatment.
And so, that's why we're monitoring the situation. We haven't included it in our numbers, like we've shared in the past. And we'll obviously -- if we do see something, we'll share it with you, as soon as we do.
But if it was to happen, it would be later in the year.

Operator

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

Daniel O'Day

Terrific, everybody. Let me wrap up by thanking the Gilead teams that are responsible for this great start to the year.
I'll just say that, on behalf of all of us, the strong base business growth of 4% year over year and 6% growth in our HIV business, combined with the continued success of the Livdelzi launch and growing demand for Trodelvy, alongside the impressive operating margin and earnings per share, all demonstrate that we have a strong and efficient business today, which I think is extremely important, given the current environment that we're all operating in.
And, moving forward, we're also excited about what's next: our diverse pipeline and generating multiple upcoming potential launches, including lenacapavir for PrEP, which is weeks away; Livdelzi in further markets; anito-cel; and, now, Trodelvy, based on the positive Phase 3 results from the ASCENT-04 study, all fill us with great promise, as we continue on a diversification approach and confidence in our business, overall.
So this is an exciting time for Gilead: the ongoing work that we all do for patients in the communities we serve.
And I just want to close by thanking you all for joining us, today. We look forward to keeping you up-to-date on our progress, as the year continues.