8-K: Gilead Sciences Q1 2026 Earnings: Strong Base Business Growth

Gilead Sciences reported first quarter 2026 results with total revenues up 4% to $7.0 billion, driven by strong performance in its base business, particularly HIV products, and raised full-year revenue guidance.

Summary

• Gilead Sciences announced first quarter 2026 financial results, with total revenues reaching $7.0 billion, a 4% increase year-over-year.
• Product sales, excluding Veklury, grew 8% to $6.8 billion, indicating robust performance in the core business.
• HIV product sales saw a significant 10% increase to $5.0 billion, boosted by higher demand and pricing, and the launch of Yeztugo.
• Biktarvy sales increased by 7% to $3.4 billion, and Descovy sales rose by 38% to $807 million.
• Trodelvy sales surged by 37% to $402 million, demonstrating strong growth in oncology.
• Veklury sales decreased by 52% to $144 million due to lower COVID-19 hospitalizations.
• Cell Therapy product sales declined by 12% to $407 million, facing competitive headwinds.
• The company raised its full-year 2026 revenue guidance, reflecting its performance.
• Diluted EPS was $1.61, and non-GAAP diluted EPS was $2.03, both showing increases from the prior year.
• Gilead completed the acquisition of Arcellx for approximately $7.8 billion and announced definitive agreements to acquire Tubulis and Ouro.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a mixed-to-positive report; strong operational performance and raised revenue guidance are offset by a significant reduction in EPS guidance due to large acquisition-related charges.

Positives

• Total revenues increased by 4% to $7.0 billion in Q1 2026 compared to Q1 2025.
• Product sales, excluding Veklury, increased by 8% to $6.8 billion.
• HIV product sales grew by 10% to $5.0 billion.
• Biktarvy sales increased by 7% to $3.4 billion.
• Descovy sales increased by 38% to $807 million.
• Trodelvy sales increased by 37% to $402 million.
• Livdelzi sales contributed to a 1% increase in the Liver Disease portfolio to $767 million.
• Product gross margin improved to 79.2% (GAAP) and 87.5% (non-GAAP).
• Non-GAAP diluted EPS increased by 12% to $2.03.
• Full-year revenue guidance was raised.
• Acquisition of Arcellx completed, strengthening the oncology and inflammation pipeline.
• Definitive agreements to acquire Tubulis and Ouro were announced, further expanding the pipeline.

Negatives

• Veklury sales decreased by 52% to $144 million due to declining COVID-19 hospitalizations.
• Cell Therapy product sales decreased by 12% to $407 million, attributed to competitive headwinds.
• Yescarta sales decreased by 14% and Tecartus sales decreased by 4% within the Cell Therapy segment.
• Full-year 2026 GAAP and non-GAAP diluted EPS guidance was significantly reduced by approximately $9.50 due to anticipated acquired IPR&D charges and financing costs related to acquisitions.
• SG&A expenses increased by 12% (non-GAAP) primarily due to higher HIV promotional expenses and donations of equity securities.
• Effective tax rate increased to 21.7% (GAAP) and 18.3% (non-GAAP).

Risks

• The full-year 2026 GAAP and non-GAAP diluted earnings per share guidance was reduced due to anticipated acquired IPR&D charges of $11.5 billion and financing costs related to the Arcellx, Ouro, and Tubulis transactions.
• Veklury revenues are subject to uncertainty regarding the amount and timing of sales.
• Potential impact from Medicare Part D pricing reform in the Inflation Reduction Act.
• Changes in U.S. regulatory or legislative policies, and changes in U.S. trade policies, including tariffs.
• Gilead's ability to realize the potential benefits of acquisitions, collaborations, or licensing arrangements.
• The possibility that closing conditions for proposed acquisitions, collaborations, or licensing arrangements may not be satisfied or waived.
• Risks associated with clinical trials, including unfavorable results, delays, or failure to obtain regulatory approvals.
• Pricing and reimbursement pressures from government agencies and other third parties.

Future Outlook

Gilead raised its full-year 2026 revenue guidance, expecting product sales between $30,000 million and $30,400 million, and product sales excluding Veklury between $29,400 million and $29,800 million. However, full-year GAAP and non-GAAP diluted EPS guidance was significantly reduced due to anticipated acquired IPR&D charges and financing costs related to recent acquisitions.

Management Comments

• "Gilead teams have delivered another strong quarter with 8% year-over-year growth in our base business and 10% growth in HIV, supported by the successful launch of Yeztugo."
• "We have raised our full year revenue guidance as a reflection of our performance."
• "Building on the strongest pipeline in Gilead's history, we are adding potentially best-in-disease assets and platforms in oncology and inflammation from our acquisitions of Arcellx, Ouro Medicines and Tubulis."
• "With up to four potential launches and five Phase 3 updates anticipated in 2026, Gilead is well-positioned for sustained growth in the near and long term."

Industry Context

StockSavvy.ai notes that Gilead's Q1 2026 results reflect a strategic shift towards growth in its core therapeutic areas like HIV and oncology, while managing the decline in COVID-19 related products. The significant investments in acquisitions (Arcellx, Ouro, Tubulis) highlight a commitment to pipeline expansion and future growth drivers, though these also introduce substantial upfront costs impacting near-term EPS guidance.

Comparison to Industry Standards

• Gilead's 8% year-over-year growth in its base business (excluding Veklury) in Q1 2026 is a strong indicator of underlying operational health, outperforming many large-cap biopharmaceutical companies that are experiencing slower growth or patent cliffs.
• The 10% growth in HIV sales, driven by Biktarvy and Descovy, demonstrates continued market leadership in a competitive segment, where sustained single-digit to low-double-digit growth is considered robust.
• The 37% surge in Trodelvy sales indicates successful market penetration and adoption in oncology, a sector where many companies struggle to achieve such rapid growth for new therapies.
• The significant decline in Veklury sales (52%) is an expected trend across the industry as the acute phase of the COVID-19 pandemic subsides, impacting companies with significant COVID-19 related revenues.
• The substantial reduction in full-year EPS guidance due to acquisition-related charges is a common occurrence in the biotech sector, where strategic M&A often leads to short-term financial adjustments but aims for long-term value creation. Companies like Pfizer and Merck have historically made similar large-scale acquisitions with immediate EPS impacts.

Related Party Transactions

• Donations of equity securities were made to the Gilead Foundation, a California nonprofit organization, during the first quarter of 2026, impacting SG&A expenses.

Stakeholder Impact

• Shareholders: The reduction in full-year EPS guidance may negatively impact short-term stock performance, while the raised revenue guidance and strategic acquisitions signal long-term growth potential.
• Employees: Continued investment in R&D and pipeline expansion through acquisitions suggests ongoing opportunities and job security within the company.
• Customers (Patients): Continued strong sales of HIV medications like Biktarvy and Descovy indicate ongoing access for patients. Progress in oncology and inflammation pipelines offers hope for new treatments.
• Suppliers: Increased R&D investment and manufacturing activities related to pipeline development may lead to increased demand for supplier services.

Next Steps

• Continue development and regulatory filings for anitocabtagene autoleucel (anito-cel) with a PDUFA target action date of December 23, 2026.
• Monitor the FDA's review of the New Drug Application for bictegravir and lenacapavir (BIC/LEN) with a PDUFA target action date of August 27, 2026.
• Complete the acquisitions of Tubulis and Ouro, subject to regulatory approvals and customary closing conditions.
• Continue to expand HIV prevention initiatives through investments in programs like the Community Health Worker Comprehensive HIV Prevention Initiative.
• Advance the development of T cell engager (TCE) therapies for autoimmune diseases through the Ouro acquisition.
• Develop next-generation antibody-drug conjugates (ADCs) through the Tubulis acquisition.

Key Dates

Recommendation

The company demonstrates strong underlying operational performance with revenue growth in key areas and a raised revenue outlook. However, the significant reduction in EPS guidance due to large acquisition-related charges introduces near-term uncertainty. The strategic acquisitions are positive for long-term growth but require careful monitoring of integration and pipeline success. A 'hold' recommendation reflects this balance of positive operational trends and near-term financial headwinds.

Keywords

Gilead Sciences, Q1 2026 Earnings, HIV, Oncology, Biktarvy, Trodelvy, Acquisitions, Biotechnology