GILD Q3 2026 Earnings Analysis
Gilead delivered 16% base business growth driven by HIV and oncology strength, raising 2026 guidance, while facing $1.5B Medicare price headwind to Biktarvy in 2028.
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Key Takeaways
- Strongest base business growth in 10+ years (16% YoY); HIV leadership with 53% Biktarvy market share.
- Biktarvy faces $1.5B headwind in 2028 from Medicare pricing; total HIV revenue expected to grow in 2028.
- Pipeline advances: 49 clinical programs; anito-cel PDUFA Dec 23; inflammation portfolio gaining momentum.
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Transcript
// Full episode scriptWelcome to Beta Finch, your AI-powered earnings breakdown! Today we're diving into Gilead Sciences' third quarter 2026 results, and folks, this is a big one. But before we get into the numbers, just a quick note: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.
And with that out of the way, Alex, I have to say — this was a genuinely impressive quarter for Gilead. The stock popped over 3.6% on the back of it.
Right, so let's start with the headline number. Base business sales — that's excluding their COVID drug Veklury — came in at $8.2 billion, up 16% year-over-year. CEO Daniel O'Day called it their strongest growth in over a decade.
And that's not just a one-off blip either. This is the third time this year they've raised full-year guidance. They're now projecting total product sales of up to $31.3 billion for 2026, which is $1.65 billion higher than where they started the year.
Let's talk about where that growth is actually coming from, because it's broad-based. HIV is still the engine — sales grew 18% year-over-year to $6.2 billion. Biktarvy hit an all-time high U.S. market share of 53%.
That's the number that jumped out at me. Fifty-three percent market share for a drug that's been on the market for years, still gaining share. And then you layer on Yeztugo, their long-acting injectable for HIV prevention — that thing is on fire. Combined with Descovy, they now control 50% of the PrEP market with a $4 billion annual run rate.
And get this — more than 70% of Yeztugo patients are coming back for their second injection, which means you get up to a full year of protection from just two shots. That's a sticky, durable franchise.
It really is. But HIV wasn't the only story. Oncology is becoming a real second pillar here. Trodelvy, their breast cancer treatment, grew 42% year-over-year and crossed a $2 billion annual run-rate. They also got European approval to use it in combination therapy for first-line triple-negative breast cancer, which opens up the patient pool even earlier in the treatment journey.
And liver disease — specifically Livdelzi for a condition called PBC — sales nearly doubled, up 93% year-over-year. Smaller dollar figure at $203 million, but that growth rate tells you something about how fast that franchise is scaling.
Now, on the flip side, Cell Therapy — that's their Kite business — was actually down 18% year-over-year due to competitive pressure. But management is leaning hard into a near-term catalyst there: a potential FDA approval for anito-cel, a new multiple myeloma treatment, with a decision expected December 23rd. If that lands, it's Gilead's fourth approval of the year.
Let's talk profitability for a second, because the top line wasn't the only good news. Gross margin hit 88%, up from 86% a year ago. Operating margin was 50% — top quartile for their peer group. And non-GAAP EPS came in at $2.55 versus $2.47 last year.
Now here's where it gets interesting — and a little more complicated. There's a real cloud on the horizon, and it's policy-driven, not business-driven.
Right, let's get into that, because this was clearly the elephant in the room during the Q&A. Biktarvy was selected for the government's Maximum Fair Price determination under the IRA, and CMS has now set that price — a 38% discount in the Medicare channel. Gilead says this translates to a $1.5 billion net revenue hit to Biktarvy specifically in 2028.
And CEO Dan O'Day didn't hold back on this one. He basically said the price CMS set doesn't reflect the actual value of a drug that transformed HIV treatment, and he specifically called out what he termed the "pill penalty" — the idea that small molecule drugs like Biktarvy get hit harder under this pricing framework than other drug types, mid-lifecycle, which he argues discourages future innovation.
But — and this is important — management was pretty confident they can absorb it. CFO Andrew Dickinson said they still expect total HIV revenue to grow in 2028 versus 2027, and that both total product sales and EPS should grow that year too, once you factor in oncology and their emerging inflammation pipeline.
It's also worth noting they've navigated policy headwinds before — a $1.1 billion hit from Medicare Part D redesign in 2025, and over $500 million from ACA-related changes this year. So there's a track record of absorbing these shocks without derailing overall growth.
Let's touch on the pipeline too, because this is where the long-term diversification story really comes together. Forty-nine clinical programs across HIV, oncology, and inflammation. On HIV, they're working toward once-weekly oral treatments and even exploring a once-yearly injectable for prevention — which, if you think about it, could align with people's annual checkups.
And the inflammation pipeline is the new kid on the block here. Thirteen clinical programs now, and they just announced a $1.4 billion acquisition of an oral IL-23 inhibitor from a company called PepStar Therapeutics, which they want to potentially pair with their existing inflammatory bowel disease drug candidate, emvistegrast.
It's a classic Gilead move, honestly — they built an HIV monopoly, and now they're methodically building out oncology and inflammation as the "next HIV."
So what does this all mean for investors going forward? You've got a company firing on all cylinders right now — record HIV share, oncology scaling fast, margins expanding — but with a known, quantified headwind two years out. The market seems to be giving them credit for the execution and trusting management's ability to offset the IRA impact through pipeline diversification.
And that's really the thesis to watch: can oncology and inflammation scale fast enough to backfill the Biktarvy pricing hit before it even arrives?
Before we wrap up — a quick reminder that everything discussed is AI-generated analysis for educational purposes. Past performance doesn't guarantee future results. Please do your own due diligence.
Well said. Looking ahead, keep an eye on that December 23rd anito-cel decision, more data coming at medical conferences on the inflammation pipeline, and of course, how Gilead continues to navigate the 2028 Biktarvy transition.
Lots to watch. This has been Beta Finch — thanks for tuning in, and we'll catch you next time.
See you then!