2023-11-28 16:32:07 ET
Gilead Sciences, Inc. (GILD)
6th Annual Evercore ISI HealthCONx Conference
November 28, 2023 01:20 PM ET
Company Participants
Andrew Dickinson - Chief Financial Officer
Conference Call Participants
Umer Raffat - Evercore ISI
Presentation
Umer Raffat
Let's get ahead and get started. Thank you all for being here. Pleasure to have Gilead management here. There's a lot of topics to go through, including some of the FDA updates today, Andy, and I realized it's very early into the update. But maybe let me turn it over to you kick things off.
Andrew Dickinson
Yes. Great. Thank you. First of all, thank you for having us. It's great to be here. It's great to do a conference in November in Miami. So thank you for that. And I appreciate everyone and spending time with us. The -- maybe just quickly to kick it off. I mean, 2023 has been a great year for Gilead. You see the continued strength in our base business, the HIV business has performed extraordinarily well. The oncology business, which is both the Kite business and Trodelvy continue to grow, and it's just the beginning from our perspective. I'd say the other thing that we focus investors on is we've been making significant investments as we've rebuilt the company over the last four or five years and now we're moving into a period where you're going to see a lot of important Phase 3 data in the next 12 months. So we'll spend a lot of time talking about that. But a number of Phase 3 readouts across oncology and HIV and the rest of the virology business, including our COVID oral antiviral next year. So it's a pretty exciting time for us.
Question-and-Answer Session
Q - Umer Raffat
Excellent. So maybe Andy, I think that might be a good place to start, you want to lay out for us, I know folks are aware of the Trodelvy lung readout. But can you lay out for us the suite of readouts, the important ones then we can start to go one by one?
Andrew Dickinson
Sure. Again, we'll spend a lot of time talking about this early next year, as you could imagine. But I mean the readouts that I would really highlight and there's a number of them, but first and foremost, Trodelvy, which is, for those of you that don't know Gilead as well as our Trop-2 directed antibody drug conjugate that we acquired by acquiring Immunomedics. The product is approved in three different solid tumors already, two forms of breast cancers and bladder cancer. We have a very extensive late stage clinical development program underway in multiple tumor types, including earlier lines of breast cancer, earlier lines of bladder cancer and lung cancer. Next year, there will be a lot of data, but two things that I would highlight, in particular, our EVOKE-01 study of Trodelvy in second-line non-small cell lung cancer. This is a Phase 3 study that we’ll read out in the first half of next year. The competitor, there's a competitor Trop-2 antibody that presented some data a month ago, that really left the door open for us to demonstrate convincingly that our thesis that the Immunomedics construct and the Trodelvy construct is a better construct. The door is wide open for us to demonstrate that. The other data set next year that is important is the second line bladder cancer data set that's coming, again, Phase 3 data set.
I think if you look at recently some of the PADCEV data that was really very strong data in bladder cancer, our expectation is that PADCEV becomes kind of the standard of care in first line, and the door is wide open for Trodelvy to become the standard of care in second line bladder cancer, which, again, I don't think is in a lot of models and people haven't yet fully kind of made that leap. So it's an exciting time for Trodelvy. Maybe I'll transition then there are two other -- again, there's at least five or six Phase 3 data readouts next year. One other one that is incredibly important is lenacapavir, which is our novel, it's already approved, it's an HIV capsid inhibitor that's dosed subcutaneously every six months. We started our prevention, HIV prevention, studies a couple of years ago, at least the first of the two Phase 3 studies, if not both of them, will read out by the end of next year. HIV prevention is an extraordinary opportunity for Gilead and for people that are at risk of getting an HIV, this could be a really transformative development. So that data will come next year. And then finally, one of the two studies that we had started with our oral broad acting nuc, that can be used in COVID and other emerging viruses, we'll have a data readout next year in the ordinary risk or regular risk patients. So that's just the tip of the iceberg. There's a lot of Phase 2 data coming next year as well. And we continue to follow things like the Arcellx collaboration with DDB CMA, there should be additional data next year, additional TIGIT data, so really a data rich year for us.
Umer Raffat
Excellent. There are several of these to go through. Maybe let's start with EVOKE on the lung cancer side, non-squamous versus squamous, your thought process around whether you guys do think you should have a primary population laid out in non-squamous or not? I know it doesn't sound like that's not the direction you guys are going down?
Andrew Dickinson
No.
Umer Raffat
Could you lay out for us how you're thinking about that in line of Astrazeneca readout?
Andrew Dickinson
Sure. Yes. So what Umer is referring to is that the competitor data set showed a benefit or some benefit in non-squam patients, but not in squamous cell patients. The primary endpoint of our study is overall survival on an intent-to-treat basis across all the patients, squamous and non-squamous. The study is fully enrolled already, moving to -- it's a data or an event driven trial. So moving to, as I said, the readout on the Phase 3 study earlier -- in the first half of next year. We do pre-stratify as I think the competitor did that we'll look at the data on squames and non-squames. Our expectation is that we'll show a benefit in both. So when we look at the existing for Trodelvy data that's available both from a Phase 1 study that Immunomedics did as well as the Phase 2 study -- basket study that we did, and we reported some of the study data earlier this year, we see responses in both claims in squames and non-squames. So again, our expectation is that to get approved, especially in the United States, you have to show an overall survival benefit across the entire patient population, but we will look at it in terms of squames and non-squames. The other thing I would say is that this is -- it's a great point to kind of highlight again that not all ADCs are the same, not all Trop-2 directed ADCs are the same. And I think our sense was that the market may be assumed that one of the competitors because of a related compound that's approved in breast cancer that that construct would necessarily be a better construct.
Our belief has always been when we acquired Immunomedics that there are four huge points of differentiation. So those are our antibody has much higher binding affinity for Trop-2 than the lead competitor. Our linker is different. It's hydrolyzable, which means that it's cleaved in the tumor microenvironment. Some of the toxin is internalized in the cell but a good portion of the toxin is also released in the tumor microenvironment, which could also help in terms of efficacy, including in squamous cell patients. The drug antibody ratio is higher than the competitor almost twofold, if I remember correctly, and then the toxin is different. We use a irinotecan derivative that's 1,000 times more potent than a irinotecan, the competitor uses a different toxin. So these -- they're completely different constructs. You see that in the safety data, as you know, that the safety data between the two constructs is very different. We think you're now starting to see that in efficacy, too. Again, there's no head-to-head study. But when you look at the breast cancer data that the competitor shared last month, we look at that versus our breast cancer data in much more advanced, more heavily pretreated patients. We like the way our data looks on a relative basis. And then the same thing is true in the squamous patients that we mentioned were at least to date, we see responses in the squamous patients, we'll have to see what it looks like in the bigger data set.
Umer Raffat
Got it. Andy, is it just me or -- I feel like another important readout for you guys next year is the once-weekly next-gen integrates with your potential once-weekly capsid combination as well. I realize there's a bigger focus from a commercial perspective on capsid plus a bictegravir combination for premarket. But how important is that from a more lifetime -- life cycle management perspective…
Andrew Dickinson
Yes, I think it's pretty important. It's a great point. I think that there are a number of HIV products that we have in our pipeline that the market hasn't paid a lot of attention to and may be sleeping on. So we spend a lot of time talking about lenacapavir every six months for prevention. We spend less time and I think investors spend less focus on some of the other late stage programs, and there's really three of them. One of them as we've indicated in our third quarter call that we're going to share data on our internally developed once-weekly integrase inhibitor that's co-formulated as a once-weekly pill with lenacapavir. So many of you who've heard this but lenacapavir is a unique molecule and that we've been able to formulate it for once weekly pills -- once daily, once weekly, every three months subcutaneous injections and every six months and then we compare it with different agents. So what Umer is highlighting is that we have one of the -- a number of long acting integrase inhibitors that we've developed. One of them is a once weekly integrase inhibitor. We have Phase 1 data from that integrase inhibitor and lenacapavir that we're going to show or share early next year that could be really exciting to help people get the first data on a doublet combination for a long acting oral.
The other two programs that I would just mention, again, last year, we shared Phase 2 data on two broadly neutralizing antibodies that were dosed in combination with lenacapavir, that's probably a smaller opportunity. But we do hear from KOLs that treat HIV patients that there are a number of patients that tend not to take their pills and that they would love to have this option of the infusion of this antibody together with lenacapavir injection every six months. And then the last thing I'd highlight is that we have a daily doublet that -- where we now have the Phase 2 data that you'll see early next year. And so this is a daily combination of lenacapavir and bictegravir that could be used in switch patients. So I would remind everyone that Biktarvy, which is the gold standard, once daily oral combination that has three active drugs is used in 62%, I believe, today of treatment initiations in the United States. Some of those patients over time want to switch on to other therapies. This will give them another option to switch. So it's another exciting kind of part of the HIV growth story over time.
Umer Raffat
Andy, in one of our recent conversations you mentioned, you can see lenacapavir, not approach, but -- not equal but perhaps approach the size opportunity bictegravir became, meaning a multibillion dollar, very large product. Can you remind us what setting that is, is it just PrEP or is it more referring to this model like in more HIV treatment?
Andrew Dickinson
So yes, I mean there's no doubt, lenacapavir in our mind is the new backbone of our HIV franchise kind of going forward and has incredible utility across multiple combinations. But if you just start with prevention, I think what you're alluding to is the comment that we've made that there are probably -- our belief in the size of the prevention opportunity is not yet reflected in Street and investor models. And that the lenacapavir for prevention opportunity alone is a very, very substantial opportunity that I describe it as Biktarvy that's not suggesting that it's a $12 billion drug in PrEP, but it's -- the market is vastly underestimating the size of the prevention opportunity. So when Truvada went generic three years ago in the United States, the PrEP market, which is still in its infancy, was a $2 billion a year branded market. Today, it's much larger than that because prevention has grown. Over 50% of the market is generic. Descovy, our other oral once daily pill for prevention still has 40% market share, which is remarkable, but it's just the beginning of prevention. Prevention today is primarily used commercially in the United States, not outside of the United States.
So when we talk about lenacapavir being a very large opportunity for us, we're highlighting that you should see not only an expansion of the market in the United States and you're guaranteeing adherence to patients for six months, many patients that -- or people at risk of getting HIV that take the pills intermittently, and then finally it should open the markets outside of the US. So just in prevention, it's a really big market opportunity. Then to your point, when you look at the multiple launches with lenacapavir in treatment, we expect them collectively to be really significant in terms of the additional growth that they can drive in the HIV business. I can't tell you today whether that's four or five launches in treatment and different combinations that collectively could look like Biktarvy or whether that's one or two different forms. We'll have a better sense of that as the data is developed over the coming years.
Umer Raffat
Got it. Okay. Makes a lot of sense. I know there are several additional ones to go through as well. One of the questions that's come up also is on some of the data sets emerging for our Arcellx collaboration. But before we go down that direction, do you want to hit up on the cell therapy news from today.
Unidentified Analyst
Yes. Today, we heard news that the FDA received reports of T-cell malignancies across various BCMA and C19 -- CAR-Ts therapies, and this was seen in clinical trials and also post marketing data sources. So is this something that you've seen in the Arcellx data so far and how should we think about like the read across…
Umer Raffat
And is it even BCMA specific?
Andrew Dickinson
It's not BCMA specific. I mean I read what the FDA put out, it's BCMA and CD19. Look, I mean, just to step back, to answer your question, maybe starting with Kite, we've treated over 17,700 patients. You see very few, if any, like a handful of secondary malignancies, no indication that there's any causal relationship, and we update our data set and share our data with the FDA on a regular basis. So at a high level, we don't see this with our construct is our belief. And we have a close relationship with the FDA. Remember, this has been in the labels from day one. There's always been a theoretical risk of secondary malignancies with CAR-Ts given the randomness of the insertion of the CAR-T vector into the genome. So it's always been a theoretical risk. We don't see it in the real world. So we'll -- it remains to be seen. And by the way, I haven't talked to the Arcellx team, I'm not aware of us seeing anything with Arcellx. And a reminder, that's relatively early in its -- it's Phase 1/2 data set. I think there's 38 patients worth of data that will be updated on, if I remember correctly, at ASH in the coming weeks. So nothing that I'm aware of. We'll get a better sense over the coming days of whether this is more something that's specific to a certain product or the products more generally. But what I can say is when we look at the Kite products, Yescarta and Tecartus, they've been used, as I said, in over 17,000 patients. You see no causal relationship at all with secondary malignancies, and we look at this closely.
Umer Raffat
Andy, I feel like -- and again, I'm just catching up myself on this. I was sitting here on the fire side when this came out. But I felt like FDA report was prompted by reports of some secondary malignancies. So this is not randomized data. This is observation of secondary malignancies in tumor patients to begin with. And the first thought in my head was, I remember many years ago, having the same conversation with Celgene management and [Indiscernible] was asking them about secondary malignancy risk on Revlimid. It was in a classic issue went on for months and months and months. And in the end, it was sort of obvious that it's there but it's also because it's in the context of a heme tumor setting, and those were just background rate of secondary malignancies that do, in fact, happen. And I couldn't tell if there was anything more specific regarding the cell therapy constructs that was driving this because people are trying to make much bigger ramifications of this over to the construct…
Andrew Dickinson
Yes. And maybe just that actually, I had the same reaction. I think with the cell therapy constructs, given that there's always been this theoretical risk given the insertion of the vector in the genome in the T cells that -- we'll get a better sense of where this is going. I think maybe the important thing is if you step back and look at the benefit just using in heme malignancies, specifically in second line plus, we and others are demonstrating this extraordinary benefit to patients. You see that in our ZUMA-7 data relative to stem cell transplant. As you know, stem cell transplant has enormous risk for patients in terms of the side effects and the mortality from stem cell transplant. So I think any which way you look at the risk/benefit equation here, I would expect, given what we've seen in all the patients that we've treated in clinical studies in the real world, but the benefit far outweighs any theoretical risk if -- whether there is one at the end of the day or not a practical risk. So we'll see.
Unidentified Analyst
Just one follow-up question. Would this make you think twice before maybe thinking about bringing CAR-Ts into the autoimmune space?
Andrew Dickinson
Great question. I don't think so. Again, the data that we've seen, and we have seen all the data that you've seen that's publicly available in very severe lupus patients. We've also seen -- we made an investment early in one of the private companies that is working in the autoimmune for -- CAR-T for autoimmune space. Their data in a different indication is equally stunning in a very small handful of patients. So everything that we're seeing, granted you're talking about a dozen or two dozen patients demonstrates that in very severely ill patients with advanced autoimmune disease, the benefit appears to be similar to the benefit that you see in hematological conditions. So if that remains the case and if you're focused on later-line advanced patients, the risk/benefit probably would weigh in favor of that from our perspective. And this is just my initial reaction, I need to talk to the Kite team. Of course, as you move up in earlier lines or in less severe patients in autoimmune disease, the calculus may be different. So we’ll need to get a sense of what's really happening here, but it's a great question. And I think it's really more of in those autoimmune or neurological conditions as you move up to less sick patients, you may have a different calculus. But too early to say.
Umer Raffat
Got it. Maybe just to wrap it up on the BCMA cell therapy side. There was some confusion in the marketplace recently that there were some comparisons being made by perhaps your partner on the BCMA side by Arcellx on to Legend's prior trial where the PFS was closer to 19 months, even though the perception of Legend is more like 35 months. Could you lay that into context? I know we spoke about that previously, too.
Andrew Dickinson
Yes. Yes. I'm not sure exactly what they're referring to. I think the message they're trying to convey is that when you look at the ASH data that's coming up soon, that the phase -- I believe it was a Phase 1 study, I forget the name of it, but not the Phase 3 study of the competitor construct, but the Phase 1/2 study was more similar in the patient population to the patient population that we've studied in our -- they've studied, Arcellx has study together with us in the Phase 1/2 study. In particular, you see more severe disease or more extramedullary disease as I understand it. So I think they were trying to make the comparison in terms of the patient background characteristics, not the PFS expected benefit. I mean you see from the abstract for ASH that we still haven't reached kind of the median PFS after, if I remember correctly, 22 months, of treatment. So maybe I'll just say, I mean, we love the Arcellx partnership. We are really very bullish on the company, the construct, the potential for differentiation. It is a very big opportunity for us and for patients if we're just as good as the Carvykti. If as the data suggests, we have the potential to be better, for better at the end of the day, either on safety or efficacy, it's a really important opportunity for us and one that we're pretty excited about.
Umer Raffat
And you do expect their PFS to be competitive in the end versus the competitors?
Andrew Dickinson
Yes, based on what we've seen so far. Yes, absolutely. I think the other thing that we've seen that's interesting is that in the two approved BCMA, CAR-Ts, you do see in the real world 7% to 8% of patients have pretty severe neurological side effects, including developing Parkinson's, Bell's Palsy. It's more in the real world than you saw in the clinical studies. And we don't see that with Arcellx in any of the patients yet, you'd expect with the 22 months of medium kind of duration of treatment, if I remember correctly, that you would have expected to see at many of the Parkinson's like syndromes appear after a month or two. So more to come. Again, it's a relatively small number of patients but it's an encouraging place to be, and we're excited about the partnership.
Umer Raffat
Excellent. Any questions on this broader cell therapy or BCMA topic just before we move on? Okay. Okay. So that makes sense. Maybe I know another collaboration of yours, which gets a lot of interest as well, which is the Arcus collaboration. How are -- apparently Roche put their data on their Web site. I'm curious, how are you guys thinking about just broadly and the direction that space going?
Andrew Dickinson
Yes. Look, first of all, we love this partnership as well. It's an important partnership. It's a little bit different. The Arcellx partnership is on -- one product we've recently expanded it. Arcus is an all-in partnership where we have rights to everything that Arcus does. And I think that with TIGIT, we still believe that based on the data that we're seeing, TIGIT is additive to PD1. It provides an additive benefit without any additional side effects from what we’ve seen in our data. We believe that we have a differentiated TIGIT construct. We spent a lot of time before we did the deal with Arcus, looking at a number of TIGITs out there that were available and really felt that they had the best construct and the best balance of potential for safety and efficacy. There's nothing that we've seen from the competitors that leads us to believe that our thesis is wrong. I think the question on TIGIT from our perspective is how much of a benefit do you see and in which patients, and that's going to be worked out over the coming years. But again, I think broadly, our sense is that TIGIT provides a very clear benefit to certain patients. You see us moving forward aggressively in non-small cell lung cancer as well as upper GI malignancies where the data is promising, and there's still more to work out. But we think that TIGIT is going to be an important mechanism of action down the road and we recognize there are still some open questions.
Umer Raffat
Got it. And maybe if you could lay out for us, how is the recruiting going in the Phase 3? Because they had a first trial, which didn't recruit strongly, but then now there's a new trial where KEYTRUDA’s onboard on the active arm…
Andrew Dickinson
I think in the two main studies, which is STAR-121, it’s all-comers non-small cell lung trial that we're running, recruiting is going really well from what I understand. They are running the STAR-221 study, which is the Phase 3 study in upper GI malignancies, that recruiting is -- recruiting for that trial is going extraordinarily well as well. So both of them are full speed ahead, which is not a surprise. Again, I think given the -- some of the excitement out there in these areas, there are a lot of KOLs that I think really want to test this hypothesis.
Umer Raffat
Got it. Okay, excellent. But these are not readouts before 2025 time frame. Is that reasonable?
Andrew Dickinson
I don't know that we've given a specific time frame. I think that they -- they're certainly not in 2024 is what I'd say. I think that we will have additional data,there will be additional data with Arcus in 2024, including an updated ARC-7 data, if I remember correctly. But those Phase 3 studies would be '25 or '26, I don't remember off the top…
Umer Raffat
Okay. Their HIF 2, is that something standing out in a big way? Or -- I know you're not opted in on that yet.
Andrew Dickinson
Yes, we're watching it closely. I mean, again, the way the relationship works is that they take products through proof of concept, which is typically end of Phase 2. So they're in the middle of their Phase 2 studies. Obviously, we followed the HIF2 space even before Merck did the Peloton acquisition. We know the market well. We really like their construct and we're going to follow closely. So we will have the opportunity to look at the Phase 2 data set with them and decide what we want to do then…
Umer Raffat
Got it…
Andrew Dickinson
But like everything that they're doing, we've extended our collaboration there on the research side. I mean we really have a strong relationship on the research and the chemistry side and have a lot of respect for the quality of the programs that the Arcus team is developing.
Umer Raffat
Got it. Okay. I want to sort of bring this all together towards a more bigger picture conversation on where things are really going on Gilead. But just before that, I know this question around some of the near term headlines on legal stuff come up as well. How are you guys thinking about the recent California appeals court hearing on the negligence case for TAF?
Andrew Dickinson
Yes. I think we feel pretty good about it. So when Umer refers to legal stuff, I think the vast majority of the significant litigation that we had to manage, just like any large company does is behind us. There's one set of litigation that is unique and this is kind of the first example of it in the United States, where there are plaintiffs that have filed suits alleging that we had a duty to bring TAF, which is a new form of tenofovir to the market more quickly than we were able to. And so again, it's unique in that in the state court case at least, you have thousands of patients who are claiming that -- acknowledging that the product was not defective and acknowledging that there is no failure of duty to warn because all of the potential side effects were in the label at launch and clear in the clinical studies, but arguing that we had an obligation and we're able to bring TAF out earlier than we were. This is a classic case of kind of nuisance lawsuits from our perspective. The California Appellate Courts for the California cases issued what's called [Red show cause] to the plaintiffs basically saying, tell us why we shouldn't throw this out, given the novel nature of the claims and the implications they would have, not only for Gilead but the rest of the industry and other industries, if you had this duty to bring out a next generation product earlier than you could otherwise.
So that -- rule on that -- there was oral arguments a couple of months ago. Umer, as you've heard me say, I think that it became clear during the course of the oral arguments that the panel finally start -- the appellate panel finally started to understand that what the plaintiffs are claiming was very different than traditional product liability and not at all like the product liability cases that you've seen in our sector or other sectors historically. Some of the challenges that would present to businesses as we move forward. They asked for additional briefing documents, which we think is a good thing. So the court should rule no later than January and whether all these cases are dismissed. If not, we feel great about our cases. I mean, to put it in the other maybe update -- two other updates for you. When you look at the cases in the state court and the federal court, if I remember correctly, 27% of the cases in the federal court have already been dismissed by the court, because the plaintiff when they get into discovery, can't prove that there are any damages, they can't get expert witnesses, et cetera. In the state court, I think 14% of the cases have already been thrown out. So we will just stick to our knitting, continue to manage these individually if we have to, again, ideally, the California Appellate Court would throw the cases out.
The other thing I can mention is that the federal judge recently threw out a number of the claims and all the federal cases as well. So it substantially narrowed the claims that we're managing in the federal courts, which is a good thing for us. So again, we have a great litigation team internally and externally, they've done an exceptional job on this and other cases. We have a lot of confidence. We have not taken any reserve for this, as you know, and believe that the cases are completely without merit and that we'll work through it over time, it's just it's going to…
Umer Raffat
And in the scenario where it doesn't go up per plan you guys -- what does the process look like? You go to California Supreme Court or how does that work?
Andrew Dickinson
Yes. If we don't win at the California Appellate Court, obviously, then we have the potential to appeal to the California Supreme Court, which you would expect that we do. There's also starting in 2024, there will be some bellwether trials that will be done to -- that will give both the judges as well as both the parties a sense of how these would play out. I think we picked two of the cases, the plaintiffs pick two of the cases,and we think that will help resolve this as well in terms of…
Umer Raffat
But do you -- but will the -- so just to be clear, let's say, by January, we got the decision from California appeals court. And in a scenario, if they dismiss it, it's moved. But in a scenario where they say there is negligence you're going to appeal that. But while that appeals ongoing, would the bellwether trials start?
Andrew Dickinson
In the state that -- so one of the bellwether -- one of the trials, I think the first trial that's scheduled to start is in April in the federal court. The federal court could stay it while they're waiting for the state court to resolve, they don't have to. I think in the state court, the same thing is true. While we're waiting for the supreme court, they could stay the trials or you could move forward. So it's too early to say. But either way, again, whether we resolve this in the short run or the long run, we feel like we have the very strong case here and we don't see any potential liability. But it's an unfortunate part of being a large company and we'll manage it.
Umer Raffat
Got it. So as we bring it all together to the big picture then. I know from a top line perspective, you guys are growing, you believe mid-single digits. I don’t think that models low single digits. Can you remind us, are there any LOEs over the next eight year time frame?
Andrew Dickinson
No. I mean that's one of the unique differences of Gilead, as you know, we don't have significant LOEs coming in our business. So it's to kind of rewind and the big picture is that Gilead the last two years -- since last year, we grew 8% in our base business year-over-year. This year, our updated guidance is that we'll grow 7.5% to 8%, that's extraordinary, I mean, that's above the medium growth in the pharma industry. Again, it's clouded a little bit. But as many of you know, we have a drug COVID antiviral that is the standard of care for patients in the hospital. And that still is the standard of care, it's doing incredibly well. Those sales have stepped down from $6 billion in '21 to just less than $4 billion last year. We're projecting just less than $2 billion this year. Despite that our base business has grown almost in equal amount. So when you look at our guidance for this year, the top end of our guidance for revenue is close to $27 billion, you'll see Gilead kind of roughly, just for purposes of illustration, $27 billion of sales, three years in a row, but the Covid antiviral stepping down from 6 to 4 to just less than 2, which underscores the growth in the base business. So we've really made the investments that are required to drive diversification of the portfolio, growth in the portfolio. We've significantly increased our investments on the R&D side, that will start to plateau now as will the sales and marketing expense growth, and you should see substantial acceleration of earnings growth when you get to the middle part of the decade and beyond.
Umer Raffat
So exactly the direction I wanted to go. So the top line is growing low to mid single digits, mid single digits as the way you think about it. EPS could presumably grow higher than that. At what point do you think you're done with some of the oncology OpEx and R&D OpEx build out?
Andrew Dickinson
I think we're getting there now. I mean, I do want to say, though, for the top line, just to be clear, when you look at our base business, we expect to grow above the median in the pharma industry. So like let's say the median is 4% to 5% growth, we expect to grow north of that and we expect that growth in our base business to accelerate with all of the Phase 3 data that's coming up. So if you just use the second line lung cancer data as an example, that is a very large opportunity. The same thing is true for the second line bladder with Trodelvy. These are big opportunities that will further inflect that growth trajectory. So our target and expectation is that by the end of the decade, we'll be growing well above the median of the pharma industry and in the low double digits at least, and we think we have the portfolio today to do that. Then you kind of transition from that growing top line to really disciplined expense management, now that we're at the right level of investment. So we already have line of sight on the increases in our expenses plateauing over the next 12 to 24 months and then you'll see a continued strengthening of the operating margin again as well as the EPS. We still have one of the stronger operating margins in the industry and that operating margin should improve through the rest of the decade as the EPS grows.
Umer Raffat
Got it. Andy, is it fair to say -- so consensus has -- I keep saying this 2.5% growth CAGR roughly on top line. You're talking about 5% plus. As I start to break down the drivers, I see two possible avenues. One is Trodelvy is being modeled to go from 1 to 3. I think you're referring to the lung and the bladder opportunities, meaning it could even go to 5, that's one. The other one you're pointing out is lenacapavir $5 billion-plus type opportunity in PrEP setting and beyond. Are those the two main drivers and how you see the disconnect?
Andrew Dickinson
Yes, I think those are two of the big drivers. I mean again, just taking Trodelvy, right? Trodelvy could be much bigger than a $5 billion a year drug. I mean, I think, again, just in bladder cancer and breast cancer, as you move up in earlier lines, it's a very big opportunity. What Umer’s highlighting is that it's at a $1 billion run rate today and it's really just getting started. Obviously, going to lung and earlier lines of bladder and breast, the opportunity is substantial. And then PrEP, as you mentioned, is also a big opportunity. But just the base business that exists today is growing. Again, when you look at just what we have today growing 8%, last year 7.5% to 8% this year we do have a couple of headwinds that we'll manage through in terms of the Part D part of the Inflation Reduction Act as well as the potential for drug pricing negotiation on Biktarvy. But any which way we look at it and you look at the overall nature of growth, we think it's underappreciated in terms of where we're going. But to your point, yes, those are two of the big drivers, but they're not the only drivers. The BCMA is another, TIGIT could also drive things. And part of the disconnect, again, in our view and the Street view is that the Street oftentimes doesn't look at Veklury, the COVID antiviral separately. So when we talk about our business, the vast majority of our sales now are in the base business. We really focus on Veklury as a different part of it. I should say and you and I have talked about this that we expect that we are guiding to approximately $1.9 billion in sales of Veklury this year, that may be the new normal. I mean I think between '23 and '24, we'll have a sense of what the new normal for Veklury is. But what we do say is Veklury has legs and it's going to continue to deliver revenue and cash flow, it's going to be less of an overhang on our growth rate going forward despite the fact that it will be variable from year-to-year.
Umer Raffat
Got it, okay. Maybe as we think about additional possibilities, which are more inorganic in nature. I know -- I remember when I spoke to you around this time last year, you were saying, you know what, biz dev not really a plan right now. Maybe small upfront for a very early stage stuff, but no real biz dev. It sounds like there might be more openness to that now. So what exactly is that, what type of deal sizes would you think about, any therapeutic areas of interest?
Andrew Dickinson
Yes. Well, I think what we were trying to communicate last year is that we really weren't focused on large and medium sized deals. The focus was on what I call ordinary course business development, which is partnerships as well as small acquisitions. So we did a number of small acquisitions. I think on average, we will deploy at any given year, $1 billion to $2 billion of capital on business development. I'll use an example recently. We partnered with a small company in the Bay Area called Assembly, where we took two of our antiviral programs that have a lot of potential, but probably didn't have room in our P&L to move them forward, put them into Assembly with some cash. They had three other programs, they can now take all of these forward and we can share in the upside and the commercial rights going forward. That's a good example of kind of a small but important early ordinary course deal. I do think that as we get further along with Trodelvy and TIGIT, we now have more of an openness to thinking about additional late-stage programs that we can bring in. Those are still going to be below the size of deals that we did with Immunomedics certainly, which I think of as kind of a once in a company lifetime type deal, and even Kite, it's smaller deals than that. So anything that's kind of in that $1 billion to $4 billion, $5 billion plus range, I think is fair game. I think healthy companies in our sector add to their late stage pipeline with deals like that every other -- every couple of years on average. So we will always look at these things, and the bar is really high, right? We feel great about our pipeline in where we are today. So we don't have the same need today that we had three years ago and six years ago when we did the Kite deal.
Umer Raffat
Got it. And is it immunology or oncology, or any therapeutic area of focus…
Andrew Dickinson
Yes, we'll look at -- I mean, it will be virology, immunology and oncology. It all depends on the quality of the opportunities and what's there. So I think over the last couple of years, you've seen us do consistently a mix across all three of the areas of focus. Immunology, I think is -- the focus is predominantly on building immunology from within at Gilead. I think at Kite, we've said as we think about moving into immunology cell therapy, that's likely a partnering strategy similar to what we did with Arcellx and BCMA…
Umer Raffat
Immunology, you're saying partnering opportunity?
Andrew Dickinson
For Kite. For Gilead, it's more built it internally. And then we did like a small acquisition of a company called MiroBio in the UK that had a number of immune agonist, I think it's a BTLA and a PD-1 agonist that are exciting. But we'll continue to build that kind of and build it out in more of an organic early stage to late internal development.
Umer Raffat
And do you see -- I know you mentioned virology from a biz dev perspective as well. Are there stand-alone efforts in that space? Because outside of COVID antivirals or vaccines, which are not something you guys have done in directionally…
Andrew Dickinson
Yes, there aren't that many. You're absolutely right. There's -- and we know most of the companies that are working at it. I mean the Assembly deal is a good example of that, or a couple of years ago, we acquired a number of virology programs from Novartis as they were deprioritizing virology. So there's always stuff for us to do in virology, but there are far fewer opportunities externally in virology than there are in oncology or immunology, and most of what we do in virology is developed internally.
Umer Raffat
Excellent. Anything from the audience? I know we're at time. I think you crushed that, there's no questions remaining.
Andrew Dickinson
Thank you. Appreciate everyone.
Umer Raffat
Thank you very much.
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Gilead Sciences, Inc. (GILD) Presents at 6th Annual Evercore ISI HealthCONx Conference (Transcript)