Gilead received FDA approval for Yeztugo (lenacapavir) for HIV PrEP, offering a new twice-yearly option, and conditional marketing authorization in the EU for seladelpar for primary biliary cholangitis. However, the FDA placed a clinical hold on HIV treatment trials for GS-1720 and/or GS-4182, indicating a setback in certain pipeline assets.

The company completed the acquisition of CymaBay Therapeutics for $3.9 billion in March 2024, adding seladelpar to its pipeline. Additionally, Gilead entered a strategic partnership with LEO Pharma with a $250 million upfront payment for STAT6 programs and an exclusive option and license agreement with Kymera Therapeutics for CDK2 degraders, demonstrating active business development.

A partial impairment charge of $190 million was recognized for bulevirtide IPR&D in Q2 2025. This was due to additional competitive clinical data indicating a potentially more competitive market for the unapproved asset outside the EU, leading to a downward revision of its estimated fair value.

Research and development expenses increased 10% to $1,491 million for the three months ended June 30, 2025, compared to the same period in 2024. This increase was primarily driven by higher spend on clinical manufacturing and studies, as well as fair value adjustments to MYR-related contingent consideration, reflecting continued investment in the R&D portfolio.

Product gross margin increased by 106 basis points to 78.7% for the three months ended June 30, 2025, primarily due to favorable product mix. Selling, general and administrative expenses decreased 1% for the quarter and 5% for the six months ended June 30, 2025, largely due to lower spend on corporate initiatives and the non-repeat of prior acquisition-related stock-based compensation.

Management is in the process of deploying a new enterprise resource planning (ERP) system, which is scheduled to occur in phases over the next few years. While this aims to enhance operational management, the transition inherently carries risks of business continuity disruptions and administrative problems, which could impact operating results.

Gilead faces ongoing ANDA litigation for Biktarvy, with a trial scheduled for October 2025, and new challenges for Veklury patents from Aspiro Pharma Ltd. The entry of generic versions of these products could lead to significant market share and price erosion, materially impacting revenues and results of operations.

The Inflation Reduction Act (IRA) continues to pose risks through Medicare drug price negotiation and Part D benefit redesign, potentially increasing payment obligations and limiting pricing power. New U.S. Presidential administration policies also aim to lower prescription drug costs, creating uncertainty regarding future revenue and profitability.

The FDA's clinical hold on HIV treatment trials (GS-1720/GS-4182) and the $190 million impairment charge for bulevirtide IPR&D due to competitive data underscore the inherent uncertainties in drug development. These events highlight the risk of delays, unsuccessful outcomes, and the inability to recoup significant R&D investments.

Biktarvy sales increased 9% and Descovy sales increased 35% for the three months ended June 30, 2025, primarily due to higher demand and average realized price. This indicates continued competitive strength and market share gains within the HIV segment, including patients switching from other Gilead HIV products.

Cell Therapy product sales decreased 7% to $485 million for the three months ended June 30, 2025, compared to the same period in 2024. This decline is attributed to lower demand reflecting ongoing competitive headwinds, indicating challenges in maintaining market share in this innovative but competitive therapeutic area.

Veklury product sales decreased significantly by 44% to $121 million for the three months ended June 30, 2025, compared to the prior year. This substantial decline is primarily due to lower rates of COVID-19-related hospitalizations, indicating a diminishing market need and competitive relevance for this product as the pandemic wanes.

Product gross margin increased by 106 basis points to 78.7% for the three months ended June 30, 2025, compared to 77.7% in the same period of 2024. This improvement was primarily driven by a favorable product mix, suggesting effective management of the sales portfolio to maximize profitability.

Selling, general and administrative expenses decreased 1% to $1,365 million for the three months ended June 30, 2025, and 5% for the six months ended June 30, 2025. This reduction was mainly due to lower spend on corporate initiatives and the non-recurrence of stock-based compensation expenses related to the CymaBay acquisition in the prior year.

The company incurred restructuring charges primarily related to reductions in its workforce during the three and six months ended June 30, 2025. A remaining liability of $92 million associated with these charges, mostly payable within the next 12 months, indicates ongoing efforts to streamline operations and cost structure.

Research and development expenses increased 10% to $1,491 million for the three months ended June 30, 2025, demonstrating continued significant investment in the company's pipeline. This spending is primarily allocated to clinical manufacturing, studies, and fair value adjustments for contingent consideration related to acquired assets, reflecting a commitment to future innovation.

Gilead entered into a strategic partnership with LEO Pharma, making a $250 million upfront payment for STAT6 programs, and an exclusive option and license agreement with Kymera Therapeutics for novel CDK2 degraders. These collaborations expand the company's technological reach and diversify its therapeutic pipeline, particularly in oncology and inflammatory diseases.

The FDA placed a clinical hold on Gilead's HIV treatment trials for GS-1720 and/or GS-4182, including WONDERS-1 and WONDERS-2. This indicates a significant setback in the development of these investigational drug candidates, highlighting the inherent risks and uncertainties in the pharmaceutical R&D process.

In July 2025, the Board of Directors authorized a new $6.0 billion stock repurchase program, which will commence upon completion of the existing program. This follows $1.3 billion in repurchases during the first six months of 2025, indicating management's confidence in the company's intrinsic value and commitment to returning capital to shareholders.

Gilead paid $2.0 billion in dividends for the six months ended June 30, 2025, and declared a quarterly dividend of $0.79 per share for Q3 2025. This consistent dividend policy demonstrates the company's ability to generate reliable cash flows to reward shareholders, while balancing other capital priorities.

The company repaid $1.75 billion of senior unsecured notes due in February 2025, contributing to a decrease in total net debt from $26,710 million to $24,946 million. This debt management, alongside significant R&D investments and strategic acquisitions, reflects a balanced approach to capital structure and growth initiatives.

Gilead acknowledges that ESG reporting standards are new, unharmonized, and continue to evolve, leading to potential inconsistencies in comparative data. Regulatory authorities are also imposing mandatory disclosure requirements, which could result in significant revisions to reported progress and expose the company to reputational and stock price risks if not accurately managed.

The company recognizes that climate change and related natural disasters, such as extreme weather and wildfires in California where facilities are located, can disrupt operations, R&D, and supply chains. New regulations to prevent or mitigate climate change implications are expected to increase operating and compliance costs, posing transition risks.

Institutional and individual investors increasingly use ESG screening criteria, pressuring Gilead to set ambitious goals and provide robust disclosures. The company has adapted its corporate responsibility program in response, but achieving and accurately reporting on these goals is subject to numerous risks, including the availability of non-carbon energy sources and supply chain compliance.

The U.S. enacted the One Big Beautiful Bill (OBBB) Act in July 2025, restoring immediate expensing of domestic R&D and modifying foreign taxation, though the full impact is being assessed. Additionally, the U.S. Presidential administration is pursuing policies to lower drug costs and the Department of Commerce is investigating tariffs on pharmaceuticals, creating a challenging regulatory environment.

The company acknowledges that high inflation and fluctuations in interest rates have adversely impacted and may continue to impact its business and financial results. This indicates a challenging macroeconomic backdrop that could affect operational costs and financial risk exposure.

Gilead's global operations are exposed to risks from foreign currency exchange rate fluctuations, primarily in the Euro, and adverse impacts from a stronger U.S. dollar. The company also faces risks from political instability, trade policy changes, and anti-bribery laws in various international markets, adding complexity to its global business model.