Analytical review · Quarter ended June 30, 2026 (Q2 2026)
Bakshi Finance — Family Office | Research Depth: Comprehensive
What this review is based on. Gilead's Form 10-Q for the quarter ended June 30, 2026, filed August 6, 2026; the Q1 2026 Form 10-Q; the Form 10-K for 2025; the quarterly earnings releases from August 2025 to August 2026; and the Form 8-K filings on the Arcellx acquisition and the notes offering. The company's August 27, 2026 announcement of the Bixlenvo approval was taken from the company website. Market data: closing price on Oct 9, 2026; Bank of Israel representative USD rate for the same day.
Gilead Sciences (גיליאד סיינסס) is a biopharmaceutical company headquartered in Foster City, California, with about 17,000 employees and operations in more than 35 countries. Most revenue comes from HIV treatment and prevention: Biktarvy, a once-daily single tablet for treatment; and Descovy and Yeztugo for prevention. Yeztugo is a twice-yearly injection based on lenacapavir.
Beyond HIV, the company has three other areas. In liver disease it has medicines for hepatitis B, C and D, plus Livdelzi for a cholestatic liver disease. In oncology it has Trodelvy, an antibody-drug conjugate for breast cancer, and CAR-T cell therapies from its Kite subsidiary. The fourth area is inflammation. Revenue for the 12 months ended June 2026 was $30.5 billion. Biktarvy alone was 49.5% of product sales in the latest quarter, and the U.S. was 73.4%.
In Q2 2026 the company completed three acquisitions. The first was Arcellx, which is developing a CAR-T therapy for multiple myeloma. The second was Tubulis, which develops antibody-drug conjugates. The third was Ouro Medicines, which is developing a treatment for autoimmune diseases and was acquired in partnership with Lakefront. Gilead has no controlling shareholder. Daniel O'Day serves as both Chairman and CEO.
In the April–June 2026 quarter, revenue rose 10% to $7.80 billion. Product sales excluding Veklury, the COVID-19 treatment, also rose 10%, to $7.60 billion. Revenue includes $156 million recognized in a single quarter from royalties on a past sale of intellectual property. Excluding it, growth was 8.0%.
HIV sales rose 12%. According to the company, growth came mainly from a higher average realized price and demand. Biktarvy rose 7%, and the company's explanation also cites "favorable inventory dynamics". In Q1 those inventory dynamics were unfavorable. Descovy rose 48%, and Yeztugo sold $232 million. Compared with the same quarter two years earlier, U.S. HIV sales were up 21.9%.
What needs to be separated: the company reported an operating loss of $10.4 billion and a loss per share of $8.45. The loss comes from $11.2 billion expensed immediately for acquired in-process research and development (IPR&D). That total includes $7.0 billion for Arcellx, $3.1 billion for Tubulis, and $1.0 billion for Ouro net of Lakefront's share. An additional $1.75 billion impairment was recorded on the Trodelvy lung-cancer asset after the EVOKE-03 trial was discontinued. According to the company, these charges are not tax-deductible, so the quarter's effective tax rate was negative.
It also matters what the company's adjusted measure removes and what it keeps. It does not exclude acquired IPR&D, so it also shows a loss, of $6.75 per share. When acquired IPR&D is also removed from the adjusted measure, operating income for the first half of 2026 rose 11.2% to $7.2 billion. That is our calculation from company data. But such acquisitions recur almost every year: $1.2 billion in 2023, $4.7 billion in 2024, $1.0 billion in 2025 and $11.3 billion in the first half of 2026.
| USD millions | Q1-25 | Q2-25 | Q3-25 | Q4-25 | Q1-26 | Q2-26 |
|---|---|---|---|---|---|---|
| Revenue | 6,667 | 7,082 | 7,769 | 7,925 | 6,960 | 7,803 |
| Sales ex-Veklury | 6,311 | 6,934 | 7,068 | 7,691 | 6,802 | 7,604 |
| HIV | 4,587 | 5,088 | 5,276 | 5,801 | 5,030 | 5,693 |
| Biktarvy | 3,149 | 3,530 | 3,687 | 3,968 | 3,361 | 3,772 |
| Veklury | 302 | 121 | 276 | 212 | 144 | 23 |
Revenue rose from $27.1 billion in 2023 to $29.4 billion in 2025. GAAP net income was highly volatile over the same years: $5.7 billion, $0.5 billion and $8.5 billion. The swings came mainly from acquired IPR&D and impairments. From 2023 through the first half of 2026, acquired IPR&D totaled $18.1 billion and impairments $6.6 billion.
| USD billions | 2023 | 2024 | 2025 | 12 months to 6.2026 |
|---|---|---|---|---|
| Revenue | 27.1 | 28.8 | 29.4 | 30.5 |
| Net income (loss) | 5.7 | 0.5 | 8.5 | (3.2) |
| Acquired IPR&D | 1.2 | 4.7 | 1.0 | 12.0 |
| IPR&D impairments | 0.05 | 4.2 | 0.6 | 2.2 |
| Free cash flow | 7.4 | 10.3 | 9.5 | 12.9* |
* Trailing free cash flow includes $860 million received from Lakefront and recorded in operating cash flow. The acquisition payments themselves were recorded in investing activities. In addition, tax payments in the first half of 2025 were about $2.0 billion higher than in the first half of 2026.
The acquisitions changed the balance sheet within six months. Cash and marketable debt securities fell from $10.6 billion at the end of 2025 to $3.2 billion in June 2026. Over that period the company sold its entire debt-securities portfolio. In the same period it repaid $2.75 billion of notes, issued $3.0 billion of new notes and drew a $1.1 billion one-year term loan. The new notes carry 4.25%–4.90% coupons and mature in 2028–2034. The loan can be prepaid at any time. The original loan facility was $4.7 billion, and the company cancelled the $3.6 billion it did not draw.
Net debt (notes and term loan less cash) rose from $13.2 billion to $22.0 billion. That is 1.44 times trailing-12-month earnings before interest, taxes, depreciation and amortization, in our calculation from the adjusted measure excluding acquisitions. Operating income covers interest expense 15 times. Stockholders' equity fell from $22.6 billion to $11.7 billion, almost entirely because the acquisitions were expensed. Debt-to-equity therefore does not reflect the company's financial strength here. About $3.1 billion of debt matures over the next year: March 2027, April 2027 and October 2027.
Capital return: the quarterly dividend rose 3.8% to $0.82. In 2025 the company paid $4.0 billion in dividends, 42% of free cash flow. Over the past 18 months it bought back $2.7 billion of stock, but the share count fell only from 1,246 million to 1,241 million. In other words, buybacks mainly offset shares issued to employees. According to the company, its capital priorities are, in order: investing in the business and pipeline, business development, growing the dividend, and only then buybacks.
Contingent obligations from the acquisitions: former Tubulis shareholders may receive up to about $1.9 billion if milestones are met. Ouro holders may receive up to $500 million, half of which is borne by Lakefront. Arcellx shareholders received a contingent value right of $5 per share, about $300 million in total. It pays only if cumulative anito-cel sales reach at least $6.0 billion by the end of 2029. This is a contractual condition only, not a sales estimate.
Gilead reports a single operating segment and breaks down sales by therapeutic area, product and region.
| USD millions | Q2-25 | Q2-26 | Change | Company explanation |
|---|---|---|---|---|
| HIV | 5,088 | 5,693 | +12% | Average realized price and demand |
| Biktarvy | 3,530 | 3,772 | +7% | Price, favorable inventory dynamics, demand |
| Descovy | 653 | 967 | +48% | Price and demand |
| Yeztugo | 15 | 232 | — | Demand; launched June 2025 |
| Genvoya and Odefsey | 675 | 528 | −22% | Patients switching to Biktarvy |
| Liver disease | 795 | 877 | +10% | Livdelzi (167 vs 78), hepatitis B and D; hepatitis C declined |
| Trodelvy | 364 | 457 | +26% | Demand |
| Cell therapy | 485 | 417 | −14% | Competition |
| Veklury | 121 | 23 | −81% | Fewer COVID-19 hospitalizations |
| Other | 202 | 161 | −20% |
Regions: in the quarter, U.S. sales rose 11% to $5.60 billion. Europe fell 2% and the rest of the world rose 4%. About a quarter of sales are in foreign currencies. Three wholesalers account for about 90% of U.S. gross sales.
Gilead's competitive base is its HIV franchise and the long protection period it has left. Under settlements with generic manufacturers, generic Biktarvy cannot be sold in the U.S. before April 1, 2036. Protection for Yeztugo and Sunlenca, both based on lenacapavir, runs to 2037. Patients are switching from the company's older medicines to Biktarvy, which is why Genvoya and Odefsey are declining. Lenacapavir underpins several products: a twice-yearly injection for prevention, and Bixlenvo, a once-daily treatment tablet approved in the U.S. in August 2026. In addition, an application has been filed for a once-weekly prevention tablet, with a decision date of Feb 2, 2027, and a once-weekly combination with Merck's islatravir is being studied. That combination produced positive Phase 3 results.
Where the filings show pressure:
This review does not include primary-source competitor data.
Gilead is two companies inside one. The first is a highly profitable HIV business. Its gross margin on the company's adjusted measure is 87%, and its protection runs to 2036–2037. The second is a machine that invests the first business's cash in acquisitions to build what comes after it. Both appear in the same filings, but each is measured differently.
Reported earnings, adjusted earnings, and adjusted earnings excluding acquisitions. In Q2 the GAAP loss was $8.45 per share and the company's adjusted loss was $6.75 per share. Excluding the acquisitions as well leaves positive, growing operating income. The question is whether acquired IPR&D is an event or a standing cost of the business. From 2023 to mid-2026 it totaled $18.1 billion, about $5 billion a year on average. In 2023–2025 alone the average was about $2.3 billion a year. The gap between those two readings is large.
Guidance went up twice on the revenue line. In February 2026 the company guided product sales of $29.6–30.0 billion; in August, $30.1–30.4 billion. The company quantifies the effect of the acquisitions and related tax on 2026 EPS at $9.08. Adding that back to the current adjusted EPS guidance gives a range very close to the original February guidance. The extra revenue was offset by higher marketing spend, integration costs and financing costs. The company states that the Arcellx acquisition will add to earnings per share from 2028.
Quality of HIV growth. According to the company, the quarter's growth rested on average realized price and demand. Biktarvy also included favorable inventory dynamics, which the filings do not quantify. Compared with two years earlier, U.S. HIV sales were up 21.9%. The guidance range implies growth of only 4.3% to 6.3% in product sales excluding Veklury in the second half, versus 9% in the first half. That is our calculation from the company's guidance range.
U.S. policy sets the price, not just the patent. In December 2025 Gilead signed an agreement with the administration. Under it, the company's products are exempt from tariffs for three years, provided it keeps investing in U.S. manufacturing. In return it commits to most-favored-nation (MFN) prices in Medicaid for selected existing products, and to MFN prices in the U.S. for any product launched in the future. At the same time the company is affected by the Inflation Reduction Act (IRA) and by the expiry of enhanced subsidies for ACA insurance plans. According to the company, the subsidy expiry has already contributed to lower enrollment. The filings do not quantify the impact of any of these factors.
The balance sheet moved from cash to debt. Before the acquisitions, the company held enough cash to cover most of its short-term debt. Afterwards, free cash flow has to fund several things at once: the dividend, contractual milestones, debt reduction and new deals. 2025 free cash flow minus the dividend left about $5.4 billion. That is the annual order of magnitude available to reduce net debt, before buybacks and before further deals.
Earlier acquisitions are already in the numbers. Livdelzi came from the 2024 CymaBay acquisition and already sells $167 million a quarter. Trodelvy came from the 2020 Immunomedics acquisition. Its asset is still carried at $7.0 billion and amortized at about $1.1 billion a year, while its sales over the last 12 months were about $1.6 billion. Impairments since 2023 total $6.6 billion. These are the historical anchors for judging the new deals.
The near-term calendar. The Q3 report is due in late October 2026. The FDA decision date for anito-cel is set for Dec 23, 2026, and for the once-weekly prevention tablet for Feb 2, 2027. A trial in a Texas lawsuit, joined by the state Attorney General, is set for December 2026.
This framework is intended to structure analysis, not to produce an investment conclusion. It does not participate in the decision — the decision belongs to the reader.
| # | Item | Latest reading |
|---|---|---|
| 1 | U.S. HIV sales vs the same quarter two years earlier | Q2: +21.9%; Q3 2024: $4,161 million |
| 2 | Company explanation of Biktarvy growth (price, demand, inventory) | +7%, including favorable inventory dynamics |
| 3 | Yeztugo and Bixlenvo sales | Yeztugo: $232 million |
| 4 | 2026 guidance: sales ex-Veklury and adjusted EPS | $29.8–30.1 billion; loss of $0.65–0.30 per share |
| 5 | Net debt and cash | $22.0 and $3.2 billion |
| 6 | FDA decision on anito-cel | Date: Dec 23, 2026 |
| 7 | Cell therapy and Trodelvy | −14% and +26% |
| 8 | Disclosure on the impact of the MFN agreement and tariffs | Not quantified |
Scenarios are descriptive, not predictive. They contain no prices, no probabilities and no ranking of outcomes. Their only purpose is to organize the conditions that would have to hold for each state to materialize, so they can be checked against upcoming filings.
The following six questions are identical in every company review we publish. They are deliberately open and do not lead to a single conclusion. Their role is to let the reader examine the company along the same six dimensions as every other company.
1. In the April–June 2026 quarter, revenue rose 10% to $7.80 billion and HIV sales rose 12% to $5.69 billion. Revenue includes $156 million recognized in a single quarter. Excluding it, revenue grew 8.0%.
2. The loss per share for the quarter was $8.45, of which $9.08 came from acquired IPR&D and related tax, according to the company. From 2023 through the first half of 2026, such acquisitions totaled $18.1 billion and impairments $6.6 billion.
3. Net debt rose from $13.2 billion to $22.0 billion, and cash fell from $10.6 billion to $3.2 billion. Stockholders' equity fell from $22.6 billion to $11.7 billion.
4. The company raised its 2026 product-sales guidance twice, to $30.1–30.4 billion. FDA decision dates are set for anito-cel on Dec 23, 2026 and for the once-weekly prevention tablet on Feb 2, 2027. Biktarvy is protected from U.S. generics until April 1, 2036, under settlements with generic manufacturers.
Bakshi Finance operates as a Family Office for qualified clients only. Mr. Yaron Bakshi held an investment advisory license from 2008 to 2023. As of the publication date of this document, the company does not hold an investment advisory, investment marketing, or portfolio management license.
This document is intended for research and professional education purposes only. Nothing herein constitutes a recommendation to buy, sell, hold, or take any action in securities. It is not a substitute for advice that takes into account each person's individual data and needs. Any decision is the sole responsibility of the investor.
Past performance is not indicative of future results. Data was drawn from official sources: the Form 10-Q for the quarter ended June 30, 2026 (filed August 6, 2026), the Form 10-Q for Q1 2026, the Form 10-K for 2025 (February 24, 2026), the quarterly earnings releases and the company's Form 8-K filings with the U.S. Securities and Exchange Commission, and the company's announcement of August 27, 2026. Market data: stockanalysis.com. Filing updates published after this date are not included.
The full analytical review of Gilead Sciences (GILD) for the quarter ended June 2026 is available to Bakshi Finance premium clients.
The review includes a 10-section analysis, "How to Think About This Company", a structured scenario framework, and a 6-dimension Analytical Lens.