Gilead Sciences (GILD)

Business Overview

Gilead shows a concentrated franchise that is still growing, set against a pipeline setback. FY2025 revenue was $29,443M and GAAP net income $8,510M. The HIV portfolio brought in $20,752M (+6% YoY), 70.5% of the total, with the daily HIV pill Biktarvy alone at $14,334M (+7% YoY). Operating cash flow was $10,019M, and cash and marketable debt securities were $10.6B at year-end 2025.

At 70.5%, HIV sits mid-table in the concentration guide: below Vertex's cystic fibrosis drugs (92.9% of revenue) and Moderna's COVID vaccines (93.1%), above Regeneron's Dupixent profit share (36.5%). Biktarvy is still growing, though HIV policy and competition move most of the income statement. Operating cash flow is positive, so runway screens do not apply.

How the Numbers Read

R&D was $5,799M in FY2025, split between HIV and oncology. The setback is Trodelvy, Gilead's antibody-drug conjugate for breast cancer. In ASCENT-07, a Phase 3 study in first-line HR+/HER2- metastatic breast cancer (the commonest type, driven by hormones rather than the HER2 protein), it missed its primary endpoint of progression-free survival. Results were presented at the San Antonio Breast Cancer Symposium (SABCS) 2025.

Remaining oncology value runs on each programme's odds of approval, which belong in the cash flows of a risk-adjusted NPV (rNPV), not in a higher discount rate. In the BIO 2011-2020 study the model uses, 57.8% of Phase III programmes reached an FDA filing (NDA/BLA) and 7.9% of Phase I programmes reached approval (see the phase success guide).

A Citi analyst estimate puts Biktarvy's peak at ~$15B by 2030, only slightly above its FY2025 sales of $14,334M. It is an assumption, so anchor the franchise on filed revenue.

Valuation Framework

Value the parts separately. The HIV franchise gets a DCF on its $20,752M of filed revenue, with Biktarvy as the anchor. The oncology pipeline gets a probability-weighted value, with the odds cut on indications affected by ASCENT-07. Then add the $10.6B of cash. Gilead's HIV drugs are mostly its own sales; any partnered asset would be modelled on Gilead's share, as Regeneron's Dupixent is.

What to Watch in the Financials

HIV's share (70.5%). Biktarvy's 7% growth keeps the concentrated revenue rising. The share only falls meaningfully if oncology adds revenue of its own.

Oncology after ASCENT-07. Rebuild the oncology rNPV with lower odds on the affected indications, and watch whether R&D of $5,799M keeps flowing to programmes that are still advancing.

Key Risks

HIV concentration. Pricing, treatment-guideline shifts or long-acting injectable competitors could shrink the $20,752M line faster than oncology replaces it.

Further pipeline setbacks. ASCENT-07 already cut the probability-weighted value of a key oncology asset. Another Phase 3 failure would cut it further and leave HIV carrying more of the group.