Gilead Sciences 10-Q 2025-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

or

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File No. 0-19731

GILEAD SCIENCES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware			94-3047598
(State or Other Jurisdiction of Incorporation or Organization)			(IRS Employer Identification No.)

333 Lakeside Drive, Foster City, California 94404

(Address of principal executive offices) (Zip Code)

650-574-3000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class						Trading Symbol(s)						Name of each exchange on which registered
Common Stock, par value, $0.001 per share						GILD						The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No x

Number of shares outstanding of the issuer’s common stock, par value $0.001 per share, as of July 31, 2025: 1,240,806,916

GILEAD SCIENCES, INC.

INDEX

PART I.			FINANCIAL INFORMATION									3
			Item 1.			Condensed Consolidated Financial Statements						3
						Condensed Consolidated Balance Sheets						3
						Condensed Consolidated Statements of Operations						4
						Condensed Consolidated Statements of Comprehensive Income (Loss)						5
						Condensed Consolidated Statements of Stockholders’ Equity						6
						Condensed Consolidated Statements of Cash Flows						8
						Notes to Condensed Consolidated Financial Statements						9
			Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations						28
			Item 3.			Quantitative and Qualitative Disclosures About Market Risk						38
			Item 4.			Controls and Procedures						38
PART II.			OTHER INFORMATION									40
			Item 1.			Legal Proceedings						40
			Item 1A.			Risk Factors						40
			Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds						54
			Item 3.			Defaults Upon Senior Securities						54
			Item 4.			Mine Safety Disclosures						54
			Item 5.			Other Information						54
			Item 6.			Exhibits						54
SIGNATURES												59

We own or have rights to various trademarks, copyrights and trade names used in our business, including the following: GILEAD®, GILEAD SCIENCES®, KITE™, AMBISOME®, ATRIPLA®, BIKTARVY®, CAYSTON®, COMPLERA®, DESCOVY®, DESCOVY FOR PREP®, EMTRIVA®, EPCLUSA®, EVIPLERA®, GENVOYA®, HARVONI®, HEPCLUDEX®, HEPSERA®, JYSELECA®, LETAIRIS®, LIVDELZI®/LYVDELZI®/, ODEFSEY®, SOVALDI®, STRIBILD®, SUNLENCA®, TECARTUS®, TRODELVY®, TRUVADA®, TRUVADA FOR PREP®, TYBOST®, VEKLURY®, VEMLIDY®, VIREAD®, VOSEVI®, YESCARTA®, YEZTUGO® and ZYDELIG®. Other trademarks and trade names are the property of their respective owners.

Certain amounts and percentages in this Quarterly Report on Form 10-Q may not sum or recalculate due to rounding.

This Quarterly Report on Form 10-Q, including Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors, contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Words such as “ambition,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “hope,” “intend,” “may,” “might,” “outlook,” “plan,” “priority,” “project,” “seek,” “should,” “target” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements other than statements of historical fact are forward-looking statements, including statements regarding overall trends; operating cost, product sales and revenue trends; liquidity and capital needs; plans and expectations with respect to products, product candidates, corporate strategy, business and operations, financial projections, strategic investments and the use of capital; expectations regarding the impact of the Inflation Reduction Act and the One Big Beautiful Bill Act, changes in U.S. regulatory policies, and changes in U.S. trade policies, including tariffs; collaboration and licensing arrangements; patent protection and estimated loss of exclusivity for our products and product candidates; ongoing litigation and investigation matters; and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions.

We have based these forward-looking statements on our current expectations about future events. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Our actual results or outcomes may differ materially from those suggested by these forward-looking statements for various reasons, including those identified in Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements included in this report are made only as of the date hereof unless otherwise specified. Except as required under federal securities laws and the rules and regulations of U.S. Securities and Exchange Commission, we do not undertake, and specifically decline, any obligation to update any of these statements or to publicly announce the results of any revisions to any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise. In evaluating our business, you should carefully consider the risks described under Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q. Any of the risks contained herein could materially and adversely affect our business, results of operations and financial condition.

PART I. FINANCIAL INFORMATION

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in millions, except per share amounts)						June 30, 2025						December 31, 2024
Assets
Current assets:
Cash and cash equivalents						$	5,144					$	9,991
Short-term marketable debt securities						69						—
Accounts receivable, net						4,781						4,420
Inventories						1,825						1,710
Prepaid and other current assets						2,899						3,052
Total current assets						14,718						19,173
Property, plant and equipment, net						5,459						5,414
Long-term marketable debt securities						1,913						—
Intangible assets, net						18,566						19,948
Goodwill						8,314						8,314
Deferred tax assets						2,721						2,378
Other long-term assets						4,031						3,769
Total assets						$	55,721					$	58,995
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable						$	582					$	833
Accrued rebates						4,215						3,892
Current portion of long-term debt, net						2,806						1,815
Other current liabilities						3,586						5,464
Total current liabilities						11,189						12,004
Long-term debt, net						22,140						24,896
Long-term income taxes payable						859						830
Deferred tax liabilities						652						724
Other long-term liabilities						1,290						1,295
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, par value $0.001 per share; 5 shares authorized; none outstanding						—						—
Common stock, par value $0.001 per share; 5,600 shares authorized; 1,242 and 1,246 shares issued and outstanding, respectively						1						1
Additional paid-in capital						8,367						7,700
Accumulated other comprehensive (loss) income						(18)						132
Retained earnings						11,325						11,497
Total Gilead stockholders’ equity						19,674						19,330
Noncontrolling interest						(84)						(84)
Total stockholders’ equity						19,590						19,246
Total liabilities and stockholders’ equity						$	55,721					$	58,995

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

						Three Months Ended												Six Months Ended
						June 30,												June 30,
(in millions, except per share amounts)						2025						2024						2025						2024
Revenues:
Product sales						$	7,054					$	6,912					$	13,668					$	13,559
Royalty, contract and other revenues						27						41						81						81
Total revenues						7,082						6,954						13,749						13,640
Costs and expenses:
Cost of goods sold						1,501						1,544						3,041						3,096
Research and development expenses						1,491						1,351						2,870						2,871
Acquired in-process research and development expenses						61						38						315						4,169
In-process research and development impairments						190						—						190						2,430
Selling, general and administrative expenses						1,365						1,377						2,623						2,752
Total costs and expenses						4,608						4,309						9,038						15,317
Operating income (loss)						2,474						2,644						4,711						(1,678)
Interest expense						254						237						513						491
Other (income) expense, net						(208)						355						120						265
Income (loss) before income taxes						2,429						2,053						4,077						(2,433)
Income tax expense						468						438						802						123
Net income (loss)						1,960						1,614						3,275						(2,556)
Net income attributable to noncontrolling interest						—						—						—						—
Net income (loss) attributable to Gilead						$	1,960					$	1,614					$	3,275					$	(2,556)
Basic earnings (loss) per share attributable to Gilead						$	1.57					$	1.29					$	2.63					$	(2.05)
Diluted earnings (loss) per share attributable to Gilead						$	1.56					$	1.29					$	2.61					$	(2.05)
Shares used in basic earnings (loss) per share attributable to Gilead calculation						1,245						1,247						1,246						1,247
Shares used in diluted earnings (loss) per share attributable to Gilead calculation						1,255						1,251						1,257						1,247

See accompanying notes.

GILEAD SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)

						Three Months Ended												Six Months Ended

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The following discussion and analysis is intended to provide material information around events and uncertainties known to management that are relevant to an assessment of the financial condition and results of operations of Gilead and should therefore be read in conjunction with our audited Consolidated Financial Statements and the related notes thereto and other disclosures included as part of our Annual Report on Form 10-K for the year ended December 31, 2024 and our unaudited Condensed Consolidated Financial Statements for the three and six months ended June 30, 2025 and the related notes thereto and other disclosures (including the disclosures under Part II, Item 1A. Risk Factors) included in this Quarterly Report on Form 10-Q.

Management Overview

Gilead Sciences, Inc. (including its consolidated subsidiaries, referred to as “Gilead,” the “company,” “we,” “our” or “us”) is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades, with the goal of creating a healthier world for all people. We are committed to advancing innovative medicines to prevent and treat life-threatening diseases, including HIV, viral hepatitis, coronavirus disease 2019 (“COVID-19”), cancer and inflammation. We operate in more than 35 countries worldwide, with headquarters in Foster City, California.

Key Business Updates

The following represents a summary of notable business updates and events since the filing of our Annual Report on Form 10-K for the year ended December 31, 2024, including certain items from our press releases, which readers are encouraged to review in full as available on our website at www.gilead.com. The content on the referenced website does not constitute a part of and is not incorporated by reference into this Quarterly Report on Form 10-Q.

Virology

• Received U.S. Food and Drug Administration (“FDA”) approval for Yeztugo (lenacapavir) for pre-exposure prophylaxis (“PrEP”) to reduce the risk of sexually acquired HIV in adults and adolescents weighing at least 35kg. Yeztugo is the first and only twice-yearly HIV PrEP option available in the U.S.

• Received a positive opinion under accelerated review from the European Medicines Agency’s Committee for Medicinal Products for Human Use (“CHMP”) recommending lenacapavir for use as PrEP to reduce the risk of sexually acquired HIV-1 in adults and adolescents with increased HIV-1 acquisition risk. We also received a positive EU-Medicines for All opinion from the CHMP, which will facilitate national regulatory evaluations in low- and lower-middle-income countries.

• Announced that FDA had placed a clinical hold on the HIV treatment trials of GS-1720 and/or GS-4182, including the WONDERS-1 and WONDERS-2 trials. These drug candidates are investigational and not approved anywhere globally.

Oncology

• Announced positive topline results from the Phase 3 ASCENT-03 trial evaluating Trodelvy in patients with 1L metastatic triple-negative breast cancer (“mTNBC”) who are not candidates for PD-1/PD-L1 checkpoint inhibitors. Additionally, presented results from the Phase 3 ASCENT-04 trial evaluating Trodelvy plus Keytruda in 1L PD-L1+ mTNBC at the American Society of Clinical Oncology (“ASCO”) meeting. Trodelvy is not approved in either of these settings.

• Entered into an exclusive option and license agreement with Kymera Therapeutics, Inc. to develop novel oral molecular glue CDK2 degraders with broad oncology treatment potential.

Inflammation

• Received conditional marketing authorization from the European Commission for seladelpar for the treatment of primary biliary cholangitis (“PBC”) in combination with ursodeoxycholic acid (“UDCA”) in adults who have an inadequate response to UDCA alone, or as monotherapy in those unable to tolerate UDCA.

Key Financial Results

The following table summarizes our key financial results for the period and period-over-period changes:

						Three Months Ended																		Six Months Ended
						June 30,																		June 30,
(in millions, except percentages and per share amounts)						2025						2024						Change						2025						2024						Change
Total revenues						$	7,082					$	6,954					2		%				$	13,749					$	13,640					1		%
Net income (loss) attributable to Gilead						$	1,960					$	1,614					21		%				$	3,275					$	(2,556)					NM
Diluted earnings (loss) per share attributable to Gilead						$	1.56					$	1.29					21		%				$	2.61					$	(2.05)					NM

---

NM - Not Meaningful

Total revenues increased 2% to $7.1 billion for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to higher HIV, Livdelzi and Trodelvy sales, partially offset by lower chronic hepatitis C virus (“HCV”) and Veklury sales.

Total revenues increased 1% to $13.7 billion for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to higher HIV and Livdelzi sales, partially offset by lower Veklury and HCV sales.

Net income attributable to Gilead was $2.0 billion and diluted earnings per share attributable to Gilead was $1.56 for the three months ended June 30, 2025, compared to net income attributable to Gilead of $1.6 billion and diluted earnings per share attributable to Gilead of $1.29 for the same period in 2024. The increase was primarily due to:

• Net unrealized gains on equity securities compared to net unrealized losses in 2024; and

• Higher product sales; partially offset by

• A pre-tax in-process research and development (“IPR&D”) partial impairment charge of $190 million related to IPR&D assets acquired from MYR GmbH (“MYR”); and

• Higher research and development (“R&D”) expenses.

Net income attributable to Gilead was $3.3 billion and diluted earnings per share attributable to Gilead was $2.61 for the six months ended June 30, 2025, compared to net loss attributable to Gilead of $2.6 billion and diluted loss per share attributable to Gilead of $2.05 for the same period in 2024. The increase was primarily due to:

• A $3.9 billion acquired IPR&D expense related to the acquisition of CymaBay Therapeutics, Inc. (“CymaBay”) during the three months ended March 31, 2024, which did not repeat; and

• A pre-tax IPR&D partial impairment charge of $2.4 billion during the three months ended March 31, 2024 related to Trodelvy IPR&D assets acquired from Immunomedics, Inc., which did not repeat; partially offset by

• Higher income tax expense.

Please refer to “Results of Operations” below for further information on results for the three and six months ended June 30, 2025.

Results of Operations

Revenues

The following table summarizes our Total revenues and period-over-period changes:

						Three Months Ended June 30, 2025																								Three Months Ended June 30, 2024
(in millions, except percentages)						U.S.						Europe						Rest of World						Total						U.S.						Europe						Rest of World						Total						Change
Product sales:
HIV
Biktarvy						$	2,799					$	429					$	302					$	3,530					$	2,585					$	370					$	277					$	3,232					9		%
Descovy						601						24						28						653						434						25						26						485						35		%
Genvoya						322						40						16						377						372						45						23						440						(14)		%
Odefsey						221						66						11						298						233						72						10						315						(5)		%
Symtuza - Revenue share(1)						88						33						3						124						131						34						3						168						(26)		%
Other HIV(2)						65						33						9						107						65						25						15						105						2		%
Total HIV						4,096						624						368						5,088						3,821						571						353						4,745						7		%
Liver Disease
Sofosbuvir/Velpatasvir(3)						184						81						76						342						267						84						126						476						(28)		%
Vemlidy						122						13						117						252						117						11						115						243						4		%
Other Liver Disease(4)						106						76						19						201						47						47						19						113						77		%
Total Liver Disease						413						170						211						795						431						142						259						832						(4)		%
Veklury						51						19						50						121						76						53						85						214						(44)		%
Oncology
Cell Therapy
Tecartus						41						41						9						92						63						37						7						107						(14)		%
Yescarta						162						154						77						393						186						169						58						414						(5)		%
Total Cell Therapy						203						196						86						485						250						206						66						521						(7)		%
Trodelvy						224						96						44						364						224						69						26						320						14		%
Total Oncology						427						291						131						849						474						275						92						841						1		%
Other
AmBisome						7						65						56						129						17						69						65						151						(14)		%
Other(5)						44						8						21						73						98						8						24						130						(44)		%
Total Other						52						73						77						202						115						77						88						280						(28)		%
Total product sales						5,038						1,178						838						7,054						4,916						1,118						878						6,912						2		%
Royalty, contract and other revenues						13						10						4						27						25						15						1						41						(34)		%
Total revenues						$	5,051					$	1,189					$	842					$	7,082					$	4,941					$	1,133					$	879					$	6,954					2		%

						Six Months Ended June 30, 2025																								Six Months Ended June 30, 2024
(in millions)						U.S.						Europe						Rest of World						Total						U.S.						Europe						Rest of World						Total						Change
Product sales:
HIV
Biktarvy						$	5,272					$	804					$	603					$	6,679					$	4,900					$	735					$	542					$	6,177					8		%
Descovy						1,139						45						55						1,239						805						51						55						911						36		%
Genvoya						627						79						35						741						704						95						44						843						(12)		%
Odefsey						436						123						20						579						457						148						21						626						(7)		%
Symtuza - Revenue share(1)						170						62						6						238						236						67						6						309						(23)		%
Other HIV(2)						115						63						19						198						125						70						27						222						(11)		%
Total HIV						7,760						1,177						738						9,675						7,226						1,167						695						9,088						6		%
Liver Disease
Sofosbuvir/Velpatasvir(3)						351						161						175						687						515						163						203						881						(22)		%
Vemlidy						222						24						257						504						212						22						233						467						8		%
Other Liver Disease(4)						175						152						35						362						89						94						38						221						64		%
Total Liver Disease						748						338						467						1,553						816						279						474						1,569						(1)		%
Veklury						250						41						132						423						391						123						255						769						(45)		%
Oncology
Cell Therapy
Tecartus						82						72						17						171						118						73						16						207						(18)		%
Yescarta						321						304						154						779						357						327						110						794						(2)		%
Total Cell Therapy						403						376						171						949						475						400						126						1,001						(5)		%
Trodelvy						405						171						81						657						429						137						62						628						5		%
Total Oncology						808						547						252						1,606						904						537						188						1,629						(1)		%
Other
AmBisome						13						132						123						268						31						139						124						294						(9)		%
Other(5)						91						16						35						143						156						18						36						209						(32)		%
Total Other						104						149						158						410						188						156						160						504						(19)		%
Total product sales						9,669						2,251						1,747						13,668						9,525						2,262						1,772						13,559						1		%
Royalty, contract and other revenues						49						21						10						81						49						30						2						81						1		%
Total revenues						$	9,719					$	2,273					$	1,757					$	13,749					$	9,574					$	2,292					$	1,774					$	13,640					1		%

---

(1) Represents our revenue from cobicistat (“C”), emtricitabine (“FTC”) and tenofovir alafenamide (“TAF”) in Symtuza (darunavir/C/FTC/TAF), a fixed dose combination product commercialized by Janssen Sciences Ireland Unlimited Company.

(2) Includes Atripla, Complera/Eviplera, Emtriva, Stribild, Sunlenca, Truvada, Tybost and Yeztugo.

(3) Includes Epclusa and the authorized generic version of Epclusa sold by Gilead’s separate subsidiary, Asegua Therapeutics LLC (“Asegua”).

(4) Includes ledipasvir/sofosbuvir (Harvoni and the authorized generic version of Harvoni sold by Asegua), Hepcludex, Hepsera, Livdelzi/Lyvdelzi, Sovaldi, Viread and Vosevi.

(5) Includes Cayston, Jyseleca, Letairis and Zydelig.

HIV

HIV product sales increased 7% to $5.1 billion for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to higher demand and higher average realized price, inclusive of the U.S. Medicare Part D program redesign impact. In particular:

• Biktarvy sales increased 9% primarily due to higher demand, including patients switching from Genvoya and other Gilead HIV products; and

• Descovy sales increased 35% primarily due to higher average realized price and higher demand.

HIV product sales increased 6% to $9.7 billion for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to higher demand and higher average realized price, inclusive of the U.S. Medicare Part D program redesign impact. In particular:

• Biktarvy sales increased 8% primarily due to higher demand, including patients switching from Genvoya and other Gilead HIV products; and

• Descovy sales increased 36% primarily due to higher average realized price and higher demand.

Liver Disease

Liver Disease product sales decreased 4% to $795 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to lower average realized price, inclusive of the U.S. Medicare Part D program redesign impact, and demand for HCV products. This decrease was partially offset by higher demand for Livdelzi, Hepcludex and chronic hepatitis B virus (“HBV”) products.

Liver Disease product sales decreased 1% to $1.6 billion for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to lower average realized price, inclusive of the U.S. Medicare Part D program redesign impact, and demand for HCV products. This decrease was partially offset by higher demand for Livdelzi, HBV products and Hepcludex.

Veklury

Veklury product sales decreased 44% to $121 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to lower rates of COVID-19-related hospitalizations.

Veklury product sales decreased 45% to $423 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to lower rates of COVID-19-related hospitalizations.

Oncology

Cell Therapy

Cell Therapy product sales decreased 7% to $485 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to lower demand reflecting ongoing competitive headwinds, partially offset by higher average realized price.

Cell Therapy product sales decreased 5% to $949 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to lower demand reflecting ongoing competitive headwinds, partially offset by higher average realized price.

Trodelvy

Trodelvy product sales increased 14% to $364 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to higher demand and inventory dynamics.

Trodelvy product sales increased 5% to $657 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to higher demand.

Foreign Currency Exchange Impact

We generally face exposure to movements in foreign currency exchange rates, primarily in the Euro. We use foreign currency exchange contracts to hedge a portion of our foreign currency exposures.

Approximately 27% and 26% of our product sales were denominated in foreign currencies during the three months ended June 30, 2025 and 2024, respectively. Foreign currency exchange, net of hedges, had a favorable impact on our total product sales of $41 million for the three months ended June 30, 2025, based on a comparison using foreign currency exchange rates from the three months ended June 30, 2024.

Approximately 27% and 28% of our product sales were denominated in foreign currencies during the six months ended June 30, 2025 and 2024, respectively. Foreign currency exchange, net of hedges, had an unfavorable impact on our total product sales of $39 million for the six months ended June 30, 2025, based on a comparison using foreign currency exchange rates from the six months ended June 30, 2024.

Costs and Expenses

The following table summarizes our costs and expenses and period-over-period changes:

						Three Months Ended																		Six Months Ended
						June 30,																		June 30,
(in millions, except percentages)						2025						2024						Change						2025						2024						Change
Cost of goods sold						$	1,501					$	1,544					(3)		%				$	3,041					$	3,096					(2)		%
Product gross margin						78.7		%				77.7		%				106 bps						77.7		%				77.2		%				58 bps
Research and development expenses						$	1,491					$	1,351					10		%				$	2,870					$	2,871					—		%
Acquired in-process research and development expenses						$	61					$	38					61		%				$	315					$	4,169					(92)		%
In-process research and development impairments						$	190					$	—					NM						$	190					$	2,430					(92)		%
Selling, general and administrative expenses						$	1,365					$	1,377					(1)		%				$	2,623					$	2,752					(5)		%

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NM - Not Meaningful

Product Gross Margin

Product gross margin increased to 78.7% for the three months ended June 30, 2025, compared to the same period in 2024, primarily driven by product mix.

Product gross margin remained relatively flat for the six months ended June 30, 2025, compared to the same period in 2024.

Research and Development Expenses

Research and development expenses consist primarily of personnel costs including salaries, benefits and stock-based compensation expense, infrastructure, materials and supplies and other support costs, research and clinical studies performed by contract research organizations and our collaboration partners and other outside services.

We manage these expenses by identifying the research and development (“R&D”) activities we expect to be performed during a given period and then prioritizing efforts based on scientific data, probability of successful technical development and regulatory approval, market potential, available human and capital resources and other considerations. We regularly review our R&D activities based on unmet medical need and, as necessary, reallocate resources among our internal R&D portfolio and external opportunities that we believe will best support the long-term growth of our business. We do not track total R&D expenses by product candidate, therapeutic area or development phase.

The following table provides a breakout of expenses by major cost type:

						Three Months Ended																		Six Months Ended
						June 30,																		June 30,
(in millions, except percentages)						2025						2024						Change						2025						2024						Change
Personnel, infrastructure and other support costs						$	855					$	830					3		%				$	1,709					$	1,793					(5)		%
Clinical studies and other costs						636						520						22		%				1,160						1,077						8		%
Research and development expenses						$	1,491					$	1,351					10		%				$	2,870					$	2,871					—		%

Research and development expenses increased 10% to $1.5 billion for the three months ended June 30, 2025, compared to the same period in 2024. Personnel, infrastructure and other support costs remained relatively flat. Clinical studies and other costs increased primarily due to higher spend on clinical manufacturing and studies as well as fair value adjustments to the MYR-related contingent consideration.

Research and development expenses remained relatively flat for the six months ended June 30, 2025, compared to the same period in 2024. Personnel, infrastructure and other support costs decreased primarily due to the impact of stock-based compensation expenses and other integration costs related to the acquisition of CymaBay during the six months ended June 30, 2024, which did not repeat, as well as lower restructuring costs. Clinical studies and other costs increased primarily due to fair value adjustments to the MYR-related contingent consideration and higher spend related to new and progressing clinical studies.

Acquired In-Process Research and Development Expenses

Acquired in-process research and development expenses are recorded when incurred and reflect costs of externally-developed IPR&D projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use, including upfront and pre-commercialization milestone payments related to various collaborations and the costs of rights to IPR&D projects.

Acquired in-process research and development expenses were $61 million for the three months ended June 30, 2025. Acquired in-process research and development expenses were $315 million for the six months ended June 30, 2025, primarily related to $250 million associated with the LEO Pharma A/S collaboration in January 2025.

Acquired in-process research and development expenses were $38 million for the three months ended June 30, 2024. Acquired in-process research and development expenses were $4.2 billion for the six months ended June 30, 2024, primarily related to $3.9 billion associated with the CymaBay acquisition in March 2024 and $100 million associated with the Arcus Biosciences, Inc. collaboration amendment in January 2024.

See Note 6. Acquisitions, Collaborations and Other Arrangements of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

In-Process Research and Development Impairment

2025 Impairment

During the three months ended June 30, 2025, additional competitive clinical data became available indicating a potentially more competitive market for bulevirtide where it is not yet approved. Based on our evaluation of the data, and in connection with the preparation of the financial statements for the second quarter, we performed an interim impairment test and determined that the revised estimated fair value of the bulevirtide IPR&D intangible asset was below its carrying value. As a result, we recognized a partial impairment charge of $190 million in In-process research and development impairments on our Condensed Consolidated Statements of Operations for the three months ended June 30, 2025.

To arrive at the revised estimated fair value as of June 30, 2025, we used a probability-weighted income approach that discounts expected future cash flows to present value, which requires the use of Level 3 fair value measurements and inputs, including critical estimated inputs, such as: revenues and operating profits related to the planned utilization of bulevirtide outside of the European Union (“EU”), which includes inputs such as addressable patient population, projected market share, treatment duration, and the life of the potential commercialized product; the probability of technical and regulatory success; the time and resources needed to complete the development and approval of bulevirtide outside of the EU; an appropriate discount rate based on the estimated weighted-average cost of capital for companies with profiles similar to our profile; and risks related to the viability of and potential alternative treatments in any future target markets. Our revised discounted cash flows for the June 30, 2025 fair value estimation primarily reflected the updated expectations for bulevirtide’s potential market share outside of the EU.

2024 Impairment

In January 2024, we received data from our Phase 3 EVOKE-01 study of Trodelvy evaluating sacituzumab govitecan-hziy (“SG”) indicating that the study did not meet its primary endpoint of overall survival in previously treated metastatic non-small cell lung cancer (“NSCLC”), thus triggering a review for potential impairment of the NSCLC IPR&D intangible asset. Based on our evaluation of the study results and all other data currently available, and in connection with the preparation of the financial statements for the first quarter, we performed an interim impairment test and determined that the revised estimated fair value of the NSCLC IPR&D intangible asset was below its carrying value. As a result, we recognized a partial impairment charge of $2.4 billion in In-process research and development impairments on our Condensed Consolidated Statements of Operations for the three months ended March 31, 2024.

To arrive at the revised estimated fair value as of March 31, 2024, we used a probability-weighted income approach that discounts expected future cash flows to present value, which requires the use of Level 3 fair value measurements and inputs, including critical estimated inputs, such as: revenues and operating profits related to the planned utilization of SG in NSCLC, which includes inputs such as addressable patient population, projected market share, treatment duration, and the life of the potential commercialized product; the probability of technical and regulatory success; the time and resources needed to complete the development and approval of SG in NSCLC; an appropriate discount rate based on the estimated weighted-average cost of capital for companies with profiles similar to our profile; and risks related to the viability of and potential alternative treatments in any future target markets. Our revised discounted cash flows for the March 31, 2024 fair value estimation primarily reflected the smaller addressable market that Trodelvy could serve among metastatic NSCLC patients and a delay in expected launch timing for second-line plus patients.

If future events result in adverse changes in the key assumptions used in determining fair value, including the timing of product launches, information on the competitive landscape of treatments in this indication, changes to the probability of technical or regulatory success, failure to obtain anticipated regulatory approval or discount rate, among others, additional impairments may be recorded and could be material to our financial statements.

Selling, General and Administrative Expenses

Selling, general and administrative expenses are recorded when incurred and consist primarily of personnel costs, facilities and overhead costs, and selling, marketing and advertising expenses, as well as other general and administrative costs related to finance, human resources, legal and other administrative activities.

The following table summarizes our Selling, general and administrative expenses and period-over-period changes:

						Three Months Ended																		Six Months Ended
						June 30,																		June 30,
(in millions, except percentages)						2025						2024						Change						2025						2024						Change
Selling and marketing expenses						$	864					$	805					7		%				$	1,617					$	1,548					4		%
General and administrative expenses						501						572						(12)		%				1,006						1,204						(16)		%
Selling, general and administrative expenses						$	1,365					$	1,377					(1)		%				$	2,623					$	2,752					(5)		%

Selling, general and administrative expenses remained relatively flat for the three months ended June 30, 2025, compared to the same period in 2024. Selling and marketing expenses increased mainly due to higher promotional and outside service expenses as well as higher compensation costs. General and administrative expenses decreased mainly due to lower spend on corporate initiatives.

Selling, general and administrative expenses decreased 5% to $2.6 billion for the six months ended June 30, 2025, compared to the same period in 2024. Selling and marketing expenses increased mainly due to higher promotional expenses. General and administrative expenses decreased mainly due to lower spend on corporate initiatives as well as stock-based compensation expenses related to the acquisition of CymaBay during the six months ended June 30, 2024, which did not repeat.

Interest Expense and Other (Income) Expense, Net

The following table summarizes our Interest expense and Other (income) expense, net and period-over-period changes:

						Three Months Ended																		Six Months Ended
						June 30,																		June 30,
(in millions, except percentages)						2025						2024						Change						2025						2024						Change
Interest expense						$	254					$	237					7		%				$	513					$	491					5		%
Other (income) expense, net						$	(208)					$	355					NM						$	120					$	265					(55)		%
(Gain) loss from equity securities, net						$	(142)					$	392					NM						$	284					$	405					(30)		%
Interest income						$	(73)					$	(35)					NM						$	(166)					$	(144)					16		%
Other, net						$	6					$	(1)					NM						$	2					$	3					(44)		%

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NM - Not Meaningful

Interest expense increased slightly for the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to higher debt balances and higher weighted-average interest rates on the debt.

Favorable movements in Other (income) expense, net for the three months ended June 30, 2025, compared to the same period in 2024, primarily related to net unrealized gains from equity securities compared to net unrealized losses in 2024 as well as higher interest income.

Favorable movements in Other (income) expense, net for the six months ended June 30, 2025, compared to the same period in 2024, primarily related to lower net unrealized losses from equity securities and higher interest income.

Income Taxes

The following table summarizes our Income tax expense and period-over-period changes:

						Three Months Ended																		Six Months Ended
						June 30,																		June 30,
(in millions, except percentages)						2025						2024						Change						2025						2024						Change
Income (loss) before income taxes						$	2,429					$	2,053					18		%				$	4,077					$	(2,433)					NM
Income tax expense						$	468					$	438					7		%				$	802					$	123					NM
Effective tax rate						19.3		%				21.4		%				-207 bps						19.7		%				(5.1)		%				NM

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NM - Not Meaningful

Our effective tax rate decreased for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to favorable changes in the fair value of our equity securities that are non-taxable for income tax purposes, partially offset by a settlement with a tax authority during the second quarter of 2024.

Our effective tax rate increased for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to the non-deductible acquired IPR&D expense recorded in connection with our first quarter 2024 acquisition of CymaBay, partially offset by tax benefits from stock-based compensation.

In July 2025, the U.S. enacted tax reform legislation through the One Big Beautiful Bill (“OBBB”) Act. Included in this legislation are provisions that restored immediate expensing of domestic R&D expenditures and certain capital expenditures and modified the U.S. taxation of profits derived from foreign operations. The legislation’s provisions have varying effective dates, some of which begin in 2025. While we are still assessing the full impact of the new legislation, we do not expect it to have a material impact on our result of operations.

Liquidity and Capital Resources

We regularly analyze our ability to generate and obtain adequate amounts of cash to meet our short-term and long-term requirements and plans. Our capital priorities include: (i) investing in our business and R&D pipeline, (ii) continuing select partnerships and business development transactions, (iii) growing our dividend over time, and (iv) repurchasing shares to offset dilution and opportunistically reduce share count. Based on our evaluation of our current position of liquidity, available capital resources and our material cash requirements, we believe that we can satisfy our capital needs for the next 12 months and the foreseeable future.

Liquidity

Cash and cash equivalents were $5.1 billion and marketable debt securities were $2.0 billion as of June 30, 2025. The table below summarizes our cash flow activities, followed by our analysis of changes and trends:

						Six Months Ended
						June 30,
(in millions, except percentages)						2025						2024						Change
Net cash provided by (used in):
Operating activities						$	2,584					$	3,544					(27)		%
Investing activities						(2,531)						(2,514)						1		%
Financing activities						(4,993)						(4,314)						16		%
Effect of exchange rate changes on cash and cash equivalents						92						(29)						NM
Net change in cash and cash equivalents						$	(4,848)					$	(3,313)					46		%

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NM - Not Meaningful

Operating Activities

Net cash provided by operating activities is our primary source of funds, driven mainly by collections on product sales, partially offset by operating spend. Changes in working capital balances, generally associated with the timing of collections and payments, as well as unanticipated payments related to litigation, taxes or other matters, may create some variation in any given year. Net cash provided by operating activities decreased for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to higher income tax payments as well as higher operating payments, partially due to timing, and higher inventory purchases. During the six months ended June 30, 2025, we paid the final $1.3 billion federal income tax payment for transition tax on the mandatory deemed repatriation of foreign earnings related to the Tax Cuts and Jobs Act.

As a result of the OBBB Act, we anticipate a reduction in income tax payments for the remainder of the year ending December 31, 2025.

Investing Activities

Net cash used in investing activities remained relatively flat for the six months ended June 30, 2025, compared to the same period in 2024. During the six months ended June 30, 2025, we utilized cash primarily for purchases of marketable debt securities. Net cash used in investing activities for the six months ended June 30, 2024 primarily related to the $3.9 billion net cash payment for the CymaBay acquisition and purchases of equity securities, partially offset by proceeds from the liquidation of marketable debt securities. Net cash used in investing activities may vary in any given year depending on the favorability of strategic opportunities for the business.

Financing Activities

The change in Net cash used in financing activities for the six months ended June 30, 2025, compared to the same period in 2024, was due mostly to higher common stock repurchases. During the six months ended June 30, 2025, we utilized cash of $2.0 billion for dividend payments, $1.8 billion for repayment of debt and $1.3 billion for common stock repurchases. During the six months ended June 30, 2024, we utilized cash of $2.0 billion for dividend payments, $1.9 billion for repayment of debt and other obligations, and $500 million for common stock repurchases. Net cash used in financing activities may vary in any given year depending primarily on the timing of debt repayments and proceeds from debt offerings and the amount of common stock repurchases.

In August 2025, we announced that our Board of Directors declared a quarterly dividend of $0.79 per share of our common stock, with a payment date of September 29, 2025 to all stockholders of record as of the close of business on September 15, 2025. Future dividends are subject to declaration by our Board of Directors.

Capital Resources

A summary of our capital resources and material cash requirements is presented in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. Other than as disclosed in the Liquidity section above and in Notes 4. Available-for-Sale Debt Securities and Equity Securities, 6. Acquisitions, Collaborations and Other Arrangements, 9. Debt and Credit Facilities, 10. Commitments and Contingencies and 12. Income Taxes of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, there were no material changes to our capital resources and material cash requirements during the six months ended June 30, 2025.

Critical Accounting Estimates

A summary of our critical accounting estimates is presented in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. Other than as disclosed in Notes 2. Revenues, 7. Intangible Assets, 10. Commitments and Contingencies and 12. Income Taxes of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, there were no material changes to our critical accounting estimates during the six months ended June 30, 2025.

Information Available on Our Website

Our company website is www.gilead.com. We routinely post important information for investors in the “Investors” section of our website, https://investors.gilead.com. Among other things, an estimate of Acquired IPR&D expenses is expected to be made available on the Quarterly Results page within the first ten days after the end of each quarter. The content on the referenced websites does not constitute a part of and is not incorporated by reference into this Quarterly Report on Form 10-Q.