Gilead Sciences Inc.

10/30/2026 | Press release | Distributed by Public on 10/30/2026 04:09

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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, 2025 and our unaudited Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2026 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, COVID-19 and cancer. 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, 2025, 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
•In October 2026, the Centers for Medicare and Medicaid Services completed the process of setting the Maximum Fair Price for Biktarvy under Medicare. The new price will be effective and impact our Biktarvy revenue starting January 1, 2028.
•Received U.S. Food and Drug Administration ("FDA") approval for Bixlenvo for the treatment of HIV in adults who are virologically suppressed on a stable antiretroviral regimen, including those switching from complex multi-tablet regimens. Bixlenvo is a complete single-tablet regimen indicated for the treatment of HIV to replace current antiretroviral regimens in people with virological suppression with no known or suspected resistance to bictegravir or lenacapavir.
•Announced FDA accepted a supplemental New Drug Application ("NDA") submission for Yeztugo 300-mg tablet as a potential once-weekly oral formulation for HIV pre-exposure prophylaxis, with a Prescription Drug User Fee Act ("PDUFA") target action date of February 2, 2027.
•Received FDA accelerated approval for Hepcludex for the treatment of chronic hepatitis delta virus ("HDV") infection in adults without cirrhosis or with compensated cirrhosis, which is now the first and only FDA-approved treatment for HDV in the U.S.
Oncology
•Received European Commission ("EC") marketing authorization for Trodelvy in combination with Keytruda® (pembrolizumab) for the treatment of adult patients with unresectable locally advanced or metastatic triple-negative breast cancer ("mTNBC") who have not received prior systemic therapy for metastatic disease and whose tumors express PD-L1 (CPS≥10).
•Received FDA approval of Trodelvy for the first-line treatment of adult patients with locally advanced or mTNBC as either a single agent for patients who are not candidates for PD-(L)1 inhibitor-based therapy or in combination with Keytruda® (pembrolizumab) or Keytruda Qlex™ (pembrolizumab and berahyaluronidase alfa-mph) for patients whose tumors express PD-L1 (CPS ≥10).
•Received EC marketing authorization for Trodelvy as a monotherapy for the treatment of adult patients with unresectable locally advanced or mTNBC who have not received prior systemic therapy for metastatic disease and are not candidates for PD-(L)1 inhibitor therapy.
•Announced the discontinuation of the Phase 3 EVOKE-03 study, in partnership with Merck & Co., Inc., evaluating Trodelvy in combination with Keytruda® for the investigational treatment of first-line metastatic non-small cell lung cancer ("NSCLC") with high PD-L1 expression (TPS ≥50%). The decision was based on the recommendation of the external Data Monitoring Committee, following review of data from a pre-specified final analysis of progression-free survival and interim analysis of overall survival.
•Completed the acquisition of Tubulis GmbH ("Tubulis"), which brings Gilead next-generation antibody-drug conjugate ("ADC") assets, including TUB-040, a NaPi2b-directed topoisomerase-I inhibitor ADC, and a platform to develop novel ADCs.
•Completed the acquisition of Arcellx, Inc. ("Arcellx"), which builds on an existing collaboration agreement with Arcellx for the development of anitocabtagene autoleucel ("anito-cel") in relapsed or refractory ("R/R") multiple myeloma ("MM"), and also adds Arcellx's D-Domain BCMA binder that has the potential to strengthen Gilead's portfolio in oncology and inflammation.
•Announced that the Biologics License Application for anito-cel in 4L+ R/R MM has been accepted by FDA, with a PDUFA target action date of December 23, 2026.
•Received FDA full approval for Tecartus in adult patients with R/R mantle cell lymphoma, following an accelerated approval in this setting in July 2020. The Tecartus label now includes efficacy, safety and pharmacokinetic data from Cohort 3 of the ZUMA-2 study in patients who are R/R after one or more lines of therapy and who are Bruton tyrosine kinase inhibitor-naïve.
Inflammation
•Announced a definitive agreement to acquire an oral IL-23R inhibitor program, including lead asset HCXT-2001, from PepStar Therapeutics Limited, a privately held, clinical-stage biotechnology company. Closing of the transaction is subject to certain customary conditions.
•Completed the acquisition of Ouro Medicines, LLC ("Ouro Medicines"), which adds gamgertamig, a clinical-stage BCMAxCD3 T cell engager for autoimmune diseases, to Gilead's inflammation portfolio. The acquisition was completed in collaboration with Lakefront Biotherapeutics NV ("Lakefront") (formerly known as Galapagos NV), which equally shared the upfront payment and will equally share contingent milestone payments, subject to customary adjustments.
Key Financial Results
The following table summarizes our key financial results for the period and period-over-period changes:
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions, except percentages and per share amounts) 2026 2025 Change 2026 2025 Change
Total revenues $ 8,300 $ 7,769 7 % $ 23,063 $ 21,518 7 %
Net income (loss) $ 2,429 $ 3,052 (20) % $ (6,045) $ 6,327 NM
Diluted earnings (loss) per share $ 1.94 $ 2.43 (20) % $ (4.87) $ 5.04 NM
_______________________________
NM - Not Meaningful
Total revenues increased 7% to $8.3 billion and $23.1 billion for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025, primarily due to higher sales of HIV products, Trodelvy and Livdelzi, partially offset by lower sales of Veklury and Cell Therapy products, as well as lower royalty, contract and other revenues. Total revenues for the nine months ended September 30, 2026 were also impacted by lower sales of chronic hepatitis C virus ("HCV") products.
Net income was $2.4 billion and diluted earnings per share was $1.94 for the three months ended September 30, 2026, compared to net income of $3.1 billion and diluted earnings per share of $2.43 for the same period in 2025. The decrease was primarily due to:
•Net losses from equity securities in 2026 compared to net gains in 2025;
•Higher operating expenses; and
•Higher income tax expense; partially offset by
•Higher revenues; and
•Lower acquired in-process research and development ("IPR&D") expenses.
Net loss was $6.0 billion and diluted loss per share was $4.87 for the nine months ended September 30, 2026, compared to net income of $6.3 billion and diluted earnings per share of $5.04 for the same period in 2025. The decrease was primarily due to:
•Higher acquired IPR&D expenses related to our acquisitions of Arcellx, Tubulis and Ouro Medicines;
•A pre-tax IPR&D impairment charge of $1.75 billion related to assets previously acquired from Immunomedics, Inc.; and
•Higher operating expenses; partially offset by
•Higher revenues.
Please refer to "Results of Operations" below for further information on results for the three and nine months ended September 30, 2026.
Results of Operations
Revenues
The following table summarizes our Total revenues and period-over-period changes:
Three Months Ended September 30, 2026 Three Months Ended September 30, 2025
(in millions, except percentages) U.S. Europe Rest of World Total U.S. Europe Rest of World Total Change
Product sales:
HIV
Biktarvy $ 3,284 $ 442 $ 333 $ 4,059 $ 2,940 $ 427 $ 320 $ 3,686 10 %
Descovy 998 22 26 1,046 652 23 25 701 49 %
Genvoya 301 27 12 339 323 34 19 377 (10) %
Odefsey 226 52 8 286 206 61 10 277 3 %
Symtuza - Revenue share(1)
103 26 3 132 95 26 3 124 7 %
Yeztugo 294 - 10 305 39 - - 39 NM
Other HIV(2)
55 22 5 82 43 22 8 73 12 %
Total HIV 5,261 591 397 6,249 4,299 592 386 5,277 18 %
Liver Disease
Livdelzi 176 26 1 203 93 11 - 105 93 %
Sofosbuvir/Velpatasvir(3)
139 59 76 274 146 65 97 309 (11) %
Vemlidy 170 13 151 333 136 12 132 280 19 %
Other Liver Disease(4)
39 62 16 117 39 70 17 126 (7) %
Total Liver Disease 524 161 243 927 414 158 247 819 13 %
Veklury 63 12 11 86 140 43 93 277 (69) %
Oncology
Cell Therapy
Tecartus 24 31 5 60 40 35 8 83 (27) %
Yescarta 114 107 73 294 123 151 75 349 (16) %
Total Cell Therapy 139 138 78 355 163 186 83 432 (18) %
Trodelvy 336 98 71 506 221 89 47 357 42 %
Total Oncology 475 236 149 860 384 275 129 788 9 %
Other
AmBisome 3 52 44 99 2 69 52 123 (20) %
Other(5)
36 8 25 68 34 7 20 61 12 %
Total Other 39 59 69 167 36 76 72 184 (9) %
Total product sales 6,361 1,058 869 8,289 5,274 1,144 928 7,345 13 %
Royalty, contract and other revenues 2 6 3 11 7 411 5 424 (97) %
Total revenues $ 6,363 $ 1,065 $ 872 $ 8,300 $ 5,281 $ 1,555 $ 933 $ 7,769 7 %
Nine Months Ended September 30, 2026 Nine Months Ended September 30, 2025
(in millions) U.S. Europe Rest of World Total U.S. Europe Rest of World Total Change
Product sales:
HIV
Biktarvy $ 8,837 $ 1,347 $ 1,009 $ 11,193 $ 8,212 $ 1,231 $ 922 $ 10,366 8 %
Descovy 2,680 69 71 2,820 1,791 67 81 1,939 45 %
Genvoya 752 97 44 892 950 114 54 1,118 (20) %
Odefsey 550 170 27 747 642 184 30 857 (13) %
Symtuza - Revenue share(1)
315 85 8 407 265 88 9 362 13 %
Yeztugo 676 - 26 702 54 - - 54 NM
Other HIV(2)
114 72 24 211 144 85 28 256 (18) %
Total HIV 13,924 1,839 1,209 16,972 12,059 1,769 1,124 14,952 14 %
Liver Disease
Livdelzi 437 65 1 503 207 16 - 223 NM
Sofosbuvir/Velpatasvir(3)
422 200 237 860 497 227 273 996 (14) %
Vemlidy 385 40 435 860 358 36 389 783 10 %
Other Liver Disease(4)
74 219 56 349 100 218 52 370 (6) %
Total Liver Disease 1,319 523 729 2,571 1,162 496 714 2,372 8 %
Veklury 188 28 36 253 390 84 225 700 (64) %
Oncology
Cell Therapy
Tecartus 83 102 21 206 122 107 25 254 (19) %
Yescarta 366 392 215 973 444 455 228 1,127 (14) %
Total Cell Therapy 450 494 235 1,179 566 562 253 1,381 (15) %
Trodelvy 896 285 183 1,364 626 259 128 1,013 35 %
Total Oncology 1,346 779 418 2,543 1,192 821 381 2,395 6 %
Other
AmBisome 14 158 175 347 15 201 175 391 (11) %
Other(5)
97 24 57 177 125 23 55 204 (13) %
Total Other 111 181 232 524 140 225 230 594 (12) %
Total product sales 16,888 3,350 2,624 22,862 14,943 3,395 2,674 21,013 9 %
Royalty, contract and other revenues 4 183 13 201 57 433 16 505 (60) %
Total revenues $ 16,892 $ 3,534 $ 2,637 $ 23,063 $ 15,000 $ 3,828 $ 2,690 $ 21,518 7 %
_______________________________
NM - Not Meaningful
(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, Bixlenvo, Complera/Eviplera, Emtriva, Stribild, Sunlenca, Truvada and Tybost.
(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, Sovaldi, Viread and Vosevi.
(5) Includes Cayston, Jyseleca, Letairis and Zydelig.
HIV
HIV product sales increased 18% to $6.2 billion for the three months ended September 30, 2026, compared to the same period in 2025, primarily due to higher average realized price, higher demand in HIV prevention and favorable inventory dynamics. In particular:
•Biktarvy sales increased 10% primarily due to higher demand, including patients switching from Genvoya and other Gilead HIV products, higher average realized price and favorable inventory dynamics;
•Descovy sales increased 49% primarily due to higher average realized price and favorable inventory dynamics; and
•Yeztugo sales increased primarily due to higher demand.
HIV product sales increased 14% to $17.0 billion for the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to higher demand and higher average realized price. In particular:
•Biktarvy sales increased 8% primarily due to higher demand, including patients switching from Genvoya and other Gilead HIV products, and higher average realized price;
•Descovy sales increased 45% primarily due to higher average realized price and higher demand; and
•Yeztugo sales increased primarily due to higher demand.
Liver Disease
Liver Disease product sales increased 13% to $927 million for the three months ended September 30, 2026, compared to the same period in 2025, primarily due to higher demand for Livdelzi, as well as higher average realized price for HCV and chronic hepatitis B virus ("HBV") products, partially offset by lower demand for HCV products.
Liver Disease product sales increased 8% to $2.6 billion for the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to higher demand for Livdelzi, as well as HBV products and Hepcludex, partially offset by lower sales for HCV products.
Veklury
Veklury product sales decreased 69% and 64% to $86 million and $253 million for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025, primarily due to lower rates of COVID-19-related hospitalizations.
Oncology
Cell Therapy
Cell Therapy product sales decreased 18% and 15% to $355 million and $1.2 billion for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025, primarily due to lower demand reflecting ongoing competitive headwinds.
Trodelvy
Trodelvy product sales increased 42% and 35% to $506 million and $1.4 billion for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025, 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 22% and 27% of our product sales were denominated in foreign currencies during the three months ended September 30, 2026 and 2025, respectively. Foreign currency exchange, net of hedges, had an unfavorable impact on our total product sales of $8 million for the three months ended September 30, 2026, based on a comparison using foreign currency exchange rates from the three months ended September 30, 2025.
Approximately 24% and 27% of our product sales were denominated in foreign currencies during the nine months ended September 30, 2026 and 2025, respectively. Foreign currency exchange, net of hedges, had a favorable impact on our total product sales of $127 million for the nine months ended September 30, 2026, based on a comparison using foreign currency exchange rates from the nine months ended September 30, 2025.
Royalty, Contract and Other Revenues
Royalty, contract and other revenues decreased to $11 million and $201 million for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025, primarily due to recognition of $400 million in the third quarter of 2025 of previously constrained revenues from the sale of certain intellectual property. For the nine months ended September 30, 2026, the decrease was partially offset by recognition of an additional $156 million in the second quarter of 2026 of previously constrained revenues related to the intellectual property sale.
Costs and Expenses
The following table summarizes our costs and expenses and period-over-period changes:
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions, except percentages) 2026 2025 Change 2026 2025 Change
Cost of goods sold $ 1,571 $ 1,569 - % $ 4,595 $ 4,610 - %
Product gross margin 81.0 % 78.6 % 241 bps 79.9 % 78.1 % 184 bps
Research and development expenses $ 1,608 $ 1,346 19 % $ 4,744 $ 4,215 13 %
Acquired in-process research and development expenses $ 18 $ 170 (89) % $ 11,307 $ 485 NM
In-process research and development impairments $ - $ - NM $ 1,750 $ 190 NM
Selling, general and administrative expenses $ 1,641 $ 1,357 21 % $ 5,013 $ 3,980 26 %
_______________________________
NM - Not Meaningful
Product Gross Margin
Product gross margin increased to 81.0% and 79.9% for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025, primarily driven by the expiration of a royalty-related obligation.
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 summarizes our Research and development expenses and period-over-period changes:
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions, except percentages) 2026 2025 Change 2026 2025 Change
Personnel, infrastructure and other support costs $ 974 $ 807 21 % $ 2,981 $ 2,516 18 %
Clinical studies and other costs 634 539 18 % 1,762 1,699 4 %
Research and development expenses $ 1,608 $ 1,346 19 % $ 4,744 $ 4,215 13 %
Research and development expenses increased 19% to $1.6 billion for the three months ended September 30, 2026, compared to the same period in 2025. Personnel, infrastructure and other support costs increased primarily due to higher employee-related costs. Clinical studies and other costs increased primarily due to higher clinical materials costs.
Research and development expenses increased 13% to $4.7 billion for the nine months ended September 30, 2026, compared to the same period in 2025. Personnel, infrastructure and other support costs increased primarily due to integration expenses, including $229 million of stock-based compensation expenses related to our second quarter 2026 acquisitions of Arcellx, Ouro Medicines and Tubulis, as well as other higher employee-related costs. Clinical studies and other costs increased primarily due to higher clinical materials and other study support costs, partially offset by lower oncology clinical study activity.
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 $18 million for the three months ended September 30, 2026.
Acquired in-process research and development expenses were $11.3 billion for the nine months ended September 30, 2026, primarily related to the following transactions:
•$7.0 billion Arcellx acquisition;
•$3.1 billion Tubulis acquisition;
•$1.0 billion Ouro Medicines acquisition, comprised of $1.9 billion for our acquisition of Ouro Medicines, partially offset by $860 million related to Lakefront's share of the upfront consideration; and
•$80 million for the Suzhou Genhouse Bio Co., Ltd. collaboration.
Acquired in-process research and development expenses were $170 million for the three months ended September 30, 2025, primarily related to $120 million associated with the Shenzhen Pregene Biopharma Co., Ltd. ("Pregene") collaboration upfront payment.
Acquired in-process research and development expenses were $485 million for the nine months ended September 30, 2025, primarily related to $250 million associated with the LEO Pharma A/S collaboration upfront payment and $120 million associated with the Pregene collaboration upfront payment.
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
2026 Impairment
In June 2026, we announced the discontinuation of our Phase 3 EVOKE-03 study of Trodelvy evaluating sacituzumab govitecan-hziy in combination with pembrolizumab in certain patients with previously untreated metastatic NSCLC. In consideration of this decision, and in connection with the preparation of the financial statements for the second quarter of 2026, we determined that no future cash flows were expected to be generated in relation to the NSCLC IPR&D intangible asset, and therefore, no value was attributed to the asset. As a result, we recognized an impairment charge of the remaining balance of $1.75 billion in In-process research and development impairments on our Condensed Consolidated Statements of Operations for the nine months ended September 30, 2026.
2025 Impairment
During the three months ended June 30, 2025, additional data became available indicating a more competitive market for bulevirtide where it was not yet approved. Based on our evaluation of the data, and in connection with the preparation of the financial statements for the second quarter of 2025, 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 nine months ended September 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.
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 Nine Months Ended
September 30, September 30,
(in millions, except percentages) 2026 2025 Change 2026 2025 Change
Selling and marketing expenses $ 946 $ 829 14 % $ 2,856 $ 2,446 17 %
General and administrative expenses 695 527 32 % 2,158 1,534 41 %
Selling, general and administrative expenses $ 1,641 $ 1,357 21 % $ 5,013 $ 3,980 26 %
Selling, general and administrative expenses increased 21% to $1.6 billion for the three months ended September 30, 2026, compared to the same period in 2025. Selling and marketing expenses increased primarily due to higher HIV promotional expenses. General and administrative expenses increased primarily due to integration expenses related to our second quarter 2026 acquisitions of Arcellx, Ouro Medicines and Tubulis, as well as higher expenses related to legal matters and higher employee-related costs.
Selling, general and administrative expenses increased 26% to $5.0 billion for the nine months ended September 30, 2026, compared to the same period in 2025. Selling and marketing expenses increased primarily due to higher HIV promotional expenses. General and administrative expenses increased primarily due to integration expenses, including $332 million of stock-based compensation expenses related to our second quarter 2026 acquisitions of Arcellx, Ouro Medicines and Tubulis, as well as donations of equity securities made to the Gilead Foundation, higher expenses related to legal matters and higher employee-related costs.
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 Nine Months Ended
September 30, September 30,
(in millions, except percentages) 2026 2025 Change 2026 2025 Change
Interest expense $ 269 $ 256 5 % $ 756 $ 769 (2) %
Other (income) expense, net $ 130 $ (569) NM $ (492) $ (449) 9 %
Loss (gain) from equity securities, net $ 164 $ (483) NM $ (321) $ (198) 62 %
Interest income $ (41) $ (88) (54) % $ (181) $ (254) (29) %
Other, net $ 7 $ 1 NM $ 10 $ 3 NM
_______________________________
NM - Not Meaningful
Interest expense was $269 million and $756 million for the three and nine months ended September 30, 2026, respectively, and remained relatively flat compared to the same periods in 2025.
Unfavorable movements in Other (income) expense, net for the three months ended September 30, 2026, compared to the same period in 2025, primarily related to net losses from equity securities compared to net gains in 2025 as well as lower interest income due to lower average cash balances.
Favorable movements in Other (income) expense, net for the nine months ended September 30, 2026, compared to the same period in 2025, primarily related to higher net gains from equity securities, partially offset by lower interest income due to lower average cash balances.
Income Taxes
The following table summarizes our Income tax expense and period-over-period changes:
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions, except percentages) 2026 2025 Change 2026 2025 Change
Income (loss) before income taxes $ 3,063 $ 3,641 (16) % $ (4,610) $ 7,718 NM
Income tax expense $ 634 $ 589 8 % $ 1,435 $ 1,391 3 %
Effective tax rate 20.7 % 16.2 % 452 bps (31.1) % 18.0 % NM
_______________________________
NM - Not Meaningful
Our effective tax rate increased for the three months ended September 30, 2026, compared to the same period in 2025, primarily due to a settlement with a tax authority and a remeasurement of certain deferred tax liabilities related to acquired intangible assets, both of which occurred in the three months ended September 30, 2025.
Our effective tax rate differed for the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to non-deductible acquired IPR&D expense in connection with our second quarter 2026 acquisitions of Arcellx, Tubulis and Ouro Medicines.
The Organisation for Economic Co-operation and Development ("OECD") has developed a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as "Pillar Two"), with certain aspects effective January 1, 2024 and other aspects effective January 1, 2025. Certain countries in which we operate have enacted Pillar Two legislation, and other countries are in the process of introducing legislation to implement Pillar Two. In January 2026, the OECD announced additional administrative guidance, including a "side-by-side" framework intended to coordinate the application of Pillar Two with existing minimum tax regimes in certain jurisdictions. We do not expect Pillar Two, including the side-by-side framework, to have a material impact on our results of operations, liquidity or capital resources.
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 $6.4 billion as of September 30, 2026. The table below summarizes our cash flow activities, followed by our analysis of period-over-period changes and trends:
Nine Months Ended
September 30,
(in millions, except percentages) 2026 2025 Change
Net cash provided by (used in):
Operating activities $ 11,152 $ 6,692 67 %
Investing activities (8,821) (2,958) NM
Financing activities (3,423) (6,482) (47) %
Effect of exchange rate changes on cash and cash equivalents (34) 87 NM
Net change in cash and cash equivalents $ (1,126) $ (2,661) (58) %
_______________________________
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 increased for the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to lower income tax payments, collections on higher product sales, receipt of the Lakefront collaboration payment and lower inventory spend, partially offset by higher operating spend.
Investing Activities
Net cash used in investing activities may vary in any given year depending on the favorability of strategic opportunities for the business. The change in Net cash used in investing activities for the nine months ended September 30, 2026, compared to the same period in 2025, was primarily due to payments made in 2026 related to the acquisitions of Arcellx, Tubulis and Ouro Medicines, partially offset by the liquidation of our marketable securities portfolio to fund the acquisitions, compared with cash used in 2025 to build up our marketable securities portfolio.
Financing Activities
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. The change in Net cash used in financing activities for the nine months ended September 30, 2026, compared to the same period in 2025, was primarily due to proceeds from debt offerings in 2026, which did not occur in 2025, and lower common stock repurchases, partially offset by higher debt repayments and a contingent consideration payment made in 2026, which did not occur in 2025. See Notes 3. Fair Value Measurements and 9. Debt and Credit Facilities 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 October 2026, we announced that our Board of Directors declared a quarterly dividend of $0.82 per share of our common stock, with a payment date of December 30, 2026 to all stockholders of record as of the close of business on December 15, 2026. 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, 2025. Other than as disclosed in the Liquidity section above and in Notes 4. Investments, 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 nine months ended September 30, 2026.
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, 2025. 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 nine months ended September 30, 2026.
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.
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