What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-28 · 187 added, 162 removed, 232 unchanged (60% of the section changed)

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(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 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.

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and (iii) deliver shareholder value in a sustainable and responsible manner.

Our strategic priorities to deliver on these ambitions include:

(i) maximize near-term revenue growth;

(ii) maximize impact of long-acting HIV therapies;

and (iii) expand and deliver on oncology programs.

Our strategic priorities, as refreshed in late 2025, to deliver on these ambitions include:

(i) maximize impact of long-acting HIV therapies;

(ii) accelerate our pipeline build in oncology and inflammation;

(iii) adopt and scale artificial intelligence to transform how we work;

(iv) prioritize investments for highest impact;

and (v) strengthen collaboration to accelerate innovation.

Year in Review

During 2024, we delivered growth in our HIV, Oncology and Liver Disease product sales and continued to invest in our business and research and development (“R&D”) pipeline through advancement of our portfolio and broadening of available therapies, including through acquisitions and collaborations.

Meanwhile, we maintained our financial position through repayment of senior notes coming due and the issuance of new senior notes, and provided shareholder returns through dividends and share repurchases.

The following represents a summary of notable business updates and events during 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.

During 2025, we delivered growth in our HIV product sales, introduced Yeztugo, the first and only twice-yearly HIV pre-exposure prophylaxis (“PrEP”) option available in the U.S., and expanded Livdelzi’s market share in the treatment of primary biliary cholangitis (“PBC”).

As evidenced by various late-stage clinical trial updates in HIV and oncology, we continued to invest in our business and research and development (“R&D”) pipeline through advancement of our portfolio and broadening of available therapies, including through acquisitions and collaborations.

Meanwhile, we maintained our financial position by lowering operating expenses, repaying senior notes coming due and providing shareholder returns through dividends and share repurchases.

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 Annual Report on Form 10-K.

• Completed the New Drug Application submissions to U.S.

Food and Drug Administration (“FDA”) for twice-yearly lenacapavir for HIV prevention.

• Announced results of PURPOSE 2, the second Phase 3 study of twice-yearly lenacapavir for HIV prevention, with data presented at the HIV Research for Prevention Conference.

In the lenacapavir group, 99.9% of participants did not acquire HIV infection, with two incident cases among 2,179 participants.

Lenacapavir reduced HIV infections by 96% compared to background HIV incidence in cisgender men and gender-diverse people, and additionally demonstrated superiority to daily Truvada (89% relative risk reduction).

Lenacapavir was generally well-tolerated and no significant or new safety concerns were identified.

The use of lenacapavir for the prevention of HIV is investigational.

• Received Breakthrough Therapy Designation from FDA to Trodelvy for the treatment of adult patients with extensive-stage small cell lung cancer (“ES-SCLC”) whose disease has progressed on or after platinum-based chemotherapy.

The use of Trodelvy in ES-SCLC is investigational.

• Announced plans to voluntarily withdraw the U.S.

accelerated approval of Trodelvy for use in pre-treated adult patients with locally advanced or metastatic urothelial cancer, following the results of the Phase 3 TROPiCS-04 trial announced in May 2024.

• Incurred partial impairment charges related to in-process research and development (“IPR&D”) assets acquired by Gilead from Immunomedics, Inc.

in 2020 as a result of our evaluation of the Phase 3 EVOKE-01 study data and a strategic decision to discontinue our clinical development program in metastatic non-small cell lung cancer (“NSCLC”) for Trodelvy in the second-line indication (see further information in “Results of Operations;

In-Process Research and Development Impairments” below).

• Received a positive opinion from the European Medicines Agency’s (“EMA”) Committee for Medicinal Products for Human Use recommending 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.

• Received accelerated approval from FDA for Livdelzi for the treatment of primary biliary cholangitis in combination with UDCA in adults who have had an inadequate response to UDCA, or as monotherapy in patients unable to tolerate UDCA.

• Entered into an amended license agreement featuring the buy-out of global seladelpar royalties from Janssen Pharmaceutica NV for $320 million.

• Completed the acquisition of CymaBay Therapeutics, Inc.

(“CymaBay”) for $4.3 billion in total equity value, or $3.9 billion net cash paid, adding investigational candidate seladelpar for the treatment of primary biliary cholangitis to Gilead’s Liver Disease portfolio.

• Announced the appointment of Dietmar Berger, MD, PhD, as Chief Medical Officer effective January 2025.

• Announced positive topline Phase 3 results from the ARTISTRY-1 and ARTISTRY-2 trial, evaluating our investigational daily oral single-tablet regimen of bictegravir 75mg and lenacapavir 50mg (“BIC/LEN”) for virologically suppressed adults with HIV.

BIC/LEN met its primary endpoint, demonstrating non-inferiority to baseline multi-tablet antiviral regimens (ARTISTRY-1) and Biktarvy (ARTISTRY-2).

• Announced settlement agreements to resolve Biktarvy patent litigation with generic manufacturers Lupin Ltd., Cipla Ltd.

and Laurus Labs Ltd.

Under the agreements, the earliest date the three generic manufacturers can market a generic version of full dose Biktarvy in the U.S.

is April 1, 2036, subject to standard acceleration provisions.

This is more than two years later than our previous loss of exclusivity projection for Biktarvy (December 2033).

• Received a strong recommendation for the use of twice-yearly injectable Yeztugo (lenacapavir) for HIV PrEP in the new U.S.

Centers for Disease Control and Prevention guidelines.

• Announced a partnership with the U.S.

State Department and the U.S.

President’s Emergency Plan for AIDS Relief (“PEPFAR”) to deliver lenacapavir for HIV PrEP for up to two million people over three years in countries supported by both PEPFAR and the Global Fund.

• Received European Commission (“EC”) marketing authorization for Yeytuo (lenacapavir) for PrEP to reduce the risk of sexually acquired HIV-1 in adults and adolescents with increased HIV-1 acquisition risk.

• Received U.S.

Food and Drug Administration (“FDA”) approval for Yeztugo (lenacapavir) for PrEP to reduce the risk of sexually acquired HIV in adults and adolescents weighing at least 35kg.

• 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.

• Announced that we entered into a definitive agreement to acquire all of the outstanding common stock of Arcellx, Inc.

(“Arcellx”), providing us with full control of its leading pipeline candidate, anitocabtagene autoleucel, an investigational BCMA-directed CAR-T cell therapy for patients with relapsed and/or refractory multiple myeloma.

This transaction is anticipated to close during the second quarter of 2026, subject to the satisfaction or waiver of customary closing conditions.

• Announced the discontinuation of the Phase 3 STAR-221 study, in partnership with Arcus Biosciences, Inc.

(“Arcus”), evaluating the anti-TIGIT antibody domvanalimab (“dom”) plus zimberelimab (“zim”) and chemotherapy in first-line HER2- advanced gastric and esophageal cancers.

The decision was based on the recommendation of the Independent Data Monitoring Committee, following review of data from a pre-specified interim analysis.

Additionally, Gilead and Arcus will discontinue the Phase 2 EDGE-Gastric study evaluating dom and zim regimens in upper gastrointestinal cancers.

Dom and zim are investigational products and are not approved anywhere globally.

• Announced that our Phase 3 ASCENT-07 study of Trodelvy evaluating sacituzumab govitecan-hziy (“SG”) as a first-line treatment post-endocrine therapy in hormone receptor-positive, human epidermal growth factor receptor 2-negative (“HR+/HER2-”) metastatic breast cancer patients did not meet the primary endpoint of progression-free survival.

Overall survival is a key secondary endpoint and was not mature at the time of the primary analysis;

however, an early trend was observed favoring patients treated with Trodelvy compared to chemotherapy.

• Presented Phase 3 ASCENT-03 data for Trodelvy in 1L metastatic triple-negative breast cancer (“mTNBC”) patients who are not candidates for PD-1/PD-L1 checkpoint inhibitors at the 2025 European Society for Medical Oncology Congress.

Trodelvy is not approved in this setting.

• Entered into a collaboration with Shenzhen Pregene Biopharma Co., Ltd.

(“Pregene”) to develop next-generation in vivo therapies.

• Announced the acquisition of Interius BioTherapeutics, Inc.

(“Interius”), a privately held biotechnology company developing in vivo chimeric antigen receptor therapeutics, for approximately $350 million.

• 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 meeting.

Trodelvy is not approved in this setting.

• 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.

• Received conditional marketing authorization from the EC for seladelpar for the treatment of 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.

• Entered into a strategic partnership with LEO Pharma A/S (“LEO Pharma”) to develop and commercialize their pre-clinical oral signal transducer and activator of transcription 6 programs for the potential treatment of inflammatory diseases.

• Announced an agreement with the U.S.

government to lower the cost of medicines for Americans, reinforcing a commitment to U.S.-based innovation, affordability and global health leadership.

• Announced ground-breaking on a new Pharmaceutical Development and Manufacturing Technical Development Center in Foster City, California as part of a planned $32 billion investment in the U.S.

through 2030.

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

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Total revenues $ 29,443 $ 28,754 2 %

Net income attributable to Gilead $ 480 $ 5,665 (92) %

Diluted earnings per share attributable to Gilead $ 0.38 $ 4.50 (92) %

Total revenues increased 6% to $28.8 billion in 2024, compared to 2023, primarily due to higher sales in HIV, Oncology and Liver Disease, partially offset by lower sales of Veklury.

Net income attributable to Gilead was $480 million and diluted earnings per share attributable to Gilead was $0.38 in 2024, compared to net income attributable to Gilead of $5.7 billion and $4.50 diluted earnings per share attributable to Gilead in 2023.

The decrease was primarily due to:

• A pre-tax IPR&D partial impairment charge of $4.2 billion related to Trodelvy IPR&D assets;

• Higher acquired IPR&D expenses, primarily $3.8 billion related to the acquisition of CymaBay;

Net income attributable to Gilead $ 8,510 $ 480 NM

Diluted earnings per share attributable to Gilead $ 6.78 $ 0.38 NM

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Total revenues increased 2% to $29.4 billion in 2025, compared to 2024, primarily due to:

• Higher product sales primarily driven by HIV and Liver Disease products, partially offset by lower sales of Veklury;

• Higher royalty, contract and other revenues.

Net income attributable to Gilead was $8.5 billion and diluted earnings per share attributable to Gilead was $6.78 in 2025, compared to net income attributable to Gilead of $480 million and $0.38 diluted earnings per share attributable to Gilead in 2024.

The increase was primarily due to:

• A $3.8 billion acquired in-process research and development (“IPR&D”) expense related to the acquisition of CymaBay Therapeutics, Inc.

(“CymaBay”) in 2024, which did not repeat in 2025;

• Lower pre-tax IPR&D partial impairment charges, with $590 million in 2025 related to assets acquired from MYR GmbH (“MYR”) compared to $4.2 billion in 2024 related to assets acquired from Immunomedics, Inc.;

• Higher net unrealized gains on equity securities;

• Higher revenues;

• Lower selling, general and administrative expenses;

partially offset by

• Higher product sales;

• Lower income tax expense.

• Higher income tax expense.

Please refer to “Results of Operations” below for further information on 2025 results.

As we look to 2025, we expect to see continued increases in demand for our products overall, bolstered by the growth of our HIV business.

We look forward to the regulatory decisions for twice-yearly lenacapavir for HIV prevention in the U.S.

under priority review as well as in the EU where we submitted a marketing authorization application in early 2025.

We anticipate that strong, demand-led volume growth in 2025 will be offset by:

(i) the effects of the Inflation Reduction Act, which is expected to increase our payment obligations under the redesigned Medicare Part D discount program;

(ii) an expected decrease in our Veklury product sales reflecting lower rates of COVID-19-related hospitalizations;

and (iii) the impact of the U.S.

dollar strengthening against major foreign currencies.

Our R&D portfolio includes over 100 pre-clinical and clinical-stage programs across our core therapeutic areas.

As we look to 2026, we expect to see continued growth for our product sales overall, bolstered by increased demand in our HIV business.

We anticipate that such growth will be partially offset by the impact of various policy-related developments in the U.S., as well as an expected decrease in our Veklury product sales due to lower rates of COVID-19-related hospitalizations and an expected decrease in our Cell Therapy product sales reflecting ongoing competitive headwinds.

Our R&D portfolio includes over 50 clinical-stage programs across our core therapeutic areas.

We expect updates in 2026 on various clinical trials and certain regulatory filing submissions and decisions, including FDA decisions related to two first-line breast cancer therapies and an additional HIV treatment option.

We plan to continue investing in our business and R&D pipeline both internally and externally through partnerships and select business development transactions.

For example, we entered into an agreement with LEO Pharma A/S in early 2025 to develop and commercialize their pre-clinical oral signal transducer and activator of transcription 6 programs for the potential treatment of inflammatory diseases.

In addition, as part of our overall investment approach to fund the advancement of our pipeline and commercialization of our products, we will continue to focus on disciplined operating expense management.

Our ability to deliver on our strategy and 2025 objectives is subject to a number of uncertainties.

Please refer to Part I, Item 1A.

Risk Factors of this Annual Report on Form 10-K for a listing of risk factors that could materially and adversely affect our results of operations and financial condition.

As part of our overall investment approach to fund the advancement of our pipeline and commercialization of our products, we will continue to focus on disciplined operating expense management.

Results of Operations

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Year Ended December 31, 2025 Year Ended December 31, 2024

(in millions) U.S.

(in millions, except percentages) U.S.

Europe Rest of World Total U.S.

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Total product sales 20,816 4,617 3,483 28,915 20,508 4,576 3,526 28,610 1 %

Royalty, contract and other revenues 82 58 4 144 62 114 7 182 (21) %

Royalty, contract and other revenues 60 447 20 527 82 58 4 144 NM

Total revenues $ 20,876 $ 5,064 $ 3,503 $ 29,443 $ 20,591 $ 4,634 $ 3,529 $ 28,754 2 %

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(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 (“Janssen”).

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Collaborations and Other Arrangements of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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

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

(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, Sovaldi, Viread and Vosevi.

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

HIV product sales increased 8% to $19.6 billion in 2024, compared to 2023, primarily due to higher demand and higher average realized price.

(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 product sales increased 6% to $20.8 billion in 2025, compared to 2024, primarily due to higher demand for treatment and prevention, with average realized price being relatively flat despite the U.S.

Medicare Part D program redesign impact.

In particular:

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

To a lesser extent, the increase was also due to higher average realized price.

• Descovy sales increased primarily due to higher demand, partially offset by lower average realized price.

• Biktarvy sales increased 7% primarily due to higher demand, including patients switching from Genvoya and other Gilead HIV products, partially offset by lower average realized price due to the U.S.

Medicare Part D program redesign;

• Descovy sales increased 31% primarily due to higher demand and average realized price.

Liver Disease

Liver Disease product sales increased 9% to $3.0 billion in 2024, compared to 2023, primarily due to higher demand in products for chronic hepatitis C virus, HBV and, in Europe, chronic hepatitis delta virus, as well as the launch of Livdelzi for treatment of PBC.

Veklury product sales decreased 18% to $1.8 billion in 2024, compared to 2023, primarily due to decreased rates of COVID-19-related hospitalizations.

Cell Therapy product sales increased 6% to $2.0 billion in 2024, compared to 2023, primarily due to increased demand outside the U.S.

for Yescarta and Tecartus and higher average realized price, partially offset by lower demand in the U.S.

Trodelvy product sales increased 24% to $1.3 billion in 2024, compared to 2023, primarily due to higher demand across all regions.

Liver Disease product sales increased 6% to $3.2 billion in 2025, compared to 2024, primarily due to higher demand for Livdelzi and products for chronic hepatitis B virus and chronic hepatitis D virus, partially offset by lower average realized price across all Liver Disease products, most notably for chronic hepatitis C virus, inclusive of the U.S.

Medicare Part D program redesign impact.

Veklury product sales decreased 49% to $911 million in 2025, compared to 2024, primarily due to lower COVID-19-related hospitalizations.

Cell Therapy product sales decreased 7% to $1.8 billion in 2025, compared to 2024, primarily due to lower demand reflecting ongoing competitive headwinds.

Trodelvy product sales increased 6% to $1.4 billion in 2025, compared to 2024, primarily due to higher demand in breast cancer treatment, partially offset by the indication withdrawal in bladder cancer treatment.

Gross-to-Net Deductions

A substantial portion of our product sales is subject to significant discounts from list price, including government and commercial rebates and chargebacks, as well as other deductions, including patient co-pay assistance, cash discounts for prompt payment, distributor fees, and sales return provisions.

These deductions to product sales are generally referred to as gross-to-net deductions and are primarily a function of product sales volume, product mix, contractual or statutory discounts and estimated payer mix.

Rebates and chargebacks are based on contractual arrangements or statutory requirements and include amounts due to payers and healthcare providers under various programs.

These amounts may vary by product, payer and individual plans.

Providers qualified under certain programs can purchase our products through wholesalers or other distributors at a discount.

The wholesalers or distributors then charge the discount back to us.

Other gross-to-net deductions include patient co-pay assistance, cash discounts for prompt payment, distributor fees that we pay under our inventory management agreements with our significant U.S.

wholesalers and are based on contractually-determined fixed percentage of sales, and sales return provisions.

Our gross-to-net deductions totaled $17.8 billion, or 38%, of gross product sales in 2024, compared to $16.4 billion, or 38%, of gross product sales in 2023.

Of the $17.8 billion in 2024, $15.5 billion, or 33%, of gross product sales was related to rebates and chargebacks, and $2.3 billion, or 5%, was related to other gross-to-net deductions.

Of the $16.4 billion in 2023, $14.3 billion, or 33%, of gross product sales was related to rebates and chargebacks, and $2.2 billion, or 5%, was related to other gross-to-net deductions.

Current year gross-to-net deductions as a percent of gross product sales may not be indicative of future results.

Product sales are recorded n et of estimated gross-to-net deductions, including rebates and chargebacks, patient co-pay assistance, prompt pay discounts, distributor fees, sales return provisions and other related deductions.

The following table summarizes our gross-to-net deductions and period-over-period changes:

Year Ended December 31,

(in millions, except percentages) 2025 2024 Change

Gross-to-net deductions (1)

$ 19,953 $ 17,776 12 %

% of gross product sales 41 % 38 % 250 bps

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(1) Includes rebates and chargebacks of $17.5 billion and $15.5 billion for the years ended December 31, 2025 and 2024, respectively.

F or further information, see “Critical Accounting Estimates” section below.

Gross-to-net deductions as a percentage of gross product sales increased in 2025, compared to 2024, primarily due to U.S.

Medicare Part D program redesign impact.

Foreign Currency Exchange Impact

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Approximately 26% and 27% of our product sales were denominated in foreign currencies during 2025 and 2024, respectively.

Foreign currency exchange, net of hedges, had an unfavorable impact on our total product sales of $163 million in 2024, based on a comparison using foreign currency exchange rates from 2023.

Foreign currency exchange, net of hedges, had a favorable impact on our total product sales of $56 million in 2025, based on a comparison using foreign currency exchange rates from 2024.

Royalty, Contract and Other Revenues

Royalty, contract and other revenues increased to $527 million in 2025, compared to 2024, primarily due to recognition of $400 million of previously constrained revenues from the sale of certain intellectual property.

Costs and Expenses

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Research and development expenses $ 5,799 $ 5,907 (2) %

Acquired in-process research and development expenses $ 4,663 $ 1,155 NM

In-process research and development impairments $ 4,180 $ 50 NM

Acquired in-process research and development expenses $ 1,024 $ 4,663 (78) %

In-process research and development impairments $ 590 $ 4,180 (86) %

Selling, general and administrative expenses $ 5,774 $ 6,091 (5) %

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Product Gross Margin

Product gross margin increased to 78.2% in 2024, compared to 2023, primarily due to prior year restructuring expenses related to changes in our manufacturing strategy, which resulted in write-offs of certain manufacturing facilities, related inventories and other costs totaling $479 million.

Product gross margin was 78.4% in 2025 and remained relatively flat compared to 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 our R&D expenses by identifying the 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 manage these expenses by identifying the 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:

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

Year Ended December 31,

(in millions) 2024 2023

(in millions, except percentages) 2025 2024 Change

Personnel, infrastructure and other support costs $ 3,427 $ 3,555 (4) %

Clinical studies and other costs 2,372 2,352 1 %

Total $ 5,907 $ 5,718

Research and development expenses increased 3% to $5.9 billion in 2024, compared to 2023.

Personnel, infrastructure and other support costs increased mainly due to higher compensation expenses, increases in restructuring costs, and stock-based compensation expenses and other integration costs related to the acquisition of CymaBay.

Clinical studies and other costs decreased mainly due to timing of clinical activities, including the wind-down of studies for magrolimab and obeldesivir for treatment of COVID-19, and higher R&D reimbursements, partially offset by increases related to the progression of other studies.

Research and development expenses $ 5,799 $ 5,907 (2) %

Research and development expenses decreased 2% to $5.8 billion in 2025, compared to 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 in 2024, which did not repeat in 2025, as well as lower restructuring costs.

Clinical studies and other costs remained relatively flat, with higher expenses driven by fair value adjustments to the MYR-related contingent consideration largely offset by lower study-related and clinical manufacturing expenses.

Acquired In-Process Research and Development Expenses

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Acquired in-process research and development expenses were $1.0 billion in 2025, primarily related to the following transactions:

• $311 million Interius acquisition;

• $250 million LEO Pharma collaboration upfront payment;

• $200 million Pregene collaboration upfront and milestone payments.

Acquired in-process research and development expenses were $4.7 billion in 2024, primarily related to the following transactions:

• $3.8 billion CymaBay acquisition;

• $320 million Janssen Pharmaceutica NV future royalty obligation extinguishment related to seladelpar;

• $100 million Arcus Biosciences, Inc.

collaboration continuation fee;

• $68 million Arcellx, Inc.

(“Arcellx”) collaboration milestones met;

• $100 million Arcus collaboration continuation fee;

• $68 million Arcellx collaboration milestones met;

• $47 million Tmunity Therapeutics, Inc.

(“Tmunity”) acquisition milestones met.

Acquired in-process research and development expenses were $1.2 billion in 2023, primarily related to the following transactions:

• $313 million Arcellx collaboration;

• $269 million Tmunity acquisition;

• $218 million XinThera, Inc.

• $97 million Assembly Biosciences, Inc.

collaboration;

• $60 million Compugen Ltd.

licensing agreement.

acquisition milestones met.

Acquisitions and Note 7.

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In-Process Research and Development Impairments

As of December 31, 2023, our indefinite-lived IPR&D intangible asset related to Trodelvy for metastatic NSCLC was approximately $5.9 billion.

In addition to NSCLC, Trodelvy is being explored for potential investigational use in a range of tumor types where Trop-2 is highly expressed.

Gilead’s clinical development program in metastatic NSCLC includes ongoing Phase 2 and registrational Phase 3 studies for Trodelvy as a first- or second-line indication.

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 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.

2025 Impairments

In the second quarter of 2025 and again in the fourth quarter of 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 of 2025 and again for the year ended December 31, 2025, we performed impairment tests and determined that the revised estimated fair value of the bulevirtide IPR&D intangible asset was below its carrying value in both periods.

As a result, we recognized partial impairment charges of $190 million and $400 million in In-process research and development impairments on our Consolidated Statements of Operations for the second and fourth quarters of 2025, respectively, for a total of $590 million for the year ended December 31, 2025.

To arrive at the revised estimated fair values as of June 30, 2025 and December 31, 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 and December 31, 2025 fair value estimations primarily reflected the updated expectations for bulevirtide’s potential market share outside of the EU.

2024 Impairments

In January 2024, we received data from our Phase 3 EVOKE-01 study of Trodelvy evaluating 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 available at the time, and in connection with the preparation of the financial statements for the first quarter of 2024, 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 Consolidated Statements of Operations during the first quarter of 2024.

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This decision triggered a review for potential impairment of the NSCLC IPR&D intangible asset.

Based on our evaluation, and in connection with the preparation of the financial statements for the third 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 $1.8 billion in In-process research and development impairments on our Consolidated Statements of Operations during the third quarter of 2024.

Based on our evaluation, and in connection with the preparation of the financial statements for the third quarter of 2024, 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.

To arrive at the revised estimated fair value, 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:

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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.

Our revised discounted cash flows for the September 30, 2024 fair value estimation primarily reflected the removal of cash flows associated with second-line plus patients.

There were no IPR&D impairment charges in the three months ended December 31, 2024.

Therefore, total In-process research and development impairments on our Consolidated Statements of Operations were $4.2 billion in 2024, and the revised estimated fair value of the NSCLC IPR&D intangible asset was $1.8 billion as of December 31, 2024, which reflects Trodelvy’s opportunity as a combination therapy in first-line metastatic NSCLC patients supported by its ongoing Phase 3 clinical trial in this patient population.

In 2023, In-process research and development impairments included $50 million related to a partial impairment charge on our bulevirtide IPR&D intangible asset due to a change in assumptions primarily around probability and timing of regulatory approval.

Our revised discounted cash flows for the September 30, 2024 fair value estimation primarily reflected the removal of cash flows associated with second-line plus patients, and the remaining carrying value as of that date reflects Trodelvy’s opportunity as a combination therapy in first-line metastatic NSCLC patients supported by its ongoing Phase 3 clinical trial in this patient population.

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.

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Selling, general and administrative expenses $ 5,774 $ 6,091 (5) %

Selling, general and administrative expenses were $6.1 billion and remained relatively flat in 2024, compared to 2023.

Selling and marketing expenses increased mainly due to:

• media spend across multiple therapeutic areas, including launch preparation activities for lenacapavir for the investigational use of HIV PrEP as well as for Livdelzi;

• integration costs related to the acquisition of CymaBay;

• higher restructuring costs;

partially offset by

• a decrease in our allocation of the branded prescription drug fee.

General and administrative expenses decreased mainly due to lower expenses related to legal matters, partially offset by stock-based compensation expenses and other integration costs related to the acquisition of CymaBay, and higher restructuring costs.

Selling, general and administrative expenses decreased 5% to $5.8 billion in 2025, compared to 2024.

Selling and marketing expenses increased primarily due to higher HIV promotional expenses.

General and administrative expenses decreased primarily due to lower expenses related to corporate initiatives and legal matters, as well as the impact of stock-based compensation expenses and other integration costs related to the acquisition of CymaBay in 2024, which did not repeat in 2025, partially offset by donations of equity securities made to the Gilead Foundation.

Interest Expense and Other (Income) Expense, Net

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Interest expense $ 1,024 $ 977 5 %

Other (income) expense, net $ (6) $ (198) (97) %

Loss from equity securities, net $ 274 $ 167 64 %

Other (income) expense, net $ (798) $ (6) NM

(Gain) loss from equity securities, net $ (451) $ 274 NM

Interest income $ (349) $ (281) 24 %

Other, net $ 1 $ 2 (41) %

Interest expense increased 3% to $977 million in 2024, compared to 2023, primarily due to a higher average interest rate on long-term debt.

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NM - Not Meaningful

Interest expense increased 5% to $1.0 billion in 2025, compared to 2024, primarily due to higher debt balances and a higher weighted-average interest rate on the debt.

Debt and Credit Facilities of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information on our long-term debt and related interest rates.

Unfavorable movements in Other (income) expense, net in 2024, compared to 2023, primarily related to higher net losses from equity securities and lower interest income due to lower average cash balances.

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

Favorable movements in Other (income) expense, net in 2025, compared to 2024, primarily related to net unrealized gains from equity securities compared to net unrealized losses in 2024, as well as higher interest income.

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

Year Ended December 31,

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Income tax expense $ 1,286 $ 211 $ 1,075

Effective tax rate 30.5 % 18.2 % 12.4 %

Our effective tax rate increased in 2024, compared to 2023, primarily due to:

• The non-deductible acquired IPR&D expense recorded in connection with our first quarter 2024 acquisition of CymaBay;

• A decrease in unrecognized tax benefits as a result of reaching agreement with a tax authority on certain tax positions in 2023;

Effective tax rate 13.1 % 30.5 % NM

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NM - Not Meaningful

Our effective tax rate decreased in 2025, compared to 2024, primarily due to:

• The non-deductible acquired IPR&D expense recorded in connection with our acquisition of CymaBay in 2024, which did not repeat in 2025;

• A settlement with a tax authority related to a prior year legal entity restructuring;

• Favorable changes in the fair value of our equity securities that are non-taxable for income tax purposes;

partially offset by

• A non-recurring tax benefit associated with a legal entity restructuring;

• A decrease in state deferred tax liabilities associated with the $4.2 billion NSCLC IPR&D intangible asset impairment charge;

• Settlements with tax authorities in 2024;

• Remeasurement of certain deferred tax liabilities related to acquired intangible assets.

The Organisation for Economic Co-operation and Development has 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 adopted Pillar Two legislation and other countries are in the process of introducing legislation to implement Pillar Two.

We do not expect Pillar Two to have a material impact on our results of operations, liquidity or capital resources.

• A tax benefit associated with a legal entity restructuring in 2024;

• A decrease in state deferred tax liabilities associated with the $4.2 billion NSCLC IPR&D intangible asset impairment charge in 2024.

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

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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.

Cash and cash equivalents were $10.0 billion as of December 31, 2024.

Cash and cash equivalents were $7.6 billion and marketable debt securities were $3.0 billion as of December 31, 2025.

The table below summarizes our cash flow activities, followed by our analysis of changes and trends:

Year Ended December 31,

(in millions) 2024 2023

(in millions, except percentages) 2025 2024 Change

Net cash provided by (used in):

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Investing activities (4,793) (3,449) 39 %

Financing activities (3,433) (5,125)

Effect of exchange rate changes on cash and cash equivalents (40) 57

Net change in cash and cash equivalents $ 3,906 $ 673

Financing activities (7,745) (3,433) NM

Effect of exchange rate changes on cash and cash equivalents 92 (40) NM

Net change in cash and cash equivalents $ (2,428) $ 3,906 NM

Operating Activities

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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 in 2024 mainly due to higher collections on sales and lower income tax and operating payments.

Net cash provided by operating activities included $0.5 billion in HIV antitrust litigation settlement payments in 2023, as well as transition tax payments associated with the 2017 Tax Cuts and Jobs Act of $1.2 billion and $0.9 billion in 2024 and 2023, respectively.

We expect Net cash provided by operating activities in 2025 to include the effect of an approximately $1.3 billion transition tax payment.

Net cash provided by operating activities decreased in 2025, compared to 2024, primarily due to higher inventory build-up and higher income tax payments, as well as unfavorable timing of accounts receivable collections.

In 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, compared to $1.2 billion paid in 2024.

Investing Activities

Net cash used in investing activities was notably higher in 2024 primarily related to the $3.9 billion net cash payment for the CymaBay acquisition, partially offset by proceeds from the liquidation of marketable debt securities to fund that acquisition.

Net cash used in investing activities increased in 2025, compared to 2024.

In 2025, we utilized cash primarily for purchases of marketable debt securities and payments related to the Interius acquisition and various collaborations.

In 2024, we utilized cash primarily for the $3.9 billion CymaBay acquisition and purchases of equity securities, partially offset by cash received 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

Net cash used in financing activities in 2024 was primarily the result of $2.0 billion for debt repayments, $3.9 billion for dividend payments and $1.2 billion for common stock repurchases, partially offset by $3.5 billion in net proceeds from the issuance of senior unsecured notes in November 2024.

In 2023, we utilized cash of $2.3 billion for debt repayments, $3.8 billion for dividend payments and $1.0 billion for common stock repurchases, partially offset by $2.0 billion in net proceeds from the issuance of senior unsecured notes in September 2023.

The year-over-year changes were due mostly to higher cash provided by new debt issuances.

The change in Net cash used in financing activities in 2025, compared to 2024, was primarily due to cash provided by a new debt offering in 2024, which did not repeat in 2025, as well as higher common stock repurchases.

In 2025, we utilized cash of $4.0 billion for dividend payments, $1.9 billion for common stock repurchases and $1.8 billion for repayment of debt.

In 2024, we utilized cash of $3.9 billion for dividend payments, $2.0 billion for repayment of debt and other obligations, and $1.2 billion for common stock repurchases, partially offset by $3.5 billion in net proceeds from the issuance of senior unsecured notes in November 2024.

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.

Subsequently, in February 2025, we repaid $1.75 billion of principal balance related to our senior unsecured notes due February 2025.

Also, on February 11, 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 March 28, 2025 to all stockholders of record as of the close of business on March 14, 2025.

On February 10, 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 March 30, 2026 to all stockholders of record as of the close of business on March 13, 2026.

Future dividends are subject to declaration by our Board of Directors.

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Debt and Credit Facilities);

• income tax payments, including the remaining obligations for the one-time repatriation transition tax from the Tax Cuts and Jobs Act, as well as potential payments related to uncertain tax positions (see Note 16.

• income tax payments, including potential payments related to uncertain tax positions (see Note 15.

Income Taxes);

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Rebates and Chargebacks

Rebates and chargebacks are determined using a complex estimation process which requires significant judgment by management in part due to the lag between the date of the product sales and the date the related rebates or chargeback claims are settled.

Rebates and chargebacks are based on contractual arrangements or statutory requirements and include amounts due to payers and healthcare providers under various programs.

These amounts may vary by product, payer and individual plans.

Rebates and chargebacks are estimated primarily based on product sales, and expected payer mix and discount rates, which require significant estimates and judgment.

Rebates and chargebacks include amounts due to payers and healthcare providers under various programs based on contractual arrangements or statutory requirements, which may vary by product, payer and individual plans and may not be known at the time of sale.

As a result, our recorded amounts for rebates and chargebacks are determined using a complex estimation process that requires significant management judgment.

In developing our estimates of rebates and chargebacks, we consider the following:

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Historically, our actual rebates and chargebacks claimed for prior years have varied by less than 5% from our estimates.

However, historical results are not indicative of future results.

Valuation of Intangible Assets

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For example, in the second quarter of 2023, we recorded an accrual of $525 million in Other current liabilities on our Consolidated Balance Sheets for settlements with certain plaintiffs in the HIV antitrust litigation, which we paid in the second half of 2023.

Also, we accrued approximately $200 million for a potential settlement with the U.S.

Attorney’s Office for the Southern District of New York, on our Consolidated Balance Sheets as of December 31, 2024.

Also, as of December 31, 2024, we accrued approximately $200 million on our Consolidated Balance Sheets for a potential settlement with the U.S.

Attorney’s Office for the Southern District of New York, which we eventually entered into in April 2025 and subsequently paid.

We are subject to income taxes in the U.S.

and various foreign jurisdictions, including Ireland.

Income Taxes of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information.

Critical inputs in determining our provision for income taxes and related tax balances include forecasts of our future income and expenses, potential tax planning strategies and determination of the probability of certain tax positions being sustained upon examination by tax authorities.

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Changes in these conditions could have a material adverse impact on our results of operations and financial position.

Income Taxes of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information.

For example, in October 2025, we reached a settlement with a tax authority related to a prior year legal entity restructuring.

As a result, we recognized approximately $450 million of income tax benefit and a corresponding $530 million reduction in our unrecognized tax benefits in the quarter ending December 31, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis