Jacquie Ross: Thank you, Nadia. We’re ready for our next question.
Operator: Thank you. Our next question goes to Brian Abrahams of RBC Capital Markets. Brian, please go ahead. Your line is open.
Brian Abrahams: Hi there. Thanks for taking my question. It seems like the long acting HIV combos are moving ahead really well. I was wondering if you could talk a little bit more about the strategic role that the Lenacapavir, Bictegravir daily oral or the weekly 17/20 based combo could play in the HIV competitive landscape. Do you think these could move beyond treatment experienced patients on complex regimens into the earlier lines? Thanks.
Daniel O’Day: Sure, maybe. Johanna, do you want to talk about weekly oral? And I’ll do the weekly?
Johanna Mercier: Sure. Thanks for the question, Brian. I think the way we’re looking at lenacapavir, bictegravir in the virologically suppressed really has to do with. We’ve set the standard of care with Biktarvy, and the opportunity now is to ensure that if for some reason there was a reason to switch Biktarvy from a tolerability profile or anything else that they have an option to go to that has a really interesting combination. Right. When you think about a capsid inhibitor as well as an integrase inhibitor. So for us, it’s really about the optionality for patients and making sure that this could offer something a little bit different in the daily oral market. And I do think that this will also be a longer term strategy for us as we think about beyond Biktarvy’s LOE in 2033.
So I would go there and on the weekly just to start, and then I’ll kick it over to Merdad to share with you our plans there. On the weekly oral, it’s clear from the patient research that we’ve done in treatment that we really do see benefit not only the daily oral market, but also in the oral weekly, or even potentially even a little bit longer, as we think about what patients are asking for today. So as much as we’re very interested in the long actings that are every three months or every six months. We are also making sure that we meet the needs of patients and their requests as they’re looking at for some really don’t like any injectables or sub Q, and really looking at that weekly oral as potentially expending a little bit the time they don’t think about the fact that they have HIV.
Merdad Parsey: Yes, just minor things to add, I would say. We have been focusing our development on what people living with HIV and people who are looking for PrEP options have told us that they’re interested in, and that’s longer acting oral options and injectable options that are every three months, every six months. And that’s what we’ve been focusing our development program on. And we want to make sure that we provide that optionality to different folks. The other thing about the [indiscernible] to Remember is remember that Lena is a new class of antiretroviral, and that provides caregivers the option to leverage that new class for the appropriate people living with HIV. So our goal as the leader in HIV is to continue to provide as many of the relevant options to people living with HIV and people looking for prevention options as we think are going to be reasonable and valuable.
And remember that we think the weekly oral is important enough that we have two programs. So you mentioned 1720. Remember, we also have the program with his islatravir, lenacapavir. So we’re very happy with the progress we’ve made, as you noted, and really on track to provide better options.
Jacquie Ross: Nadia, may we have our next question, please?
Operator: Our next question goes to Terrence Flynn of Morgan Stanley. Terrence, please go ahead. Your line is open.
Terrence Flynn: Thanks for taking the question. I was just wondering if you can provide any preliminary thoughts on 2024 spend or margins. Andy, thanks so much.
Andrew Dickinson: Hey, Terrence, thanks for the question. Happy to take that. Obviously, in late January or early February, as we customarily do, we’ll provide very specific guidance in 2024. What we’ve said, and I would continue to reiterate, is that as you’ve seen, our expenses increase over the last couple of years as our portfolio has increased, and again, from our perspective, a very necessary and appropriate increase as we developed what we feel is one of the best and broadest pipelines in the industry, both in virology, oncology, across cell therapy, and at Gilead. We’re finally at the level where we’re spending on par with our peers, especially on the R&D side. You saw that in the third quarter. So as you think about expenses, going forward, we expect that you will see more moderate growth in expenses over time.
We’re doing a lot to manage our expenses, as you heard on the last couple of quarters. Maybe the best evidence of that, Terrence, is if you look at our first quarter R&D expenses, our third quarter R&D expenses are essentially flat. So you saw a little bit of a step down from the first quarter. In the second quarter, in the third quarter, we’re flat. So you already see that we’re kind of, as we said, we’re approaching kind of the peak spend, recognizing that we have 60 different clinical programs. If I remember correctly, we have 27 programs in phase, 219 programs in Phase 3. That is very different than the Gilead of prior years that you remember. And it’s part of what makes it so excited about where we’re going as a company. And the final thing I’d say is you’re already seeing the benefits of those investments and the commercial performance that we’ve talked about for the last two years.
So we expect that you will continue to see those benefits in our commercial performance across the entire business, and you’re going to see a moderation of expense growth. And again, we’ll provide much more specific detail early next year and look forward to talking about this further. Thank you.
Jacquie Ross: Nadia. Our next caller, please?
Operator: Our next question goes to Evan Seigerman of BMO Capital Markets. Evan, please go ahead. Your line is open.
Evan Seigerman: Hi, guys. Thank you so much for taking my question. I want one on kind of capital allocation as a function of competitiveness in your respective markets. For example, you have a great moat in virology. How do you think about investment there, say versus oncology, where it’s a more competitive marketplace and where we’re seeing incremental kind of benefit over time? Maybe some thoughts there. Thank you so much.
Andrew Dickinson: Hey, Evan, it’s Andy. I’ll start. And others may want to jump in as. Look I mean, what we’ve said historically, and I’d reiterate, is we’re always going to follow the science. So we are completely committed to virology, not just HIV, but virology broadly. You see that, for instance, with our progress with oral DESCOVY [ph] as well as other programs, we’ve also said in virology that a lot of what happens in virology happens in our internal research and that there are less opportunities externally to invest in. That doesn’t mean that we won’t continue to look for them. And we’re going to continue to invest in oncology. We have a much larger oncology organization today, we’ve increased our internal research and development, and we’re still very focused as the third pillar on inflammation.
