Gilead Sciences, Inc. (NASDAQ:GILD) produced an unusual earnings report in fiscal Q2 2026. Its commercial portfolio delivered double-digit growth, and yet the company posted one of the largest quarterly losses in its recent history. So where did the disconnect come from? It was created by more than $11 billion in acquired research and development expenses rather than a collapse in product demand.
That distinction is significant for investors because Gilead’s (NASDAQ:GILD) existing business appears healthy enough to finance expansion, but management has committed substantial capital to therapies whose commercial value remains unproven at present. Let’s dive deeper into it.
Bull Case
Product sales excluding Veklury increased 10% to $7.6 billion, which showed that Gilead’s (NASDAQ:GILD) growth was not entirely dependent on its shrinking COVID-19 business. But HIV remained the foundation for the quarter, with sales rising 12% to $5.7 billion. Biktarvy revenue increased 7% to $3.8 billion, and Descovy sales climbed 48% to $967 million. Yeztugo, which is Gilead’s twice-yearly injectable HIV-prevention medicine, also contributed $232 million. The launch gives Gilead (NASDAQ:GILD) another potential growth driver within a therapeutic area where it already possesses significant commercial scale.
The more encouraging development was the progress outside HIV. Liver-disease revenue increased 10% to $877 million, supported by Livdelzi, whose sales more than doubled from $78 million to $167 million. Trodelvy revenue rose 26% to $457 million following higher demand for the breast-cancer treatment. This momentum led management to raise the lower end of its 2026 product-sales guidance. Gilead (NASDAQ:GILD) now expects $30.1–$30.4 billion, compared with $30.0–$30.4 billion previously. Guidance for product sales excluding Veklury increased more meaningfully, from $29.4–$29.8 billion to $29.8–$30.1 billion.
The acquisitions also have strategic logic for the company. Buying Arcellx gave Gilead (NASDAQ:GILD) full control of anito-cel, an investigational CAR-T treatment for multiple myeloma, while eliminating future profit-sharing, milestone, and royalty obligations. The FDA has accepted its application, and a target decision date has been set for December 23, 2026. Gilead (NASDAQ:GILD) expects the transaction to become accretive in 2028, subject to approval. In addition, Tubulis adds next-generation antibody-drug conjugate technology, including GS-8824, while Ouro Medicines brings gamgertamig, an investigational treatment for autoimmune diseases. Together, the deals could broaden Gilead (NASDAQ:GILD) beyond HIV and deepen its exposure to oncology and inflammation.
Bear Case
While the expansion opens new avenues for the company, the price of that expansion is substantial. Gilead (NASDAQ:GILD) recorded $11.2 billion in acquired in-process R&D expenses, including $7 billion related to Arcellx, $3.1 billion for Tubulis, and $1 billion for Ouro Medicines, net of the Lakefront collaboration. Those charges contributed to a GAAP loss of $8.45 per share and a non-GAAP loss of $6.75 per share. Cash, cash equivalents, and marketable debt securities fell from $10.6 billion at the end of 2025 to $3.2 billion in June. Gilead (NASDAQ:GILD) recorded $11.3 billion of acquisition-related cash outflows during the first half and raised $4.1 billion through debt financing.
The company is therefore taking on financial risk before the acquired programs generate commercial revenue. Anito-cel is closest to a possible launch, but its contribution still depends on regulatory approval and successful commercialization. The Tubulis and Ouro assets carry additional clinical-development risk. Gilead’s (NASDAQ:GILD) existing oncology record also remains mixed. Trodelvy is growing, but cell-therapy sales declined 14% to $417 million amid competitive pressure. Yescarta fell 12% to $346 million, while Tecartus declined 24% to $70 million. These figures demonstrate that promising technologies do not automatically translate into durable commercial growth.
Conclusion
Gilead’s (NASDAQ:GILD) core business is performing well enough to support a more ambitious pipeline strategy. HIV remains strong, while Yeztugo, Livdelzi, and Trodelvy provide credible sources of additional growth.
While the acquisitions could ultimately create a more diversified company, investors are being asked to accept significant clinical, integration, and balance-sheet risk before that outcome is visible. It is significant to note that Gilead (NASDAQ:GILD) has already paid much of the price, and the next test is whether anito-cel and the broader acquired pipeline can produce returns that justify it.
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Disclosure: None. This article is originally published at Insider Monkey.
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