Gilead Sciences, Inc. (NASDAQ:GILD) delivered its strongest commercial momentum in several years during fiscal Q2 2026, with growth extending across HIV, oncology, and liver disease. Total revenue increased 10% year over year to approximately $7.8 billion, while product sales rose 8% to $7.6 billion.
Yet, the income statement tells a considerably less flattering story. Gilead (NASDAQ:GILD) reported a substantial quarterly loss after recording more than $11 billion in acquired research and development expenses. Investors may look at the earnings as a strengthening commercial business, but not without an expensive attempt to build its next generation of growth.
Bull Case
Gilead’s (NASDAQ:GILD) underlying business performed strongly during the quarter. Product sales excluding Veklury increased 10% to $7.6 billion, demonstrating that growth was driven by the company’s core portfolio rather than its declining COVID-19 treatment. HIV remained the principal contributor, with sales rising 12% to $5.7 billion. Biktarvy revenue increased 7% to $3.8 billion, while Descovy sales climbed 48% to $967 million. Yeztugo, Gilead’s (NASDAQ:GILD) twice-yearly injectable HIV-prevention medicine, generated $232 million as its launch continued to gain traction.
It is significant to note that growth in the quarter was not limited to HIV. Liver-disease sales increased 10% to $877 million, supported primarily by higher demand for Livdelzi and treatments for chronic hepatitis B and hepatitis delta. Livdelzi alone generated $167 million, more than doubling year over year.
Trodelvy also strengthened Gilead’s (NASDAQ:GILD) oncology case. Driven by higher demand, sales of the breast-cancer treatment increased 26% to $457 million. Although oncology remains much smaller than HIV, Trodelvy’s growth provides evidence that Gilead (NASDAQ:GILD) is developing another meaningful commercial franchise. Management responded to the quarter by raising the lower end of its 2026 product-sales guidance. The company now expects 30.1–30.4 billion, compared with 30.0–30.4 billion previously. It also increased its product-sales forecast excluding Veklury to 29.8–30.1 billion, up from 29.4–29.8 billion.
Bear Case
The most visible weakness for the company in the quarter was profitability, as Gilead (NASDAQ:GILD) reported a GAAP loss of $8.45 per share and a non-GAAP loss of $6.75 per share, compared with profits of $1.56 and $2.01, respectively, in the prior year period. These losses primarily reflected a $9.08-per-share impact from acquired in-process research and development expenses and related taxes. Gilead (NASDAQ:GILD) recorded $11.2 billion of acquired IPR&D expenses, principally associated with its acquisitions of Arcellx, Tubulis, and Ouro Medicines.
These transactions are intended to broaden Gilead’s (NASDAQ:GILD) pipeline across oncology and inflammatory diseases, but the company has committed substantial capital before the acquired programs have produced meaningful commercial revenue. Their ultimate value will depend on successful clinical trials, regulatory approvals, and product launches. Furthermore, the existing diversification efforts also remain uneven. Cell-therapy revenue declined 14% to $417 million amid continuing competitive pressure. Yescarta sales fell 12% to $346 million, while Tecartus declined 24% to $70 million. Veklury revenue also dropped 81% to $23 million, leading Gilead (NASDAQ:GILD) to reduce its full-year Veklury forecast from approximately $600 million to $300 million.
Conclusion
Gilead’s (NASDAQ:GILD) fiscal Q2 results show that its commercial business is performing well. HIV continues to expand, while Trodelvy and Livdelzi are developing into additional growth drivers, and higher core-product guidance further supports the bullish case.
However, investors must separate operational momentum from reported profitability. Gilead’s (NASDAQ:GILD) acquisitions could reduce its dependence on HIV and strengthen its long-term pipeline, but their enormous upfront cost introduces substantial clinical and execution risk. The quarter, therefore, strengthens confidence in Gilead’s (NASDAQ:GILD) existing products while leaving the return on its recent dealmaking unresolved.
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Disclosure: None. This article is originally published at Insider Monkey.
