Company Overview
Gilead Sciences reported impressive Q3 2025 results in early November that beat analyst expectations across the board, with revenue growing 7% year-over-year to $7.5 billion (versus $7 billion expected) and non-GAAP EPS hitting $2.02 compared to the consensus of just $1.51. More importantly, the company raised its full-year product sales guidance to $27.8-$28.1 billion from the prior $27.1-$27.5 billion range, while also boosting adjusted profit guidance to $4.25-$4.45 per share from $3.60-$3.90 per share.
What makes Gilead particularly compelling right now is the convergence of multiple catalysts: the company’s flagship HIV drug Biktarvy – which generated $3.5 billion in Q3 sales (beating estimates by $140 million) – recently secured patent extension through April 2036 following settlements with generic manufacturers, a move analysts estimate adds $6-$12 per share in value. The FDA approval of Yeztugo (lenacapavir) as the world’s first twice-yearly HIV prevention option in mid-2025 represents a potential game-changer, with Gilead achieving 75% payer coverage and expecting full-year sales around $150 million. With HIV sales comprising $5.1 billion in Q3 (up 9% year-over-year) and the company raising full-year HIV revenue growth guidance to approximately 5% despite a $900 million headwind from Medicare Part D reform, Gilead’s core franchise demonstrates remarkable resilience while positioning for long-term growth through its innovative long-acting portfolio.
Key Technical and Fundamental Drivers
Q3 Beat & Raised Guidance → $2.02 EPS vs $1.51 Expected Gilead crushed Q3 estimates with $7.5 billion revenue (vs $7 billion expected) and $2.02 EPS (vs $1.51), raising full-year product sales guidance to $27.8-$28.1 billion and profit guidance to $4.25-$4.45 per share.
Biktarvy Patent Extension → Secured Through 2036 Generic settlements extended Biktarvy patent protection to April 2036 (vs prior December 2033 expiration), with analysts estimating this adds $6-$12 per share in value for the $3.5 billion quarterly revenue blockbuster.
Yeztugo Launch Success → $150M Full-Year Expected The world’s first twice-yearly HIV prevention option achieved 75% payer coverage, with year-to-date sales of $54 million and full-year expectations around $150 million as awareness and patient uptake accelerate into 2026.
HIV Franchise Momentum → 9% Q3 Growth HIV sales surged 9% in Q3 to $5.1 billion, with Biktarvy up 13% to $3.5 billion and Descovy jumping 20% to $586 million, demonstrating continued market leadership despite generic and biosimilar competition.
Analyst Price Target Upgrades → $135 Consensus Major firms including Citigroup and Cantor Fitzgerald raised price targets to $135 per share (13% upside from current levels) following strong clinical data and strategic patent settlements.
Market Takeaway
Gilead Sciences represents one of the most underappreciated turnaround stories in biotech, with the company demonstrating that its HIV franchise – often dismissed by skeptics as a mature, slow-growth business – continues to deliver robust expansion while the innovative long-acting portfolio positions it for sustained growth through the 2030s. The Biktarvy patent extension through 2036 alone provides over a decade of revenue visibility for a drug generating $14 billion annually, while the Yeztugo launch opens an entirely new market in HIV prevention that analysts project could dramatically expand the addressable patient population.
The 78.5% gross margin and $10.3 billion in free cash flow generated in 2024 (up 39% year-over-year) underscore Gilead’s financial fortress, enabling aggressive shareholder returns including $1.4 billion returned in Q3 alone through dividends and share buybacks. With the stock trading at approximately 23x forward earnings despite 22% year-over-year non-GAAP EPS growth in Q3 and raised full-year guidance, Gilead appears significantly undervalued relative to both its growth profile and the broader biotech sector.
The company’s strategic focus on extending HIV leadership through twice-yearly dosing options like Yeztugo, combined with the diversified oncology portfolio (Trodelvy growing 17% year-over-year) and liver disease franchise (Livdelzi achieving European marketing approval), provides multiple growth vectors beyond the core HIV business. Management’s commentary about being “on track” to maintain best-in-class positioning in HIV while potentially “revitalizing growth in the PrEP market” with Yeztugo suggests the company sees significant upside ahead. With analysts at major firms raising price targets to $135 (representing 13% upside) following the strong Q3 results and patent extensions, and the stock having climbed nearly 60% over the past year while still trading at reasonable multiples, Gilead offers a compelling combination of growth, income (current yield around 3.5%), and downside protection for investors seeking exposure to the HIV and oncology markets.