Gilead Sciences, Inc. (NASDAQ:GILD) J.P. Morgan Annual Healthcare Conference January 9, 2023 1:30 PM ET
Company Participants
Daniel O’Day – Chairman and CEO
Johanna Mercier – Chief Commercial Officer
Merdad Parsey – Chief Medical Officer
Andrew Dickinson – CFO
Conference Call Participants
Chris Schott – JPMorgan
Chris Schott
Good morning, everybody. I’m Chris Schott from JPMorgan, and it’s my pleasure to be introducing Gilead today. From the company, we have a presentation from Dan O’Day, the company’s Chairman and CEO. And following that presentation, we’ll have a broader Q&A panel with the rest of the management team. So Dan, Happy New Year. Thanks for joining us, and over to you.
Daniel O’Day
Thank you, Chris. Good morning, everybody. Terrific to be with all of you today, and it’s really great to be back after, gosh, three years, right, since we were last here. And I’m really pleased to be with the team up here today. We’re going to be focusing on our work for 2023 and beyond. I want to start by thanking Chris and the organizers for the conference for getting us all together. And really, I want to say right up front today, after three years, we laid our strategy out about three years ago. I can say we’ve successfully transformed the company, and we want to talk to you a little bit about how we did that and what you can expect in the future.
As always, I want to remind you that our presentation will include forward-looking statements, and I refer you to our SEC documents for a full discussion of the risks and uncertainties associated with these statements.
So in a nutshell, this is what we would like you to take away from today’s presentation, the take-home message, so to speak. I mean the first one is that we very much believe that the transformation is on track that we achieved what we set out to do several years ago, and we have tangible evidence of that, an impact to that. We’re confident as a second point on this in the growth trend for HIV, and I’ll be speaking a little bit more about that. And we have very strong momentum in oncology with a world-leading cell of other cancer modalities across more than 20 indications.
So I’ll talk to you about how we’re going to accelerate this progress. But before we do that, let me start by recapping the journey that we have been on at Gilead Sciences together as a team. Our aim several years ago as we laid out our strategy was to create a diverse and sustainable business, paying heed to Gilead’s legacy in virology, only strengthening that, and I’ll talk about how I believe we’ve done that in HIV, COVID and beyond, but building through both M&A and internal R&D a world-class portfolio. And you can see that portfolio has increased double, but I would say what’s underneath that story is the quality of the portfolio that we have today and the potential of that portfolio.
I’d also say that we’re now a company with great colleagues on Board that can really consistently execute. And I think you saw that every quarter in 2022 on both the commercial and the clinical side. And I would say it’s been a holistic evolution. I mean, really taking the best of Gilead, and I’ll speak a bit about that, and adding to that. And that includes both working on our culture and decision-making, which I couldn’t be more pleased with where we’re at.
When we laid out the strategy and at the top of the slide, you see our 10-year ambitions. As a strategy, you don’t want to change your ambitions every few years. These are for 10 years and they remain consistent. They remain our true North Star as we think about prioritization and decision-making within the organization. The strategic priorities that you see on the other hand, below here, and this is a subset of them, have adjusted because initially, we had to build up the portfolio. And now as you can see, we’re firmly focused on the following 3 things that will also form the basis of my presentation here today: So that’s maximizing near-term revenue growth; that’s maximizing the impact of long-acting HIV therapies; and expanding and delivering on our oncology programs.
So let me start with the first one, which is maximizing our near-term revenue growth. The first lever of near-term revenue growth is clearly our HIV business. Biktarvy continues to be the treatment of choice in HIV treatment, it continues to grow. You can see the numbers up there. I think what belies our confidence overall in our oncology business that’s been built up over the past several years is a few things.
First of all, the pandemic impact affecting HIV is behind us now. Number two, and I’ll talk about this, our first long-acting medicine is now approved in the United States and Europe. And then the final thing is we have no — really, no patent expiry throughout the course of this next decade. And that was solidified with the TAF patent legislation that was — or litigation that was recently completed. So we see and expect an HIV revenue growth trend through 2030. The second slide on maximizing near-term revenue growth is really the oncology business at Gilead. And you’ll see here, it’s now at a $2 billion annual run rate and growing rapidly. Our oncology impact is very tangible. We have a clear leadership in cell therapy, and it’s still early days as we both introduce this technology and change standard of care in large B-cell lymphoma and in other diseases, particularly as we move up in lines of therapy.
So early days for that but very promising results, and I’ll get back to cell therapy in the presentation. But Trodelvy is also off to a very strong start and good success in its first indications in breast cancer, and we’ll talk more about the potential for Trodelvy as the presentation continues.
Gilead has and will continue to play a critical role in public health. And certainly, Veklury is a shining example of that. Now used in more than 12 million patients around the world, the vast majority actually in the developing world through our voluntary licensing, it continues to be the standard of care in the hospital setting and was the first drug approved, as you know, for COVID-19 in the pandemic. We’ve reinvested and continued to work on that world-leading antiviral expertise for our novel oral COVID medicine that has now started one Phase 3 trial outside the United States in high-risk patients. And a new disclosure at this meeting here is that we will be starting our standard risk study that will start in the United States in the first quarter of this year.
So more to come on that, but there is a significant medical need out there for patients in the non-hospitalized setting. And we believe that a novel oral COVID medicine that can help all patients could be a potential benefit for that, and we’ll continue to pursue that.
So the second area of our strategic priority focus really deals with leadership and long-acting HIV care. It’s hard to overemphasize the importance of Sunlenca as a medicine that could transform the HIV epidemic. We think it may be the strongest tool yet to help us end the epidemic. Just to put this into context, because I think this is really the best of Gilead really shining through. This is a result of our own research and development, first in-kind medicine, 16 years of innovation, more than 4,000 compounds screened and a truly unique molecule that was approved both in Europe and the United States, just before the holiday in the very late-stage HIV patients. But our plans for Sunlenca go far beyond the late-stage HIV patients. And you can see here, we have trials ongoing in both earlier stage treatment and also prevention.
I just want to talk a bit about prevention because I think as we think about ending the HIV epidemic, where in the most sophisticated developed world, only about one out of four people that could benefit from taking PrEP medicine or actually on a PrEP regimen. We believe that the advantage, if successful, in our late-stage clinical trials of a twice a year subcutaneous injection can transform the ability to protect people from ever getting the disease in the first place and really bend the arc of the HIV epidemic curve. This is true in both the developed world and very importantly, to Gilead’s focus on health equity in the developing world as well. So I’m really proud to be part of a company that has such a unique molecule. In treatment, of course, we need a partner molecule. And you know the extensive nature of our R&D has been focused on finding that partner molecule. You can see here a representation of that. There are some new disclosures here today. Since we’ve done our virology deep dive to this audience, some molecules have progressed, and those are identified with the blue star and some new molecules have entered in, which are recognized with the red star. So we’ll continue to pursue these programs in treatment regimens that we believe people that need prevention and also patients that have HIV are looking for these types of long-actings, either weekly orals or less frequent subcutaneous injections.
So you can see this, and you can see on the right-hand side, we leave today an oral. With these programs, we intend to both lead today and oral, but also with long-actings as we continue to pursue these programs.
And now the third area of focus that I want to speak about today is our cancer medicine portfolio. It’s broad, it’s diverse. You can see here it goes across almost every major tumor type, and we have a range of partnerships that have been thoughtfully curated to help us put a holistic approach to our oncology medicine approach. And what I want to do is just break this down a little bit, highlighting some of the key medicines. But just to point out that we have today 14 late-stage trials ongoing across our oncology portfolio and more than 5 medicines in those late-stage alone and in combination. But let me start with the first one, which is Trodelvy. It’s, again, hard to overemphasize the potential here because of the expression of TROP2 across so many tumor types. We have an extensive development program, as you can see on this slide, and obviously, already supporting patients in breast cancer.
When we dig into that a little bit deeper, starting with breast cancer, 90% of Trodelvy’s current business is in breast cancer, starting with triple-negative breast cancer. We’re the first and only approved ADC with overall survival benefit, and we’ve also shown now overall survival benefit in hormone receptor positive/HER2 negative, which is the largest form of breast cancer.
But you can see our strategy, which is to start with later-stage patients with Trodelvy and then move up with a comprehensive development program into earlier lines of treatment to have an even greater impact on patients’ lives. This is a drill down on the current filing that we have in with the FDA, which is hormone receptor positive/HER2 negative. You could see the potential treatment pathway here. It’s pending approval. The PDUFA date is about a month away, and it could be the only ADC in HR+/HER2- breast cancer that works in patients regardless of HER2 status.
You can also see that with the very strong results that we saw in very late-stage recalcitrant patients, we have a lot of confidence in moving ups and lines of therapy to have that effect be even larger, and we expect first patient enrollment in the ASCENT-07 trial in 2023.
Trodelvy is also a key component of our lung cancer strategy. And you can see that represented here in both the first-line Stage IV lung cancer and in the second-line Stage IV lung cancers, where we have programs ongoing already. But of course, our approach in lung cancer goes beyond Trodelvy. It goes to the many medicines that you see here, both within Gilead and partnered molecules. And we know in lung cancer, which is such an intractable large cancer type that has a huge need that we need to also look at combinations. And we’re doing those combination approaches within Gilead with a variety of different novel mechanisms and also with partner companies that are leaders in the field in lung already, and that you see represented here as well.
I’d be remiss not to point out the very exciting Phase 2 data that was presented at ASCO virtual event in December on TIGIT, which is a compound that we are in partnership with Arcus. We’re very encouraged by the separation of these curves. It’s the largest body of evidence on TIGIT that has been communicated so far to date. It gives us great encouragement and validation as we continue to accrue patients into our Phase 3 trials and the consistency that we’ve seen on safety and efficacy are very encouraging to us and yet another important potential medicine in combination with other immunotherapy agents and potentially other medicines within our portfolio to move the standard of care in lung cancer.
Let me move now to another medicine that has true cross-tumor potential, and that’s magrolimab. You can see here the number of cancer types that we are exploring this novel anti-CD47 mechanism in we’re in a leadership position with our hematologic malignancies as well, but I want to give you an understanding of the breadth of these programs that could be used alone and in combination for magrolimab.
I wanted to provide a brief update on magrolimab ongoing Phase 3 programs, the so-called ENHANCE trials across the disease states that you see here and give you a bit of an update that we’ve had the IDMC be exposed to the data, obviously, as they do from time to time throughout the course of the study. And they recommended that the study continue as designed and as planned. We will pursue an overall survival endpoint for this from a regulatory perspective, and we remain blinded to these results. I remind you that this is an event-driven study in ENHANCE MDS and that the next interim analysis, we expect to be able to give you an update on in some form in the second half of this year. We continue to have confidence in magrolimab and want to make sure we let the study run its course to get the true benefit that could come out of this trial for patients, and we will be updating you more in the second half of this year, but continue on with our total clinical trial program with magrolimab.
In cell therapy, I couldn’t be more impressed by Kite and the team and their market leadership and patient reach. We also have two therapies here and five different indications, tremendous growth potential now as we see more and more community physicians referring patients into authorized treatment centers in both the third-line setting and our early enter into the second-line setting. We are expanding in lines of therapy and we have studies in earlier lines as you see here, and also in more geographies. We also have two transactions that are pending that we announced just before the holidays. One that is a partnership that provides a potential BCMA asset on our proven manufacturing and quality base for cell therapy, with Arcellx and another one community that has novel advances in different types of solid tumors and also potential process improvements as we continue to invest in our leadership position in cell therapy, which we will continue to do.
We’re in a very good position as we look at our M&A strategy for the future because of the richness of our portfolio and the level of investment that we need to continue to do to realize the potential in the portfolio, we can be selective about M&A given the M&A that we’ve done over the past several years, and we will be. But of course, we’ll continue to look at that in our business. And our capital allocation strategy will remain the same, which is, first and foremost, to invest in the promising pipeline for the benefit of patients and the medicines that are newly launched and established for our patient communities around the world. Secondly, look at M&A and partnerships that will complement with the strategy that I mentioned before. We’ll continue to look to return money to shareholders with an attractive dividend growth policy. And then our fourth but certainly not final capital allocation priority is to repurchase shares to both offset dilution and to be opportunistic. And again, we’re disclosing here today that in total, in 2022, we repurchased $1.4 billion of share including almost $800 million in the fourth quarter, which is opportunistic share purchase, which belies the value we see and the growth of our business as we move forward.
So to summarize, and I appreciate your intention and to turn it over to the team to have you hear from them as well. We just want to say that we’re very proud to be a part of Gilead Sciences, honoring the legacy, building on a diverse and sustainable portfolio, we’re in a very different position today than we were a few years ago. What you can expect to see from us in the future is even faster adoption of our portfolio and even greater impact for patients. And I just want to thank the colleagues at Gilead that I get to work with every day who are tremendous inspirations for me.
And with that, I’m going to invite Chris back up to get us into some Q&A with the team here. Thank you all.
Question-and-Answer Session
Q – Chris Schott
Excellent. So maybe to kick off the Q&A session here. I thought I might start just on the HIV business. I think last year, you gave at this conference, I think, some initial kind of guidance about a stable to growing revenue base through 2030. And since then, we’ve had the TAF settlements, but at the same time, we had IRA move forward. So maybe as you sit here today, how are you feeling about that outlook for the existing business?
Johanna Mercier
Sure. Thanks, Chris. It’s Johanna. We feel very confident actually in our growth trend 2030. We believe it’s going to be a positive CAGR through 2030. The drivers of that have to do with our oral standard of care with Biktarvy in HIV treatment as well, of course, as our long actings, both in treatment and prevention that Dan mentioned a little bit earlier. Those are the two major pieces from a growth standpoint. I think the other thing that just opens it all up is the fact that there is no patent exclusivity issue in the next decade or so.
And because of that TAF patent legislation brings us out to 2031, 2032. That also was a nice lift as well. But we were already before the TAF patent we were already suggesting that growth in the next decade or so. The IRA, obviously, the TAF and the IRA are going to kind of compete a little bit from a positive and negative. But we think the IRA with what we know today, although it’s still early days, we do believe that this is going to be manageable. And that’s part of the planning that we’ve put forth with a positive CAGR through 2030.
Chris Schott
Great. And then the HIV category, obviously, is coming up very strong in 2022, are we at a fully normalized market post COVID at this point? Or is there still growth as that market just kind of recovers as we exit the pandemic?
Johanna Mercier
Yes. So we’ve seen — the last five quarters, we’ve seen consecutive growth in the market. So we’re back at the 2% to 3% range, which is pretty much normalized to your point. So we would assume to see that going forward despite some of the different surges that we’ve seen with COVID. But we do think that’s normalized. On the treatment — that’s on the treatment front.
On the prevention side, we’ve seen a really nice acceleration of that. But that market has picked back up much faster in prevention than it has in treatment. And you’re looking at about 19% to 20% growth there. And we believe with new long-acting agents, like Sunlenca in the future in prevention, that will also continue to increase that growth. Because, as Dan mentioned, only one in four that could benefit from a medicine in prevention, only today is using that. And so with new optionalities in this market, I think we’re really going to see an expanded growth in the back half of this decade.
Chris Schott
Okay. Great. And then on — maybe just staying on the treatment side. On Biktarvy, you saw, obviously, very strong market share gains. How do we think about maybe 2023 and beyond, how much more room is there to go as we think about the share potential of that drug?
Johanna Mercier
Sure. So Biktarvy is at a 45% market share in the U.S. We have been growing on a year-on-year basis, about 4%, so about 1% or a little less than 1% per quarter-over-quarter. And we do believe that there’s still an opportunity for growth with Biktarvy. We believe that because of its profile and what it offers for this patient population, we do believe that there is still room for growth in ’23 and beyond in the oral market. And obviously, as we expand, we also do believe that the long-acting treatments will also take on a different proportion as well.
Chris Schott
On maybe the PrEP market for a second, we’ve had a competitor launch I guess, been in the market for about a year now or so. Just anything you’ve learned from that rollout as we think about lenacapavir and what that could do over time?
Johanna Mercier
Yes. I think the learnings there have a lot to do with the reimbursement and physician habits, right? Most physicians that prescribe in HIV are not used to anything injectables or Part B kind of area. And so that’s going to be learning. And so therefore, with Sunlenca, we’re being very clear in the approach and the education that needs to happen prior to, so that people understand how to use it and how to make sure patients have access to it. So the access piece of it is probably the biggest learning.
Chris Schott
Okay. Okay. Great. Maybe as I think in the slides you highlighted kind of a range of treatment combinations you’re looking at with lenacapavir. Can you just at this point talk about what you’re most excited about or most focused on as we think of those kind of — it seems like a growing list of combinations?
Merdad Parsey
Sure. Yes, hi. Merdad Parsey. We’ve done a great job. And I think Dan really alluded to the research group and the expertise that, that team has in terms of the medicinal chemistry and the discovery around developing new molecules and that’s where lenacapavir came from. And that team has really redoubled their efforts to look for a different class of medication that will bring a similar profile.
As you saw on the list, we have a number of options now. And our strategy has been to move as many forward as possible in parallel with the goal of identifying that the one with the best properties to allow us to get into an ideal position with a treatment regimen that could be long acting that could really match Sunlenca’s duration of activity. So ideally, if we can find something that we can dose once every six months, for example, it would be the ideal combination, again, in treatment. Important to remember that for prevention, we are in the PURPOSE trials and those studies should read out and for prevention I think we’re set for — with lenacapavir.
Chris Schott
I guess on the treatment combinations, when do you think you’ll be in a position kind of identify those kind of lead assets? Is that something we can think about this year or next? Or is it a longer-term thought?
Merdad Parsey
I think over the next couple of years. So some are in Phase 1, some are going to be in Phase 1. And really, because the mechanism of action is understood because we understand sort of all the machinations if you will. The key questions will be tolerability and pharmacokinetic profile. So — and we can figure that out usually fairly early on in the Phase 1 study. So we don’t need to wait till the end of Phase 3 to really be able to pick something to be able to move forward. So I think over the next couple of years, we’ll have a lot better feel for which one really hits the mark for us.
Chris Schott
Okay. Great. Maybe pivoting over to oncology. I guess maybe first for Trodelvy in breast cancer. It was obviously a big year of news flow last year, both yourself and competitors. Can you maybe just help put us some context of how you see that product positioned as we kind of digest all the data we saw last year.
Daniel O’Day
You want to start?
Johanna Mercier
Sure. So yes, so we have been approved in the marketplace with second line metastatic triple-negative breast cancer. And I think that position is — continues to stay strong despite new competitive data. And I think that has a lot to do with the overall survival that we’ve shown in such a broad — in this patient population. And to this day, we are the preferred agent in second line with Trodelvy. I think the data you’re referring to is also in a broader breast cancer patient population with HR positive/HER2 low negative. And in that population as well, we’ve shown in later lines of therapy overall survival data as well.
And I think we’re expecting PDUFA within the next month or so. And we’re really excited because these are women that really don’t have any other options, so latent therapies. And to show overall survival in this very late stage, I think, is very exciting, to — not only for these women, but also for the clinical trials that we have planned to move up lines of therapy as well. So I think we’re well positioned to really make a difference for patients.
Chris Schott
When I think about competitive landscape within HER2, how do you think about that? How this is going to practically play out in the market?
Johanna Mercier
Yes. I think in HER2 trial is — and you could speak to this better than I can, Merdad. But in HER2 trial is earlier lines of therapy. So I think you’re comparing apples and oranges a little bit. But having said that, I also think it’s important to understand the data in the patient populations that were studied. And when you think about the IHC status and what that looks like, in triple-negative breast cancer, actually IHC-0 is actually a much higher proportion than it is in in HR positive, it’s kind of the flip. And so they’re still, however, an HR positive, about 35% of the patients that are IHC-0, which Trodelvy is still today the only one that has proven efficacy and overall survival in this patient population.
So we do believe, depending on the patient profile, I think physicians will have to make a choice as to what better suits that patient with their profile and the different dynamics of the tumor.
Chris Schott
Okay. Great. And maybe sticking on Trodelvy. As I think about Trodelvy in lung, can you just give us some perspective there as we is probably most relevant when we think about the competitive landscape there as well. So talk a bit about the studies you’ve got run. How you’re thinking about that landscape playing out as well?
Merdad Parsey
Sure. And I think that actually speaks partly to your first — your earlier question around other molecules in breast cancer, I think the thing to remember is Trodelvy is — because we have a different target we’re going to have a very different profile in terms of the tumor types that we’re going to treat and the lines of therapy. And lung cancer is a great example of that, where we believe that we’ll be able to move into lung cancer, as you’ve seen with our Phase 3 studies and really bring a new option to patients with lung cancer targeting TROP2. It’s, as with anything these days, very competitive. And I think our approach really is loot at the broader portfolio, as we’ve seen, to look for opportunities to not only bring Trodelvy to lung cancer but also our anti-TIGIT antibody and other approaches, so that we can look at combinations that could really move the needle from what our — I think a lot of people would say, well, IO is doing great for lung cancer. But I think it’s really important to remember that the median survival and the number of people who respond is still pretty poor. And we have a lot of opportunity to do better for patients. And I think adding in a TROP2 antibody, potentially adding a TIGIT on top of that, and other options down the road will really give us that — answer those questions for us. And that is really a big part of our portfolio strategy is looking at those intra-portfolio combinations.
Chris Schott
You mentioned TIGIT. I know we just came off some data a few weeks ago. It seems like it’s still an incredibly controversial category for the community for better or for worse. So can you maybe just your takeaways from that data and what gives you confidence that kind of the signal we saw in Phase 2 is going to be able to show that kind of differentiation versus KEYTRUDA as we think of the Phase 3?
Merdad Parsey
Yes. I think probably the first thing I would say is it’s very important to remember what that study is designed to show. And that study is designed to show whether TIGIT adds efficacy on top of a PD-1 inhibitor. And Dan showed the curves. I don’t think it’s ambiguous that TIGIT is adding to a PD-1 inhibitor at that point. We know that TIGIT alone doesn’t really have a lot of activity and really needs a PD-1 to bring that additional activity. So when you think about it in that context, the purpose of that trial, I think, along with all the other data that are there, it seems pretty clear that TIGIT is going to bring something.
Now the question then becomes how broad does it become? How deep is it? How does it do when you look at apples-to-apples comparison? And I think those are the studies that have to be done now. And you’re seeing us start to take on those trials where we’d be looking at those combinations in those frontline — in the frontline setting where we’ll be looking at randomized data sets and really be able to establish that. But I don’t think there should be a lingering question as to whether TIGIT adds something to PD-1 inhibition. I think that — now it’s a matter of how much do we add what is the overall survival benefit that we’re going to see over time, and those are going to require the Phase 3 studies to read out.
Chris Schott
And maybe on that same lane, can you just talk about your confidence that the PD-1 you’re using is kind of able to show equivalent or efficacy to KEYTRUDA?
Merdad Parsey
We have a lot of experience with zimberelimab. It’s not limited to this one study. We — the zimberelimab performance of in this trial is comparable and what we would expect. If you saw the ASCO plenary you heard the discussant speak to that, and I think, very eloquently speak to what we would expect given very different patient populations and study design. So — and we have data in multiple tumor types and multiple trials that show that zimberelimab is performing exactly how we would expect it to perform. So I think doing cross-trial comparisons is always a risky business, and I would encourage people to not do that.
Chris Schott
Okay. Fair enough. Moving over to the CAR-T business. Just elaborate a little bit on Yescarta and DLBCL and kind of the uptake and opportunities that you see there?
Johanna Mercier
Sure. So we’re very pleased with the growth that we’ve seen, especially the impact, obviously, on patients in the onetime treatment for a potentially curative effect. Our growth is actually coming from multiple areas and really is just starting. If you look at the — as Dan discussed, the number of products, the number of indications, those indications are expanding globally. So we have expansion into new geographies indications, reimbursement coming on board. And especially as you look at second line, reimbursement coming on board in Europe now month-after-month, we’ll continue that growth.
Also, the number of ATCs are growing. We have over 320 globally now. We just announced the Daiichi Sankyo deal with Japan is the second largest market in the world. So we’re taking — we now have the marketing authorization and full rights back starting this year, and we’ll start actually producing and manufacturing for Japan early this year. So lots of expansion and growth opportunities just in DLBCL alone.
Chris Schott
Can I ask about just the competitive environment? I know some of your peers have been challenged with capacity, but to the extent those get addressed, whether in ’23 or however long that takes, how do you think about that playing out when there’s less multiple companies that have full capacity available?
Merdad Parsey
So we keep saying that when, right? It’s not easy to do cell therapy. It’s very manual in nature. We have cell therapy researchers. We tend to call them cell therapy research labs, not manufacturing sites because these are really humans doing all of the work. And now have 3 facilities that are full-fledged commercially operational. We have the viral vector site and Oceanside, which is currently producing RVV for commercial supply and LVV for clinical supply, we’re also producing and we’ll produce that commercially as we expand into multiple myeloma. So you — as you look at the manufacturer, I can’t speak for other companies, but I think that is the ticket to entry.
The one thing, though, I’d like to point out is, it’s not just about manufacturing. It’s a supply chain, it’s the end-to-end teamwork that has to happen with a manufacturing supply chain and the commercial feet on the street that has to happen in that ATC to make sure that, that patient from apheresis to manufacturing, back to delivery, which we do at industry best at 16 days is really an intricate process. And so I think manufacturing is one thing to get up to scale. But now we have the know-how for multiple years now being able to expand our development, commercialization, whole process end to end.
Chris Schott
Right. Great. Capital deployment, I know the company made a number of large acquisitions. I think the messaging seems to be that it’s more tuck-ins now. Is that — should we think about the strategy to be kind of committed to when we think about going forward, it’s going to be more maybe what we saw in 2022 of these kind of smaller partnerships or smaller acquisitions?
Andrew Dickinson
Yes. Thanks, Chris. Hi, everyone. I’m Andy Dickinson. I’m happy to take the question. The answer is yes. I mean what you saw in 2022 is likely what you’re going to see in 2023. And the reason is, Dan touched on this in the presentation that we have a great portfolio today. It’s strong, it’s broad. We have a lot to digest and to work on. And we really like the growth profile. You’ve seen an incredibly strong growth profile in our base business. This year, we are very confident in the growth profile of the business going forward, both relative to where Gilead was as well as relative to the broader biopharmaceutical sector. So we don’t need to do the same big deals that we did historically. That doesn’t mean we’re not going to do things. So the number of deals that we did recently with Kite, community and Arcellx the MiroBio deal, the Dragonfly deal, that gives you a good sense of the types of transactions that we’re going to focus on. So we have a lot of flexibility. We generate a ton of cash flow, as you know. We’re going to be reinvesting that cash flow in the business, as Dan suggested, but you should not expect us to do the large Kite, Immunomedics type deals that we did to build out the core of our oncology franchise over the last 5 years.
Chris Schott
And as I then think about the cash the company is generating, if it is smaller tuck-in deals, I guess where does share repo fit into the mix? Is that something we could — as you further delever, could we be thinking about that as a bigger component of the capital return every year?
Andrew Dickinson
Yes. And it’s still our fourth priority when you look at our — how we think about capital structure and deploying our capital. So first and foremost, we want to make sure that we have an incredibly strong internal portfolio, external portfolio and that we’re committed to maintaining and growing the dividend over time. Then, we’re going to look at opportunistically at other things, including share repurchases. And you saw that in the fourth quarter. As Dan said, we had some excess cash relative to where we wanted to end the year. And you should see more of that going forward, not necessarily the share repurchase, it’s just the optionality given the cash flow that we’re building and our cash position over time. We have a lot of optionality, both with respect to share repurchases is also with respect to debt and whether we refinance debt or whether we just pay the debt off going forward.
Chris Schott
Also just when I think about OpEx and longer-term margins, you’ve got now an HIV business that’s growing, you’ve got an oncology portfolio that’s growing nicely over time. I guess how much can you leverage your existing infrastructure and have some of that top line growth kind of trend to margin expansion dropped to the bottom line? Or do we need to think about still increases in R&D or SG&A to support some of the growth initiatives?
Andrew Dickinson
Yes. I mean, it’s a great question and one that I would break into two pieces. Well, first of all, we still have incredibly strong margins, as you know. I think historically, we underinvested in R&D, in particular, now have SG&A investment in R&D that is on par with the rest of the industry. So you’ve seen a significant increase over the last three or four years. It was absolutely necessary to developing and building a company that is sustainable and will reach the growth targets that we have. We are kind of at the final stage of that is the way I would describe it, especially in Merdad’s development organization and Johanna’s organization, prior to a lung launch, so assuming that we have positive data in launching lung. We will build more on the SG&A side. I think Kite is the same thing.
So we still have a couple of years of additional investment ahead of us. There’s a lot of leverage in the model. We are a very small company relative to our competitors. So to your question, over the long run, absolutely, you should see a lot of that top line growth giving very significant growth in the bottom line over the next decade and beyond. So we love the structure and kind of what the setup is from here, both for top line growth as well as EPS growth.
Chris Schott
Great. And maybe just the last one minute or so here. Just everybody just kind of as we think about 2023, any kind of pushes and pulls you’d highlight that we should kind of keep in mind as we think about the setup. I know you’ll be giving guidance in a few weeks, but any color you can provide on that front?
Daniel O’Day
You want me to take that?
Andrew Dickinson
Sure.
Daniel O’Day
Look, obviously, we’ll be giving guidance shortly. I just want to compliment the team. I think at the end of the day, we’ve got tremendous potential, I think, ahead of us. We’re just at the beginning really venturing that whole oncology space for the $2 billion run rate. And you heard from Christi and you heard from Johanna about that potential. We’ve got lots of readouts that are going to occur over the next couple of years, some in different phases, some earlier phase, some later phase. And I think what you can expect from Gilead is now consistent execution. We were growing into oncology, I would say, last year and the year before. And I think we all feel like we have an organization that can continue to execute. And so we’ll be giving you at the year-end results presentation, obviously, guidance for the next year, but also the key milestones clinically that you can expect from us. So that will be coming in a few weeks’ time.
Chris Schott
Great. I think we’re out of time. Thank you so much for the comments today. I appreciate it.
Daniel O’Day
Thank you.
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