Gilead’s HIV Business is Surging, but is the Company Too Dependent on One Franchise?

Gilead Sciences, Inc. (GILD) reported solid fiscal Q2 2026 results, with total revenue increasing 10% year-over-year to around $7.8 billion. The growth was largely attributed to the expanding HIV franchise, including products such as Biktarvy and the recently launched Yeztugo. However, HIV products accounted for nearly three-quarters of the company's total quarterly product sales, prompting questions about the company's over-reliance on this single franchise.

Sales of HIV products like Trodelvy® (sacituzumab govitecan-hziy) and Livdelzi® (seladelpar) rose 12% to $5.7 billion in Q2 2026, driven by higher average realized prices and demand. Descovy's sales grew by 48% to $967 million, while Biktarvy increased by 7% to $3.8 billion. These figures demonstrate the robustness of Gilead's established HIV business.

Meanwhile, the recently introduced Yeztugo generated $232 million in the quarter, marking a significant jump from $15 million in the prior-year period. The twice-yearly dosing of Yeztugo could potentially broaden Gilead's prevention business. Nonetheless, it is still premature to predict the treatment's long-term market share.

The liver-disease portfolio also contributed to growth, with sales increasing 10% to $877 million in Q2 2026 compared to the previous year. The rise was mainly driven by higher demand for Livdelzi, chronic hepatitis B virus products, and Hepcludex. Despite HIV products generating a significant portion of the company's total sales, the company's liver disease business shows potential for growth, albeit on a smaller scale.

While HIV growth is currently a boon for Gilead, the concentration of revenue in this single franchise presents long-term risks if competition, pricing pressures, or changes in prevention and treatment markets negatively impact the franchise.

Trodelvy experienced solid performance but cell-therapy sales declined by 14% to $417 million, reflecting ongoing competitive pressures. This indicates that Gilead's broader oncology strategy has yet to yield consistent portfolio-wide growth. The company also incurred substantial quarterly losses of $11.2 billion due to research and development expenses from acquisitions, including Arcellx, Tubulis, and Ouro Medicines.

Although these charges do not imply that Gilead's established products have become unprofitable, they highlight the steep price the company is paying to expand its growth outside of HIV, with the acquired assets still carrying clinical and commercial risks.

In terms of investor sentiment, hedge funds holding GILD stock increased from 71 in Q4 2025 to 77 in Q1 2026, indicating a moderate improvement in institutional outlook. However, this positive sentiment does not automatically translate into a definitive shift in confidence. Gilead's investment case has been bolstered by the growth of Biktarvy, the potential of Yeztugo, and the performance of Trodelvy and the liver-disease portfolio.

Management's guidance increase also reflects confidence in the company's underlying business. Despite these promising aspects, Gilead remains heavily dependent on HIV, and its efforts to diversify into oncology have yet to generate consistent commercial success. While the short-term outlook for GILD appears positive, its long-term performance may depend on the company's ability to develop another major franchise outside of HIV.