Gilead’s Revenue Is Accelerating, But are its Acquisitions Worth the Cost?

Gilead Sciences reported a solid quarter in fiscal Q2 2026, with total revenue rising 10% to approximately $7.8 billion. Product sales climbed 8% to $7.6 billion, driven by strong performance in HIV, oncology, and liver disease treatments. However, the company's income statement paints a less favorable picture, as Gilead disclosed a substantial quarterly loss due to acquired R&D expenses.

Investors may view the earnings as a sign of a growing commercial business, but the high cost of acquisitions has raised concerns. Product sales excluding Veklury, the company's COVID-19 treatment, grew 10% to $7.6 billion, indicating that the company's core portfolio is the primary driver of growth. HIV remained the top contributor, with sales increasing 12% to $5.7 billion, while Biktarvy and Descovy saw growth of 7% and 48%, respectively.

Gilead's twice-yearly injectable HIV-prevention medicine, Yeztugo, generated $232 million, and Livdelzi's sales increased 10%, supported by higher demand. Oncology sales also saw a boost, with Trodelvy sales rising 26% to $457 million. Despite the revenue growth, Gilead reported a GAAP loss of $8.45 per share and a non-GAAP loss of $6.75 per share, primarily due to $9.08-per-share impact from acquired in-process R&D expenses and related taxes.

The company spent $11.2 billion on acquired IPR&D expenses, primarily related to its acquisitions of Arcellx, Tubulis, and Ouro Medicines. While these transactions aim to expand Gilead's pipeline across oncology and inflammatory diseases, their ultimate value depends on successful clinical trials, regulatory approvals, and product launches.

The company's ongoing diversification efforts have uneven results, with cell-therapy revenue declining 14% to $417 million and revenue from Yescarta and Tecartus falling 12% and 24%, respectively. Veklury revenue dropped 81% to $23 million, leading Gilead to reduce its full-year Veklury forecast from $600 million to $300 million.

Despite these challenges, management raised the lower end of its 2026 product-sales guidance to 30.1–30.4 billion, up from the previous range of 30.0–30.4 billion. The quarter demonstrates the company's strong commercial business, with HIV continuing to expand and Trodelvy and Livdelzi emerging as growth drivers. However, investors must separate operational momentum from reported profitability, as Gilead's acquisitions introduce substantial clinical and execution risk.