“Excluding these transactions, our effective tax rate would be 20%, no change from our February guidance.”

In context

“Andrew Dickinson (Chief Financial Officer): Thank you, Dietmar, and good afternoon, everyone. Once again, our quarterly results demonstrated the strength and durability of Gilead's portfolio, underpinned by our disciplined operational execution. As shown on Slide 22, our base business grew 10% year-over-year to $7.6 billion, driven by continued growth across HIV products, Trodelvy and Livdelzi, partially offset by lower sales of cell therapy and HCV products. Sequentially, sales were up 12%, driven by growth across HIV, liver disease and oncology. Total product sales of $7.6 billion were up 8% year-over-year, reflecting the 10% growth we saw in our base business, partially offset by lower Veklury sales due to fewer COVID-19-related hospitalizations. Other revenue of $176 million included $156 million related to an increase in future estimated royalties associated with the prior IP asset sale. This is a nonrecurring and noncash item reflecting an accounting change. Moving to our non-GAAP second quarter results on Slide 23. Product gross margin was 87%, flat year-over-year and in line with our full year guidance. R&D expenses were $1.4 billion, relatively flat year-over-year, reflecting lower oncology clinical study activity, partially offset by higher R&D costs associated with our newly acquired entities. Acquired IPR&D expenses were $11.2 billion, primarily reflecting our acquisitions of Arcellx, Tubulis and oral medicines. SG&A expenses were $1.5 billion, up 12% year-over-year, primarily due to expected promotional activities related to Yeztugo. Second quarter operating margin was negative 94%, reflecting our acquisitions of Arcellx, Tubulis and Ouro Medicines. Excluding the $11.1 billion in acquired IP R&D expenses associated with the 3 acquisitions, our second quarter operating margin was approximately 49%. This is consistent with the strong margins we've delivered in prior quarters and firmly in the top quartile of our peer group, underscoring our disciplined operating model. The non-GAAP effective tax rate was negative 11.4% in the second quarter, primarily driven by the acquisitions of Arcellx, Tubulis and Ouro Medicines. Excluding these acquisitions, non-GAAP effective tax rate was approximately 19%. And on Slide 24, our non-GAAP diluted EPS was negative $6.75. This reflected higher acquired IPR&D expenses, tax and SG&A expenses, partially offset by higher revenue. Excluding these acquisitions and the nonrecurring other revenue, non-GAAP diluted EPS was $2.27. I'll highlight that for both the second quarter and the first half, illustrative EPS has grown approximately 13% compared to the same period last year. This compares favorably to total product sales growth of 8% in the second quarter of 2026 and 7% in the first half of the year, highlighting the leverage in our business model as we continue through this period of sustained growth. Moving to our full year guidance on Slide 25. We had strong second quarter base business performance and are updating our full year sales and EPS guidance as follows: We now expect base business sales to grow approximately 6% to 7% year-over-year and range between $29.8 billion and $30.1 billion. This represents an increase of $350 million at the midpoint compared to our May guidance and an increase of $750 million at the midpoint compared to our initial 2026 guidance. Within HIV, we now expect full year sales to grow between 9% and 10% year-over-year, up from 8% previously, driven by continued strong growth in Biktarvy for HIV treatment as well as Yeztugo and Descovy for PrEP. We continue to expect approximately $1 billion for Yeztugo sales for the full year. And we now expect cell therapy to decline mid-teens percentage year-over-year. Moving to total product sales. We have raised the lower end of our range and now expect total product sales in the range of $30.1 billion and $30.4 billion. Included in total product sales, we now expect Veklury sales of approximately $300 million compared to approximately $600 million previously, reflecting lower COVID-19-related hospitalizations. With regards to our non-GAAP P&L, we now expect acquired IPR&D of $11.5 billion, reflecting $300 million lower second quarter expenses associated with the accounting treatment of potential future milestones related to the Tubulis acquisition. We continue to expect both R&D and SG&A expenses to increase a mid-single-digit percentage on a dollar basis compared to 2025. Moving to tax. We now expect full year 2026 effective tax rate to be between 140% and 115%, reflecting the nondeductible acquired IPR&D expenses associated with the Arcellx, Tubulis and Ouro medicines transactions. Excluding these transactions, our effective tax rate would be 20%, no change from our February guidance. Overall, we expect full year non-GAAP EPS between negative $0.65 and negative $0.30. Turning to Slide 26. Excluding approximately $9.15 per share relating to the acquired IPR&D expense and full year financing costs associated with the Arcellx, Tubulis and Ouro Medicines transactions as well as nonrecurring other revenue, our full year non-GAAP diluted EPS would be $8.50 to $8.85, raised $0.05 on the bottom end from our May illustrative guidance due to higher base sales, partially offset by lower Veklury sales. On Slide 27, we returned close to $1.4 billion to shareholders in the second quarter of 2026, including $355 million of share repurchases. Combined with our dividend, we have returned approximately 49% of our free cash flow to shareholders in the first half of 2026. As we look ahead and given the acquisitions completed during the first half of 2026, our near-term priorities are centered on integrating the new programs and platforms into our business. Therefore, we do not currently anticipate pursuing additional sizable M&A transactions this year. That said, we will remain opportunistic and continue to assess strategic opportunities to further enhance our portfolio and create value. In summary, Gilead has delivered another quarter of strong clinical and commercial execution and continued operating discipline. We believe Gilead is well positioned for both near-term and long-term growth, and we remain fully focused on executing on our strategic commitments. With that, I'll invite Rebecca to begin the Q&A.”