Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2020 Gilead Sciences Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today to Douglas Maffei, Senior Director of Investor Relations. Thank you. Please go ahead, sir.

Thank you, Dillon, and good afternoon, everyone. Just after market closed today, we issued a press release with earnings results for the third quarter of 2020. The press release and detailed slides are available on the Investors section of our website. The speakers on today's call will be Daniel O'Day, Chairman and Chief Executive Officer; Johanna Mercier, Chief Commercial Officer; Merdad Parsey, Chief Medical Officer; and Andrew Dickinson, Chief Financial Officer. Also on the call and available for question-and-answer will be Christi Shaw, Chief Executive Officer of Kite; and Diana Brainard, SVP and Head of our Virology Therapeutic Area. Before we begin with our prepared remarks, let me remind you that we will be making forward-looking statements, including risks and uncertainties related to the impact of the COVID-19 pandemic on Gilead's business, financial condition and results of operations, plans, and expectations with regard to products, product candidates, corporate strategy, financial projections and the use of capital, and 2020 financial guidance, all of which involve certain assumptions, risks, and uncertainties that are beyond our control and could cause actual results to differ materially from these statements. A description of these risks can be found in the earnings press release and our latest SEC disclosure documents. All forward-looking statements are based on information currently available to Gilead, and Gilead assumes no obligation to update any such forward-looking statements. Non-GAAP financial measures will be used to help you understand the Company's underlying business performance. The GAAP to non-GAAP reconciliations are provided in the earnings press release, as well as on the Gilead website. I will now turn the call over to Dan.

Thank you, Doug, and good afternoon, everyone. This has really been a pivotal quarter for Gilead. With last week’s closing of the Immunomedics acquisition, we’ve effectively transformed our near and long-term growth story. Trodelvy, an approved medicine for third-line metastatic triple-negative breast cancer has tremendous potential for patients today and significant pan-tumor potential for the future. We're all excited to deliver on that potential along with the teams from Immunomedics who became a part of the Gilead family last week. I want to take this opportunity to thank everyone at Immunomedics for the extraordinary work that you've done on Trodelvy to-date. It's an honor to work with all of you now to build on those efforts to the benefit of patients with cancer around the world. The acquisition is undoubtedly an inflection point in terms of our growth and adds to the growing pipeline of transformational medicines that we've been strengthening over the course of the year. All of this is building on the strong foundation of our core business. We've seen the strength and durability of our HIV business once again in the past quarter, and we're confident in our long-term leadership. I'd like to briefly talk about the changing nature of our growth prospects, driven primarily by the acquisition of Immunomedics. I'll also touch on our core business and I'll share a few words about Veklury or remdesivir, which just gained FDA approval, and then Johanna and Merdad will pick up with more details. I'll start with Immunomedics and Trodelvy. The acquisition of Immunomedics is the largest transaction in Gilead's history and undoubtedly marked a turning point for the Company. As you know, Trodelvy is already approved in the U.S. for third-line metastatic triple-negative breast cancer. The recent data at ESMO underscored its transformative potential for this particularly…

Thanks, Dan, and good afternoon, everyone. I want to begin by building on Dan's comments about our durable core business. Our results through Q3 amid the ongoing COVID-19 pandemic have been strong. And as anticipated, we continue to see signs of recovery during the quarter in underlying demand trends across our core franchises in U.S. and Europe. Looking at our HIV business. We continue to make great progress in both treatment and prevention. Biktarvy in treatment and Descovy for prevention continue to gain share quarter-over-quarter. In treatment, Biktarvy remains the number one regimen across key global markets. In the U.S., one in two new patients start on Biktarvy and roughly one in two patients switching to Biktarvy do so from a non-Gilead single tablet regimen, growing overall Gilead share. In PrEP, despite COVID dynamics, we continue to make progress with Descovy with 46% conversion of clinically appropriate individuals at risk at the end of September, exceeding our stated goal of 40% to 45%. Our overall HIV revenue in Q3 was very strong with 14% sequential growth over Q2 and 8% year-over-year growth, driven by both, strong demand fundamentals and normalized inventory dynamics. The unique quarterly phasing of inventory dynamics this year and the recent Truvada loss of exclusivity will impact our sequential quarterly revenue dynamics in the fourth quarter. With 91% of Gilead's U.S. patients having converted to TAF-based regimens, we will continue to build on our strength in HIV, including long-acting formulations for both, treatment and prevention. Now, briefly on HCV. Our HCV business showed 4% sequential growth over Q2 while down 31% from Q3 last year due to lower patient starts year-on-year. As markets started to reopen in the U.S. and Europe, we saw an increase in diagnosis and patient starts in Q3. Our stock market share across…

Thanks, Johanna, and good afternoon, everyone. I'm pleased to share some perspectives on several clinical pipeline-related updates and progress. Starting with Veklury. We're very pleased with the recent full approval of Veklury by the FDA. Veklury is now approved in the U.S. for the treatment of hospitalized patients with COVID-19-based disease on a strong and consistent body of evidence from three rigorous, randomized, controlled clinical trials over the past six months to inform us about the profile of Veklury. It's the first antiviral treatment proven to help patients hospitalized with COVID-19, recover and leave the hospital more quickly, a significant benefit for patients, their families and society. The results include the double-blind, placebo-controlled NIAID Phase 3 ACTT-1 trial, published recently in the New England Journal of Medicine. The study met its primary endpoint of time to clinical recovery through day 29, demonstrating Veklury plus standard of care, reduced the time of recovery through day 29 compared with placebo plus standard of care from 15 to 10 days with a P-value of less than 0.001. The key secondary endpoint of clinical status at day 15 was also met. Patients receiving Veklury were 50% more likely to have it improved by day 15 compared with those receiving placebo, and the effect was maintained through day 29. The secondary mortality endpoint in the overall population only showed a trend towards reduced mortality with a P-value of 0.07. Recall that when we started these trials with the NIAID, we knew very little about the disease itself and didn't know which patients might be most likely to benefit from Veklury. Given the range of disease severity in the overall study population and the emerging understanding that clinical outcomes are highly dependent on a patient's requirement for oxygen at baseline, an exploratory post-hoc analysis was conducted…

Thanks, Merdad, and good afternoon, everyone. Our third quarter performance was strong, and it reflects the solid underlying fundamentals in our core HIV franchise and the start of the post donation phase for Veklury. It also reflects the ongoing and dynamic impact of the COVID-19 pandemic. You will find our detailed Q3 results in the press release and materials we have posted. In my following remarks, I will review elements of our Q3 performance and provide you with an update on our full year guidance. Turning now to the financial highlights. Total revenues for the third quarter of 2020 were $6.6 billion, with non-GAAP diluted earnings per share of $2.11. This compares to total revenue of $5.6 billion and non-GAAP diluted earnings per share of $1.64 for the same period last year. Non-GAAP diluted earnings per share for the third quarter of 2020 increased 29% year-over-year, primarily due to higher operating income driven by growth in HIV product sales and our initial Veklury sales as well as lower non-GAAP tax rate. As noted in the earnings press release, on a GAAP basis, the third quarter diluted earnings per share was $0.29, primarily due to $1.2 billion in charges related to our collaborations and equity investments in building out our oncology pipeline as well as a $900 million loss from unfavorable changes in the fair value of our equity investment in Galapagos. Product sales for the third quarter of 2020 were $6.5 billion, up 28% sequentially and up 18% year-over-year, primarily due to Veklury sales and our core HIV products driven by stronger demand as well as higher volume as channel inventory continues to normalize in the United States. HIV revenues grew sequentially 14%, driven by a continued patient uptake of Biktarvy and Descovy for PrEP and increased channel inventory purchases…

[Operator Instructions] I show our first question comes from the line of Matthew Harrison from Morgan Stanley. Please go ahead.

Great. Good afternoon. Thanks for taking the question. I guess, on filgotinib, can you guys maybe just describe what you're thinking in terms of the potential outcomes here once you have that Type A meeting? Is this something where you could decide not to launch the drug in the U.S. at all, or is this more a nuanced approach where maybe you won't move forward with RA, but move forward with the IBD indication? Thanks very much.

Hi. Matthew, it's Merdad. Yes. I think, the outcomes -- it's hard to predict what the outcomes are. I do think that both the options you suggested are possible. And I would sort of tend towards your latter approach, which is that we would -- if things aren't able to move forward with RA, we'd like to keep the door open for us to continue to move forward in IBD and continue those discussions, obviously, dependent on the MANTA and the MANTA-RAy data outcome.

I show our next question comes from the line of Evan Seigerman from Credit Suisse. Please go ahead.

So, with the recent review of Galapagos' Toledo program, Merdad, what do you really need to see from the proof-of-concept trials to opt in and be comfortable, potentially incorporating this into your portfolio, given your focus on portfolio optimization? Thank you.

Yes. Thanks. Great question. They're doing a really great job of exploring the potential of that program in multiple indications. And they have a great approach of trying to get there quickly, looking for early signals of activity. On our end, obviously, we would like to see the programs de-risked to the appropriate level at the time that we opt in. That will vary based on the signals we see and the magnitude of the improvement that we see. So, obviously, if you saw, hypothetically, a huge response in one indication that was really unexpected and blew it out of the water, we might opt-in more early. Whereas if it's more nuanced in a small trial, we might want to flush that out a little bit more before we opt in. Our contract allows us to continue to work with them as the programs are de-risked. And our desire is to opt in and move as quickly as possible once we have an appropriate level of risk.

Our next question comes from the line of Cory Kasimov from JP Morgan.

I wanted to ask about remdesivir and the change to guidance now. I guess, I'm just trying to better understand kind of what has changed since your guidance in 2Q that leads to the lowering of fiscal year guidance by $1.5 billion. And I mean, just given the pace of infections that we're seeing across the country, can you just kind of go into a little bit more detail on why this -- why the lowering and kind of how this market is evolving, in your eyes?

Cory, it's Andy. I'll start, and Johanna can jump in as well. I think, it's relatively straightforward. I mean, it's a dynamic situation. It's very difficult to forecast, as we've discussed. And as I think most people understand, the rate of hospitalizations is the biggest factor that has moved around a lot over the last six months, and it continues to move today. So, what you're seeing is our -- the latest estimate based on the information that we have we're pleased with the uptake in the third quarter, obviously, with the formal U.S. approval, the joint procurement agreement in place, Johanna and her team, I think, have a better sense of where we see the year, but it's still very dynamic and is unusual compared to what you have to typically forecast. Johanna, if you want to add anything to that?

Yes. Maybe just to add to that, Andy, I think, what we're also seeing is the severity of the disease. So, I think as you saw through the summer months, even though there were surges, going through the U.S. mostly, some of those were younger patient population. And therefore, the hospitalization rates really dropped over the summer months. We were seeing closer to 12% to 15% late Q2. And as you go into Q3, they're closer to 5%. So, we're really tracking those very closely. It's not just the incidence. It's really, to Andy's point, the hospitalization rates. And obviously, the assumption is, in light of the surge this fall, both in Europe as well as in the U.S., that those numbers will pop back up a little bit. So, that would be one piece of the puzzle. The other piece, I would say, is we looked at some of our assumptions around stockpiling, and although we've seen some stockpiling, not at the level that we had originally projected. And so, we're adapting to that as well.

Our next question comes from the line of Michael Yee from Jefferies. Please go ahead.

I wanted to follow up a little more on filgotinib. Obviously, it's an important driver, and you said you'll have a Type A meeting and you'll make some decisions. Can you just clarify what you would actually learn from a Type A? And if you were to, as you said, maybe keep IBD, isn't 200-milligram is really important, and so that would tie together with RA being approved at 200? So, maybe just explain a little bit where these scenarios would evolve from. And could you just make tough decisions to not go forward at all? Thank you. Daniel O’Day: Sure, Michael. Yes, couldn't agree more. Look, I think, the conversation we’ll have in the Type A meeting will center around really what level of evidence the FDA would be looking for on both of those issues, right, in terms of trying to get to a better benefit risk understanding. And so, that will depend -- so we need to find that out from the 200-milligram standpoint, and we need to find it out from the MANTA and MANTA-RAy standpoint. So, those two things we will get guidance from the FDA at the Type A meeting. And then, based on that outcome, we will make some decisions how to go forward, whether it's -- whether there's a clear path, whether we have to only go forward in IBD or whether 200 milligrams is not viable until MANTA reads out -- MANTA-RAy readout. All those are possibilities. So, it's hard to speculate what the outcome of that will be. We'll be transparent obviously as we have that discussion with how we'll proceed.

Our next question comes from the line of Geoffrey Porges from SVB Leerink. Please go ahead.

One question -- a multipart question on Veklury and then a quick one on Trodelvy. So, on Veklury, could you give us a sense of how many patients have been treated so far or at least in the quarter and disclose for us what the inventory stocking was? And then, a little bit of color about what proportion of hospitalized patients are getting remdesivir because we get the sense the standard of care. And then, Merdad, could you just talk a little bit about the profile of Trodelvy and combinations? It does have some significant safety and tolerability liabilities. So, which of the combinations do you think it makes the most sense to use it in? Thanks.

So, let me start, Geoff, with the Veklury question around usage. So, what we've seen is, obviously, in Q3, a little bit of a interesting dynamic in light of most of the supply was committed through the HHS to U.S. patient population. So, there was a bit of an inventory build through the Q3 that you're going to see play out in Q4 in the U.S. specifically. We're also in a situation due to the incredible work that's been done by our manufacturing teams to be in a situation where our current supply now is at a level where it is exceeding global demand. So, we feel very confident in making sure we can -- global demand around the world, namely in Europe right now, in light of not only the drug procurement agreement, but in light of the recent surge that you're seeing across countries in Europe. I think, to your point about percentage of patients, it really varies across countries but also regions. And I do think that that percentage is increasing as we speak. As the FDA approval came out last week, we're already seeing a lot more noise around that, but also in light of the fact that we have a field team. So medical and commercial that are now going out to make sure that physicians are aware and educated on where best to use Veklury. And I think that's one of the pieces that's the most important. So, that's playing out as we speak. But, we have seen probably out of hospitalization rates in many countries anywhere between 40% to 50% in the U.S. usage of remdesivir. And of course, that number will only grow as people better understand the data now that it's been published as well as approved through the FDA. And maybe, Merdad, on Trodelvy.

Yes. And I'll take the Trodelvy question, Geoffrey. Yes. Look, I think, what we know so far with the Trodelvy [indiscernible] combo is a couple of things. One is just looking at the combos where it's been tested, there's data with the parts and there's data with checkpoint inhibitors. And so far, those data seem to support the ability to go forward with combos. And that obviously opens a number of doors there for us to investigate. When we look at the adverse event profile and we look at what -- and we talk to the investigators about what they're seeing and how they're managing it, the tox is largely the neutropenia and the diarrhea, and often that the investigators are saying that toxicity seems to be manageable, something they're comfortable managing. And we're getting a lot of encouragement to move earlier in lines of therapy, based on that adverse event profile. The individual combinations will be dictated by the indication that we're in, right, whether it's breast, urothelial, lung, those combinations will depend. But, I think a big one will probably be the checkpoint inhibitors where I think we're optimistic and have reasonably good data about being able to combine there.

Our next question comes from the line of Alethia Young from Cantor Fitzgerald. Please go ahead.

I just wanted to talk a little bit about kind of big picture immunology. So, maybe depending on what you decide with filgotinib next year based on some of the conversations, like how are you thinking about the space? Are you still committed? Would you consider doing M&A or do you have an internal pipeline that continues to drive potential revenues there? Thanks Daniel O’Day: Thanks, Alethia. I'll start and then maybe Merdad can add as well. But first of all, I mean, nothing has changed about our dedication to our three disease areas. As you know, I mean, our strategy that we announced at the beginning of the year was based upon two really strong scientific disciplines that we have from a discovery perspective at Gilead and with our partners, and that is antivirals and immunomodulation. And we've been firmly focused on that strategy in terms of how it plays out in both, antivirals, inflammation and fibrosis, and then also oncology. So, we think there's a lot of synergies associated with that science. Obviously, immunology, as you know, Alethia, goes across so many disease states. Immunology plays in the antivirals, for instance, particularly when we look at some of our HBV cure programs. But clearly, in the field of inflammation, we've already spoken about where we stand with filgotinib. We have a variety of follow-on agents within our Gilead research, with our partners with Galapagos, and we'll maintain an external view on opportunities to continue to advance our inflammation portfolio in-house. And you can see, of course, what we've done in the oncology field, predominantly immuno-oncology over the past year, really building up our oncology base based upon -- largely based upon immuno-oncology. Trodelvy allows us to have a really strong footprint now into solid tumors in a pan-tumor way, which we think will be very complementary to our first-in-class, best-in-class immuno-oncology portfolio. Merdad, maybe you want to add as well, your view on the -- on that question as well.

I think, you hit all the key points, Dan. I think, we -- the only thing I'd add is I think we really have a great team here. And I think that team is going to be really great about charting our future in immunology. But as Dan said, we remain committed to that. And we'll continue to look at both near and long-term opportunities there that makes sense for us in the portfolio. Daniel O’Day: I mean, maybe, Merdad, it's just important to emphasize the unmet medical need in that area. It's still a very significant.

Yes. And we look at -- maybe the only other thing I'd add is that we look at it through a fairly broad lens of what immunology means. There are a lot of indications with a lot of unmet need that persist in that space. And we'll be looking for that transformative profile.

Our next question comes from the line of Carter Gould from Barclays.

Maybe just to follow up on that same sort of question on portfolio construction. Historically, old Gilead was routinely criticized for not being as disciplined with many of its mid-stage assets. Clearly, the pipeline is much broader. You guys highlighted sort of a return to discipline. Yet, it doesn't seem to be apparent, I guess, when we look to the pipeline side. When you think about the size and breadth of the pipeline today, are you comfortable with that? And I guess, will we start to see some of those prioritization decisions start to manifest soon, or if there's things you can point to today? That would be helpful. Daniel O’Day: Yes, Carter. Again, I think. the entire team here is dedicated to putting together a portfolio management process that's state of the art. I think, your question is very well taken. It's a work in progress, right? So, we're -- first of all, we've hired a lot of new people into the organization with terrific expertise in different therapeutic areas. We're putting processes into place across research and development, into our commercial organization to help us make decisions accordingly. And I think, you'll see some of those play out in the near term as well. But, the philosophy that Merdad and Johanna and the rest of the team and I are firmly committed to is drawing the line at a level that makes sure that the programs that hurdle that line are really first and best-in-class. And I'm really pleased with how the organizations progress, both from an operational perspective, but then also from a scientific perspective over the course of the past year. But, as you know, I mean, this is a continual process. And we need to make sure that we're constantly looking at the outside environment, looking at the unmet medical need, going back to where that line is drawn in our organization and making consequential decisions on the portfolio. And we intend to do that. We intend to make tough decisions and fund those most attractive opportunities. I would also say, the other thing we're looking very hard at is a balance in our portfolio. I think, in the past, Gilead has also been -- seen as a company that went after a lot of high-risk, high-reward projects. In some cases, those were not successful in the late stages. I think, we're firmly committed to having a balanced portfolio where we're always holding the bar high for innovation, but making sure we derisk as much as possible earlier in the stages of development such that when you get into the late-stage investments in Phase 3, things have been de-risked, and therefore, your ability to succeed rises as well. So, these are all very conscious things we're working on together. Merdad, again, I apologize if -- you've trained me well. You [indiscernible] things to add on that as one of the leaders in organizing this portfolio.

The only thing I'd add, Carter, it's a really insightful question. And it's something that we -- as Dan said, we're really committed to doing. And, what I would say is that you will see us exercising that discipline. That will be something that will be apparent sooner than later. And recognize that there are a lot of things that are in-flight that they don't make sense to deprioritize because they're already ongoing. So, we'll let those things read out. So, it'll probably take a little bit longer for everything to get taken care of in the wash, if you will. But you will definitely see that playing out with us as data get read out and as new things enter into the portfolio that we'll be exercising that discipline to make sure we're making some tough decisions.

Our next question comes from the line of Brian Abrahams from RBC Capital Markets.

A question on HIV, inventory and stockpiling. I'm wondering if you could quantify if what you observed in the third quarter was a benefit or just normalization. And if you look to fourth quarter and beyond, what should we expect with respect to potential stockpiling, just given the newest COVID spike versus inventory drawdowns?

So, maybe I'll take that one, Brian. I think, that as we're seeing Q3 -- this whole year, and I'm sure everybody kind of seeing this full year has been really interesting when it comes to inventory because we've seen a pattern that's very different than prior years, obviously, due to COVID-19. The expectation that we have this year is, as you normally see in Q4, you actually do have a lift in product supply at the end of December that plays into our total inventory for 2020. Having said that that's a little bit also impacted by the fact that Truvada’s LOE, and there's now a generic on the market with Teva as of early October. And so, we believe that number is a little lower than the norm that we've seen in the past. We haven't assumed a -- stockpiling to your point about COVID-19 because it's already -- usually, Q4 is already on the rise versus other quarters. So, we've assumed that. What we've seen in Q3, to the first part of your question, I think, it’s just normalization of the last couple of quarters. And you kind of -- if you recall, Q1 usually draws down on Q4 supply. What we saw is a pickup in March because of COVID-19 that then kind of bled out in Q2, and then we saw a pickup again in Q3, which I think is really the normalization of those two quarters. So assuming Q4 is like other quarters in the past, that's what's currently in our current projection. Hopefully, that addresses the thinking there for HIV.

Our next question comes from the line of Tyler Van Buren from Piper Sandler. Please go ahead.

I was just hoping to get a little bit more precision on the Veklury guidance. I guess if you take the midpoint of the updated guidance relative to the guidance in the beginning of the year and the Q3 sales, it could suggest that sales could be down significantly in Q4 quarter-over-quarter. So -- but then obviously, the core business has been impacted a bit by the pandemic, which could offset and make it more flat. So, I wanted to understand what you’re modeling for Veklury in Q4 or what your guidance incorporates. And then, the second part of the question is, on the outpatient and the inhaled studies, can you give any more granularity on when we should expect that data? And how much do you think demand could increase if those studies are successful? Daniel O’Day: Great. Thanks, Tyler. So, Andy, why don't you handle the guidance, and maybe we'll go to Diana for the updates on Veklury's next generation?

Sure. Hi, Tyler. Thanks for the question. I appreciate it. We're not providing specific product guidance, as you know, and we typically don't. But, as you suggested and as we mentioned earlier, the revision in guidance is tied not entirely, but almost entirely to expectations around Veklury. Johanna also mentioned that there was some excess inventory in the channel as a result of the terrific work that our manufacturing team did. And you'll see in our materials that we're on track to meet the expectation that we had set in terms of 2 million treatment courses by the end of the year. So, as inventory was moving into the channel in the third quarter, at the same time that hospitalization rates and the severity of the outbreak in the U.S., at least at that time, was coming down, there was less demand in the third quarter than expected. And then, you see that play through in the fourth quarter. So, we didn't recognize revenue for all of the Veklury that was shipped in the third quarter, to be clear. Some of that was constrained, and then you see that playing through in the fourth quarter and the full year guidance. So, we can't be more specific than that. Happy to provide any additional color that we can, but we're not going to provide specific product level guidance. Maybe over to Diana.

Hi, Tyler. So, our outpatient study is ongoing. We're recruiting actively. And in terms of our predictions, we think that that study will wrap up early next year, and we should have results in the first quarter. It is harder than is typical to predict the dynamics of trial enrollment for COVID-19. So much depends on the number of cases, the competition with other clinical trials. So, we're going to have to kind of take it month-by-month and see how the dynamics go. As you know, we're approved with Veklury for hospitalized patients or patients in equivalent in-patient setting. So, in terms of then what that does for us once we have the trial results, if it were successful, we would then look to getting an expanded label for that population. So, that would be further down the line. But our first step is to get the study enrolled and see how Veklury performs in the outpatient setting where we're trying to present hospitalization rather than hasten recovery in the hospital.

Our next question comes from the line of Umer Raffat from Evercore. Please go ahead.

Just two very quick ones. First, on Biktarvy perhaps, the IMS trends don't appear particularly encouraging for the last six months or so. I know it's growing, but not the way it was in the past. I would love to get your take on that. And secondly, on the capsid inhibitor, Merdad, how are you thinking about possible candidates for a combo? I know, there are other companies with HIV candidates as well, and this has been an ongoing question. Where are you guys headed at? Daniel O’Day: Sure. Johanna can start, and then take it from there. Johanna, do you want to start?

Yes. Thanks, Umer. So, listen, we're really proud of actually Biktarvy growth. And I think that if you look at the share growth, it's basically 8 points of share year-on-year when you think about as Q3 '19 to Q3 '20. And when you look at Q2 to Q3, it's a point of share. So, we do think that the growth continues. Where we've seen a little bit more of an impact is from a market standpoint because if you think about the impact of COVID-19, it had a larger impact in our HIV treatment business really when it comes to switches. And so, it'll impact disproportionately newer agents in the market because physicians aren't switching to newer agents. But obviously, Biktarvy is part of that pool. The overall share of Gilead still remains really strong because of that because we -- more than 75% of patients are actually on a Gilead compound. And so, therefore, they're just remaining. There's less switches. We've seen that rebound a little bit in Q3. We expect that to continue through Q4. But I think, overall, if you think about it in the U.S., which is our larger business, right now, 1 out of 2 -- actually, more than 1 out of 2 patients starts on Biktarvy. We have about a 56% share of naive patients. And when you think about the switches, although the market for switches is a little bit lower, we're still roughly about 1 in 2 patients going to Biktarvy, and they're going to Biktarvy from a non-Gilead single treatment regimen, which I also think is a great place to be. So, we continue to feel extremely confident in Biktarvy's continued growth because you're seeing it basically happen across all of the markets around the world to really consolidate around Biktarvy. In addition to the fact that COVID-19 is actually for naïve patients, a real advantage with Biktarvy because of the rapid start. And that's something that even guidelines are recognizing in light of the fact that you don't need to -- there's no genotype testing, there's no HLA testing, et cetera. So, that's also helping to continue to grow our share in the naive patient population. So with that, Merdad or Diana on the capsid.

Yes. I have to take that. Hey, Umer. As you mentioned, look, we have both, internal candidates for combining with lenacapavir, and we remain open. As you said, there are other agents out there that could potentially be combination partners. And we remain definitely open to figuring out what's in the best interest of patients. And we'll continue to be diligent on that front. So, I think both possibilities remain there.

And I show our last question comes from the line of Geoff Meacham from Bank of America. Please go ahead.

I just had a couple on remdesivir. Dan, you've talked about likely not making a major long-term contribution. So, I just wanted to ask, are the investments in nebulized or next-gen programs still a priority in the near term? And the second one related is, how do you manage your inventories for when the infection step down happens, which is hopefully sometime next year? Daniel O’Day: Thanks, Geoff, for the question. Really helpful, I mean, to hear your context on that. I mean, let me say a couple of things, first of all. I mean, we think Veklury remdesivir will make a significant contribution certainly to Gilead. I mean, it already has, as you've seen in the sales to date, and we think through the end of this year and into 2021. And potentially, on a seasonal basis, beyond, I mean, one has to -- there's a lot we still don't know about the pandemic, of course. But I think what we do know is that in order to get us all back to normal, this is going to take a variety of approaches. Of course, it's going to take vaccines. It's going to take therapeutics in the hospital. It's going to potentially take combinations of therapies in the hospitals. And then, it's going to need therapeutics pre-hospitals. So, I think we're proud to be at the front end of this with a very potent antiviral, which is a bedrock I think of any approach to a pandemic. But, we'll continue to need investment. We're fully committed to the investment in line extensions here and in seeing where else we might be able to play in that continuum from pre-hospital setting to hospitalized patients. Obviously, we're not going to play in the area of vaccines, but in area of therapeutics.…

Thank you. This concludes the Q&A session. At this time, I'd like to turn the call over to Douglas Maffei for closing remarks.

Thank you, Dillon, and thank you all for joining us today. We appreciate your continued interest in Gilead. And the team here looks forward to providing you with updates on our future progress.

Ladies and gentlemen, thank you. This concludes today's presentation. Thank you for participating. You may now disconnect.