Gilead delivered a strong third quarter of 2025, with base business product sales up 4% year-over-year to $7.1 billion on HIV strength (Biktarvy +6%, Descovy +20%) and Livdelzi topping $100 million for the first time. Non-GAAP EPS rose 22% to $2.47 (up 10% excluding a $0.25 non-recurring item) at a 50% operating margin, and the company raised its full-year HIV growth outlook to about 5% and the low end of product-sales guidance. The Yeztugo prevention launch hit its 75% payer-coverage goal three months early and Trodelvy posted practice-changing ASCENT-03 data in first-line TNBC. Offsetting these gains, Veklury sales fell 60% on fewer COVID hospitalizations and cell therapy was guided to a roughly 10% full-year decline.
Thank you, Rebecca. Just after market close today, we issued a press release with earnings results for the third quarter of 2025. The press release, slides, and supplementary data are available on the investor section of our website at gilead.com.
The speakers on today's call will be our Chairman and Chief Executive Officer, Daniel O'Day, our Chief Commercial Officer, Johanna Mercier, our Chief Medical Officer, Dietmar Berger, and our Chief Financial Officer, Andrew Dickinson. After that, we'll open the call to Q&A, where the team will be joined by Cindy Perettie, the Executive Vice President of Kite. Let me remind you that we will be making forward-looking statements. Please refer to slide two regarding the risks and uncertainties relating to forward-looking statements that could cause actual results to differ materially. With that, I'll turn the call over to Dan.
Thank you, Jacquie, and good afternoon, everyone. We appreciate you joining today as we take you through another very strong set of quarterly results. Our third quarter earnings underscore the growing momentum you're seeing from Gilead today, which is driven by our strong portfolio and the impressive execution of our teams. As you'll hear during the call, our progress is visible in both our quarterly results and in our strong clinical pipeline.
Highlights of our third quarter include commercial outperformance across our HIV therapies and Livdelzi. This resulted in 6% year-over-year growth for Biktarvy, 20% year-over-year growth for Descovy, and 35% sequential growth for Livdelzi. Disciplined operating expense management contributed to 22% year-over-year growth in non-GAAP EPS. Even excluding a $0.25 benefit from a non-recurring accounting item, non-GAAP EPS grew 10% compared to 4% base business growth year-over-year, highlighting the leverage in our business model.
As a reflection of our strong performance year to date, we are increasing our full-year HIV revenue growth expectations to approximately 5%. This is despite the $900 million headwind for our HIV business in 2025, associated with the Medicare Part D redesign. Our newest addition to the HIV portfolio, Yeztugo, for HIV prevention, delivered third quarter sales of $39 million, or $54 million, including the first few weeks of launch in June.
Of course, our initial priority has been securing payer coverage, and I'm very pleased to share that we've already achieved our 75% coverage goal, nearly three months ahead of our target. This sets a strong foundation for continued growth in 2026. Our confidence in our HIV business comes from both our existing on-market product leadership and our innovative pipeline.
We look forward to sharing progress on one of our next-generation HIV treatments before the end of the year, with an update on the ARTISTRY-1 and ARTISTRY-2 studies. These phase III programs are evaluating an investigational single tablet regimen of Biktarvy and lenacapavir, and we continue to target a product launch in early 2027. As I mentioned, Livdelzi was a standout of the quarter, contributing to 12% year-over-year growth in our liver portfolio.
Livdelzi exceeded $100 million in quarterly sales for the first time and is already the number one treatment for second-line PBC in the U.S. We're also pleased to share that we have filed for FDA approval of bulevirtide for the treatment of chronic hepatitis delta virus. This therapy has been available in Europe since 2020 under the brand name of Hepcludex, and we expect to bring it to patients in the U.S. in 2026.
Turning to oncology, we continue to make significant clinical progress, most recently with the presentation of our ASCENT-03 detailed data at ESMO and simultaneous publication in the New England Journal of Medicine. Given the particularly aggressive nature of this disease, we are moving as quickly as we can to bring Trodelvy to first-line metastatic triple-negative breast cancer patients.
We have submitted sBLAs with the FDA and are targeting a potential commercial launch in 2026 that could extend Trodelvy's leadership in breast cancer. We also continue to target commercial launch for anito-cel for multiple myeloma in 2026 and look forward to sharing an update from the pivotal iMMagine-1 study before the end of this year. In summary, we are very pleased with our performance in the third quarter, building on a very strong 2025 overall, and just as importantly, we have significant potential ahead.
The quality, breadth, and diversity we built into the portfolio over the past years is now presenting us with multiple opportunities to drive benefits for patients. With several just launched or soon-to-be-launched products across HIV, oncology, and liver disease, and clinical readouts on the horizon with further commercial potential, this continues to be an exciting phase of growth. The fact that we now have no major LOEs until 2036 reinforces our strong position. My thanks, as always, to the Gilead team for their incredible work this quarter and their continued dedication to doing more for the communities we serve. With that, I'll hand it over to Johanna.
Thanks, Dan, and good afternoon, everyone. I'm pleased to share our third quarter results representing another strong quarter of commercial execution, with exciting momentum in our most recently launched products, Yeztugo and Livdelzi, in addition to continued robust Biktarvy and Descovy growth. Starting on slide seven, third quarter product sales, excluding Veklury, were $7.1 billion, up 4% year-over-year and up 2% sequentially, driven by strength across our HIV portfolio, offset in part by lower oncology revenue.
Including Veklury sales of $277 million, third quarter total product sales were $7.3 billion, up 4% sequentially and down 2% year-over-year, primarily reflecting lower Veklury sales associated with fewer COVID-19-related hospitalizations. Moving to slide eight, HIV sales of $5.3 billion represented 4% growth versus prior year and prior quarter, primarily driven by higher demand and favorable inventory dynamics, partially offset by lower average realized price.
Year to date, our HIV business has grown more than 5%, which is particularly impressive as we managed through a $900 million headwind for the full year related to the Medicare Part D redesign. Consistent with our performance year to date, we are increasing our guidance for full-year HIV revenue growth to approximately 5%, up from 3% last quarter.
On slide nine, Biktarvy sales of $3.7 billion were up 6% year-over-year and 4% sequentially due to higher demand reflecting continued market growth of 2% to 3% and strong commercial execution. Biktarvy's year-over-year market share in the U.S. has grown every quarter since launch and achieved a record high of approximately 52% in the third quarter. Given Biktarvy's clear differentiation and market leadership, we're pleased that the expected loss of exclusivity in the U.S. for Biktarvy has been extended into 2036.
Moving to Descovy, third quarter sales were a record $701 million, increasing 20% year-over-year, primarily due to higher demand for Descovy for PrEP. Sequentially, sales were up 7%, driven by higher demand and average realized price due to channel mix, partially offset by inventory dynamics. As a reminder, roughly three-quarters of Descovy sales are for HIV prevention.
This highlights the incredible momentum in the prevention market, driven by the growing awareness and increasing unrestricted access, as well as excellent commercial execution. Descovy for PrEP achieved a new record market share of more than 45% in the U.S. in the third quarter. This reflects the strength of our PrEP team and the impact they're having in ensuring HIV PrEP reaches more of the people who could benefit from it. Overall, the PrEP market grew approximately 14% year-over-year.
Moving to slide 10, and one quarter in, we're really excited with the initial positive reception to our Yeztugo launch across consumers, clinicians, and payers. Yeztugo is increasingly recognized in clinical guidelines, including most recently the U.S. CDC. This strong endorsement of Yeztugo offers healthcare providers, public health leaders, and communities clear guidance on an innovation that could help shift the trajectory of the HIV epidemic.
As we've discussed previously, expanding payer coverage is a critical indicator in our initial launch, and we're working with every payer to accelerate access. I'm thrilled that we have already achieved 75% access in the U.S., almost three months ahead of our target. This includes coverage by UnitedHealthcare and Express Scripts, as well as 20 of the top 25 state Medicaid plans. In most cases, payers do not require prior authorizations or copays.
Keep in mind that much of our progress to the 75% access goal has been made in the last several weeks. We continue to work on an account-by-account basis to help clinicians navigate the new logistics and reimbursement process, and the benefits of this access will pull through in 2026. Looking forward, we're moving quickly to expand access beyond 75% and continue to target 90% by the end of the first half of 2026.
Altogether, Yeztugo is off to a strong start, delivering $39 million in sales in the third quarter. From launch in the middle of June to the end of the third quarter, Yeztugo revenue was $54 million, including $15 million of new launch-related stocking at the end of the second quarter.
As we expected, most early prescribers are existing HIV PrEP clinicians who are leveraging white bagging to simplify the logistic and reimbursement arrangements. In August, the European Commission approved lenacapavir for PrEP under the name Yeytuo. We look forward to further regulatory decisions across other geographies. Additionally, as part of our broader commitment to access, Gilead has agreed with the Global Fund and the U.S. Department of State through PEPFAR to supply enough doses of lenacapavir for PrEP to reach up to 2 million people over three years in certain low and lower-middle-income countries.
Moving to liver disease on slide 11, sales of $819 million were up 12% year-over-year and 3% sequentially, driven almost entirely by Livdelzi for primary biliary cholangitis. Livdelzi grew 35% sequentially, driven by strong commercial execution, including some new launches outside the U.S. and withdrawal of a competitor's product in the U.S.
Thank you, Johanna, and good afternoon, everyone. In the third quarter, the team progressed 56 clinical programs across our three therapeutic focus areas, with four additions since last quarter, as we advance our research with the most meaningful potential scientific and patient impact into the clinic.
Building on Johanna's comments on our Yeztugo launch, we continue to lead HIV innovation with 10 clinical programs across treatment and prevention. Lenacapavir and its prodrugs are foundational in our treatment and prevention programs, and in July, we initiated the registrational phase III PURPOSE 365 trial, evaluating lenacapavir as HIV prevention with once-yearly injections. This is a single-arm PK and safety study, which, along with the unprecedented efficacy seen in the phase III PURPOSE one and two studies, is expected to support a regulatory filing with potential for approval in 2028.
Moving to treatment, we have seven ongoing clinical programs evaluating daily, weekly, monthly, quarterly, and twice-yearly regimens based on lenacapavir or one of its prodrugs. Beginning with our next-generation daily oral regimen, bictegravir/lenacapavir, we continue to expect an update from our phase IIIARTISTRY studies later this year. ARTISTRY-1 and ARTISTRY-2 are evaluating the potential of Gilead's investigational complete regimen that combines bictegravir, the key integrase inhibitor in Biktarvy, and lenacapavir, our breakthrough capsid inhibitor.
The regimen is a potential option for virologically suppressed people with HIV, including many people currently on complex regimens. Further, we have a suite of long-acting oral and injectable agents in development for a range of dosing frequencies, from once-weekly oral to twice-yearly injectables. Our strategy has been to set up our pipeline for multiple shots on goal and then choose the best option for each dosing frequency.
Notably, for our development of a twice-yearly treatment regimen combining a novel integrase inhibitor with lenacapavir, we took two INSTI agents to phase I, GS-1219 and GS-3242. Aligned with the guidance we shared at our HIV analyst event last year, we have now chosen to prioritize the development of GS-3242 over GS-1219, and we expect to share more details on GS-3242 at a virology conference in 2026.
On slide 16, I'm pleased to highlight that we have completed the BLA filing for bulevertide in chronic hepatitis delta virus, or HDV. We're excited by the potential to bring bulevertide to HDV patients in the U.S. with a potential regulatory decision in 2026. As a reminder, HDV affects approximately 2% of patients with HBV, or about 40,000 people in the U.S.
Patients with chronic untreated HDV infection can experience accelerated development of cirrhosis or severe scarring of the liver and have higher risk of liver cancer and potentially end-stage liver disease and failure. Beyond bulevertide, we are also evaluating next-generation approaches to HDV treatment. Specifically, we have advanced GS-4321, a pre-S1 neutralizing antibody, into phase I clinical development. We believe GS-4321 has significant potential given its preclinical safety profile and long half-life with potentially quarterly subcutaneous dosing.
Moving to Trodelvy on slide 17, earlier this month at the ESMO meeting, we presented detailed potentially practice-changing phase III ASCENT-03 data in first-line metastatic triple-negative breast cancer patients who are not candidates for PD-L1 inhibitors. Specifically, Trodelvy demonstrated a 9.7-month median progression-free survival compared to 6.9 months for standard-of-care chemotherapy. This reflects a statistically significant and clinically meaningful 38% reduction in disease progression or death versus standard-of-care chemotherapy.
As we expected when we initiated the study, the median overall survival data are not yet mature. These results were simultaneously published in the New England Journal of Medicine. Additionally, the detailed results from ASCENT-04 were shared at the ESMO meeting in May. These data, combined with ASCENT-03, highlight the potential for Trodelvy to be a backbone treatment across first-line metastatic triple-negative breast cancer.
Based on these positive phase III updates from ASCENT-03 and ASCENT-04, we have submitted two supplemental Biologics License Applications for Trodelvy in first-line metastatic TNBC and expect regulatory decisions in 2026. This is incredibly important for patients as metastatic TNBC is the most aggressive subtype of breast cancer with limited treatment options and poor prognosis.
Historically, progress in first-line therapy has been minimal, and nearly half of patients do not progress beyond first-line treatment, meaning they may never access Trodelvy if it remains a later-line option. Similarly, we are currently exploring Trodelvy for first-line post-endocrine hormone receptor-positive, HER2-negative metastatic breast cancer patients in the phase III ASCENT-07 trial. We now expect to provide an update from this trial before the end of the year.
On slide 18, we are highlighting overall survival results shared at ESMO earlier this month from arm A1 of the phase II EDGE-Gastric study evaluating domvanalimab, our Fc-silent anti-TIGIT, plus zimberelimab and chemotherapy in patients with locally advanced unresectable or metastatic upper gastrointestinal cancers. In the 41 patients who received the novel regimen in this analysis, the median overall survival was 26.7 months. These findings were simultaneously published in Nature Medicine.
Starting on slide 22, our third-quarter results showed continued strong execution across the company. Our base business was up 4% year-over-year to $7.1 billion, driven by growth in Biktarvy, Descovy, and Livdelzi. Veklury sales were down 60% year-over-year to $277 million, which continued to reflect fewer COVID-related hospitalizations. Including Veklury sales, total product sales were $7.3 billion.
Moving to slide 23, you can see we benefited from a $400 million contribution in royalty, contract, and other revenues in the third quarter. This relates to an IP asset sale from 2018. Given we are now able to reasonably estimate future royalty and milestone payments, we are required to recognize this revenue in the third quarter. This is a non-recurring accounting item and does not reflect cash received during the quarter.
As a reminder, this contribution was not part of our product sales and therefore did not impact our product gross margin in the third quarter, but it does otherwise flow through to the bottom line, contributing approximately $0.25 after tax. Moving to our non-GAAP results on slide 24, third-quarter product gross margin was 86%, in line with 87% in the third quarter of 2024.
R&D expenses of $1.3 billion were down 3% compared to the third quarter of 2024. Year-to-date, 2025 R&D expenses were $4.1 billion, in line with 2024, suggesting we are on track for our full-year goal. Acquired IP R&D expenses were $170 million in the third quarter, including a $120 million upfront payment to Pregene for a research and licensing collaboration in the in vivo cell therapy space.
SG&A expenses of $1.4 billion were down 4% compared to the third quarter of 2024, modestly lower than we expected due to the timing of spending. Third-quarter operating margin was 50%, reflecting the continued focus on operating expense discipline and leverage. The non-GAAP effective tax rate was 18% this quarter, slightly below our expectations due to a $79 million tax settlement.
And finally, non-GAAP diluted EPS was $2.47 for the quarter. Excluding the $400 million non-recurring other revenue, non-GAAP diluted EPS would have been $2.22 for the third quarter. Moving to our full-year guidance on slide 25, we are raising the low end of our product sales range by $100 million to reflect our strong performance year-to-date. As a reminder, the $400 million included in our royalty, contracts, and other revenue in the third quarter does not impact our full-year guidance, as we do not guide the total revenue.
We now expect total product sales, excluding Veklury, to be between $27.4-$27.7 billion, primarily reflecting higher HIV growth. Driven by the outperformance of both Biktarvy and Descovy year-to-date, we now anticipate our HIV franchise will grow approximately 5% year-over-year versus our prior guidance of 3%. Consistent with last quarter, I'll note that our assumptions for the impact of the Medicare Part D redesign remain unchanged from the beginning of the year, and we continue to expect approximately $900 million of impact to our HIV business in 2025.
Our 2025 assumptions for Yeztugo also remain unchanged, and we remain very encouraged by the launch so far, particularly the accelerated timeline for payer coverage. In other parts of our business, strength in HIV is expected to be partially offset by weaker cell therapy estimates, where we now forecast approximately a 10% decline for full-year 2025 versus full-year 2024.
For Veklury, we continue to expect full-year revenue of approximately $1 billion. As a result, total product sales are anticipated to be in the range of $28.4-$28.7 billion. As noted earlier, this reflects a $100 million increase at the low end of the range from our previous guidance. Finally, we continue to expect the impact of known tariffs to be manageable in 2025. Moving to the rest of the P&L, there is no change to our prior non-GAAP guidance for product gross margin, R&D, and SG&A expenses.
We continue to expect product gross margin of approximately 86%, R&D expenses to be roughly flat on a dollar basis from 2024, and SG&A expenses to decline by a mid- to high-single-digit percentage compared to 2024. Similar to last year, we expect a step up in both R&D and SG&A expenses in the fourth quarter, reflecting normal end-of-year trends.
We have updated our IP R&D expectations for the full year to reflect our actual through the third quarter and our known fourth-quarter commitments, including $300 million relating to the Interius acquisition. We now expect full-year acquired IP R&D to be $900 million. Rounding out the P&L, we expect operating income to be between $13.1 billion and $13.4 billion, reflecting an increase of $100 million at the low end of the prior guidance range.
We continue to expect our effective tax rate to be approximately 19%. And finally, we expect non-GAAP EPS in the range of $8.05-$8.25, raising non-GAAP EPS by 10 cents at the low end of the range. GAAP EPS is expected to be in the range of $6.65-$6.85.