AI-generated analysis, not investment advice. The articles are written by AI, edited, and checked against company filings — but the judgements are opinions and the figures go stale. How this is made · Terms

Three Wholesalers, Seventy-Four PercentNarrow moat

Gilead Sciences (GILD) — moat facet

Three wholesalers bought 74% of Gilead's gross product sales in 2025, but they distribute rather than decide: the patients belong to the prescribers.

Gilead's revenue concentration is extreme by name and modest in substance. Three wholesalers, Cardinal Health, McKesson and Cencora, accounted for 29%, 24% and 21% of gross product sales in 20251, 74% together2. In 2024 the figures were 29%, 23% and 21%3. Historically, "approximately 90% of our gross product sales in the U.S." have been to these three4.

Gilead gross product sales by customer, 2025 (%)Cardinal Health — 29%McKesson — 24%Cencora — 21%All other — 26%Gilead Form 10-K FY2025, customer concentration note
Three distributors, three-quarters of the gross.

The basis of the disclosure changed. In its 2023 10-K Gilead reported the three as shares of total revenues: 26%, 21% and 19%5. The 2025 10-K reports them as shares of gross product sales6, before the 41% of gross-to-net deductions. The newer basis makes the concentration look larger because the denominator is larger; the wholesalers' importance did not jump.

What the wholesalers do not do is choose. They buy what pharmacies and hospitals order and are paid a distribution fee; they carry receivables, and about 60% of Gilead's accounts receivable at 30 June 2026 related to these three7. Losing one would mean rerouting product through the other two, not losing patients.

The real risk is credit and inventory. A wholesaler that stocked heavily in one quarter buys less in the next, which is how Biktarvy's second-quarter 2026 growth came partly from "favorable inventory dynamics"8.

The wholesalers also manage inventory on Gilead's behalf. Under inventory management agreements, the US wholesalers "make estimates to determine end-user demand and may not be accurate in matching their inventory levels to actual end-user demand"9. That sentence is the reason quarterly sales can drift from prescriptions, and the reason Gilead's receivables, $5,055 million at 30 June 202610, sit so heavily with three names.

The concentration is safe while the three stay solvent and the patients stay with Gilead. If any one of them passes 35% of gross product sales, Gilead's dependence on a single distributor's credit and stocking decisions will have risen to a level worth worrying about.

Moat trajectory: Holding steady

Shares 29/24/21% in 2025 against 29/23/21% in 2024.

The number that tests this moat
Moat Explorer calc
Three largest wholesalers' share of gross product sales, full year
74% (2025: Cardinal 29%, McKesson 24%, Cencora 21%)

Distribution concentration; any single wholesaler above 35% would raise credit and stocking risk.

How it's calculated: Sum of the three wholesalers' percentages of gross product sales, Gilead Form 10-K FY2025.
Source: Moat Explorer calculation from Gilead Sciences filings ↗
References
  1. ReportedThree wholesalers, Cardinal Health, McKesson and Cencora, accounted for 29%, 24% and 21% of gross product sales in 2025, 74% together.
    Gilead Sciences Form 10-K for 2025 - customers, wholesalers, distribution and gross-to-net deductions. — FY2025 · publ. 24 February 2026 · source ↗
  2. Moat Explorer calcThree wholesalers, Cardinal Health, McKesson and Cencora, accounted for 29%, 24% and 21% of gross product sales in 2025, 74% together.
    Moat Explorer calculation from Gilead Sciences reported figures ($ millions unless stated). HIV and Biktarvy: HIV share of total revenues 20,752 / 29,443 = 70.5% (2025); of product sales 20,752 / 28,915 = 71.8%; 16,438 / 22,449 = 73.2% (2019); 16,315 / 27,305 = 59.8% (2021); 18,175 / 27,116 = 67.0% (2023); 19,612 / 28,754 = 68.2% (2024). Biktarvy share of total revenues 14,334 / 29,443 = 48.7%; of HIV 14,334 / 20,752 = 69.1%; Biktarvy US 11,467 / 14,334 = 80.0%; Biktarvy growth 2025 14,334 / 13,423 - 1 = +6.8%; 2019-2025 14,334 / 4,738 = 3.0 times, (3.03)^(1/6) - 1 = about 20% a year. Other HIV 20,752 - 14,334 = 6,418; HIV other than Biktarvy, Descovy, Genvoya and Odefsey 20,752 - 14,334 - 2,758 - 1,498 - 1,167 = 995; Veklury plus Other plus royalties 911 + 799 + 527 = 2,237. Genvoya 1,498 / 3,931 - 1 = -61.9%. HIV growth 2019-2025 20,752 / 16,438 - 1 = +26.2%, about 4.0% a year; 2021 16,315 / 16,938 - 1 = -3.7%; 2023 18,175 / 17,194 - 1 = +5.7%; 2024 19,612 / 18,175 - 1 = +7.9%; 2025 20,752 / 19,612 - 1 = +5.8%, about 6%; H1 2026 10,723 / 9,675 - 1 = +10.8%; Q2 2026 5,693 / 5,088 - 1 = +11.9%. Descovy 2025 2,758 / 2,113 - 1 = +30.5%, about 31%; Q2 2026 967 / 653 - 1 = +48.1%; Descovy over Yeztugo Q2 2026 967 / 232 = 4.2, about four times. Yeztugo Q1 2026 = H1 397 - Q2 232 = 165; Yeztugo over Biktarvy H1 2026 397 / 7,133 = 5.6%, about 6%. US HIV 16,904 / 20,752 = 81.5%, about 81%; US product sales 20,816 / 28,915 = 72.0%; Europe 4,617 / 28,915 = 16.0%. Gilead HIV growth Q2 2026 +11.9% less ViiV +11% = about +1 point. Exclusivity: Descovy + Vemlidy + Odefsey 2,758 + 1,070 + 1,167 = 4,995, about $5.0bn, / 29,443 = 17.0% of revenue; Descovy + Vemlidy 2,758 + 1,070 = 3,828; Vemlidy share of Liver Disease 1,070 / 3,217 = 33.3%, a third; 2025 sales by primary US patent window: Tecartus 344 + Genvoya 1,498 = 1,842 (2027-2029); Trodelvy 1,397 + Descovy 2,758 + Vemlidy 1,070 + Odefsey 1,167 + sofosbuvir/velpatasvir 1,272 = 7,664 (2028-2033); Biktarvy 14,334 (2036). Hepatitis C 2015 Harvoni 13,864 + Sovaldi 5,276 = 19,140, / product sales 32,151 = 59.5%, about 60%; product sales 2018 21,677 / 32,151 - 1 = -32.6%; Liver Disease 2025 3,217 / 19,140 = 16.8%, about 17%, a sixth. Liver Disease 2019 HCV 2,936 + HBV/HDV 742 = 3,678; 2020 2,064 + 860 = 2,924. Price: gross product sales 2025 28,915 + 19,953 = 48,868, about $48.9bn; 2024 28,610 + 17,776 = 46,386; net product sales growth 28,915 / 28,610 - 1 = +1.1%, about 1%; gross-to-net deductions 19,953 / 17,776 - 1 = +12.2%; accrued rebates 4,337 / 3,892 - 1 = +11.4%, about 11%; rebates and chargebacks over net product sales 17.5bn / 28,915 = 60.5%, about 60% (2025); 15.5bn / 28,610 = 54.2% (2024). H1 2026 capital expenditure = operating cash flow 6,117 - free cash flow 5,859 = 258. Three wholesalers 29% + 24% + 21% = 74% of gross product sales (2025); 29% + 23% + 21% = 73% (2024). Hepatitis C share of revenue 1,272 / 29,443 = 4.3%, about 4%; sofosbuvir/velpatasvir 2025 1,272 / 1,596 - 1 = -20.3%, a fifth; Mavyret 1,317 / 1,311 - 1 = +0.5%. Cash and capital: free cash flow over revenue 9,456 / 29,443 = 32.1%, about 32%; dividends paid over free cash flow 4,003 / 9,456 = 42.3%, about 42%; free cash flow left after dividends and buybacks 9,456 - 4,003 - 1,922 = 3,531. Dividend per share (3.16 / 1.29)^(1/10) - 1 = 9.4% a year; increases 1.84 / 1.29 - 1 = +42.6% (2016); 2.72 / 2.52 - 1 = +7.9% (2020); 3.00 / 2.92 - 1 = +2.7% (2023); 3.08 / 3.00 - 1 = +2.7% (2024); 3.16 / 3.08 - 1 = +2.6% (2025); quarterly 0.82 / 0.79 - 1 = +3.8% (2026). Buybacks 2015-2016 10,002 + 11,001 = 21,003, about $21bn; year-end market value 2016 over 2015 94.34 / 145.83 - 1 = -35.3%, about a third. Net debt 31 December 2025 = total debt 24,937 - cash and marketable debt securities 10,605 = 14,332; 30 June 2026 = 26,246 - 3,179 = 23,067; net debt over 2025 free cash flow 23,067 / 9,456 = 2.4 years. Interest over operating income 1,024 / 10,022 = 10.2%, about a tenth (2025); 977 / 1,662 = 58.8%, more than half (2024). Gilead stockholders equity 11,829 / 22,703 - 1 = -47.9%, about 48%; return on equity 2025 8,510 / ((19,330 + 22,703) / 2 = 21,017) = 40.5%. Acquisitions: Trodelvy IPR&D impairments 2.7bn (2022) + 2.4bn + 1.8bn (2024) + 1.75bn (2026) = 8.65bn of 15.8bn recorded = 54.7%; Trodelvy Q1 2026 = H1 859 - Q2 457 = 402; Kite plus Immunomedics 11,155 + 20,600 = 31,755, over $31bn; cell therapy 2025 1,839 / 1,973 - 1 = -6.8%; Arcellx IPR&D 7.0bn / cell therapy 2025 1.839bn = 3.8 years. Acquired IPR&D 2019 5,051 + 2020 5,856 + 2021 939 + 2022 944 + 2023 1,155 + 2024 4,663 + 2025 1,024 + H1 2026 11,290 = 30,922, about $30.9bn; acquired IPR&D 2019-2025 alone = 30,922 - 11,290 = 19,632; Biktarvy 2025 US 11,467 + outside US 1,676 + 1,190 = 14,334, all other revenues 29,443 - 14,334 = 15,109 (shown 15.1); net income 2019-2025 5,386 + 123 + 6,225 + 4,592 + 5,665 + 480 + 8,510 = 30,981, about $31.0bn. Revenue lines: Liver Disease share 3,217 / 29,443 = 10.9%, about 11%; Oncology share 3,236 / 29,443 = 11.0%; Oncology 2020 cell therapy 607 + Trodelvy 49 = 656; Oncology 2025 3,236 / 3,289 - 1 = -1.6%, about 2%; 2019-2025 3,236 / 456 = 7.1 times, about sevenfold. Veklury 2021 5,565 / 27,305 = 20.4%, about a fifth; 2025 911 / 29,443 = 3.1%; product sales 2021-2025 28,915 / 27,008 - 1 = +7.1%; excluding Veklury (28,915 - 911 = 28,004) / (27,008 - 5,565 = 21,443) - 1 = +30.6%, about 31%. Other product sales plus royalty, contract and other revenues: 1,547 + 330 = 1,877 (2019); 1,026 + 334 = 1,360; 1,027 + 297 = 1,324; 946 + 299 = 1,245; 859 + 182 = 1,041; 889 + 144 = 1,033; 799 + 527 = 1,326 (2025). Bands sum to total revenues: 2025 20,752 + 3,217 + 3,236 + 911 + 1,326 = 29,442 against reported 29,443 (rounding); 2019 16,438 + 3,678 + 456 + 0 + 1,877 = 22,449. Non-HIV revenue 29,443 - 20,752 = 8,691, / 29,443 = 29.5%. Valuation and earnings: trailing twelve months to June 2026 revenue 29,443 - H1 2025 13,749 + H1 2026 14,763 = 30,457; net income 8,510 - 3,275 + (-8,475) = -3,240; diluted EPS 6.78 - 2.61 + (-6.82) = -2.65. Year-end market value over net income and revenue: 2015 145.83bn / 18,108 = 8.05, / 32,639 = 4.47; 2016 94.34 / 13,501 = 6.99, / 30,390 = 3.10; 2017 93.58 / 4,628 = 20.2, / 26,107 = 3.58; 2018 80.92 / 5,455 = 14.8, / 22,127 = 3.66; 2019 82.21 / 5,386 = 15.3, / 22,449 = 3.66; 2020 73.03 / 123 = 594, / 24,689 = 2.96; 2021 91.08 / 6,225 = 14.6, / 27,305 = 3.34; 2022 107.68 / 4,592 = 23.4, / 27,281 = 3.95; 2023 100.94 / 5,665 = 17.8, / 27,116 = 3.72; 2024 115.12 / 480 = 240, / 28,754 = 4.00; 2025 152.28 / 8,510 = 17.9, / 29,443 = 5.17; October 2026 179.47bn / 30,457 = 5.89. 2026 product sales guidance midpoints (29,600 + 30,000) / 2 = 29,800 (February); (30,000 + 30,400) / 2 = 30,200 (May); (30,100 + 30,400) / 2 = 30,250 (August). Non-GAAP EPS guidance midpoint (-0.65 + -0.30) / 2 = -0.475, plus 9.08 of acquired IPR&D and tax per share = 8.61. Additional: dividends paid 3,918 / 3,809 - 1 = +2.9% (2024), 4,003 / 3,918 - 1 = +2.2% (2025); gross product sales 48,868 / 46,386 - 1 = +5.4%, about 5%; Epclusa 1,966 / 3,510 - 1 = -44.0%; US HIV over US product sales 16,904 / 20,816 = 81.2%; European HIV over European product sales 2,392 / 4,617 = 51.8%; analyst target 158.65 / 144.74 - 1 = +9.6%, about 10%; market value 2025 over 2024 152.28 / 115.12 - 1 = +32.3%, a third. AmBisome 509 / 533 - 1 = -4.5%. Biktarvy over HIV: 4,738 / 16,438 = 28.8% (2019); 8,624 / 16,315 = 52.9% (2021); 11,850 / 18,175 = 65.2% (2023). Descovy + Vemlidy + Odefsey: 1,500 + 488 + 1,655 = 3,643 (2019); 1,700 + 814 + 1,568 = 4,082 (2021); 1,985 + 862 + 1,350 = 4,197 (2023); 2,113 + 959 + 1,288 = 4,360 (2024). Apretude Q1 2026 = H1 260 - Q2 140 = 120 (GBP M). Livdelzi Q1 2026 = H1 300 - Q2 167 = 133 - prices, deductions, customers, geography and exclusivity. — FY2015-Q2 2026 · publ. October 2026 · source ↗
    Method: Arithmetic on figures reported in Gilead Sciences Forms 10-K, 10-Q and results releases, SEC XBRL, stockanalysis.com market values, and the GSK and AbbVie filings cited; each operand is stated in the source line.
  3. ReportedIn 2024 the figures were 29%, 23% and 21%.
    Gilead Sciences Form 10-K for 2025 - Item 1 business and the revenue-by-product table: products, programs, employees and manufacturing. — FY2025 · publ. 24 February 2026 · source ↗
  4. ReportedHistorically, "approximately 90% of our gross product sales in the U.S." have been to these three.
    Gilead Sciences Form 10-K for 2025 - customers, wholesalers, distribution and gross-to-net deductions. — FY2025 · publ. 24 February 2026 · source ↗
  5. ReportedIn its 2023 10-K Gilead reported the three as shares of total revenues: 26%, 21% and 19%.
    Gilead Sciences Form 10-K for 2023 - revenue by product group for 2021-2023, wholesaler shares of total revenues and the 2023 balance sheet. — FY2023 · publ. February 2024 · source ↗
  6. ReportedThe 2025 10-K reports them as shares of gross product sales, before the 41% of gross-to-net deductions.
    Gilead Sciences Form 10-K for 2025 - customers, wholesalers, distribution and gross-to-net deductions. — FY2025 · publ. 24 February 2026 · source ↗
  7. ReportedThey buy what pharmacies and hospitals order and are paid a distribution fee; they carry receivables, and about 60% of Gilead's accounts receivable at 30 June 2026 related to these three.
    Gilead Sciences Form 10-Q for the quarter ended 30 June 2026 - acquired IPR&D for Arcellx, Tubulis and Ouro, the $1.75 billion Trodelvy impairment, debt, receivables and the December 2025 agreement with the US administration. — Q2 2026 · publ. 6 August 2026 · source ↗
  8. ReportedA wholesaler that stocked heavily in one quarter buys less in the next, which is how Biktarvy's second-quarter 2026 growth came partly from "favorable inventory dynamics".
    Gilead Sciences second-quarter 2026 results release, Form 8-K exhibit 99.1 - revenue by product, income statement, cash flow, balance sheet, pipeline updates and 2026 guidance - revenue by product and product group and the drivers of each. — Q2 2026 · publ. 4 August 2026 · source ↗
  9. ReportedUnder inventory management agreements, the US wholesalers "make estimates to determine end-user demand and may not be accurate in matching their inventory levels to actual end-user demand".
    Gilead Sciences Form 10-K for 2025 - Item 1A risk factors and pricing regulation: the IRA, Medicare negotiation, Medicaid, the ACA and tariffs. — FY2025 · publ. 24 February 2026 · source ↗
  10. ReportedThat sentence is the reason quarterly sales can drift from prescriptions, and the reason Gilead's receivables, $5,055 million at 30 June 2026, sit so heavily with three names.
    Gilead Sciences Form 10-Q for the quarter ended 30 June 2026 - acquired IPR&D for Arcellx, Tubulis and Ouro, the $1.75 billion Trodelvy impairment, debt, receivables and the December 2025 agreement with the US administration. — Q2 2026 · publ. 6 August 2026 · source ↗
Sources
Generated October 4, 2026