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Thank you, Sung and good afternoon, everyone. We are pleased to share our financial results for the fourth quarter and full year 2018 and provide 2019 guidance. I will first review financials followed by comments from Laura and John.

2018 was a year filled with accomplishments where we met our financial and operational goals. Beginning with our HIV franchise, we extended our leadership position and grew the business to an all-time high in product revenue. We continued to execute and maximize our opportunity in HCV and initiated a plan to launch authorized generics this year, which should keep us very competitive in a durable, long-term market.

In cell therapy, we made tremendous progress in the number of centers authorized and saw the steady and measured adoption of Yescarta in the US and the approval of Yescarta in Europe. We advanced our pipeline and finished the year with a strong balance sheet that will enable us to continue to execute on M&A and partnerships to drive future growth.

Turning to the financials -- total revenues for the fourth quarter were $5.8 billion with non-GAAP earnings of $1.44 per share. This compares to revenue of $5.9 billion of non-GAAP earnings of $1.78 per share for the same period last year. For the full year 2018, total revenues were $22.1 billion, down 15% year over year. Non-GAAP diluted earnings were $6.67 per share for the year, down from $8.84 per share for the full year 2017.

The full year 2018 GAAP diluted earnings of $4.17 per share included an unfavorable impact of $0.98 per share due to an impairment charge for in process research and development for the KITE-585 anti-BCMA program for the treatment of multiple myeloma and a non-cash tax charge related to intangible assets acquired from KITE.

Now, turning to our product sales -- product sales for the fourth quarter were $5.7 billion, up 4% sequentially and down 3% year over year. For the full year, product sales were $21.7 billion, down 16% year over year, driven by lower HCV sales. In the US, product sales for the quarter were $4.5 billion, up 8% sequentially and 8% year over year. This marks the first quarter in several years where US product sales grew year over year as the revenue growth of our HIV franchise more than offset the market dynamics of our HCV franchise.

While demand, particularly for Biktarvy and Truvada for PrEP, was a driver of sequential growth, the quarter also benefited some seasonal inventory purchases and a favorable payer mix. These two factors contributed an estimated incremental $250 million to the sequential performance. In Europe, product sales for the quarter were $813 million, down 7% sequentially and 29% year over year. The sequential and year over year declines were anticipated and included the full quarter impact and launch of generic HIV products in certain markets, as well as an accounting adjustment related to statutory revenue claw back reserves.

Now, turning to the expenses for the full year 2018 -- non-GAAP cost of goods sold were $300.6 billion, up 5% compared to $3.4 billion in 2017. The increase was caused by a $410 million reserve or an unfavorable $0.31 EPS impact, primarily for excess Harvoni inventory due to a shift in demand to Epclusa.

Non-GAAP R&D expenses were $3.5 billion and non-GAAP SG&A expenses were $3.6 billion. Both expense categories increased by 7% compared to the same period last year, primarily due to a full year of investments to support the growth of our business following the acquisition of KITE.

Our non-GAAP effective tax rate for the full year 2018 decreased to 19.8% compared to 24.5% in the same period last year, primarily due to a reduction of the US corporate tax rate as a result of tax reform and the favorable impact of a tax settlement.

Turning to the balance sheet, we generated $8.4 billion in cash from operations for the full year 2018 and $2.3 billion for the quarter. We ended the year with $31.5 billion in cash and cash equivalent. During 2018, we repaid $6.3 billion of debt, the majority of which was related to our acquisition of KITE, and paid cash dividends of $3 billion.

In 2018, we repurchased $40 million for $2.9 billion. In Q4, we made opportunistic repurchases of approximately 14 million shares for $962 million, resulting in a reduction of diluted shares outstanding at year end. Earlier today, we announced an 11% increase in our quarterly dividend, from $0.57 to $0.63 per share, which will become effective in the first quarter of 2019.

This represents the fourth consecutive year of double-digit increases to the dividend and underscores our confidence in the strength of the business in future cash flows. In 2019, our capital allocation priorities will remain the same with a focus on M&A and partnerships to augment our pipeline, followed by dividends and share repurchases.

Before I provide details for our full year 2019 guidance, I would like to highlight aspects of 2018 performance as illustrated on slide 20, which will impact the anticipated level of product revenue growth in 2019 relative to 2018.

In October, during our Q3 earnings announcement, we increased our 2018 full year product revenue guidance due to two unanticipated events. Our second half 2018 revenues did not reflect the entry of a generic version of Letairis in the US, as expected when we issued our original guidance at the beginning of 2018.

Secondly, we saw the entry of generic versions of our HIV products occurred later in certain ex-US countries than we had originally expected. It is important to keep these events in mind as our 2019 revenue performance unfolds, as they will have an impact on the level of product revenue growth in the year.

Turning to guidance, our 2019 non-GAAP financial guidance is summarized on slides 19 through 23 in the earnings presentation available on our corporate website. Product sales are expected to be in the range of $21.3 billion to $21.8 billion.

This guidance is subject to a number of uncertainties, including slower than anticipated growth in our HIV franchise, a larger than anticipated shift in payer mix to more highly discounted payer segments, such as PHS, SSS, Medicare, and the VA, lower than expected market share and greater price erosion resulting from the sale of generic versions of TDF, the fixed-dose combination of FTC-TDF, and the fixed-dose combination of FTC-TDF-efavirenz.

The accuracy of our assumptions about HCV market share, the accuracy of our estimates for HCV patient starts in 2019, unanticipated pricing pressures from payers and competitors, as well as volatility in foreign currency exchange rates, which could be plus or minus $300 million for each 10% change relative to our assumptions.

Non-GAAP product gross margins are expected to be in the range of 85% to 87%. We expect our non-GAAP R&D expenses to be in the range of $3.6 billion to $3.8 billion. Non-GAAP SG&A expenses are expected to be in the range of $3.9 billion to $4.1 billion, and include investments to prepare for commercial launches in NASH and inflammation.

For the full year, our non-GAAP effective tax rate is expected to be in the range of 20% to 21%. We anticipate the full-year diluted EPS impact of acquisition-related stock-based compensation and other expenses to be in the range of $1.40 to $1.50 per share.

As we look toward Q1 2019, we anticipate total Gilead product sales will decline sequentially by a percentage similar to what we've seen over the past two years, which was in the range of 12% to 14%, primarily driven by the US seasonal inventory patterns and buying patterns of public payers that negatively impact payer mix.

Also factored into the Q1 sequential decline is a stepdown in price for our HCV drugs sold into US Medicare. Despite this anticipated sequential decline in total product sales in Q1, I want to underscore our confidence in the health of our worldwide HIV business from which we expect double-digit year on year growth again in 2019.

I will now turn the call over to Laura.

Laura Hamill -- Executive Vice President, Worldwide Commercial Operations

Thank you, Robin. Good afternoon, everyone. I will provide an update on our commercial performance during the fourth quarter and share some highlights from markets around the world. Beginning with HIV, we achieved an all-time high in quarterly revenues. This speaks to the appeal of our Descovy-based regimen led by Biktarvy, the growing use of Truvada for PrEP, and our ability to execute commercially. In the US, total HIV revenue was $3.4 billion in the fourth quarter, up 30% year over year and 13% quarter over quarter.

Year over year growth was driven by a 13% increase in prescriptions and also benefited from inventory purchases and favorable payer mix mentioned earlier by Robin. We continue to see strong adoption of Descovy-based regimens, which accounted for 77% of Gilead's total US HIV prescription volume as we ended the fourth quarter. This is a remarkable achievement considering the first Descovy-based regimen was introduced just three years ago.

Through its first 11 months Biktarvy remains the best HIV launch of all time in the US, as measured by total prescriptions on a launch-aligned basis. During the fourth quarter, Biktarvy generated $551 million in revenue in the US and is the number one prescribed regimen for both treatment-naïve and switched patients.

Approximately 80% of Biktarvy's US prescriptions came from switches, 25% of these switches from dolutegravir and another 25% coming from Genvoya. This is a testament to the profile of Biktarvy, its strong efficacy, and no identified cases of treatment-emergent resistance at week 96 in our phase III studies.

Biktarvy provides the renal and bone safety advantages offered by Descovy backbone with minimal drug to drug interactions. These are important considerations for an aging HIV population and for younger patients on lifelong treatment.

Moving to prevention, Truvada for PrEP continues to grow as we invest in the US to raise awareness among at risk individuals and treating physicians. We estimate that approximately 202,000 people were taking Truvada for PrEP at the end of the fourth quarter in 2008.

We initiated two direct-to-consumer campaigns in mid-2008 and have a dedicated team of therapeutic specialists focused on Truvada for PrEP. Additionally, we have a number of commercial programs aimed at helping populations disproportionally impacted by HIV, where utilization of Truvada for PrEP is low. While these investments have helped increase awareness, there is still so much more we can do. The CDC estimates that 1.1 million people in the US could benefit from PrEP.

Now, turning to Europe -- total HIV revenue was $511 million in the fourth quarter, down 21% year over year and down 13% quarter over quarter. This decline was driven by the expected available of generics across all major EU countries. During 2018, we experienced slower erosion of the HIV franchise due to later generic entry in a few countries, while at the same time, we saw rapid upticks of our Descovy-based products, which accounted for more than 80% of our total HIV revenue in Europe for the fourth quarter.

We are encouraged by the strong uptake of Biktarvy in Germany and in France. In Germany, Biktarvy was the number one prescribed regimen for both treatment-naïve and switched patients during the fourth quarter. And in France, just six weeks after launch, Biktarvy was among the top five regimens for switched patients.

We anticipate by mid-year Biktarvy will also launch in Spain, Italy, and the UK. Once Biktarvy is broadly reimbursed and entrenched in the market, we believe our European HIV business will stabilize and return to growth.

Now, turning to HCV, product sales for the fourth quarter were $738 million, down 51% year over year and 18% quarter over quarter, in line with the guidance we provided in 2018. As previous announced, our authorized generic version of Epclusa and Harvoni have become available in the US this quarter through Asegua Therapeutics LLC, a separate subsidiary.

We expect to see a positive impact on sharing Medicaid markets during the second half of 2019. Over the long-term we anticipate the adoption of these authorized generics will allow us to be more competitive in a rapidly growing Medicaid segment.

In 2018, we launched a new direct to consumer campaign highlighting Epclusa as a pan-genotypic, pan-fibrotic single-tablet regimen. Epclusa has the right profile to address the broadest population in HCV. As a leading liver company, we remain fully committed to serving patients with HCV, contributing to the elimination of the disease and competing with a great of confidence based on the profiles of our HCV products.

Turning to Yescarta -- we are building on the momentum generated by the two-year real world data presented at the American Society of Hematology Annual Meeting. This year, we expect to steadily and measuredly progress in the US and in Europe and potentially see a doubling of a our revenue for Yescarta as centers gain experience and community oncologists become increasingly aware of this life-saving therapy.

We now have 68 centers in the US certified to provide treatment with Yescarta. In Europe, we are encouraged by the early stages of our launch. We have treated commercial patients in the UK and in Germany and we have activated sites in France. In total, we have authorized 12 centers and look forward to additional centers coming on line this quarter. We are pleased with the engagement of countries across EU markets wanting to rapidly offer Yescarta.

Finally, our US cardiopulmonary team continues to deliver impressive results. Letairis and Ranexa revenue totaled $431 million for the quarter. We did not see any generic competition for Letairis in the fourth quarter. We currently anticipate the entry of generics in the second quarter of 2009.

We begin the year from a position of strength. I would like to thank the teams around the world for their incredible efforts. With a continued focus on our outstanding portfolio of products and operational excellence, we are confident in our ability to deliver on our 2019 goals. Now, I will turn the call over to John.

John McHutchison -- Chief Scientific Officer and Head of Research and Development

Thank you, Laura and thank you, everyone for joining us today. As you know, this is a very exciting time for Gilead's R&D organization. We anticipate readouts from five phase III clinical trials in the first half of this year. I will talk briefly about those studies, provide an update on our cell therapy and oncology programs, and then close with some thoughts on 2019.

We expect upcoming readouts of STELLAR 3 and STELLAR 4, the ongoing phase III trials evaluating selonsertib, an ASK1 inhibitor in patients with advanced fibrosis due to NASH. If supposed by the data, we expect to file for regulatory approvals in the second half of this year. In addition, we continue to advance multiple other investigational compounds in NASH as both single agents and as combination therapies. We anticipate ATLAS, our phase II study of various two-drug combinations or regimens in patients with NASH and advanced fibrosis to read out in the fourth quarter.

As we continue to build our pipeline in NASH, I would like to highlight two other recent pre-clinical agreements. Last month, we announced the collaborations and license agreement with Yuhan to co-develop novel treatments for patients with advanced fibrosis due to NASH that will complement our other internal programs.

In December, we also entered into another collaboration with Scholar Rock to discover and develop highly specific inhibitors of TGF beta activation. We will work with Scholar Rock to investigate this novel approach directed toward one of the core pathways driving fibrotic diseases, including NASH and diabetic kidney disease.

Now, turning to inflammation, this quarter, we expect results from FINCH-1 and FINCH-3, two phase III studies of our selective JAK1 inhibitor filgotinib in rheumatoid arthritis. As you may recall, last year, we announced positive results from FINCH-2, the first of our phase III studies to read out. Those results demonstrated that filgotinib met all primary and secondary efficacy endpoints in a difficult to treat group of patients.

Now, if supported by the data, we expect to be able to then progress the filgotinib rheumatoid arthritis indication filings for regulatory approvals globally. In the US, our ability to file the NDA is dependent on data from the MANTA study, a safety study in men with ulcerative colitis. This was requested by the FDA and is designed to address non-clinical findings observed in pre-clinical animal studies.

The FDA recently allowed us to expand the inclusion criteria, which has enabled us to enhance enrollment. We will continue to evaluate our progress and options to advance timelines. Once we have the phase III data from three FINCH studies in hand, we will initiate and request further interactions with the FDA and other regulatory groups worldwide. We will then be able to provide greater clarity as to filing timeline in the US.

Moving to HIV, in the coming months, we anticipate the results from the discovery trial, a phase III randomized double-blind study of more than 5,000 people evaluating whether Descovy is as safe and as effective as Truvada at reducing the risk of HIV infection when used as PrEP or preexposure prophylaxis. The trial speaks to our ongoing commitment to people at risk of HIV infection and those living with HIV, where our goal is to continue to lead and drive innovation across the spectrum of care from prevention to treatment to hopefully one day a cure.

And finally, I'd like to make a few comments on cell therapy. Our investment in cell therapy is and always has been an investment in the future. Similar to what we've done in other areas historically, we are committed to leading with cutting edge science that one day creates a path to a cure.

Last December at the American Society of Hematology Annual Meeting, we presented a number of significant updates. The two-year safety and efficacy ZUMA-1 data presented at the meeting and simultaneously published in Lancet Oncology showed an unprecedented plateau in duration of response and overall survival in patients with refractory large B-cell lymphoma. After a single infusion of Yescarta with a minimum follow-up of two years, more than half of the patients were still alive and nearly 40% of patients had an ongoing response.

The two-year point is a major milestone for Yescarta. This is the longest duration of follow-up of any registrational clinical cell therapy study and the results set the bar, reinforcing our leadership in cell therapy. Also, at the ASH meeting, there were numerous presentations highlighting real world Yescarta data from centers outside of the clinical trial setting. It was encouraging to see similar 30-day efficacy and safety data in this setting, despite sicker patients compared with ZUMA-1 as well as the consistent manufacturing performance and product turnaround time.

Finally, for Yescarta, we are moving forward in earlier lines of therapy in large B-cell lymphoma and several new indications for other B-cell malignancies as part of our broader registrational plan. This year, we will also continue several studies aimed at investigating strategies to further improve the safety and the efficacy of Yescarta.

More broadly now in cell therapy, we are advancing an allogeneic platform to IND this year, progressing different cell therapy approaches in multiple solid tumors with next generation technologies, and leveraging our best in class cell therapy manufacturing. We will also continue to pursue scientific collaborations that will help us achieve these goals when they make sense.

With regard to our other oncology programs, during the fourth quarter, we announced a global collaboration with tango therapeutics to discover, develop, and commercialize a pipeline of innovative, targeted immuno-oncology treatments for patients with cancer. Our collaboration will combine Tango's CRISPR-based discovery technology alongside Gilead's drug discovery and development capabilities.

We also recently entered into a partnership with Agenus focused on the development and commercialization of up to five novel immuno-oncology therapies, three of which are expected to be in the clinic in 2019. We believe these novel approaches can augment the impressive benefits that have been seen with checkpoint inhibition in a variety of cancers.

Last quarter, we disclosed an initial patent outlining some of our exciting pre-clinical work related to our small molecule PDL-1 program. To that end, we have now initiated a phase I study of GS4224 in healthy volunteers.

I am confident we will continue to make significant progress in 2019 and want to close by highlighting several key areas for Gilead this year. We are focused on returning to growth in terms of product sales and are confident this can be achieved with our operational excellence, a strong and growing HIV franchise, and a stabilizing hepatitis C market. As I have just shared, on the R&D side, we continue to make excellent progress with our pipeline and we are looking forward to the readouts of the five phase III studies as I described today.

With regard to cell therapy, we will maintain our position of leadership as we continue to reach more patients with Yescarta and advance the next generations of cell therapy. Finally, we are in a position of financial strength, which gives us the flexibility to execute on M&A and partnerships to augment our pipeline. On behalf of the entire organization, we look forward to welcoming Dan O'Day to Gilead next month as our new Chairman and CEO.

In closing, I would like to thank our 11,000 employees around the world. It is your commitment and dedication that have made us successful and will continue to make us successful in 2019 and into the future. So, let's now open the call for questions. Operator?

Questions and Answers:

Operator

Thank you. Today's question and answer session will be conducted electronically. Anyone wishing to ask a question may signal us by firmly pressing the * key followed by the digit 1 on his or her touchstone telephone. We will call on you in the order that you signal us. If you find that your question has been asked, you may remove yourself from the roster by pressing the # key. As a reminder, we will be taking a maximum of one question per person at a time. If you have further questions, you're welcome to rejoin the queue. We'll pause for just a moment to compile the Q&A roster.

Our first question comes from the line of Geoff Meacham from Barclays. Your question, please?

Geoff Meacham -- Barclays -- Managing Director

Thanks so much for the question. John, I want to continue the thought on BD. I'm looking at the step-up in 2018 that you guys had. It's mostly on early to mid-stage assets. So, the question is one, does this change Gilead's appetite for later stage deals and two, what's the appetite for an expansion beyond your core therapeutic areas? I realize the answer is likely to change after Dan gives a more detailed review of the business. Thanks.

Robin Washington -- Executive Vice President and Chief Financial Officer

Hi, Geoff, it's Robin. Why don't I start? I say, again, the high bar and criteria for us when it comes to M&A is scientific differentiation. I think you're right to state that we are primarily focused on our existing therapeutic areas. While these have been small deals, I think we've continued to look for deals with commercial assets as well as latest-stage pipeline deals as well. But they happen when they happen. As you can see, we've been very active. We've been even more active the second half of the year and we'll continue to focus in this area as Dan joins us.

John McHutchison -- Chief Scientific Officer and Head of Research and Development

Geoff, it's John. I'll add on to what Robin has said also. We have looked at many other things as well over the last year and we'll continue to do so. It is driven by the science and it is driven by the opportunity and the importance and impact it will have on certain diseases. So, we will look and earlier stage opportunities as they come forward. As Robin said, the late-stage opportunities are few and far between.

Operator

Thank you. Our next question comes from the line of Michael Yee from Jefferies. Your question, please.

Michael Yee -- Jefferies -- Analyst

Thanks for the question. My question is although Dan hasn't come on board yet, what do you think investors should anticipate or should expect through the course of the year? Is that him just trying to get on board familiar with everything and that could take a year? Do you think he would or management or the board anticipate urgency to put the balance sheet to work? What should investors expect through 2019 as it relates to Dan coming on board?

Gregg Alton -- Interim CEO and Chief Patient Officer

This is Gregg Alton. I'll take this question. I think it's neither of the scenarios that you laid out there. I think that Dan will come on board March 1st, as you know. I think Dan will be patient. He's going to take his time to get to know the company, spend more time with the management team, get to know our strategy. Certainly, he will then put his own mark on where he wants to take the company. I wouldn't expect it to take up a year, but I think he will be patient and I think he's going to be thoughtful and make sure he's really understanding what we're doing.

Operator

Our next question comes from the line of Bryan Abrahams from RBC Capital Markets. Your question, please?

Bryan Abrahams -- RBC Capital Markets -- Analyst

Thanks very much for taking my question and congrats on the quarter. How should we be thinking about your 2019 guidance for HIV with respect to contribution from volume versus price? And then along those lines, for the longer term, there's been some discussion around CMS practices shifting for protected classes. Can you talk a little bit about the impact that you foresee elements like formulary management or prior authorizations potentially having on clinical practice in HIV and on potential future revenues for the franchise? Thanks.

Robin Washington -- Executive Vice President and Chief Financial Officer

Hi, Brian. It's Robin. I'll take the first part of your question and then turn it over to Gregg. Thank you for calling out both of those parameters. Keep in mind that volume is a major driver of growth for our business. That will be the case in 2019. Four our HIV business, we have taken price increases in the US in the past, but keep in mind that the net effect of them has been limited because the majority of our volume goes through public channels. For instance, ADAP has not had a price increase since 2008 and that's part of our US business.

In Europe, as you know, we actually take price decreases. So, the net result on a worldwide basis is really a low single-digit price benefit when we think about any price increases. For this year, as you can appreciate due to competitive reasons, we're not going to mention if we aren't taking price increases at this point in time. You recall back mid-year, we announced no price increases for six months, but any thinking that we do have around price increases is currently reflected in our guidance. I'd say that we're aware and continue to be aware of the climate out there. We've always had a very sensible approach to how we think about pricing.

Gregg Alton -- Interim CEO and Chief Patient Officer

If I could jump into the second part of your question relating to the proposal by CMS on the protected classes -- as you're all aware, Gilead has bee on the forefront of innovation in HIV for 30 years now bringing out products for treatment and prevention that improve potency, safety, tolerability, simplicity. The protected classes has been a very important component to ensure patients have access to that and physicians are free to prescribe what's best for their patients.

The reason for the protected classes, as many of you know, is these are six disease areas where the products really are not interchangeable. They need to be right for the patients. This has allowed patients, individuals, to do very well with HIV, but also allows us to have a very good public health response to HIV and reducing new infections. We believe that any challenges to the protected class, particularly the prior authorization or step therapy would be a significant step backwards in these efforts.

We also share this with a lot of the other therapeutic areas that are impacted by the protected classes. So, we are in constant discussions with them. This is the number one public policy initiative by Gilead, ensuring that people understand the importance of protected classes. We're very engaged with the administration at CMS, HHS, as well as the Senate and Congress. So, we are ensuring that we're very vocal there. We're also very closely tied with the patient groups and the physician groups who care very much about this issue.

So, this isn't the first time this has come up, but we take this very seriously. We are making sure that the message is very strong, that this would be a step backwards. We also don't see significant cost saving to our health system in doing this and potentially a long-term step back in terms of what we've accomplished.

Operator

Thank you. Our next question comes from the line of Geoffrey Porges from Leerink. Your question, please?

Geoffrey Porges -- Leerink -- Managing Director

Thank you very much for taking my question and the information provided in the call. Robin, could you talk us through the increase in SG&A specifically? It's about a 10% increase compared to where you are this year. It's about $500 million above what the street was expecting. Can you talk us through where the incremental $500 million is going and if at all possible, I presume you went through everything else you were spending on previously and couldn't find any way to reduce in other areas. Thanks.

Robin Washington -- Executive Vice President and Chief Financial Officer

Thanks for the question, Geoff. Let me talk about the sequential increase. That was driven by a one-time grant. I wouldn't take Q4 and assume that's the run rate. During the second half of the year, to answer your question, we have included incremental expenses focused on our new emerging therapeutic area launches, in particular NASH and inflammation. We've also included some incremental expense to our cell therapy ramp because as you know, we're continuing to build outside of the US in that area as well.

So, those are some of the primary drivers. The smaller drivers include some geographic expansion. If you saw from our guidance, we're expected to have HIV revenue in Japan next year. There's some investment there. We're also continuing to get products approved in China. That's an area of focus. There is a second half ramp in our expenses to support those launches.

I would say, Geoff, to your point, "Have we thought about trade-offs?" Yes, we have. I would say particularly for NASH we have. Maybe Laura can comment on this as well. We do believe continuing to stay focused on our hep C franchise in a much more competitive environment is the way to go. So, there are some incremental expenses that we hadn't initially thought about associated with NASH, but we've appropriately included them in our guidance.

Laura Hamill -- Executive Vice President, Worldwide Commercial Operations

Robin did a perfect job covering it. For HCV, we believe we want to be fully focused around the world, but also in terms of reaching consumers in the United States, that's a very strong focus. External and outside the United States, there is a number of initiatives to really help with elimination in conjunction with the government and we're committed to that. I think that's really what we were contemplating with [inaudible]. When we have an opportunity to join forces, we should believe we should keep those separate and focus on them as individual very important products uniquely.

Operator

Thank you. Our next question comes from the line of Matthew Harrison from Morgan Stanley.

Matthew Harrison -- Morgan Stanley -- Analyst

John, I have one for you specifically on the NASH study. Can you talk a little bit about how you powered those studies? I know you've talked in the past 20% delta is clinically meaningful. I wonder if you could comment if you achieved a delta below that, if those studies could still be statistically successful and how you might look at a result like that. Thanks.

John McHutchison -- Chief Scientific Officer and Head of Research and Development

Thank you, Matthew. We're excited about the NASH readouts from STELLA-3 and STELLA-4. We have 1,600 patients with bridging fibrosis or cirrhosis. So, those results are due to imminently readout this quarter. So, we are looking forward to them. To answer your question, we are looking for a significant increase over placebo response rate, which we believe we can calculate accurately from our previous trials. We believe that we would like to show a 10% to 15% response rate over placebo to have a meaningful effect of a group of people that have a high likelihood of disease progressing to transplant, etc.

So, without getting into all the details about the numbers, this would be our first step forward for patients with advanced fibrosis due to NASH and a meaningful improvement if we could allow one in five of them to prevent progression of the disease, to transplant decompensation, etc. We believe that would be meaningful clinically, statistically, and otherwise.

Operator

Thank you. Our next question comes from the line of Robyn Karnauskas from Citi. Your question, please?

Robyn Karnauskas -- Citigroup -- Analyst

My question is on PrEP. You talked about over 200,000 on PrEP. By our math, there could be around $2 billion worth of sales coming from PrEP. I don't know if that's right. My question is there's data out there saying this could be 1 million to 3 million people that ideally could benefit from PrEP. How are you thinking about getting Descovy in the hands of those people? What is this argument you would make to make sure those patients go on PrEP? How are you going to make that argument and where do you think PrEP will go? It's a very long question. Sorry.

Laura Hamill -- Executive Vice President, Worldwide Commercial Operations

How about if I take the conversion question and on the clinical study, I'm going to leave that up to John? So, this is Laura. So, as it relates to PrEP, as I mentioned earlier, in the United States, there are 1.1 million people that the CDC estimates could benefit from PrEP. We really believe there's a lot more to do.

There are a lot of populations that are affected that just don't have the awareness that they really need to protect themselves. So, not only do we have a dedicated field force, but we have a lot of community individuals that have come from nonprofits that are very much committed to helping these communities and we are leaning into these communities to try to raise awareness.

In addition, we've actually put a significant amount of additional funding behind both Biktarvy and Truvada for PrEP in 2019 because we believe that's a very important thing to do. Now, to answer your question about your conversion from a TDF-based regimen to a TAF-based regimen or Descovy-based regimen, obviously the clinical trial results I'll let John talk to, but what I would say is when we look at the treatment market as I mentioned, in the US, we're at 77% of total prescriptions now in Descovy-based backbone and in Europe, we're at 80%.

We believe the benefits that accrue to a patient for HIV are the same benefits that we need to have for a patient at risk that is being treated for PrEP. Some of the duration of therapy than we may anticipate. So, these otherwise healthy individuals want to have a normal, healthy life and the Descovy-based region really lends for that to be a great treatment option. I'll turn it over to John on the study.

John McHutchison -- Chief Scientific Officer and Head of Research and Development

Robyn, the safety advantages of taking a TAF-based backbone, as has been in the case and seen in the conversion rates for the HIV-infected individual will apply equally to the at-risk individual who's taking medication for PrEP. So, we'll be able to show in the study with over 5,000 patients that there are differences, I presume, in terms of safety, kidney, and bone.

Because of their young age and their longevity in terms of taking medicines to prevent HIV infection, the same principles apply as it does to somebody who's infected already. Another way of saying what Laura has already said and hopefully the study will lay down the answers to that question. It's reading out in the coming months.

Operator

Thank you. Our next question comes from the line of Alethia Young from Cantor Fitzgerald. Your question, please.

Alethia Young -- Cantor Fitzgerald -- Analyst

Thanks for taking my question. I'm just asking about the MANTA study. I wanted to clarify one thing -- is that study made for a label or is it really needed for the filing package? Can you update us with a little bit more precision on how those individuals have played out with your enrollment timelines? Thanks.

John McHutchison -- Chief Scientific Officer and Head of Research and Development

Thanks, Alethia and thank you for your question on MANTA. Before I go into it and answer it, let me say I do appreciate everybody's interest in the program. It's a somewhat different situation than we've found ourselves in before. The data that we're generating in the phase III trials will provide me and our team with a lot more details that will allow us to be able to answer your questions with greater clarity regarding the timelines. So, we have had a pickup in enrollment, Alethia, since we've made the modifications to the program.

As I said today, really, we don't need it for labeling, necessarily, but it would give clarity as to whether there's any risk associated with male infertility and so forth. It's not required, but it's obviously advantageous for us to have it in all of those respects. As I said to you, this is an issue that we're really addressing an FDA issue of a filing that we observed in the pre-clinical animal studies.

We've seen a pickup in enrollment. I don't want to get into specifics about the numbers, but there has been a significant pickup in enrollment. I'll keep watching and we will keep watching that process very carefully to advance our timeline. Once we have the data from the phase III bench trials, we will be able to initiate further interactions, discuss the MANTA study and its progress more and then be able to provide you with greater clarity.

Operator

Thank you. Our next question comes from the line of Umer Raffat from Evercore ISI. Your question, please.

Umer Raffat -- Evercore ISI -- Managing Director

I have one for Robin and one quick clarification on something John said. Robin, there was an expectation among investors based on a lot of the comments you shared at the January conference that 2018 was the trough and 2019 should be a growth year in product sales. Judging by guidance, at least, it doesn't quite look like that. Can you go over that and?

Also, particularly curious about hep C because it looks like versus 4Q run rate, there isn't a whole lot of erosion modeled into it. John, just to clarify something you mentioned on NASH earlier, is there a hierarchical analysis for the low dose versus high dose in the readout or is the P-value being split? Thank you very much.

Robin Washington -- Executive Vice President and Chief Financial Officer

Umer, let me start with your question on guidance -- I just want to reiterate -- we are very focused on returning to growth in 2019 and really believe that's achievable. If you look at the strength of our HIV franchise, as I've said, we expect double-digit year on year growth, stabilizing trends and our HCV business as well as the momentum of our cell therapy franchise, where as you saw, we expect it to practically double this year.

I think the other thing we've tried to is to be very transparent in our 2019 guidance of outlining those unplanned factors of 2018 that definitely will impact the level of growth that we expect in 2019. The other thing I want to point is just our philosophy around setting guidance at the beginning of the year. It remains pretty consistent with how we've done it in prior years. It includes all the uncertainties you could expect could impact our franchises.

I mentioned several on the call. Just take FX, that alone, volatility could have a plus or minus $300 million impact. Guidance, particularly our first guidance of the year does include downside risk and we're going to monitor those and manage them throughout the year, but our conviction as well as our confidence around returning a net product revenue growth is very, very strong and we're going to look forward to updating you throughout the year as activities progress across our franchises.

John McHutchison -- Chief Scientific Officer and Head of Research and Development

Umer, in regard to your second question -- we took two doses into the phase III trials, A, because we had targeted engagement of both doses in terms of immunohistochemistry. We also allowed ourselves to have another chance in terms of the safety profile that might be potentially differentiated at lower or higher doses. Those were the two reasons for taking two doses forward into phase III. Without getting into all the details of the statistical analysis plan, we will be able to compare both doses to placebo in terms of the primary endpoint.

Operator

Our next question comes from the line of Cory Kasimov from JP Morgan. Your question, please?

Cory Kasimov -- JP Morgan -- Analyst

I wanted to ask on the cell therapy side of things -- can you talk about the source of your confidence and the projected growth for Yescarta in 2019? I believe you said it's up $200 million. Given there's only $6 million of sequential growth from 3Q to 4Q. Along these lines, I think you previously guided to having more centers online for the product in Europe by the end of '18 than where you ended up. How should we be thinking about the cadence of opening centers into 2019 and how that plays into your guidance? Thanks.

Laura Hamill -- Executive Vice President, Worldwide Commercial Operations

This is Laura. I will say that our launches of Yescarta have really made excellent progress, both in the US and in EU. As part of our guidance, we do expect Yescarta revenue to nearly double, as you had mentioned. We feel like we have very, very strong momentum. We are seeing greater depth and breadth of treatment with Yescarta across the 68 certified sites in the US.

When we started off, there is a process of the institution really figuring out how to operationalize treatment and we had a very high amount in the top 20 academic institutions. We're starting to see that spread further across the 68 institutions and also, like I said, depth of patients going through.

In addition, at ASH, the data that was prevented as the follow-up for the real world evidence really is providing that extra energy in the community about the importance of treating, not only at obviously the 68 sites, but what's more important is the community oncologists are referring these patients into the sites for treatment.

We do have field force focused on helping with that referral process. You did ask us specifically about Europe. We do have 12 sites in Europe that are actively engaged. We will tell you that in terms of what we're seeing in Germany, we're very, very impressed with the results and we also have provided product and opened up sites in France and we will continue to expand throughout 2019 in the Europe markets.

Operator

Our next question comes from the line of Phil Nadeau from Cowen and Company. Your question, please?

Phil Nadeau -- Cowen and Company -- Managing Director

Question on the HIV franchise -- I think in your prepared remarks you mentioned the use of TDF generic regimens is a risk to HIV pricing this year. In fact, we have seen some payer programs to incentivize the use of those generic regimens. So, I'm curious if you could maybe talk in a little more detail what you are seeing from payers and the impact on pricing of those generic regimens. Should payers get more aggressive about recommending their use?

Laura Hamill -- Executive Vice President, Worldwide Commercial Operations

This is Laura. That was a pretty consistent question that we had at the JP Morgan conference too. When we look at specifically one particular payer that was emphasized, we really have not seen any major impact at all. As a matter of fact, when we look at the program, which is specifically supporting the duo, we saw no more than 100 prescriptions generated during a ten-month period of time, and in addition to that in December, I basically sent a letter out to physicians saying they were no longer going to run the MyScripts program. I think that was an effort to ese if patients would choose to switch back, but we really didn't see any impact.

Operator

Thank you. Our next question comes from the line of Salim Syed from Mizuho Securities. Your question, please?

Salim Syed -- Mizuho Securities -- Managing Director

I actually have two quick ones, if you don't mind. The first is on HIV Japan. So, if I recall, the end of last year, you guys bought back the HIV rights from Japan. I was wondering if you could give us some color -- how should we be modeling that opportunity coming out of Japan now that you are marketing that solo and what should we be taking out of the royalty line, where I believe you previously booked the economic? On your allo CD19 CAR-T, I'm wondering if you view CD19 CAR-T and K-cell therapy as complementary or competition to your allo P-cell therapy. Thank you.

Robin Washington -- Executive Vice President and Chief Financial Officer

Maybe I'll start with the HIV question, Salim. We're really excited about the opportunity in Japan. It is included in our guidance. To your point, we got between about $50 million and $60 million a year in Japan tobacco royalties. That was in total revenue, not product revenue. So, net-net, this is a positive for us in that we'll now see those revenues flow through net product revenue but we'll lose that royalty contract going forward. Again, I've been very excited about gaining the commercial rights to the HIV products. Laura, I don't know if you want to expand a bit on the commercialization of that relationship at all.

Laura Hamill -- Executive Vice President, Worldwide Commercial Operations

So, the teams have been actively working in this move for a smooth transition for the HIV franchise. It's not only the HIV franchise that exists, but it's really the opportunity this year, 2019, to launch Biktarvy. So, we're really, really excited about that opportunity. The teams, like I said, are working hard and we appreciate the great partnerships with Japan Tobacco on helping us with the conversion and building this franchise for us and helping us with a successful launch.

John McHutchison -- Chief Scientific Officer and Head of Research and Development

In terms of the question, Salim, related to the allogeneic program, as I said on the call, we are very pleased to announce we hope to have our IND our allogeneic CD19 program this year. We will engineer certain factors into that program, one of which we've already announced. It will be HLI-related that will have an effect on NK cells that will allow an advantage in terms of persistence of those manipulated or engineered CAR-T cells. It's an early field, more to be seen, lots of different approaches. We are pleased with our progress so far.

Operator

Thank you. Our next question comes from the line of Terence Flynn with Goldman Sachs. Your question, please?

Terence Flynn -- Goldman Sachs -- Analyst

Maybe just on I was just wondering if you could confirm if you'd be able to file on one positive phase III trial or if you need both of those trials to file. Then I would love your thoughts on how you see this market playing out over the near and long-term under a positive outcome for the STELLAR studies. Do you need the event-free survival to drive the value proposition or just the histology data is enough? Thanks.

John McHutchison -- Chief Scientific Officer and Head of Research and Development

Thanks, Terence. We would like those studies to be positive. They're either going to be available in the next quarter or few months as well. If one was positive and one was negative as you outlined, we'd have to have a discussion with the regulators. That would be something we would discuss, analyzing data in that situation. In terms of pricing and moving forward, I'll land those aspects onto Laura.

Laura Hamill -- Executive Vice President, Worldwide Commercial Operations

So, obviously, it's too early to really comment on our pricing strategy. Of course, we modeled scenarios. The medical affairs team has done a lot of work from an economics perspective. We're quite familiar with the overall cost of an F3/F4 patient. These patients are extremely expensive to the system. Having that real world data which shows us how expensive and how many patients when they get to that level are in dire need, we can take that information coupled with what John produces from a clinical perspective and utilize that for our discussions.

Operator

Thank you. Our next question comes from the line of Ying Lang from Bank of America Merrill Lynch. Your question, please?

Ying Lang -- Bank of America Merrill Lynch -- Analyst

Maybe first off for Robin, your assumption for the incremental SG&A for 2019 impacted a launch for filgotinib in NASH, I would assume that would occur in the second half. If NASH fails, would SG&A would be lower than they're expected? For the HIV launch in your guidance, does that assume more switches from dolutegravir-containing regimens or not in 2019?

Laura Hamill -- Executive Vice President, Worldwide Commercial Operations

Sure, Ying. First, to talk about SG&A, as I mentioned earlier, yes, it is the ramp in SG&A is more second half 2019, don't use Q4 2018 as your baseline. It's an unfortunate yes. If for some reason we would not launch, our SG&A expenses would go down. That is hopefully not what happens. This is one place where I hope we spend every single dollar that we've allocated. I'll also add because of the health of our HIV franchise, there is a component of incremental investment we're making there as well. To your question, if NASH did not launch, you would have more expenses. It's about $0.06 a share.

Gregg Alton -- Interim CEO and Chief Patient Officer

There was a question on HIV launch assumptions in terms of a competitor. I think it's safe to say we're not going to get into detailed assumptions of our guidance. We fully anticipate Biktarvy will go on to be the best-selling single-tablet regimen.

Operator

Thank you. Our next question comes form the line of Carter Gould from UBS. Your question, please.

Carter Gould -- UBS -- Analyst

Thanks, guys. I just wanted to dig in a little bit deeper to the EU dynamics in HIV. You obviously highlighted a couple countries with Biktarvy but a little bit more opaque around if that business will stabilize this year and return to growth or is that something we should look to 2020 for?

Robin Washington -- Executive Vice President and Chief Financial Officer

This is Robin. Maybe I'll start and if Laura has any color -- in 2019, we don't expect US HIV revenues to grow, but we'll have the full year impact of genericization and as Laura talked about, we'll continued to see that ramp of Descovy-based products. Over the next few years, we'll be launching Biktarvy throughout Europe. The one component of that quarter sequential decline we saw was a one-time adjustment we had to make relative to prior periods, where certain Southern European countries reach a cap in terms of spending on pharmaceutical products and then they do what's called claw back, where we get an additional tax.

There has been a lot of changes in government. We did make an additional adjustment. If you take that out, the sequential declines are more consistent of what we've seen in the past. Beyond 2019, again, Laura talked about the great uptake of Descovy, we do expect over time in '20 or '21 a return to growth for EU HIV.

Laura Hamill -- Executive Vice President, Worldwide Commercial Operations

I'll just add a little bit. I think Robin covered it very well. In terms of launches, we've definitely been able to with Biktarvy launch, like I said, at the very end of the year, some of the big countries. We have launches going on all through '19 for Biktarvy. There will still be erosion of generics occurring through '19. We had it in '18. We'll see it in '19. The conversion to the Descovy-based regimen being at 80%, those three variables, we believe we will be able to move to '19 and grow from that base.

Operator

Thank you. This does conclude the question and answer session of today's program. I'd like to hand it back to management for any further remarks.

Sung Lee -- Vice President of Investor Relations

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

Operator

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Duration: 67 minutes

Call participants:

Sung Lee -- Vice President of Investor Relations

Robin Washington -- Executive Vice President and Chief Financial Officer

Laura Hamill -- Executive Vice President, Worldwide Commercial Operations

John McHutchison -- Chief Scientific Officer and Head of Research and Development

Gregg Alton -- Interim CEO and Chief Patient Officer

Geoff Meacham -- Barclays -- Managing Director

Michael Yee -- Jefferies -- Analyst

Bryan Abrahams -- RBC Capital Markets -- Analyst

Geoffrey Porges -- Leerink -- Managing Director

Matthew Harrison -- Morgan Stanley -- Analyst

Robyn Karnauskas -- Citigroup -- Analyst

Alethia Young -- Cantor Fitzgerald -- Analyst

Umer Raffat -- Evercore ISI -- Managing Director

Cory Kasimov -- JP Morgan -- Analyst

Phil Nadeau -- Cowen and Company -- Managing Director

Salim Syed -- Mizuho Securities -- Managing Director

Terence Flynn -- Goldman Sachs -- Analyst

Ying Lang -- Bank of America Merrill Lynch -- Analyst

Carter Gould -- UBS -- Analyst

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