Gilead stock surged Thursday, retaking its 50-day line, after its twice-annual shot proved 100% effective in preventing HIV infections in cisgender women.
The news is a boon for Gilead Sciences, which already sells its HIV drugs Descovy and Truvada as preventative treatments for people at risk of contracting the virus. But these are both daily pills. Experimental drug lenacapavir is an under-the-skin shot twice a year.
"Our market research had suggested potential for high receptivity to a twice-yearly subcutaneous injectable among uninfected, higher-risk individuals, and we have estimated subcutaneous lenacapavir for prep could grow the market considerably and have sales of $1.7 billion-plus in the out years," RBC Capital Markets analyst Brian Abrahams said in a report.
On today's stock market, Gilead stock soared 8.5% to 68.49. That helped push shares above their 50-day moving average, according to MarketSurge.
Gilead Stock Flies On 'Zero Infections'
Gilead's study showed lenacapavir is superior to daily Truvada in preventing HIV infections in cisgender women. Based on the results, an independent data monitoring committee suggested Gilead offer lenacapavir to all participants.
"With zero infections and 100% (effectiveness), twice-yearly lenacapavir has demonstrated its potential as an important new tool to prevent HIV infections," Chief Medical Officer Merdad Parsey said in a written statement.
Gilead now needs a second Phase 3 study to gain approval, RBC's Abrahams said. Results from the second study are expected in the fourth quarter of 2024 or the first quarter of 2025. It's also possible the second study could succeed early, he said.
'Much-Needed' Win
Abrahams has a sector perform rating and 74 price target on Gilead stock. He called the news a "much-needed pipeline win for Gilead." Descovy will lose patent exclusivity in 2031. If approved, lenacapavir could offset the expected revenue loss to generics.
For Gilead stock to "more materially re-rate," the company needs more breaks in oncology and elsewhere beyond HIV, he said. "Though today's data could be a solid start."
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