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On Wednesday, Bernstein analysts, led by Courtney Breen, maintained a positive outlook on Gilead Sciences stock, reiterating an Outperform rating and a $120.00 price target. The pharmaceutical giant, with a market capitalization of $141.35 billion and trading near its 52-week high, has demonstrated strong momentum with a 58.64% return over the past year. According to InvestingPro data, the company maintains a GREAT financial health score, supported by its robust 78.26% gross profit margin. The endorsement comes with high expectations for the pharmaceutical company’s preventative HIV treatment, known as Len for PrEP, in its current six-month (Q6M) formulation.
The analysts highlighted three main reasons for their optimism: the treatment’s efficacy, which is over 99.9% effective in preventing HIV infections according to the PURPOSE1&2 studies; its potential to improve patient adherence by more than 1.5 times compared to daily pills; and its ability to increase the market penetration of PrEP treatments in both the United States and the rest of the world. Bernstein’s revenue projection for Len for PrEP peaks at an estimated $5.7 billion by the year 2033.
Further bolstering the positive sentiment is the potential of a yearly (Q12M) injection formulation. The analysts suggest that such a development could not only maintain the effectiveness seen with the Q6M injections but also further improve adherence by an additional 1.2 times. This improvement could significantly accelerate market penetration and increase Gilead’s market share beyond the current 50% peak assumption.
Bernstein’s analysis indicates that if the once-yearly Len for PrEP formulation improves adherence rates from 75% to 90%, there could be an additional $1.1 billion in revenue upside. Moreover, if the new formulation also increases market share from 50% to 60% while enhancing adherence, the upside could potentially grow by an additional $2.5 billion.
Gilead Sciences is a biopharmaceutical company traded on the NASDAQ under the ticker (NASDAQ:GILD). The company is known for its innovative treatments in areas such as HIV/AIDS, liver diseases, cancer, and inflammatory and respiratory diseases. The positive assessment from Bernstein reflects confidence in Gilead’s ability to expand its presence in the HIV prevention market with Len for PrEP. For deeper insights into Gilead’s financial health and growth prospects, InvestingPro offers a comprehensive research report with detailed analysis of the company’s performance metrics, valuation, and future potential, along with 15+ additional ProTips available exclusively to subscribers.
In other recent news, Gilead Sciences has reported significant advancements in its HIV treatment and prevention portfolio. The company showcased data from a Phase 3 study on Biktarvy, demonstrating high rates of viral suppression in HIV and HBV co-infected patients. Additionally, Gilead’s investigational combination of lenacapavir with broadly neutralizing antibodies received Breakthrough Therapy Designation from the FDA, highlighting its potential in HIV treatment. In a separate development, Gilead announced promising results from a Phase 1 study of lenacapavir for HIV prevention, which maintained efficacy for at least 56 weeks and will inform a forthcoming Phase 3 trial.
Oppenheimer analysts have raised their price target for Gilead to $132, citing optimism about the cancer drug Trodelvy, which is gaining traction in treating triple-negative breast cancer. Morgan Stanley (NYSE:MS) also maintained an Overweight rating on Gilead, with a $123 price target, following the FDA’s acceptance of Gilead’s New Drug Application for lenacapavir, granting it Priority Review status. The anticipated launch of lenacapavir in the U.S. is expected to contribute significantly to Gilead’s sales, with projections exceeding consensus estimates. Meanwhile, BTIG analysts noted Gilead’s potential for growth within the healthcare sector, which has been leading the S&P 500 this year.
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