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Gilead Sciences (NASDAQ:GILD), a prominent biotechnology player with $28.7 billion in annual revenue and an impressive 78% gross profit margin, received FDA approval for Yeztugo (lenacapavir), its injectable HIV-1 capsid inhibitor for pre-exposure prophylaxis (PrEP). The medication becomes the first and only twice-yearly option available in the United States for HIV prevention in adults and adolescents weighing at least 35kg.
BMO Capital on Monday reiterated an Outperform rating and $120.00 price target on Gilead Sciences following the regulatory approval, aligning with the broader analyst consensus. According to InvestingPro data, analyst targets range from $93 to $140, with most viewing the stock favorably. The firm described the approval as "a major win for Gilead in driving meaningful growth in its PrEP business."
The FDA-approved label for Yeztugo contains considerations similar to other PrEP medications like Descovy, which BMO Capital suggests should make physician adoption relatively straightforward. The clean label positions the drug favorably for market introduction.
BMO Capital’s confidence in Yeztugo’s commercial potential stems from strong clinical data observed in the PURPOSE-1 and PURPOSE-2 trials. The firm believes the long-acting nature of the treatment could expand the broader PrEP market.
The twice-yearly dosing schedule represents a significant advancement over existing daily oral PrEP options, potentially improving adherence for patients seeking HIV prevention. Yeztugo joins Gilead’s portfolio of HIV treatments and preventative medications. Based on InvestingPro’s Fair Value analysis, Gilead currently appears fairly valued, with additional insights available in the comprehensive Pro Research Report covering this $134 billion market cap company.
In other recent news, Gilead Sciences received FDA approval for its new HIV prevention treatment, lenacapavir, marketed as Yeztugo. This injectable medication is administered twice a year, offering an alternative to daily oral medications for both adults and adolescents. RBC Capital raised its price target for Gilead Sciences from $92 to $95, citing market opportunities for lenacapavir despite potential challenges in market expansion. Meanwhile, Morgan Stanley (NYSE:MS) reiterated its Overweight rating, maintaining a $135 price target, and highlighted lenacapavir’s potential impact on Gilead’s stock with projected sales of $184 million in 2025 and $760 million in 2026.
Citi analysts also reaffirmed a Buy rating for Gilead Sciences, maintaining a $125 price target, following promising data from the ASCENT-04 trial for Trodelvy, a treatment for triple-negative breast cancer. The trial showed Trodelvy reduced disease progression or death risk by 35% when combined with Keytruda, compared to Keytruda and chemotherapy. The combination treatment also improved median progression-free survival and demonstrated a higher overall response rate. Additionally, Gilead is developing a once-yearly formulation of lenacapavir for PrEP, with a Phase 3 trial expected in the second half of 2025.
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