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Investing.com - Gilead Sciences (NASDAQ:GILD) stock faces a temporary setback after CVS Caremark declined to add its HIV prevention drug Yeztugo to commercial formularies, according to a Reuters report published Wednesday. CVS Health (NYSE:CVS), trading near its 52-week high of $72.51 and showing impressive YTD returns of 63%, maintains a strong position as a prominent player in the Healthcare Providers & Services industry, according to InvestingPro data.
BMO Capital maintained its Outperform rating and $130.00 price target on Gilead despite the news, noting that while disappointing, this development does not represent a broader concern for the Yeztugo launch. InvestingPro analysis reveals CVS maintains strong financial health with a GOOD overall score, supported by its consistent dividend payments and current yield of 3.76%.
CVS Caremark cited "clinical, financial, and regulatory factors" for its decision, though conversations between the companies are ongoing, and Affordable Care Act coverage remains driven by the Department of Health and Human Services through the US Preventative Services Task Force (USPSTF).
Gilead management remains confident about Yeztugo’s coverage trajectory, stating they are "well on our way to achieving 75% access for Yeztugo within six months and 90% within 12 months" despite this temporary setback with one pharmacy benefit manager.
BMO Capital believes the USPSTF will eventually mandate coverage for Yeztugo given the strong efficacy demonstrated in PURPOSE trials, which would likely require CVS Caremark to cover the drug for its commercial patients as well.
In other recent news, CVS Health reported impressive second-quarter 2025 earnings, with adjusted earnings per share of $1.81, surpassing the projected $1.46. The company also exceeded revenue expectations, achieving nearly $99 billion. Following these results, CVS Health raised its full-year earnings guidance, highlighting robust operational performance and strategic initiatives. In addition to these financial achievements, Baird upgraded CVS Health’s stock rating from Neutral to Outperform, increasing the price target to $82.00, citing opportunities in the Medicare Advantage space. Truist Securities also reiterated its Buy rating with an $84.00 price target, noting the company’s strong performance in the Health Care Benefits and Pharmacy Services segments. Meanwhile, Jefferies maintained a Buy rating with a price target of $80.00, amid investor concerns ahead of the financial results. Additionally, CVS Health announced it will not cover Gilead Sciences’ new HIV prevention drug Yeztugo in its commercial plans, based on clinical, financial, and regulatory factors. These developments reflect CVS Health’s strategic positioning in the healthcare sector.
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