RBC Capital maintains Gilead Sciences stock rating, sees access hurdles

On Tuesday, RBC Capital analysts maintained a Sector Perform rating for Gilead Sciences stock (NASDAQ:GILD) while keeping a price target of $92.00. The prominent biotechnology company, with a market capitalization of $138 billion and trailing twelve-month revenue of $28.7 billion, is currently trading near its 52-week high. The analysts provided insights into the anticipated reimbursement dynamics for lenacapavir PrEP ahead of its PDUFA date on June 19, 2025.

The feedback was gathered from nine payers covering 1.5 million U.S. lives. Analysts noted that while switching hurdles for lenacapavir PrEP might be moderate, they are potentially surmountable, especially for individuals with private insurance or those currently on generic PrEP. This could aid in medium-term market conversion and launch traction for Gilead, which has demonstrated strong financial health with a consistent 10-year dividend growth history and current yield of 2.8%.

However, the analysts pointed out that requirements for generic step-throughs for most new PrEP starts could limit expansion into non-PrEP users. Despite these challenges, ongoing interest in PrEP and promising data from anito-cel might keep Gilead Sciences shares elevated.

The PDUFA decision on lenacapavir PrEP is a significant event for Gilead Sciences, which could impact its market position and stock performance in the coming months.

In other recent news, Gilead Sciences has announced successful results from its ASCENT-03 Phase 3 trial for Trodelvy, showing significant improvements in progression-free survival for patients with metastatic triple-negative breast cancer who are not eligible for PD-1/PD-L1 inhibitors. This development comes alongside promising data from the ASCENT-04 trial, where Trodelvy, in combination with Keytruda, demonstrated a 35% reduction in the risk of disease progression or death compared to standard treatments. Citi analysts have reaffirmed a Buy rating for Gilead Sciences, citing these advancements as pivotal. Additionally, Morgan Stanley (NYSE:MS) analysts have reiterated their Overweight rating on Gilead Sciences, highlighting the potential of lenacapavir (LEN) for HIV pre-exposure prophylaxis, with an FDA approval anticipated by mid-2025.

In another development, Gilead Sciences has agreed to a $202 million settlement to resolve a civil fraud lawsuit regarding alleged kickbacks to doctors for prescribing its HIV drugs. The company recently held its annual stockholders meeting, re-electing nine directors and ratifying Ernst & Young LLP as the independent accounting firm. However, several stockholder proposals, including those concerning executive compensation and human rights policies, were not approved. Gilead’s strategic focus includes converting existing PrEP users to its new formulation and exploring international market opportunities, with ongoing development plans for a once-yearly LEN formulation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.