Fed’s Powell opens door to potential rate cuts at Jackson Hole
Investing.com -- Gilead Sciences (NASDAQ:GILD) stock fell 2.7% in pre-market trading Thursday after reports that CVS Health (NYSE:CVS) will not add the company’s new HIV prevention drug, Yeztugo, to its commercial plans for now.
According to Reuters, CVS, which operates the largest U.S. pharmacy benefit manager, based its decision on "clinical, financial, and regulatory factors." The company also will not cover Yeztugo under its Affordable Care Act formularies, as its ACA preventive program follows recommendations from the U.S. Department of Health and Human Services.
This setback comes despite Gilead management’s previous confidence about Yeztugo’s coverage trajectory. The company had stated it was "well on our way to achieving 75% access for Yeztugo within six months and 90% within 12 months."
BMO Capital analyst Evan David Seigerman called the development "an incremental negative to GILD" but noted that "CVS coverage delays are not yet concerning for Yeztugo broad coverage goals." He pointed out that conversations with CVS are ongoing, and that the U.S. Preventative Services Task Force (USPSTF) has yet to make a determination on adding Yeztugo as a covered drug.
Mizuho (NYSE:MFG) analysts suggested that upcoming coverage decisions from UnitedHealth (NYSE:UNH) and Cigna (NYSE:CI) could now be more significant catalysts than previously thought. They noted that CVS appears to be "pushing back on price for the injection(s) either straight up or when compared to daily pills."
Yeztugo, administered as a bi-annual injection, has demonstrated strong efficacy in clinical trials for HIV prevention.