This Pharmaceutical Stock Could Easily Deliver a 20% Gain Next Year, According to Jefferies
Investing.com -- This pharmaceutical company stock could see gains of 20% in 2025 with the anticipated launch of a long-acting HIV prevention treatment, analysts predict.
Shares of Gilead Sciences Inc (NASDAQ:GILD) could rise to $110 in 2025. Jefferies made this prediction following the company's disclosure of its robust HIV treatment portfolio, ranging from weekly pills to six-month injections, during an analyst meeting.
The focus is on the six-month injectable pre-exposure prophylaxis (PrEP) treatment, set to launch in the summer of 2025. Analysts estimate this treatment could reach a total addressable market (TAM) of $2-5 billion.
This treatment, known as LEN, is expected to provide better adherence and compliance compared to existing treatments, including Gilead's own Descovy and generic Truvada. LEN has already been incorporated into the 2024 International Antiviral Society-USA guidelines, which could accelerate market penetration.
LEN's pricing dynamics also appear favorable for Gilead. Analysts expect lower discounts compared to Descovy, which currently has a gross-net margin of approximately 50%. Additionally, LEN could further expand its market potential by attracting patients switching from generic Truvada.
Analysts indicated that LEN's reimbursement logistics would largely bypass the burdensome "buy and bill" system. Instead, it is expected that 70-80% of prescriptions will use a streamlined specialty pharmacy process, simplifying access for both patients and providers.
Gilead currently holds 45% of the U.S. PrEP market, primarily through Descovy, with the remainder covered by generics and GSK's competing injectable products. The company aims to increase its PrEP market share to over 60% by 2030. This expectation is supported by anticipated adherence rates expected to exceed 80%, rising from the current 50-55%.
The future upside potential may come from Gilead's plans for an annually injectable PrEP formulation. Phase III trials for this version are slated to start in 2025, with a potential regulatory submission by 2027. While this development is not currently factored into market expectations, analysts see it as a modest long-term growth driver.
Analysts concluded that Gilead's focus on innovative HIV treatments and strategic approach towards reimbursement and compliance lays the groundwork for significant revenue growth.
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