Gilead Sciences Inc (NASDAQ: GILD) is strongly positioned to “change the face of HIV” in 2025, according to its chairman and chief executive Daniel O’Day.
He dubbed lenacapavir – the company’s twice-a-year HIV shot a “once-in-a-decade medicine” in an interview with CNBC today as it was found to be 100% effective in a late-stage trial.
Gilead expects to receive FDA approval for the treatment over the next six months and has “programs both in developed and the developing world” to help millions of people who are at risk of developing HIV.
Gilead stock has rallied some 40% since mid-June.
Gilead expects public and private funding for lenacapavir
CEO Daniel O’Day is fully convinced that governments, as well as private institutions, will line up funding for Gilead’s lenacapavir.
The biopharmaceutical behemoth is already working with the US President’s Emergency Plan for AIDS Relief or “PEPFAR” and the Global Fund to “make sure that 2 million people can receive this in the first three years,” he revealed on “Squawk Box”.
In fact, governments from around the globe are taking interest in the company’s HIV treatment, the chief executive added.
Note that Gilead stock currently pays a healthy dividend yield of 3.43% as well which makes it all the more attractive for long-term investors.
Gilead to make its HIV treatment available globally
Gilead plans on making lenacapavir available in 120 low- and middle-income countries through six generic manufacturers. It won’t charge any royalty fee to these manufacturers either.
“We know they’ll take time to scale, [so] we’ve committed with two large organizations [PEPFAR and Global Fund] to supply lenacapavir at no profit,” as per chairman O’Day.
His comments arrive a couple of months after Gilead Sciences reported its financial results for the third quarter that handily topped Street estimates.
Higher demand and increased average realized price resulted in a 9.0% year-on-year increase in the company’s HIV product sales to $5.1 billion in Q3.
Should you invest in Gilead stock today?
Gilead stock has started the new year on a strong note but Morgan Stanley analysts are convinced it’s not out of juice just yet.
Last week, the investment firm upgraded GILD to “overweight” and said its shares could hit $113 in 2025.
Their revised price target indicates potential for about a 25% upside from current levels.
Morgan Stanley also cited lenacapavir for its bullish view and expects investors to pay a higher multiple as Gilead Sciences continues to advance its next-generation HIV treatment.
The firm’s analysts are constructive on the company’s anito-cel for multiple myeloma as well.
They expect Gilead to outperform the broader biopharma space in terms of revenue and earnings per share growth through 2033.
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