This pharma stock could easily gain 20% next year, Jefferies says

Investing.com -- This pharma stock could see its stock gain 20% in 2025, driven by the anticipated launch of its long-acting HIV prevention therapy, analysts estimate.

Gilead Sciences Inc (NASDAQ:GILD ) could rise to $110 in 2025, Jefferies said, after it unveiled its robust HIV treatment pipeline at an analyst meeting, ranging from weekly pills to six-month injections.

A key focus is the summer 2025 launch of a six-monthly injectable HIV pre-exposure prophylaxis (PrEP) therapy, which analysts estimate could tap into a $2-5 billion total addressable market (TAM).

The therapy, known as LEN, is expected to achieve better compliance and adherence 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 its market penetration.

LEN’s pricing dynamics also bode well for Gilead, with analysts predicting lower rebates compared to Descovy, whose gross-to-net margin is currently around 50%. Additionally, LEN could attract patients transitioning from generic Truvada, further expanding its market potential.

Analysts noted that reimbursement logistics for LEN will largely bypass the burdensome “buy-and-bill” system. Instead, 70-80% of prescriptions are expected to 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 generics and rival injectables from GSK comprising the remainder. The company expects to grow its PrEP market share to over 60% by 2030, supported by increased adherence rates projected to exceed 80%, compared to the current 50-55%.

Future upside could come from Gilead’s plans for a once-yearly injectable PrEP formulation. Phase III trials for this version are slated to begin in 2025, with a potential regulatory filing by 2027. While this development is not factored into current market expectations, analysts see it as a modest long-term growth driver.

Gilead’s focus on innovative HIV treatments and its strategic approach to reimbursement and compliance set the stage for substantial revenue growth, analysts concluded.

Source: Investing.com