Morgan Stanley Reiterates Equalweight Rating on Gilead Sciences (GILD)

Morgan Stanley analyst Matthew Harrison reiterated an Equalweight rating and $79.00 price target on Gilead Sciences (NASDAQ: GILD).

The analyst comments "GILD announced that in the second Ph3 trial, PURPOSE-2, lenacapavir (twice yearly injectable) reduced HIV infections by 96% and demonstrated superiority to Truvada (daily oral) for HIV prevention in the broader high-risk population (cisgender men, transgender men, transgender women, and gender non-binary individuals; link). There were 2 incident cases of HIV infection among 2,180 participants in the lenacapavir group (99.9% of participants not acquiring HIV infection). GILD is working to better understand why 2 individuals acquired HIV and will share further analysis at a future medical conference. The results demonstrated superiority of twice-yearly lenacapavir over background HIV incidence (bHIV; primary endpoint, incidence 2.37 per 100 person-years) and superiority of twice yearly lenacapavir over once-daily Truvada (secondary endpoint; incidence rate ratio 0.11, p=0.00245). Recall, we hosted an HIV specialist who noted 98-99% efficacy would give him confidence in LEN's profile, while lower efficacy (i.e., 90-95%) would be somewhat concerning (see note HERE). Hence, we view today's LEN data as an expected positive for the profile of the asset and the stock. In the PURPOSE-2 trial, lenacapavir was generally well-tolerated and no significant or new safety concerns were identified (recall lenacapavir/Sunlenca is already approved for the treatment of HIV). Per the release the independent Data Monitoring Committee (DMC) recommended that Gilead stop the blinded phase of the trial and offer open-label lenacapavir to all participants. More detailed data from PURPOSE-2 will be presented at a future medical conference. Regulatory filing timing: Recall, PURPOSE-2 is the second pivotal Ph3 trial to demonstrate superior efficacy for lenacapavir for HIV prevention (data from PURPOSE-1 were provided in June; see our recap note HERE). Data from both trials will be used to support regulatory filing. GILD will begin a series of global regulatory filings by the end of 2024; and continues to expect launch of lenacapavir for PrEP as early as late 2025. We model 2025/2030 sales of $156mn/ $2.2bn (100% PoS). Lenacapavir for PREP represents 7% of our total 2030 revenue estimate."

For an analyst ratings summary and ratings history on Gilead Sciences click here. For more ratings news on Gilead Sciences click here.

Shares of Gilead Sciences closed at $80.94 yesterday.

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