FOSTER CITY, Calif. - Gilead Sciences, Inc. (NASDAQ:GILD) has signed agreements with six pharmaceutical manufacturers to produce and distribute generic versions of the HIV drug lenacapavir in 120 primarily low- and lower-middle income countries, pending regulatory approval. The announcement today aligns with Gilead's strategy to broaden access to the medication for pre-exposure prophylaxis (PrEP) and treatment for heavily treatment-experienced adults with multi-drug resistant HIV.
The companies, including Dr. Reddy’s Laboratories, Emcure, Eva Pharma, Ferozsons Laboratories, Hetero, and Mylan (NASDAQ:VTRS), a subsidiary of Viatris, were selected based on their capabilities to produce sterile injectable medicines and their previous collaborations with Gilead. This initiative is a part of Gilead's commitment to ending the HIV epidemic globally, and the company plans to supply lenacapavir at no profit until the demand can be fully met by these generic manufacturers.
Gilead is also prioritizing the registration of lenacapavir in 18 countries that represent approximately 70% of the HIV burden within the licensed territories. These countries include Botswana, Eswatini, Ethiopia, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Philippines, Rwanda, South Africa, Tanzania, Thailand, Uganda, Vietnam, Zambia, and Zimbabwe.
The licensing agreements follow positive results from two pivotal Phase 3 trials, PURPOSE 1 and PURPOSE 2, which showed lenacapavir's superiority over daily oral Truvada for PrEP. Gilead will begin global regulatory filings for lenacapavir for PrEP by the end of 2024 and is exploring expedited frameworks for regulatory approval in high-incidence, resource-limited countries.
Gilead's PURPOSE program is conducting extensive HIV prevention trials worldwide to assess the safety and efficacy of lenacapavir as a twice-yearly injectable medicine. The drug is currently approved in multiple countries for treating adults with multi-drug resistant HIV in combination with other antiretrovirals, but its use for HIV prevention remains investigational.
The company's approach reflects consultations with over 100 global health stakeholders, aiming to deliver long-acting PrEP swiftly, in sufficient volume, at affordable prices, and in coordination with local partners.
This move builds on Gilead's two-decade history of facilitating access to HIV, viral hepatitis, and COVID-19 treatments in low- and middle-income countries. However, it is important to note that there is currently no cure for HIV or AIDS, and the use of lenacapavir for HIV prevention has not yet been approved globally.
The information in this article is based on a press release statement from Gilead Sciences, Inc.
In other recent news, Gilead Sciences has reported a 6% year-over-year rise in total product sales, powered by an 8% increase in sales for its HIV treatment, Biktarvy, and a 23% surge for the oncology drug, Trodelvy. This follows AstraZeneca (NASDAQ:AZN)'s failed TROPION-breast-01 study, which was seen as a potential competitor to Gilead's Trodelvy, thereby potentially reinforcing Gilead's position in the market. Investment banking firms including Mizuho, BMO Capital Markets, Goldman Sachs, and Morgan Stanley have maintained their respective ratings on Gilead.
In the realm of HIV prevention, Gilead's drug, lenacapavir, showed a 96% reduction in HIV infections in a Phase 3 trial. The company plans to file for approval of lenacapavir by the end of 2024, with anticipated market introduction in 2025. Furthermore, Jefferies has reaffirmed its confidence in Gilead with a Buy rating following AstraZeneca's clinical setback, suggesting that Gilead's Trodelvy could be adopted more broadly than previously expected.
These developments highlight Gilead's continued strides in both the HIV treatment and oncology sectors.
InvestingPro Insights
Gilead Sciences' recent move to expand access to its HIV drug lenacapavir aligns well with its position as a prominent player in the Biotechnology industry, as highlighted by InvestingPro Tips. This strategic decision could potentially bolster the company's already strong financial position.
According to InvestingPro Data, Gilead boasts a substantial market capitalization of $104.5 billion, underscoring its significant presence in the pharmaceutical sector. The company's revenue for the last twelve months stands at an impressive $27.8 billion, with a robust gross profit margin of 77.44%. These figures suggest that Gilead has the financial muscle to support initiatives like the lenacapavir access program.
An InvestingPro Tip notes that Gilead has raised its dividend for 9 consecutive years, indicating a commitment to shareholder returns. This, coupled with the current dividend yield of 3.67%, may appeal to income-focused investors. The company's ability to maintain and grow its dividend while investing in access programs speaks to its financial stability.
Gilead's stock has shown strong performance recently, with a 23.87% price total return over the past three months. This positive momentum could be partly attributed to investor confidence in the company's strategic moves, such as the lenacapavir initiative.
For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and insights. In fact, there are 11 more InvestingPro Tips available for Gilead Sciences, providing a deeper understanding of the company's financial health and market position.
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