With all the attention paid to Gilead Sciences’ (GILD) Hepatitis C treatment, Sovaldi, RBC’s Michael Yee and team remind investors not to forget about its HIV drug:
AP Investors have been highly focused on Hep C but we remind investors that Gilead’s HIV franchise is also a $10B+ giant and we think the tail is longer than investors are currently modeling. We believe Phase III data for its next-gen HIV pill TAF should look good and further increase long-term visibility…
TAF is a more potent pro-drug of Viread and has similar efficacy but less long-term kidney damage and bone mineral density loss (BMD). Also, it’s much smaller size makes it amenable to “co-formulate” with protease inhibitors so Truvada can be combined with Prezista (Johnson & Johnson (JNJ)) and make what is a 2-pill regimen now into a 1-pill simple regimen. We are confident over the long run, most developed nations won’t be “splitting up pills” and ruining compliance so we model a -20% erosion post 2019, versus consensus which is -25% to -50% erosion expectation after Viread generic launches in 2018.
Shares of Gilead have gained 2.2% to $104.51 at 2:13 p.m. today, while Johnson & Johnson has dipped 0.3% to $103.18.
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