Morgan Stanley Upgrades Gilead on HIV Treatment Growth Potential

Morgan Stanley has upgraded Gilead Sciences' stock to "overweight" from "equal weight," raising its price target to $113 from $87, citing the company's promising HIV treatment pipeline and growth prospects. The brokerage highlighted several key advancements in Gilead's HIV treatment strategy, including its investigational HIV prevention drug Lenacapavir (PrEP) and next-gen HIV treatments.

Gilead's shares, trading at about 12 times 2025 earnings, offer room for further multiple expansion, according to Morgan Stanley. The brokerage expects several catalysts to drive Gilead's HIV treatment growth, including the FDA approval and launch of LEN for PrEP in summer 2025, Phase 2 data for once-weekly oral combination of drug in 2025, initial data for the once-yearly injectable formulation of LEN, and the decision on a monthly oral INSTI candidate.



Gilead's HIV treatment pipeline is diverse and robust, with a focus on long-acting HIV prevention and treatment options. The company is exploring a broad range of agents with different dosing frequencies and administration methods, aiming to expand treatment options and address unmet needs in HIV treatment. Some of the key components of Gilead's HIV treatment pipeline include:

1. Lenacapavir (PrEP): A first-in-class capsid inhibitor being evaluated as a long-acting injectable for HIV prevention and treatment. In a Phase 1b study, the investigational combination of lenacapavir + teropavimab (GS-5423, TAB) + zinlirvimab (GS-2872, ZAB) demonstrated high efficacy and maintained virologic suppression for six months with twice-yearly dosing.
2. Once-daily, once-weekly, and twice-yearly dosing frequencies: Gilead is exploring various dosing frequencies and administration methods to cater to a wider range of patient preferences and needs, potentially increasing adherence and treatment success.
3. Promising targets in cancer therapy: Gilead's pipeline also includes promising targets in cancer therapy, which can contribute to its long-term growth potential. The company's oncology portfolio includes Yescarta, Tecartus, and Trodelvy, which treat various types of cancer.

Morgan Stanley's upgrade reflects the growing optimism surrounding Gilead's HIV treatment pipeline and growth prospects. The company's focus on long-acting HIV prevention and treatment options, as well as its diverse pipeline, positions Gilead well to address unmet needs in HIV treatment and tap into new markets for long-term growth. As Gilead continues to invest in research and development and foster strategic partnerships, it is well-positioned to maintain its leadership in HIV treatment and capitalize on new opportunities in the market.