Gilead Sciences Soars 3.11% as HIV Breakthrough Sparks Market Optimism – Will This Revolutionize PrEP?

Summary
• Gilead Sciences (GILD) surged 3.11% to $116.73, driven by a European regulatory milestone for its HIV prevention drug lenacapavir.
• The European Medicines Agency’s CHMP endorsed the twice-yearly treatment for pre-exposure prophylaxis (PrEP), a first-of-its-kind option in the EU.
• Needham upgraded GILD to 'Buy' with a $133 target, citing lenacapavir’s potential to become a multi-billion-dollar revenue driver.
• Shares traded between $114.13 and $117.6, nearing the 52-week high of $119.96, as optimism over regulatory progress and market access strategies gains traction.

Breakthrough HIV Drug Clears Regulatory Hurdle
Gilead Sciences’ 3.11% intraday surge was catalyzed by the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) endorsing lenacapavir for HIV pre-exposure prophylaxis (PrEP). This twice-yearly injectable treatment, if approved, would be the first of its kind in the EU and marks a pivotal step toward global distribution. The CHMP’s recommendation accelerates regulatory timelines, with the European Commission expected to finalize approval later this year. Complementing this, investment firm Needham upgraded GILD to 'Buy' and raised its price target to $133, citing lenacapavir’s potential to address unmet needs in HIV prevention and expand access in low-income countries through streamlined regulatory pathways.

Biopharma Sector Gains Momentum as Merck Outperforms
The biopharmaceutical sector (XBI) saw mixed performance, with Merck (MRK) rising 1.11% on optimism around its oncology pipeline and recent partnerships. Gilead’s surge, however, was driven by a product-specific regulatory milestone rather than broader sector momentum. While Merck’s gains reflect long-term confidence in its diversified portfolio, Gilead’s rally highlights investor focus on innovation in HIV prevention and global health access strategies. The sector’s divergence underscores the importance of product-specific catalysts over macro trends in biopharma.

Options and ETFs to Capitalize on GILD’s Bullish Momentum
• MACD: 0.595 (bullish signal), RSI: 53.19 (neutral), 200D MA: $100.94 (below current price).
• Bollinger Bands: $107.02–$114.75 (current price at upper band).
• Support/Resistance: 30D at $111.61–$111.78, 200D at $92.35–$93.00.
• Kline pattern: Short-term bullish trend with long-term upside potential.
• GILD’s price is testing the upper Bollinger Band while MACD remains above the signal line, suggesting continued momentum. The 200D MA provides a strong baseline for a potential breakout.

Top Options Picks:
• GILD20250801C112 (Call, $112 strike, 2025-08-01):
- IV: 22.64% (moderate), Leverage Ratio: 23.72%, Delta: 0.8937 (high), Theta: -0.2401 (high time decay), Gamma: 0.0467 (moderate sensitivity).
- High liquidity with 53,294 turnover. Delta indicates strong directional bias, while high theta suggests aggressive time decay, ideal for short-term bullish plays.
- Payoff Calculation: At a 5% upside (ST = $122.57), payoff = $10.57 per share. This contract offers a leveraged play on continued price momentum.
• GILD20250801C113 (Call, $113 strike, 2025-08-01):
- IV: 24.66% (moderate), Leverage Ratio: 28.12%, Delta: 0.8171 (high), Theta: -0.2510 (high), Gamma: 0.0621 (high sensitivity).
- High turnover (62,330) and moderate IV make it a balanced choice. Delta and gamma suggest responsiveness to price swings.
- Payoff Calculation: At 5% upside (ST = $122.57), payoff = $9.57 per share. Ideal for traders seeking slightly higher leverage with manageable risk.

Action Plan: Aggressive bulls may consider GILD20250801C113 for a leveraged bet on a continued rally above $117.6, while GILD20250801C112 offers a safer entry with higher liquidity. Watch for a breakout above the 52-week high of $119.96 to confirm bullish momentum.

Backtest Gilead Sciences Stock Performance
The 3% intraday surge in GILD has historically led to positive short-to-medium-term gains. The backtest data shows that following such an event, the 3-day win rate is 52.41%, the 10-day win rate is 49.68%, and the 30-day win rate is 57.07%. Additionally, the maximum return during the backtest period was 2.99%, which occurred on day 59 after the event, indicating that there is potential for further price appreciation if the momentum continues.

Position for GILD’s Long-Term Breakout as Global Access Drives Value
Gilead Sciences’ regulatory progress with lenacapavir and strategic partnerships in global health access position the stock for sustained growth. With the European Commission expected to finalize approval later this year, investors should monitor the $117.6 intraday high as a key resistance level. A close above this could trigger a retest of the 52-week high at $119.96, potentially unlocking the $133 price target set by Needham. Meanwhile, Merck’s 1.11% gain underscores sector-wide optimism, but GILD’s product-specific catalysts make it a standout. Act Now: Enter a long position in GILD or the recommended call options (GILD20250801C112/C113) with a stop-loss below $114.13 to capitalize on the regulatory and market access tailwinds.