Gilead Sciences' Yeztugo: A Paradigm Shift in HIV Prevention and Investment Potential

Gilead Sciences' Yeztugo (lenacapavir) has emerged as a transformative force in the HIV pre-exposure prophylaxis (PrEP) market, redefining the landscape of HIV prevention with its twice-yearly injectable formulation. Approved by the U.S. Food and Drug Administration (FDA) in June 2025, Yeztugo represents the first and only long-acting PrEP option, offering a critical solution to adherence challenges that have long plagued daily oral regimens like Truvada and Descovy. For investors, the drug's regulatory momentum, public health impact, and revenue potential present a compelling case for long-term growth, albeit with significant hurdles to navigate.

Regulatory Momentum: A Breakthrough with Global Ambitions

Yeztugo's FDA approval in 2025 was a watershed moment, underpinned by Phase 3 clinical trials (PURPOSE 1 and 2) that demonstrated 99.9% efficacy in preventing HIV. The drug's Breakthrough Therapy Designation in October 2024 and its recognition as Science's 2024 “Breakthrough of the Year” underscore its scientific and public health significance. Regulatory validation by the European Medicines Agency (EMA) in July 2025, with EU approval expected by year-end, further solidifies its global footprint. Gilead has also submitted applications in key markets such as Australia, Brazil, Canada, and South Africa, with plans to expand into Argentina, Mexico, and Peru.

However, regulatory success is only half the battle. The June 2025 U.S. Supreme Court ruling in Kennedy v. Braidwood Management affirmed the U.S. Preventive Services Task Force (USPSTF)'s authority to recommend preventive services but granted the HHS Secretary broad discretion to alter its composition and recommendations. This creates uncertainty for Yeztugo's inclusion in ACA no-cost coverage, as the current USPSTF does not recommend it for such status. Investors must monitor how HHS leadership under the Trump administration reshapes the USPSTF, which could either bolster or undermine Yeztugo's market access.

Public Health Impact: A Tool for Equity and Adherence

Yeztugo's twice-yearly dosing addresses a critical barrier to PrEP uptake: adherence. Clinical trials showed zero HIV infections in 2,134 participants and only two in 2,179, outperforming existing oral options. For marginalized populations—such as LGBTQ+ communities, sex workers, and individuals in low-income regions—this convenience could significantly reduce stigma and lifestyle disruptions.

Gilead's access strategy is equally ambitious. In the U.S., co-pay assistance programs and medication assistance for the uninsured aim to ensure affordability. Globally, partnerships with the Global Fund will supply two million doses annually in low- and middle-income countries at no profit to Gilead. Voluntary licensing agreements with six generic manufacturers further accelerate access in regions like sub-Saharan Africa, where HIV prevalence remains high. These initiatives not only enhance public health outcomes but also position Gilead as a socially responsible innovator, a trait increasingly valued by investors.

Revenue Potential: High Stakes in a Competitive Market

The HIV PrEP market, valued at $2 billion in 2025, is projected to grow at a 7% compound annual growth rate (CAGR), reaching $3.5 billion by 2033. Yeztugo's unique value proposition—twice-yearly dosing, superior efficacy, and a novel mechanism of action—positions it to capture a significant share. Analysts forecast peak annual sales of up to $5 billion in the U.S. and EU combined by 2030.

Yet, pricing and coverage challenges loom large. At $28,000 per dose in the U.S. before discounts, Yeztugo's cost is a barrier for payers. CVS Health's decision to exclude it from coverage highlights the tension between innovation and affordability. Gilead's tiered pricing strategy in the EU and reliance on real-world evidence to justify value will be critical. Meanwhile, the Inflation Reduction Act (IRA) and Medicaid's Most Favored Nation (MFN) policy could pressure margins, particularly if Yeztugo is included in Medicare price negotiations.

Strategic Risks and Opportunities

For investors, the key risks include regulatory shifts, payer resistance, and generic competition in low-income markets. However, Gilead's $7.1 billion cash reserves and strategic partnerships with the Global Fund provide a buffer. The company's ability to secure 75% U.S. insurer coverage by 2025 and 90% by 2026 will be pivotal.

Long-term success hinges on three factors:
1. USPSTF Reforms: If the HHS Secretary revises guidelines to include Yeztugo for no-cost coverage, adoption could surge.
2. Global Expansion: Regulatory approvals in the EU and emerging markets will drive revenue diversification.
3. Pricing Negotiations: Gilead must balance profitability with affordability to avoid backlash from payers and policymakers.

Investment Thesis

Yeztugo is a high-conviction play for investors willing to navigate regulatory and pricing complexities. Its potential to reduce new HIV infections, coupled with Gilead's robust access strategies, aligns with both public health goals and long-term revenue growth. While short-term uncertainties persist—particularly around U.S. coverage and pricing—Yeztugo's market differentiation and global partnerships position it as a cornerstone of Gilead's HIV portfolio.

For those with a 5–10 year horizon, Yeztugo represents a transformative opportunity. However, investors should diversify exposure and monitor developments in the U.S. Supreme Court's pending rulings on ACIP and HRSA, as well as HHS's actions to reshape the USPSTF. In a world where HIV prevention remains a global priority, Yeztugo's success could redefine not just the PrEP market, but the future of public health innovation.