Strategic Moves in HIV Treatment

HSBC has highlighted the strategic advancements by Gilead Sciences (NASDAQ:GILD) and GlaxoSmithKline (NYSE:GSK) as they pursue long-acting (LA) treatments to improve patient adherence and expand market size.

Gilead’s Progress

Last month, Gilead reported findings from its Purpose-2 trial concerning HIV prevention, showcasing a 99.9% efficacy rate for its LA product, lenacapavir. Although this represents a slight decrease from the 100% efficacy noted in the July Purpose-1 trial, Gilead plans to launch lenacapavir for pre-exposure prophylaxis (PrEP) in 2025, revised from previous guidance indicating ‘end of 2025’.

Gilead’s long-acting HIV treatment is a pivotal step as it competes with GSK, which already markets its LA product, cabotegravir, for treatment and prevention.

Addressing Compliance Issues

The move towards LA regimens aims to tackle low oral treatment compliance rates, reported at 80%. Enhanced adherence through LA treatments could ideally enlarge the market by 25%, based on complete compliance at similar pricing. More convenient treatment options may retain a greater number of patients in care, potentially resulting in increased market size and improved insurance coverage.

Market Potential

According to the CDC, 1.2 million Americans could benefit from PrEP, significantly surpassing the current 400,000 users. The HIV treatment market is anticipated to reach $5-7 billion, more than double its present size, with further expansion opportunities. Gilead and GSK, which together represent 90% of the market, are focusing on long-acting treatments to preserve market value, with GSK having upgraded its HIV growth forecast from mid-single digit growth for 2021-2026 to 6-8%.

Competitive Landscape

Competition also lies in administration methods; GSK’s cabotegravir necessitates two intramuscular injections every two months, while Gilead’s lenacapavir requires two subcutaneous injections every six months. Patient preferences will likely influence the success of these treatments. Gilead is currently observing GSK’s strategy with its LA treatment, Apretude, for PrEP to derive insights for lenacapavir.

Future Outlook

Gilead is expected to release an update regarding its outlook, strategy, and pipeline during an analyst day in December 2024. The company’s pipeline includes a potential combination treatment of Biktarvy and lenacapavir, which could be launched before Biktarvy’s patent expires in 2033. Meanwhile, GSK is developing a once-a-year treatment, VH310A, set to begin human trials. Additionally, Moderna (NASDAQ:MRNA) is progressing with an mRNA HIV vaccine, signaling continued innovation within the HIV treatment arena.

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