Glaxo's HIV prevention win should lead to upgrades

Two months ago Glaxosmithkline’s new long-acting HIV therapy cabotegravir demonstrated non-inferiority to Gilead’s Truvada at preventing HIV infections. A final cut of the data upgraded that to superiority, with the two-monthly injection showing itself to be 66% more effective than the daily pills. This could prove an important difference. Truvada loses patent protection in September, and Gilead is trying to switch patients to Descovy; the latter has shown some safety advantages, but it remains to be seen whether payers play ball. Truvada sells around $2-2.5bn a year in HIV prevention, analysts at SVB Leerink estimate, equal to 15% of Gilead’s HIV sales – so making the switch matters. Cabotegravir’s efficacy advantage will likely accelerate the demise of Gilead’s prevention sales, the analysts believe, as the company will find it even harder to persuade new patients to take Descovy. Sellside consensus for Gilead’s HIV prevention sales look highly ambitious, and seemingly reflects little impact from Truvada generics or cabotegravir competition. The numbers, revealed by EvaluatePharma, seem improbable, especially as the Covid-19 pandemic is also hitting demand for HIV drugs, particularly in this setting. Consensus for cabotegravir is also surprisingly low, at $515m in 2026, a number that looks ripe for upgrades.