Investing.com -- Morgan Stanley expects the FDA to approve Gilead Sciences (NASDAQ:GILD)' Lenacapavir (LEN) for HIV prevention (PrEP) on or before its June 19 PDUFA date, a move that the bank believes could drive upside for GILD shares.
The firm maintains an Overweight rating on the stock, citing higher-than-consensus sales projections and favorable pricing dynamics.
“We continue to see upside to GILD's Lenacapavir (LEN) launch for HIV prevention,” Morgan Stanley analysts wrote, estimating 2025 U.S. sales of $184 million, well above the $111 million consensus forecast.
One key factor in LEN’s launch trajectory is pricing and distribution strategy, according to Morgan Stanley.
While Gilead has not disclosed LEN’s price for PrEP, the bank says the company has referenced existing PrEP drugs like Descovy and GSK’s Apretude as benchmarks.
Morgan Stanley estimates a gross-to-net discount of around 23%, which would create a net pricing tailwind of 15% compared to daily oral PrEP drugs.
The acquisition pathway for LEN is expected to rely 70-80% on white bagging and 20-30% on buy-and-bill.
White bagging, which involves specialty pharmacies shipping medication directly to healthcare providers, limits providers' ability to use 340B discounts, which can significantly impact pricing and accessibility.
Morgan Stanley also noted that Gilead's initial focus will be on converting the 400,000 U.S. adults currently on PrEP—most of whom take generic Truvada or Descovy—before expanding into a broader patient population. Insurance coverage decisions will take about 4-6 months post-approval, meaning Q4 2025 will provide a clearer picture of LEN’s market penetration.
With growing policy support for PrEP coverage, including a 2024 U.S. Preventive Services Task Force update recommending coverage with $0 cost-sharing, Morgan Stanley believes Gilead is well-positioned for a strong launch.
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