Longer term, Flynn projected that Gilead Sciences' treatment Biktarvy can only protect about half of the company's $16 billion HIV franchise from generic competition.
Flynn said that while Gilead Sciences' competitors Bristol-Myers Squibb (BMY - Get Report) and AbbVie (ABBV - Get Report) also have current or upcoming loss of exclusivity exposure, the two companies "have new product cycles and/or pipelines that offer more optionality in our view."
In contrast, Flynn wrote, Gilead will only have one year to launch and market its Descovy combination pill for pre-exposure prophylaxis (PrEP) ahead of the entry of Truvada generic in Sept 2020. The company also has a very limited mid-to-late stage pipeline, Flynn wrote, "and we are lowering our estimates on immunology drug Filgotinib given emerging competition and recent data."
"We expect rebuilding the pipeline be to a key focus of (Gilead's) new CEO given his commentary on the 1Q19 call," Flynn wrote, "and while the company has a strong balance sheet this can take time to accomplish."