The U.S. Department of Health and Human Services updated its HIV treatment guidelines on Monday and in the process offered a boost for
The DHHS named Gilead's Truvada, a combination of the company's HIV treatments Emtriva and Viread, the lone preferred regimen for previously untreated HIV patients. Gilead's shares added 3.2% to $47.31 in regular trading.
Truvada and its competitor Epzicom from
were both previously listed as the preferred treatments for new patients. But on Monday, in light of recent data, DHHS said that the Glaxo drug would now be "considered to be an alternative, rather than a preferred" option.
Epzicom combines the drugs abacavir and lamivudine.
"In our view, the news is a meaningful positive for GILD shares, since data underlying the new treatment guidelines have thus far moved prescription trends only modestly," wrote JP Morgan analyst Geoffrey Meacham in a research report. "We believe the new guidelines will hasten Gilead share gains, where we note that there are approximately 100,000 patients on abacavir regimens."
Meacham, who has an overweight rating on Gilead, estimates that every 10,000 new Truvada patients are equivalent to 5 cents to 7 cents a share in 2009 earnings for the company.
Going into third-quarter earnings, analysts had anticipated that recent negative data on abacavir could be aiding the European launch of Atripla, which is a combination of Emtriva, Viread and
Sustiva (also marketed as Stocrin). Gilead confirmed on its earnings conference call that it's starting to see those effects.
Glaxo's shares were up 1.2%, and Bristol's were flat on Monday.