-- Gilead Sciences (GILD) could beat Q1 consensus estimates, but weaker-than-expected persistence rates for Yeztugo point to a potential risk to long-term peak sales for the HIV pre-exposure prophylaxis drug, RBC Capital Markets said in a Wednesday note.
Nine months after Yeztugo's launch, RBC analysts examined third-party prescription trends to assess persistence rates, repeat dosing frequency, and broader pre-exposure prophylaxis market growth and switching dynamics.
Taking into account data variability and a likely shifting capture rate, initial persistence for the drug appears to be at or below the 70% figure cited in the firm's recent doctor checks, the analysts said.
Gilead's core HIV business will continue to provide a solid foundation for the stock's valuation, according to the note.
The analysts said they expect continued declines in the company's hepatitis C business, but sustainable patient volumes should still contribute more than $12 billion in cash flows over the next decade.
RBC maintained its sector perform rating on the stock and its price target of $123.
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