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Truvada Could Drive Gilead Sciences’ Revenue Growth

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Truvada revenue trends

In 2016, Gilead Sciences’ (GILD) Truvada generated revenues of around $3.1 billion, reflecting ~3% year-over-year growth. In 1Q17, Truvada generated revenues of around $714 million. The company’s strategy to position Truvada as a pre-exposure prophylaxis (or PrEP) for HIV is expected to contribute significantly to Gilead Sciences’ revenue growth in 2017. The company has estimated that around 125,000 people across the world used Truvada in 1Q17.

In August 2013, Strides Acrolabs received FDA approval for generic versions of Truvada for sales outside the US, which could boost Truvada’s revenue share in international markets. The below graph represents the revenue trajectory of Truvada from 2012 to 2016.

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Truvada as pre-exposure prophylaxis

A pre-exposure prophylaxis (or PrEP) is a safety protocol for individuals who are at high risk of human immunodeficiency virus (or HIV) infection. The person undergoing treatment or taking preventive action is supposed to take one Truvada pill on a daily basis. The drug prevents permanent HIV infection. An individual using Truvada is advised to visit a physician every three months.

Gilead Sciences is marketing Truvada as a PrEP as well as a post-infection treatment option. Gilead Sciences faces tough competition from other HIV players such as Merck (MRK), Bristol-Myer Squibb (BMY), Johnson and Johnson (JNJ), and generic manufacturers worldwide. The success of Truvada may positively impact the iShares Nasdaq Biotechnology ETF (IBB). Gilead Sciences makes up about 7.5% of IBB’s total portfolio holdings.

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