It's not a vaccine, but it sure looks as if Gilead Sciences'
Whether it'll increase sales of Gilead's Truvada is an entirely different question.
Let's get to the good news first, though. In a trial of HIV-negative individuals, patients taking a daily dose of Truvada had a 44% reduction in their chance of contracting HIV compared to those taking placebo. For patients who were vigilant about taking their medication, the risk dropped a whopping 73%.
The research was funded by a government agency and a nonprofit. Gilead supplied the drug and some travel expenses, but wasn't a major supporter. And for good reason, the sales opportunity is fairly limited.
Condoms do a pretty good job at preventing HIV infection, and they're a heck of a lot cheaper than Truvada. Sure, some high-risk individuals might get a prescription as a backup or because of a general disdain for condoms, but sales to prevent infection aren't likely to be a major contributor to Gilead's sales. I think Church & Dwight's
The bigger issue for Gilead is what happens when Truvada goes off-patent. The company has been combining Truvada with other drugs to improve efficacy and extend the patent life. Atripla is a combination of Truvada and Bristol-Myers Squibb's
That strategy should work for HIV-infected individuals since the combinations work better than Truvada, but what happens if at-risk individuals start taking cheap generic versions of Truvada once they're available? New HIV infections could drop precipitously.
And that's the danger of investing in a focused company like Gilead. There's always the possibility that a vaccine or even a shift in culture could drastically reduce the number of patients who need its money-making HIV drugs. Unfortunately, there's not much investors can do but factor it in and make sure you're getting appropriately rewarded for taking the risk.
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