What Happened?
Shares of biopharmaceutical company Gilead Sciences (NASDAQ: GILD) jumped 3% in the afternoon session after its long-acting HIV prevention injection, lenacapavir, received a recommendation for approval from a key European regulatory committee.
The European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) endorsed the twice-yearly treatment for use as pre-exposure prophylaxis (PrEP), a method to prevent HIV infection. This positive opinion was a significant step toward making the drug available across the European Union. Following the news, investment firm Needham upgraded its rating on Gilead's stock from 'Hold' to 'Buy' and set a price target of $133. The firm expressed confidence that lenacapavir could become a major sales driver, potentially contributing billions to revenue.
After the initial pop the shares cooled down to $116.26, up 2.7% from previous close.
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What Is The Market Telling Us
Gilead Sciences’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 3.1% on the news that a new trade agreement between the United States and Japan spurred a broad market rally. The positive sentiment swept across markets after it was announced the U.S. and Japan had reached a new trade deal. The agreement included a 15% tariff on Japanese goods imported into the U.S. and a commitment from Japan to invest $550 billion in the U.S. and open its markets to American cars and agricultural products. This development boosted investor confidence and contributed to a widespread rally, lifting stocks across many sectors. The Dow Jones Industrial Average and the S&P 500 both posted gains, creating a favorable environment that likely benefited individual stocks.
Gilead Sciences is up 26.5% since the beginning of the year, and at $116.26 per share, it is trading close to its 52-week high of $117.41 from March 2025. Investors who bought $1,000 worth of Gilead Sciences’s shares 5 years ago would now be looking at an investment worth $1,560.
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