Investors May Be Losing Faith in Manufacturer as HIV Marketplace Changes

New competition in the HIV marketplace and a slowing in demand has dropped GlaxoSmithKline (GSK) shares by 1.8%, according to Reuters.

Shares began slipping following a Citigroup downgrade of GSK based on potential losses in the HIV treatment market, the report noted.

The stock was downgraded from buy to neutral, and Citigroup cut earnings forecasts by up to 9%, according to Reuters.

GSK plans to defend its profitable ViiV Healthcare unit and drug dolutegravir, a combination treatment that is used in Tivicay and Triumeq, which has been the star of GSK’s HIV operation, according to Reuters.

However, competition remains as Gilead Sciences continues developing a 3-in-1 daily pill in addition to Merck & Co’s novel drug EFdA.

Citigroup analyst Andrew Baum told Reuters he believes Merck could outshine both GSK and Gilead with EFdA, which could reach the marketplace as early as 2021. According to Reuters, the novel drug has the potential to be developed as both a daily pill and a twice-yearly injection.

Although EFdA is still in the developmental stage to treat HIV, Baum forecasts adjusted peak annual sales of $150 million, but thinks commercial success could add $5 billion to forecasts.

The repeal of the Affordable Care Act threatens to decrease the HIV market in the United States by increasing the number of uninsured patients and causing greater cost-sensitivity among health care providers, Reuters reported.