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Jefferies biotech analyst Michael Yee joins Market Domination to lay out his bull case on Gilead (GILD) and how investors should consider their biotech positions relative to the GLP-1 weight-loss craze.

Yee notes that while Gilead's stock has not moved much over the last few years, it will likely take off as it moves forward with its new HIV prevention drug. "They have announced this week a second positive Phase 3 study for a new HIV prevention drug... And with a twice-a-year injection — one jab every six months — you can prevent HIV and show people who are on PrEP, which is daily pills for the prevention of HIV, fully approved in America... high-risk individuals can now convert to a very simple, easy to administer drug with 100% prevention of HIV," he explains.

He notes that this drug could generate a multi-billion total addressable market (TAM) and grow revenues by billions of dollars. "So we're taking a very cheap stock, very down and out, very low expectations, no pipeline, and now they have a new layer to that," Yee adds.

While GLP-1 weight-loss drugs have spurred the growth of the biotech and pharmaceutical sectors, Yee believes that "we are in the fifth inning of a nine-inning game." He says, "Obviously, we had the early move maybe two and a half years ago on Novo (NVO)... And now we have cycle three, which is you have about 27 other companies that are in this game. So I think everybody kind of knows and has heard about GLP-1."

He adds that there are still good GLP-1 plays like Amgen (AMGN), as it moves forward in its trials for a monthly injection. He adds, "We still believe that certainly Lilly (LLY) is in leadership position. We think there's room for others in a huge market. But you probably have to be more selective."

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This post was written by Melanie Riehl