Gilead Sciences, Inc. GILD received new data from IMS Health about the breakdown of its drug prescriptions. Gilead is most known for its hepatitis C medications, Harvoni and Sovaldi.
IMS prescription data breaks down how many people are receiving which drug prescriptions in more than 15 countries. Robyn Karnauskas, a Deutsche Bank analyst, noted that the IMS predicts an approximate 50% increase in “new starts” for Gilead’s hepatitis C drugs in 1Q15 compared to 4Q14.
The survey also indicated that the reimbursement process for the drugs is easing, which is integral for most patients considering that Sovaldi’s full price tag if $84,000 per treatment course, or $1,000 per pill. The study also indicated that more undiagnosed patients are receiving the treatment they need and this rate will increase in 2015 through 2016.
Increases in hepatitis C prescriptions will bolster Sovaldi and Harvoni’s sales. In the fourth quarter, Gilead reported that Sovaldi brought in $1.732 billion while Harvoni brought in $2.107 billion. Together, these two hepatitis C drugs make up more than half of Gilead’s sales. Gilead’s earnings for the first quarter of 2015 are expected to be released at the end of April.
On April 6, analyst Yaron Werber of Citigroup reiterated a Buy rating on Gilead Sciences with a $120 price target. Werber finds it “unlikely” that Gilead will miss Q1 estimates since “a 30%-35% gross/net discount is already factored into consensus estimates.”
Based on his calculations using the IMS script data, Werber believes that HCV sales will be between $3 billion and $4.2 billion for the first quarter, which is higher than both the overall Citi estimate of $2.15 billion and the general consensus of $2.71 billion. Werber believes that Harvoni revenue will come in at $2.3 billion, also higher than both the Citi estimate of $1.5 billion and the general consensus of $1.9 billion. He notes that this data “is likely conservative” because it does “not capture prescriptions in the federal facilities like VA system and prisons.”
Yaron Werber has rated Gilead 8 times since November 2011, earning a 71 percent success rate recommending the pharmaceutical company and a +34.5 percent average return per GILD rating. Overall, Werber has a 75 percent success rate recommending stocks with an average return of +26.1 percent per recommendation.
According to Smarter Analyst, Robyn Karnauskas of Deutsche Bank maintained a Buy rating on Gilead with a price target of $125. After reviewing the IMS prescription data, Karnauskas concluded that “first quarter HCV consensus may be hard to meet but 2015 consensus seems achievable.” Though the analyst is bullish about the HCV drugs in the near-term, she is “lowering the numbers in out years as the patient pool deplete in our model.”
Robyn Karnauskas has rated Gilead Sciences 23 times since July 2012, earning a 70 percent success rate recommending the company with a +22.8 percent average return per GILD rating. Overall, Karnauskas has a 73 percent success rate recommending stocks with a +14.8 percent average return per recommendation.
On average, the top analyst consensus for Gilead Sciences on TipRanks is Strong Buy.
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