Several Key Catalysts Lay Ahead For Gilead Sciences In The Next Year

Stifel Nicolaus has started coverage on Gilead Sciences, Inc. GILD with a Buy rating and $100 target price on improving HCV stability and pipeline profile over the next 12 months, especially NASH (Nonalcoholic Steatohepatitis), a disease area of high unmet medical need.

NASH Pipeline

The brokerage is upbeat on the company’s pipeline on NASH, which is affecting an estimated 15 million in the United States (per Nature Biotechnology). Stifel believes it could be a $15 billion-plus market by 2025. Further, the company’s HCV, HBV and HIV franchises are generating strong operating cash flow. 

“At GILD’s current valuation, we believe there is virtually no value ascribed to its current pipeline, creating an attractive risk-reward profile in our view,” Katherine Breedis wrote in a note.

Investors became skeptical after recent pipeline attrition on Gilead's HCV franchise, which accounts for nearly 50 percent of the company’s revenue base. However, Breedis believes several of Gilead’s late-stage assets may pose less technical risk.

Key Focus Assets

According to Breedis, key focus assets include selonsertib (aka, GS-4997) for regression of fibrosis, momelotinib for myelofibrosis, bictegravir/F/TAF for HIV and GS-5745 for gastric cancer.

Further, the analyst noted that the company’s $32 billion cash could be deployed for either a large, transformational deal or a “string of pearls”.

At time of writing, shares of Gilead Sciences were up 0.39 percent at $76.72.