Gilead Sciences Outlook Brightens; Citi Upgrades

Gilead Sciences, Inc. GILD is a biopharma company focused on treatments for HIV/AIDS, liver disease, cancer, inflammatory and respiratory, and cardiovascular conditions.

The Analyst

Citigroup analyst Robyn Karnauskas upgraded shares of Gilead Sciences from Neutral to Buy, with a $103 price target.

The Thesis

Hepatitis C Virus stabilization by mid-2018 and tax reform has improved the outlook for Gilead Sciences, Karnauskas said in a note.

Given the management's statement at the JPMorgan Healthcare Conference that HCV is becoming more predictable, the analyst said post-earnings the HCV numbers could become more reasonable.

Citi expects pipeline catalysts, with JAK-1 and NASH, or non-alcoholic steatohepatitis, to start outweighing HCV declines. The firm also sees plenty of pipeline catalysts, including:

• NASH phase 2 readouts at the European Association for the Study of the Liver;
• Major Phase 3 readout for STELLER 4 early next year; and
• First Phase 3 readout for JAK-1 program likely in the second-half of 2018.

"All eyes would also be on Juno Therapeutics safety data and differentiation vs. Kite Pharma CAR-T in mid-2018," Karnauskas said. Gilead purchased Kite Pharma last October.

Price Action

Gilead Sciences shares are up over 22 percent over the past year. At time of writing, shares were down 1.8 percent to $87.20.

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