What's Wall Street Been Saying About Gilead Lately?

Gilead Sciences, Inc. GILD is scheduled to release its first quarter results on Thursday after market close.

The Estimize consensus earnings per share estimate (based on 137 estimates) is $2.48 on revenue of $7.049 billion. This compares to the Wall Street Consensus earnings per share estimate of $2.29 on revenue of $6.776 billion.

Here is a recap of recent key analyst commentary investors should be reminded of heading in to the earnings print.

Bernstein: Gilead Needs To ‘Pull The Trigger' In Acquisition Hunt

Bernstein analyst Geoffrey Porges commented on April 21 that Gilead needs to continue remain focused on the M&A front with a bid for Vertex Pharmaceuticals Incorporated VRTX. The analyst noted that many investors "remain heavily exposure to mid and large cap biotech stocks" and further consolidation within the industry is expected.

The analyst suggested a potential transaction would come with a $45 billion price target. Shares of Vertex at the time of the analyst's comments were trading with an approximate $30.4 billion market capitalization, and haven't moved much since then.

The acquisition would satisfy Gilead's need for $5 billion to $7 billion in incremental revenue by 2020 and that Vertex has "the best profile" to complement Gilead's existing product lineup.

RBC Places ‘Low Probability' Of Gilead-Vertex Deal Happening

RBC Capital Markets analyst Michael Yee commented on April 21 and offered an opposing view to Bernstein's analyst.

According to Yee, Gilead should have no issue with paying a price tag of $40 billion to $50 billion to acquire Vertex, but the company could (and may want to) buy "a lot of other things." The analyst suggested a better strategy would be to acquire 10 different companies at $1 billion to $5 billion each that will create more value versus buying only Vertex.

Moreover, Yee noted that Gilead had seen some negative press with its $85,000 Hep C drug in the past and acquiring Vertex's $220,000 to $300,000 drug for an orphan indication for kids may raise further questions.

Yee added that the acquisition may not necessarily fit in with Gilead's strategy as management has stated that they derive the greatest value by acquiring Phase II assets and helping smaller companies through Phase III and manufacturing.

Morgan Stanley: Merck Poses No Threat

Morgan Stanley's analyst Matthew Harrison commented on April 24 that Gilead's Harvoni treatment for hepatitis C doesn't appear to be threatened by a recent drug trial from Merck & Co., Inc. MRK's HCV drug.

The analyst also noted that Harvoni "clearly" remains a "best in class" as Merck's data had a "poor showing" in GT1a (92 percent SVR12 versus 96 percent to 98 percent for Harvoni), marking a "clear weakness" for Merck as 95 percent SVR12 is a typical bar for clinical use.