Jefferies Upgrades Gilead To Buy Citing Bullish Prospects For HIV Franchise

Jefferies’ Brian Abrahams believes the share price for Gilead Sciences, Inc. GILD already prices in potential declines for the HCV franchise, which could “enable a setup for upside into continued HIV commercial/clinical success, any strategic moves, or any pipeline surprises.”

Abrahams upgraded the rating on the company to Buy, with a price target of $91.

HCV Franchise

Although the HCV franchise has been tracking below the near-term consensus expectations, Abrahams believes management continues to be focused on building value and that a near-term strategic move could lead to accretion, while also improving the sentiment on the stock.

HIV Franchise

Expressing confidence regarding the prospects for Gilead Sciences’ HIV franchise, the analyst mentioned that “with effective switching strategies and low payer pushback likely enabling good LT sustainability even with modest lumpiness from genericization.”

Pipeline

Given that the company’s pipeline program have mixed risk levels, Abrahams also believes expectations are low and that any positive signals from the near-term readouts for any of these programs could drive increased enthusiasm regarding their long-term growth potential beyond HCV and HIV.

“Uptake of TAF-based regimens, particularly Genvoya, has been strong, and prescription trends continue to look favorable. This, along with recent HIV guidelines preferring TAF based regimens, should bode well for the long-term franchise,” the analyst went on to say.

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