Raymond James Reviews Gilead Pipelines, Takes Bullish Stance On Pharma Stock
The biotechnology sector remains highly competitive, and investors willing to take on a stock with a high-risk, high-growth profile may want to consider Gilead Sciences, Inc. (NASDAQ: GILD), according to Raymond James.
The Analyst
Raymond James' Steven Seedhouse initiated coverage of Gilead Sciences with a Strong Buy rating and $93 price target.
The Thesis
A rundown of each segment Gilead addresses paints a bullish picture for the stock, Seedhouse said in the initiation note. They include:
- The HCV business, which should start showing signs of stability in the bottom half of 2018 and generate around $2.5 billion in revenue in a few years, Seedhouse said. The competitive threat from rival therapy Mavyret is "baked in" to the stock at current levels, he said.
- The HIV business needed to see a strong launch with Biktarvy, and that's what occurred, the analyst said. HIV sales could peak at more than $20 billion annually by 2024, according to Raymond James, which implies a 5-percent compounded annual growth rate from 2017's $14 billion.
- Vemlidy for hepatitis B is performing well, although the pipeline is stale, Seedhouse said. Gilead could work on developing the HBV business in 2019 and beyond, he said.
- CAR-T could be a growth driver for decades, Seedhouse said.
- Key data readouts for Filgotinib in the bottom half of 2018 and beyond are expected to validate what could become a multibillion-dollar pipeline opportunity, according to Raymond James.
- The NASH pipeline isn't as impressive as other areas, as rival companies boast better datasets, the analyst said. Nevertheless, Seedhouse forecast a 60-percent chance of Gilead seeing success in its STELLAR 3/4 trials.
- Gastric cancer is a "long shot," but investors are overlooking this area, the analyst said, adding that Gilead could see some success in its Phase 3 GAMMA-1 trial.
Price Action
Gilead Sciences shares were trading higher by 2.13 percent at $70.10 at the time of publication Thursday afternoon.
Related Links:
With $36.7B In Cash, Bank of America Expects Gilead To Shop For Complements To Drug Pipeline
Latest Ratings for GILD
Date | Firm | Action | From | To |
---|---|---|---|---|
Dec 2020 | Credit Suisse | Maintains | Neutral | |
Nov 2020 | Morgan Stanley | Reinstates | Equal-Weight | |
Oct 2020 | BMO Capital | Maintains | Market Perform |
View More Analyst Ratings for GILD
View the Latest Analyst Ratings
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