Market Overview

Raymond James Reviews Gilead Pipelines, Takes Bullish Stance On Pharma Stock

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

Cramer: Gilead Is Dead Money

Latest Ratings for GILD

Dec 2020Credit SuisseMaintainsNeutral
Nov 2020Morgan StanleyReinstatesEqual-Weight
Oct 2020BMO CapitalMaintainsMarket Perform

View More Analyst Ratings for GILD
View the Latest Analyst Ratings


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