Gilead Analyst Sees Over 50% Chance Of Success For Remdesivir In Mild-To-Moderate COVID-19
The Gilead Analyst
Cantor Fitzgerald analyst Alethia Young reiterated an Overweight rating on Gilead and increased the price target from $78 to $86.
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The Gilead Thesis
Like other antiviral therapies, remdesivir's mechanism of blocking viral replication will show greater efficacy when given to mild patients early in their disease progression, when there are still relatively low levels of virus, Young said in a Tuesday note. (See her track record here.)
As COVID-19 overactivates the immune system to a greater degree as patients progress from moderate to severe, the effectiveness of an antiviral intervention at that later stage is in doubt, the analyst said.
Cantor Fitzgerald places the probability of success of remdesivir in the mild-to-moderate trial at over 50%, but assigns a probability of less than 10% in the remdesivir trial in severe coronavirus cases.
Unlike the norm of a trial's success depending on the basis of a statistical hit, Young said that with remdesivir, there is likely to be regulatory flexibility if the data shows a clinically meaningful trend.
The two China studies, which are evaluating remdesivir vs. a matched placebo, are run independently by China, and therefore Gilead will not confirm details around data, the analyst said.
Cantor is comfortable with a mid-April timeline for the readouts, she said.
"Though the potential commercial opportunity for remdesivir affects our DCF by only $2/share, we think that this readout will likely lead to a bigger stock move (10-15%) due to broad investor focus on the shares."
Cantor attributed the price target hike to potential pipeline opportunities, including Gilead's recent Forty Seven Inc (NASDAQ:FTSV) deal.
The fundamental story is improving as the company continues to do more deals over the long run, Young said.
GILD Price Action
Gilead shares were down 5.28% at $73.62 at the time of publication Tuesday.
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