Cowen’s biotech team weighs in with upbeat perspectives on biotech firms Gilead Sciences, Inc. (NASDAQ:GILD), Exelixis Inc. (NASDAQ:EXEL), and ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD). Let’s dive in to see why these analysts are singing the praises of these firms ahead of third-quarter results:
Gilead Sciences, Inc.
Gilead is set to deliver its third-quarter results on November 1st. Despite the biotech firm’s “particularly poor performance” during its first and second quarters, Cowen analyst Phil Nadeau believes investors will keep their eyes peeled toward GILD’s promising HCV franchise during its third quarter, especially as investors search for newfound indications of stabilizing revenue.
As such, the analyst reiterates an Outperform rating on shares of GILD with a $120 price target, which represents a 63% increase from where the stock is currently trading.
Nadeau asserts, “The launch of Gilead’s TAF-based regimens has put GILD’s HIV business on firmer footing. Scrip trends suggest the launch of TAFbased regimens continues to expand the franchise (+3% Q/Q). U.S. scrips are tracking somewhat ahead of our estimate. Therefore, overall, we expect a mixed quarter from Gilead. We suspect that after the quarter investors will continue to debate at what price is the uncertainty around the durability of GILD’s HCV franchise fully priced into shares.”
Regarding Nadeau’s Japan HCV sales projection for third-quarter, he anticipates a 21% quarter-over-quarter fall to $490MM, which includes $350MM of sales in Harvoni and $140MM in Sovaldi, which denote 22% and 18% declines, respectively.
“On its Q2 call Gilead noted that genotype 1 patient volumes had continued to decline as the early-launch bolus had begun to subside. Gilead was hopeful that a steady-state level of patient volume would eventually be reached, after some period of continued declines. Admittedly, visibility on Japanese sales and volumes remains low. However, with our estimate assuming a significant decline, we think it is reasonable,” the analyst explains.
Based on Nadeau’s analysis, he expects worldwide HCV revenue to circle around $3.3 billion, which falls just below his estimate of $3.5 billion and the Street’s estimate of $3.7 billion.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Phil Nadeau is ranked #579 out of 4,182 analysts. Nadeau has a 51% success rate and gains 6.1% in his annual returns. However, when recommending GILD, Nadeau faces a loss of 7.2% in average profits on the stock.
TipRanks analytics exhibit GILD as a Buy. Based on 16 analysts polled in the last 3 months, 50% rate a Buy on GILD, while 50% maintain a Hold. The 12-month price target stands at $101.46, marking a nearly 39% upside from where the shares last closed.
Cowen top analyst Eric Schmidt delves into Exelixis ahead of its third-quarter earnings, bullish that the firm’s results will bring in a sales beat with Cabometyx, its pipeline drug designed to treat patients with advanced kidney cancer, or advanced renal cell carcinoma (RCC), that has grown after treatment with other medications.
Therefore, Schmidt confidently previews results and reiterates an Outperform rating on EXEL without listing a price target.
The analyst notes, “Despite the presence of competitive agents like Bristol’s Opdivo, physician enthusiasm for Cabometyx appears high. We believe the rapid adoption of Cabometyx continued through Q3 with sales in the quarter likely to exceeding the consensus estimate of ~$27MME.”
Though EXEL has not offered its third quarter clinical progress update yet, Schmidt anticipates, “Topics of discussion on the company’s Q3 call will likely focus on (1) launch metrics and market dynamics for Cabometyx in RCC, (2) plans for regulatory filings on expanding Cabometyx’s label to first line RCC based on the CABOSUN data, (3) future development plans for cabo combinations in oncology and, (4) updates on cabo’s pivotal HCC trial.”
Moreover, “Based on feedback from RCC experts […] we continue to expect that cabo’s robust and differentiated profile will support growing adoption,” Schmidt contends, further bolstering his upbeat attitude on the firm’s prospects.
Eric Schmidt has a very good TipRanks score with a 53% success rate and he stands at #70 out of 4,182 on the analyst leaderboard. Schmidt earns 22.7% in his yearly returns and when recommending EXEL, Schmidt garners 147.3% in average profits on the stock.
TipRanks analytics demonstrate EXEL as a Strong Buy. Based on 5 analysts polled in the last 3 months, 100% rate a Buy on EXEL. The consensus price target stands at $18.00, marking a nearly 56% upside from where the stock is currently trading.
ACADIA Pharmaceuticals Inc.
As ACADIA Pharmaceuticals prepares to post its third-quarter earnings, Cowen top analyst Ritu Baral is shining light on the commercial uptake of the firm’s newly launched Parkinson’s Disease Psychosis (PDP) drug, Nuplazid, as well as the ongoing clinical development of pimavanserin, ACAD’s new chemical entity in Phase II development for treating Alzheimer’s Disease Psychosis (ADP).
Considering that Nuplazid was approved with “an anticipated black box mortality warning almost identical to other antispsychotics,” Baral reiterates an Outperform rating on shares of ACAD with a $42 price target, which represents a close to 70% increase from current levels.
Baral expresses sustained expectations for a “slow” Nuplazid launch, allowing for time for prescribers to maximize considerable sampling programs in order to heighten awareness.
Though the pace of the launch might not be at rapid-fire, the analyst remains encouraged, underscoring, “Early clinician feedback has shown willingness to trial Nuplazid and little to no payor pushback. Our KOLs indicate that early experience with quetiapine non-responders has been somewhat disappointing, though more experience, particularly with earlier-onset patients is needed.”
“The Phase 2 Alzheimer’s Disease Psychosis (ADP) trial is expected to yield data in December. ACAD has significantly tempered investor expectations on the data, based on statistical powering and enrollment criteria as designed by the previous management team,” Baral surmises.
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, top five-star analyst Ritu Baral has achieved a high ranking of #75 out of 4,182 analysts. Baral has a 49% success rate and realizes 17.4% in her annual returns. However, when recommending ACAD, Baral loses 3.3% in average profits on the stock.
TipRanks analytics indicate ACAD as a Strong Buy. Based on 9 analysts polled in the last 3 months, 7 rate a Buy on ACAD, while 2 maintain a Hold. The 12-month price target stands at $45.50, marking a nearly 84% upside from where the shares last closed.