Healthcare analysts weigh in on pharmaceutical giant Gilead Sciences, Inc. (NASDAQ:GILD) and liver disease firm Intercept Pharmaceuticals Inc (NASDAQ:ICPT). While one analyst reflects on Gilead’s claim that Merck had “unclean hands” in hepatitis C drug patent fight, the other prepares to the upcoming advisory committee review of Intercept’s lead drug candidate, obeticholic acid.
Gilead Sciences, Inc.
In a research report issued Friday, Morgan Stanley analyst Matthew Harrison reiterated an Equal-Weight rating on Gilead shares, with a price target of $111, after the company claimed that Merck was dishonest in obtaining information that used to bring an HCV case against Gilead.
Harrison observed, “Gilead alleges that one of Merck’s lawyers, Phil Durette, lied in a deposition about how he obtained information Merck used to bring the case against Gilead. Specifically, Gilead contends that Mr. Durette had confidential information from Pharmasset (the company Gilead acquired who developed sofosbuvir), misrepresented his position to Pharmasset and then contradicted himself in the Gilead trial that he ever had access to Pharmasset confidential information. Thus, Gilead contends, Merck is disqualified from royalties on sofosbuvir. The Judge told Merck, “I have taken great offense at the lies made by an attorney in this case; It’s not the death knell. You have bad facts, but that doesn’t mean I have decided you lose on this issue.”
“While this nuance seems to raise the possibility that Gilead could get this verdict thrown out, given the limited damages set by the Jury (~4% royalty) we think investors already expect a limited impact from this case,” the analyst concluded.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matthew Harrison has a yearly average return of 0.5% and a 41% success rate. Harrison has a -6% average return when recommending GILD, and is ranked #2055 out of 3840 analysts.
Out of the 19 analysts polled by TipRanks (in the past 3 months), 15 rate Gilead Sciences stock a Buy, while 4 rate the stock a Hold. With a return potential of 26%, the stock’s consensus target price stands at $115.53
Intercept Pharmaceuticals Inc
Wells Fargo analyst Jim Birchenough reiterated an Overweight rating on shares of Intercept, with a valuation range of $162.00 to $180.00, as the company is scheduled for Gastrointestinal Disease Advisory Committee review of its bile acid analog obeticholic acid (OCA) in primary biliary cirrhosis (PBC) on April 7.
Birchenough opined, “Given uncertainty on the ultimate panel composition and potential for a negative briefing document, we would advise a wait-and-see approach to ICPT pending briefing document release. Risk to subsequent GIDAC panel review depends on the strength of any FDA reviewer objections, specifics of any reviewer concerns, and final composition of the GIDAC panel. If briefing document is restricted to the question of adequacy of the surrogate endpoint and if GIDAC panel composition remains largely intact, we would see a higher likelihood of positive panel review. However, if issues extend beyond the surrogate endpoint and GIDAC panel composition changes, this could increase risk for positive review.”
According to TipRanks.com, analyst Jim Birchenough has a yearly average return of 26% and a 51% success rate. Birchenough has a 45% average return when recommending ICPT, and is ranked #42 out of 3840 analysts.
Out of the 17 analysts polled by TipRanks, 11 are bullish on Intercept stock, 5 are neutral and 1 is bearish on the stock. With a return potential of 112.5%, the stock’s consensus target price stands at $275.53.